FAQ – Frequently Asked Questions about GST Registration in India
1. What is GST?
GST stands for Goods and Services Tax, an indirect tax levied on the supply of goods and services in India. It is a comprehensive tax that subsumes various taxes like central excise duty, service tax, VAT, etc., into a single system.
2. Who needs a GST registration?
Any individual, business, or entity involved in the supply of goods or services with an annual turnover exceeding the threshold limit set by the government needs to register under GST. The threshold limit varies for different states and categories of taxpayers.
3. How can one apply for a GST registration?
One can apply for GST registration online through the Goods and Services Tax Network (GSTN) portal. The application needs to be accompanied by the required documents, such as PAN card, proof of address, and bank account details.
4. What are the benefits of GST registration?
GST registration provides several benefits, such as the ability to avail Input Tax Credit (ITC), which allows taxpayers to claim credit for the taxes paid on purchases. It enhances the credibility of the business and enables easy compliance with the law.
5. Is GST registration mandatory for small businesses?
Small businesses with an annual turnover below the threshold limit can voluntarily register under GST to avail the benefits and comply with the law. However, if the turnover exceeds the threshold, registration becomes mandatory.
6. Are there any exemptions from GST registration?
Certain categories of businesses, such as agricultural producers, small-scale manufacturers, and service providers below a specified turnover, are exempt from GST registration. However, they may need to register if they conduct inter-state trade.
7. What is the process for cancellation of GST registration?
GST registration can be voluntarily cancelled by submitting an application online. It can also be cancelled by the tax authorities due to non-compliance or if the business ceases to exist. Proper procedures need to be followed to avoid penalties.
8. Can a registered person collect GST from customers?
Yes, a registered person can collect GST from its customers and is required to deposit the collected tax to the government. The GST collected is separate from the GST paid on purchases, and the net liability needs to be settled with the tax department.
9. Is there a penalty for non-registration under GST?
Failure to register under GST can attract penalties and fines. The penalty for non-registration can be a percentage of the tax evaded or a fixed amount per day of delay, depending on the severity of the non-compliance.
10. How long does it take to get a GST registration?
The time taken to obtain a GST registration depends on the accuracy of the application and the verification process. Generally, it takes around 7-10 working days for a successful registration, provided all the required documents and information are provided accurately.