So you’re either a business owner or vendor or hoping to become one but are completely clueless on how to proceed now that we have a new tax system in place. Keep reading.
The Goods and Services Tax (GST) is a tax regime that was implemented to subsume a plethora of taxes like Excise, Entertainment tax, and so on that were charged on taxable goods and services under the previous tax structure. If you are the owner of a business, you will be required to make a GST payment online if your business turnover crosses Rs. 40 Lakh in a financial year. In special category states, the yearly turnover threshold for a financial year is Rs. 20 Lakh.
The Benefits of the Goods and Services Tax
Here are some advantages of GST:
- GST significantly helped in eliminating the double taxation or cascading effect of taxes under the old tax structure. GST removed the build-up of charges such as logistics, inter-state tax, and many others that are imposed at different levels.
- The calculation of tax payments under the previous tax structure too daunting a task to complete under the previous tax system. However, this is not true of the GST act since it absorbs the indirect taxes into one single unified tax that you have to pay the central government when you purchase taxable goods or services.
GST has many benefits such as detailed rules for E-commerce, rules that make logistics efficient and easy to navigate, and a composition scheme under GST that is of great use to smaller businesses.
What are the Different types of GST?
There are three types of GST – IGST, CGST, and SGST.
Integrated Goods and Service Tax (IGST)
The central government levies this tax when transactions occur between states.
Central Goods and Services Tax (CGST)
This tax is levied by the central government when you make transactions within a state.
State Goods and Service Tax
This tax is levied by the state government when an intra-state transaction occurs.
What do you need to know about the Goods and Services Tax Identification Number?
A Goods and Services Tax Identification Number (GSTIN) is a unique and exclusive 15-digit number assigned to GST-registered companies after they complete their GST online registration.
The value of a GSTIN cannot be emphasized. Maintaining your credibility in the eyes of the market and government is paramount as a vendor or business. Obtaining a GSTIN can solidify your chances of getting recognized as a credible provider of goods and services.
A GST number is also used during GST return filing and helps prevent tax evasions. Additionally, it keeps your transactions safe and secure and protects you from fraudulent businesses.
How can I register for a GST Number?
Getting your hands on a GST number for your business is a fairly straightforward process. Here’s how it works:
- You can begin by visiting the online GST portal and logging in.
- After this, go to services and select the new registration option. Then, enter your phone number, email address, and Personal Account Number (PAN) and proceed to the step the follows.
- You will get an OTP on the phone number you’ve submitted for GST registration. Enter this password and receive your Temporary Reference Number (TRN).
- Then, visit the services tab, head to registration, and select new registration. Make sure you enter your TRN and the captcha code and go to the next step.
- You will get an OTP again and then redirected to a page named saved applications. Hit the edit option.
- After this, fill up all the essential business-related details such as the location of the business, bank account details, and so on. You are also required to submit documents that serve as proof of those details that you provide.
End this process by submitting your application through verification methods like E-signature, Electronic Verification Code (EVC), or Digital Signature Certificate. Be sure to check your phone and email ID for your 15 digit Application Reference Number (ARN). You may use this ARN to track your GST application.