Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based tax levied on the supply of goods and services in India. It has replaced multiple indirect taxes like VAT, service tax, and excise duty, simplifying the tax structure and promoting ease of doing business. This blog explores the different types of GST and the GST registration process.
Types of GST in India
GST is divided into four main categories based on jurisdiction and transaction type:
1. Central Goods and Services Tax (CGST)
- Levied by the Central Government on intra-state transactions.
- Collected along with SGST/UTGST.
- Revenue is shared between the Center and the respective State/Union Territory.
2. State Goods and Services Tax (SGST)
- Levied by State Governments on intra-state supplies of goods and services.
- SGST revenue goes directly to the state where the sale is made.
- For instance, if a business in Maharashtra sells a product within the state, both CGST and SGST apply.
3. Union Territory Goods and Services Tax (UTGST)
- Applicable in Union Territories such as Chandigarh, Andaman & Nicobar Islands, Lakshadweep, etc.
- Functions similarly to SGST but is collected by the Union Territory government.
4. Integrated Goods and Services Tax (IGST)
- Levied on inter-state and international transactions.
- Collected by the Central Government and then shared with the respective state.
- Ensures seamless input tax credit for businesses operating across multiple states.
GST Registration: Who Needs to Register?
GST registration is mandatory for businesses that meet specific criteria. Here’s who must register:
1. Mandatory Registration
- Businesses with an annual turnover exceeding Rs. 40 lakh (Rs. 20 lakh for special category states) for goods.
- Service providers exceeding Rs. 20 lakh in turnover (Rs. 10 lakh for special category states).
- Individuals and businesses involved in inter-state trade.
- E-commerce operators and aggregators.
- Casual taxable persons and non-resident taxable persons.
- Input service distributors and those paying tax under the reverse charge mechanism.
2. Voluntary Registration
Businesses below the threshold limit can opt for voluntary GST registration to avail of input tax credits and enhance their credibility.
Process for GST Registration
Registering for GST is an online process facilitated by the GST portal (www.gst.gov.in). Here are the key steps:
Step 1: Visit the GST Portal
Go to the GST official website and click on ‘Register Now.’
Step 2: Fill the Part-A Form
Provide details such as PAN, mobile number, email ID, and state. An OTP will be sent for verification.
Step 3: Complete Part-B of the Application
Submit details including business name, constitution, principal place of business, bank account, and authorized signatory details.
Step 4: Upload Required Documents
Common documents include:
- PAN card of the business
- Aadhaar card of promoters/directors
- Address proof of the business premises
- Bank statement/cancelled cheque
- Digital signature (for companies and LLPs)
Step 5: Verification and ARN Generation
After submission, the application is verified, and an Application Reference Number (ARN) is generated for tracking.
Step 6: GSTIN Issuance
Upon successful verification, a GST Identification Number (GSTIN) is assigned, and the certificate is issued.
Conclusion
Understanding the types of GST and the registration process is crucial for businesses to remain tax-compliant and avoid penalties. Whether you are a new entrepreneur or an established business, staying informed about GST regulations ensures seamless operations and better tax planning.
For more updates on GST, compliance tips, and tax-saving strategies, stay tuned!
