GST is the biggest tax reform in India, tremendously improving ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. By abolishing and subsuming multiple taxes into a single system, tax complexities would be reduced while tax base is increased substantially. Under the new GST regime, all entities involved in buying or selling goods or providing services or both are required to obtain GST registration. Entities without GST registration would not be allowed to collect GST from customer or claim input tax credit of GST paid or could be penalised. Further, GST registration is mandatory once an entity crosses the minimum threshold turnover of starts a new business that is expected to cross the prescribed turnover.
What is GST Registration?
Every business carrying out a taxable supply of goods or services under GST regime and whose turnover exceeds the threshold limit of Rs. 20 lakh/ 10 Lakh as applicable will be required to register as a normal taxable person. This process is of registration is referred as GST registration.
As per the GST Council, entities in special category states with an annual turnover of Rs.10 lakhs and above would be required to obtain GST registration. All other entities in rest of India would be required to obtain GST registration, if annual turnover exceeds Rs.20 lakhs. There are also various other criterias, that could make an entity liable for obtaining GST registration – irrespective of annual sales turnover (Criteria for GST registration is provided below). Entities required to obtain GST registration as per regulations must file for GST registration within 30 days from the date on which the entity became liable for obtaining GST registration.