Chennai is a business city in the southern part of India. It is the capital of Tamil Naidu. Most businesses have their offices here because of the growth and development this city offers. For all the businesses whether they are situated in chennai or any other part of India, one thing is common and equally important that is GST registration. Hence if you are having business in the capital city of Tamil Naidu you must be aware about the GST threshold in Chennai. This is important to know because not all businesses need to obtain goods and services tax registration, only those who cross the GST threshold limit need to take this registration. To know more about the same must read this blog till the last line of the write-up.
What do you mean by the GST Threshold Limit?
Under the goods and services tax law not every business needs to obtain registration for GST. Only those businesses fall under the category of the businesses which exceed the minimum annual turnover limit needed to obtain registration as a GST taxpayer. This minimum annual turnover limit is known as the GST threshold limit. There are certain exceptions to the GST threshold limit which has been given under section 24 of the GST Act of 2017. If we talk about the GST threshold in Chennai, it goes the same as other parts of India except the special category of states.
What is GST Registration?
An individual or an organization must register with the GST department if they crossed the GST threshold limit. This registration with the department of GST is known as GST registration. This is necessary in order to be recognized under the Goods and Services Act of 2017 as a goods and services tax payer. If a company or individual falls inside the GST threshold in Chennai , they must complete this registration.
A tax that is imposed indirectly on the exchange of different commodities and services is called goods and services tax. In India, this is the largest tax overhaul. GST has been imposed in more than only India. Approximately 160 nations have implemented this goods and services tax worldwide. There are three different kinds of goods and services taxes: CGST, SGST, and IGST.
Key Objectives of the GST Registration
some of the key objectives of the GST registration are:
- The idea of “one nation, one tax” was attempted to be realized.
- compilation of the majority of Indian indirect taxes
- Make India’s tax system uniform.
- Removal of the tax’s cascading effect
- Protect the tax system from tax evasion
- Enlarge India’s taxpayer base
- Encourage the tax system to become more digital
What is the GST Threshold in Chennai?
The GST threshold in the capital city of Tamil Naidu that is Chennai is just like the goods and services tax limit on any other part of India. There are only some special categories of states for which the GST threshold limit is different but chennai does not fall under the same category. Given below is the GST threshold limit for Chennai has been given:
GST Threshold in Chennai for Goods
The GST registration threshold for both goods and service providers was initially set at Rs. 20 lakhs at the implementation of the Goods and Services Act of 2017. But it was later discovered that small enterprises are being negatively impacted by this threshold limit. Therefore, the government raised the threshold limit for individuals who trade in commodities in order to support small firms. Currently, there is a 40 lakh rupee threshold for business ideals in products. This was modified by the notification no. 10/2019-Central Tax dated March 7, 2019, from Rs. 20 lakhs to Rs. 40 lakhs.
GST Threshold in Chennai for Services
In India, there are primarily two categories of businesses: those that deal in commodities and those that deal in services. The upper bound on the threshold of the firms dealing in commodities has previously been covered. There is a common misconception that the GST threshold limit applies to both goods and services, but this is untrue. When GST was introduced in 2017, things were the same; however, in 2019, things changed. The threshold level for products has been modified, while it remains at Rs 20 lakhs for services.
Exceptions of GST Threshold in Chennai
There are certain categories for which GST threshold in Chennai is not applicable. They are not having any limit on the turnover. Such exceptions have been prescribed under section 24 of the Goods and Services Tax Act of 2017. These exception are:
- First and foremost, registering for goods and services taxes is required for each business engaging in online commerce. Turnover is irrelevant in this case.
- The business must register for the goods and services tax if it conducts interstate transactions. The business’s turnover is also unimportant in this case.
- When making casual supplies, those who are subject to casual taxation are required to register for goods and services tax.
- Registering for the goods and services tax is required for those who must pay the tax under the reverse charge.
- Companies and people required to pay taxes under the GST law’s section 9 clause 5
- NRIs who are engaged in taxable supplies are considered taxable individuals.
- Someone who is covered by section 51
- Agent or representative required to pay mandatory GST who is obligated to pay taxes on behalf of his principal
- Distributors of input services
Conclusion
The GST threshold in Chennai, like the rest of India, refers to the minimum annual turnover limit at which businesses are required to obtain Goods and Services Tax (GST) registration. As of now, the threshold for businesses dealing in goods is set at Rs. 40 lakhs, as per a notification in 2019. However, for businesses offering services, the threshold remains at Rs. 20 lakhs. It’s important to note that certain exceptions to the threshold limit exist, primarily related to specific categories of businesses and transactions, where GST registration is mandatory regardless of turnover. These include online commerce, interstate transactions, casual supplies, reverse charge, section 9 clause 5, NRIs engaged in taxable supplies, section 51, agents or representatives responsible for paying GST on behalf of their principals, and distributors of input services.
