The aspect of compulsory registration under GST in India is very important as it includes the specific business and the individuals under various circumstances. Registration stands compulsory not differentiating because of the yearly turnover. The registration tends to play a beneficial role among which it also includes the interstate supply of goods, and various e-commerce operators and also includes taxable as well as non-resident taxable persons.
Who Should Compulsory Register under GST?
There are certain businesses which need to be compulsorily registered under the GST laws of India. Compulsory registration meaning, that even if they are not crossing the threshold limit for GST registration they need to get registered under the GST laws. Out of which some are mentioned below:
Businesses do Interstate Supply
It includes the businesses who are involved in the interstate supply of goods and also includes the service providers who make the interstate supply of goods, it basically follows an exemption slab of Rs 20 Lakh/ Rs 10 Lakh which might be only applicable in specific cases.
Every Casual Taxable Person
This talks about the individuals who have made any transactions that particularly involve the supply of goods and services within the prescribed territory and this also includes no fixed place for carrying out business.
Non-Resident Taxable Persons
It includes the persons who do not have any particular place for business and are only involved in business occasionally and further get involved in transactions with the supply of goods and services.
Agents for Supplier
Any agents or any other persons involved in the supply of goods only on behalf of the taxable persons also need to register under the Goods and Services Taxation related laws of India. Without registering themselves they cannot work like agents.
Operators for E-commerce
It includes the one who owns or manages the digital grid for business in an electronic manner and promotes electronic commerce. It also involves the persons who are supplying the goods and services only through the manner of e-commerce operators.
Input Service Distributor
This involves the office for the goods and services that further receive tax under the prescribed documents and are thus required to further distribute the credits for the Goods and Services Tax in India under the taxation laws.
Taxpayers Crossed the Threshold Limit
If you are in the business world you must be aware about the threshold limit for GST registration till then one does not need any kind of registration under the GST laws. But the moment they cross that limit they need to get compulsory registration under the GST laws of India.
Benefits of Compulsory Registration under GST Laws of India
Some of the key benefits of doing compulsory registration under GST in India are:
- Legal Compliance: This would further help to avoid any penalties if they are properly registered under GST and hence comply with the said tax laws.
- Any Input Tax Credits: The registered business can also make claims with reference to the proper tax credits which are only paid on taxes while purchasing and the overall tax liability. It also reduced the cost of goods and services.
- Interstate Trade without Barriers: Every other registered business can now do interstate business which it certainly expands its own market to further reach many customers. The GST thus replaces every other multiple-state tax and simplifies the structure for a smoother transaction.
- Expansion of Business: The operation of an e-commerce business regularly enhances the supply chain of the business utilizing standard rates and cutting off logistics costs.
- Contracts and Tenders: Many governmental projects require to be registered under GST, hence opening up many opportunities for many businesses to further participate in these projects. This helps to maintain the reputation of the business and helps grow.
- Returns for Documentation: The tax rates are uniform in nature and are further made in a standardized manner which helps in the filing of records with ease and assists in financial management. Due to the changing age of technology, GST returns can be filed online and get a paper free process without any issues.
- Rating for Compliance: The businesses are thus rated in accordance with their compliance and further is determined by the filing of GST ratings which later on attract more customers and make a profitable business.
- Financial Inclusion: Any registered business is likely to get more loans from banks as well as other financial institutions due to its compliance with its financial history. And this will lead to better financial management and planning.
- Reduction of Cascading Effect: The registration for GST thus further helps to reduce the application of cascading effect and ensure a proper tax application on the said business.
Consequences for not Registering Under the GST Laws
If you are coming under those businesses which needs compulsory registration under GST in India but you didn’t comply with the same then you may face the following consequences:
Penalties and Fines
The non-registration for GST by a person towards his business will further attract fines and penalties and it is up to 10% of the amount due which is up to a minimum of Rs. 10,000. And if the person has internationally evaded the tax then the said percentage will increase up to 100% of the due amount for tax. The delay which is made in obtaining the registration for GST will attract a late fee on each day for the delay.
Interest on Tax Dues and Legal Action
The failure for non-registration of GST will require paying the interest with tax that is due from the date of payment until it is paid on the actual day. The associated authorities will proceed to initiate legal proceedings in a manner that will thus involve inspections and seizure for operations if one does not register as a compulsory taxpayer under the GST laws of India.
Business Operations Restrictions
Any non-registered business will now not be able to legally operate or expand their business in any manner until and unless they register for Goods and Services Tax. Hence for the growth and development of the business it’s really important to register the same under the GST laws.
Non-eligible for Government Contracts
Any non-registered business will now not be able to take contracts from the government and will lose various other benefits that are obtained from government contracts. Therefore in order to get various government benefits you must get registered under the GST laws.
How to Register for GST in India?
Given below is the GST Registration process in order to register as GST taxpayer in India:
- Visit the GST Portal (https://www.gst.gov.in/ )
- Click on ‘Services’ (Select ‘Registration’ and then ‘New Registration’)
- New Registration Form(Requires every detail and then Verification by OTP)
- Receive Temporary Reference Number (TRN).
- Complete Part B of the Registration (Click on ‘Services’ ‘Registration’ ‘New Registration).
- Fill in the Application Form (All the details of business required to be filed).
- Upload Documents with regard to the business.
- Submit the Application and receive confirmation.
- Final Processing and Approval.
Conclusion
This compulsory registration under GST in India upholds the most efficient and transparent manner for businesses and ensures regularity among all the tax payment methods as of which it also becomes easy to further contribute to the economy of the country. GST acts as the only streamlined process for the payment of taxes and helps to operate in a legal manner thus optimizing the usage for taxes and gets regulated under the GST framework.
FAQs
- What do you understand about compulsory registration under GST?
The aspect of Compulsory Registration for Goods and Services Tax (GST) in India is very important as it includes the specific business and the individuals under various circumstances.
- How does it benefit the registered business?
The registration tends to play a beneficial role among which it also includes the interstate supply of goods, and various e-commerce operators and also includes taxable as well as non-resident taxable persons.
- What are the essentials to register under GST?
It includes the business that has a turnover exceeding the threshold limit of Rs. 40 lakhs Rs. 20 lakhs or Rs. 10 lakhs and shall be considered as registered as a normal person.
- What is the aim of GST registration in India?
The main objective is to bring the entire country under a single tax regime by the application of GST and eliminate the other layers of taxation.
- What is the importance of GST registration in India?
GST is an indirect tax that was enacted to abolish several other indirect taxes in India and only to create a single taxation regime for the collection and enhance the process of collecting taxes.
