Tag Archives: GST Registration

What were the Effects of GST on MSME Business

Have you ever come across the abbreviation MSMEs while going through the newspaper (especially business columns) or watching business news on TV?  If yes its good, if not then let us inform you that MSMEs stand for micro, small and medium enterprises. MSMEs are considered to be playing a very important role as they are expected to offer higher employment by 2020.

This sector has also been contributing to the government’s initiatives; MAKE IN INDIA and SKILL INDIA.

The introduction of GST (Goods and services tax) led so many questions and confusion to rise. People had expectations, what all would be affected by it.

Difficulties faced by the MSMEs on the introduction of GST

  • Whenever we try to do something, we are faced with the challenges that may or may not prove beneficial for everyone. So let’s take a look at what all situations were faced by the MSME, when GST came into effect.
  • During the initial times, there was a lot of confusion as everybody couldn’t grab the fundamentals of GST
  • There were even some loopholes in the infrastructure, which actually took little long to stabilize, Input tax credit was also noticed to be delayed in few cases, which ultimately affected the MSME industry.
  • Goods and services tax disrupted the supply chains, especially in the case of small traders, who were supplying to big manufacturing companies.

Effect on liquidity due to Daily Sales Outstanding (DSO)

Daily sales outstanding refers to the number of days, it takes to collect the payments once you have supplied the goods or services.

According to the reports published in the economic times, daily sales outstanding turned out to be higher, after the introduction of GST registration.

Changes in the cost of borrowing for MSMEs

Most the MSMEs had outstanding inventories, which would be taxed under the new GST regime. However, as these MSMEs lacked compliance infrastructure to have the tax invoices for those inventories.

This lead to the weak credit profile, due to which these MSMEs could not the avail the bank loans, which ultimately pushed them to approach non-banking financing options, And these non-banking financial entities charged a higher rate of interest in comparison to the banks.

Effect on the sales of MSMEs

Because of the introduction of the GST registration, there was a decline in the sales of MSMEs. GST brought more steps, which caused delays in the whole MSME Registration procedure. This also led to high costs, which was not under control.

Future Expectations

Once MSMEs become the part of GST regime, these would be a part of larger compliance climate. There would be a better level of preparedness and discipline in conducting the business.

Our government of India is also committed to providing support to these MSMEs, ultimately would take a positive turn for everybody’s benefit.

These were all the effects of GST registration on MSMEs, but in the long run it would benefit us all.

Source url – https://entersliceindia.blogspot.com/2019/01/what-were-effects-of-gst-on-msme.html

Various exemptions under GST Registration in India

The day GST (Goods and Services Tax) was levied by the Government of India; the country has undergone various economic reforms till then. And not only that, but India has become the sixth biggest economy in the world. Despite this fact, many people are still skeptical about the GST registration and its benefits.

GST is an indirect tax imposed by the Government of India that has replaced all other indirect taxes (VAT, Excise, Sales, Service Tax, and more) imposed earlier by the central and state government on the supply of goods and services.

In this blog, we will come across various exemptions under GST registration. But before that, it’s important to know what people or businesses are eligible for GST registration.

Who is liable for GST Registration in India?

People or businesses falling under special category defined below are liable for GST registration in India. They are:

  • Businesses with a turnover of more than Rs. 20 lakhs in the financial year, while it’s 10 lakh for those in the North-Eastern and hill states.
  • Everybody who is registered under Pre-GST law i.e., Excise, VAT, Service Tax, Sales Tax etc.
  • Casual taxable person (who occasionally supplies goods/services in a territory where GST is applicable but doesn’t have a fixed place of business).
  • Non-Resident person (a person who doesn’t have a fixed business place in India but supply goods/services occasionally in the territory).
  • A taxpayer under the reverse charge mechanism.
  • Input service distributor.
  • A person who drives the inter-state supply of goods.
  • When a registered business is transferred to someone, the transferee shall get the registration done with effect from the date of transfer.
  • E-commerce operator.
  • The person furnishing online information and database access or retrieval services from another country to India, other than a registered taxable person.

Exemptions under GST Registration in India

There are a few people who are exempted from GST Registration in India. They are:

  • Agriculturists

A person who supplies products out of his cultivation land is exempted from GST registration. Other agricultural services such as fertilizers, seeds, irrigation (electricity is required), machinery and more are also free from GST registration.

  • Persons falling under the Threshold Exemption Limit

Businesses with annual turnover less than Rs. 20 lakh are also exempted from GST registration. While, businesses are operated in the North-Easter states and states such as Himachal Pradesh, J&K, and Uttarakhand don’t have to register under GST if their annual turnover is less than Rs. 10 lakh.

  • Activities that include neither Supply of Goods nor Services

Such activities include:

  • Funeral services
  • Services by an employee
  • Services by any court or tribunal
  • Sale of land and building
  • Actionable claims excluding lottery, betting, and gambling.
  • Functions and duties of MPs, MLAs, Municipalities, Chairperson, Directors, and more.
  • Non-taxable/Non-GST supplies of goods and services

Items listed below come under the purview of GST:

  • Alcohol for human consumption
  • Aviation turbine fuel
  • Electricity
  • Petroleum crude and petrol
  • High-speed diesel
  • Natural gas
  • People making Nil-Rated/Exempt supplies of goods and services

Their persons are engaged in supplying common items which are in the exemptions list of GST. A list of such items is as follows:

  • Education
  • Every unprocessed food like rice, vegetables, cereals, eggs, meat, fish, salt, wheat, bread etc.
  • Traveling by train by local and sleeper classes
  • Healthcare (except medicines)
  • Cosmetic items such as bindis, sindoor, bangles, lipsticks etc.
  • Hotels, lodges with room rent less than Rs. 1000
  • Kid’s coloring/drawing books

Source url – https://enterslice1.weebly.com/blog/various-exemptions-under-gst-registration-in-india

Who are Entitled for GST Registration

  1.    A Supplier of taxable goods and services whose turnover in a financial year exceeds the following threshold limit state wise is eligible for GST registration:
S.NO States Threshold limit (in lakhs)
1 North eastern states

(Assam, Nagaland, Manipur, Tripura, Arunanchal Pradesh, Meghlaya, Mizoram, Sikkim)

10
2 Hilly states

(J&K, Himachal Pradesh, uttarakhand

10
3 Other states 20
  1. The following list of persons are required to obtain GST registrationwithout the threshold limit
 S.No Category of person
1 Inter State supplies
2 Persons who are required to pay tax under reverse charge
3 Casual taxable persons
4 Non Resident taxable persons
5 Electronic commerce operators
6 Notified persons who are required to make TDS
7 Persons who supply goods on behalf of other persons whether

as an agent or otherwise

8 Input service distributor
9 Persons who are supplying goods/services through electronic commerce operators
10 Every electronic commerce operator
11 Every person supplying online information & database access

from a place outside India to a unregistered person in India

12 Any other class of persons notified by Government

WHO ARE NOT ENTITLED FOR GST REGISTRATION?

1)    A person whose aggregate turnover in a financial year is below the prescribed threshold limit

2)    A person who is engaged in supplying of non-taxable goods/services or goods/services which  are wholly exempt from GST

3)    An agriculturist (Individual, HUF) to the extent of supply of produce out of cultivation of land

OBTAINING REGISTRATION UNDER GST

Every Person required to GST registration shall obtain it on the GST portal information required within a period of 30 days from the date of his liability to register. However, casual taxable person or a non-resident taxable person (requires self attested copy of Passport) shall apply for registration at least five days prior to the commencement of business

GST Registration is a one-time except for casual taxpayers and non-resident taxpayers, who have to apply for renewal of registration after every 90 days from effective date of registration

DOCUMENTATION REQUIRED FOR GST REGISTRATION

  1.    PAN of the applicant
  2.    Address proof place of business
  3.    Proof of business registration or Certificate or Incorporation
  4.    Identity Proof and address Proof of Promoters in case of Company registration in GST
  5.    Photograph of Promoter
  6.    Bank account Statement

Source url – https://entersliceindia.dudaone.com/who-are-entitled-for-gst-registration

GST- One Government One Tax, This Article On Gst- One Solution

What Is GST Registration?

GST registration is an official regime in which the businesses whose turnover for the business is more than INR 2,000,000 (20 Lakhs) has to register themselves as normal taxable corporate entity. If the organization is not registered under GST regime it will be treated as an offence under the corporate laws and the business will be penalised heavily for it. The normal time period for a business to register itself under GST Regime is between 2-6 Working Days.

Businesses Which Should Register for GST:

  • Corporates and individuals who were registered under the pre GST laws like excise, VAT and Service Tax etc.
  • The businesses whose turnover exceeds the limit of INR 20 Lakhs.
  • Agents of a supplier and Input Service Distributor.
  • All the e- commerce aggregators.
  • The people who supply through e commerce aggregator.
  • People who are supplying the information of any kind of data from a place outside to someone in India, and that person is not a registered taxable person.

Documents Required for GST Registration:

  • The first and prime most important is the PAN of the Applicant without which no GST registration can be done.
  • Then you need to show the Aadhaar card for the applicant.
  • The personal identity proofs of all the directors of the corporate entity to be registered.
  • The proof for address verification for the business location.
  • The bank account statements and also a copy of cancelled cheque is mandatory to have.
  • It is also required to produce the Digital Signature of the directors and applicants.

Penalty for not registering under GST Regime:

In case any business does not register itself for GST Regime, the business will have to pay heavily for the penalty in this case.  The amount of penalty is 10% of the tax amount which has not been duly paid and the minimum subjected amount for this penalty is INR 10,000. If the business is found to do this mistake voluntarily the amount of penalty can be even 100% of the taxation not paid duly.

Process of GST Registration:

The entire GST Registration process is divided here into following basic 11 steps for the better understanding to a common man and they are as follows:

  • You first need to visit the GST portal and click Register on it.
  • Then the second step requires you to fill the details like type of taxpayer, state and district of your location of business, name of the business along with the PAN of the business for which you want to register for GST. The email ID and mobile numbers for further communications and OTPs. Then click on Proceed.
  • You will now be asked to enter the OTP sent on that number you mentioned in the previous detail. Enter and Continue.
  • You will now get a Temporary Reference Number (TRN). Note it for further use.
  • Then you are required to again Go the GST portal and Click Register Now.
  • Choose TRN. Now enter the TRN provided to you over the mail and proceed it further.
  • Again you will get an OTP and you need to enter it and proceed even firther.
  • The status of the application will be shown as Drafts. Click on Edit option.
  • Then you need to fill all the details and submit relevant documents.
  • Then you need to verify the information submitted, go to the verification page and tick on declare and submit the application.
  • You will now get a message for successful registration and also the Application Reference Number.

Source url – https://enterslice.site123.me/blog/gst-one-government-one-tax-this-article-on-gst-one-solution

Concept of Goods & Service Tax in India

If you want to apply for GST but not aware about the concept of GST in India then let’s have a look as before applying for GST registration, one should clearly understand the new tax regime.

GST was implementing on 1St July 2017 in India. GST is a multi-stage and destination based tax in India on the consumption of goods and services. It has subsumed previous tax structure. It has been done for free flow of tax credit on inter/intra state levels. GST is levied on all stages from manufacturing level to the consumption level. Under this, credit of taxes is available as set off which have been paid at previous stages. We can say that tax will be charged on only value addition and final consumer will borne the tax burden. GST will be accrued to that authority which has jurisdiction over the place of supply.

Every business which falls under the eligibility criteria has to apply for GST registration otherwise they would have to pay heavy penalties.

*Note: Place of supply is the place of consumption

GST subsumed previous tax structure:

GST has subsumed center taxes such as

  1. Central Excise duty
  2. Excise Duties (Medicinal and Toilet Preparations)
  3. Additional Excise Duties (Goods of Special Importance)
  4. Additional Excise Duties (Textiles and Textile Products)
  5. Additional Custom Duties (commonly known as CVD)
  6. Special Additional Customs Duty (SAD)
  7. Service Tax
  8. Central Surcharge and Cessin relation to supply of goods and services.

State taxes such as

  1. VAT
  2. Central Sales Tax
  3. Entry Tax
  4. Luxury Tax
  5. Advertisement Tax
  6. Entertainment Tax
  7. Purchase Tax
  8. Taxes on lotteries, betting and gambling

Recommendations shall be made by GST council from time to time.

Commodities not under the purview of GST

Alcoholic liquor for human consumption is outside the purview of GST as per Article 366(12A)of the Constitution of India whereas tobacco products will be subject to Central excise and GST. Tax on electricity consumption and sale fall under the purview of state and not under the GST according to entry 53 in list II of seventh schedule of constitution of India.

Below mentioned petroleum products are temporarily out of the purview of GST:

  • Petroleum crude;
  • Motor spirit (petrol);
  • High speed diesel;
  • Natural gas and
  • Aviation turbine fuel.

*Note: Previous tax structure is applicable on above till the decision of GST council.

GST Model in India

GST act consist following:

  • SGST;
  • CGST;
  • IGST;
  • UTGST;
  • GST (Compensation to States) Act

In India, there is a concurrent dual GST model.  Taxes are levied according to the place of supply of goods & services.

CGST- Payable to Central Government.

SGST- Payable to State Government.

UTGST- Payable to administrator of Union Territory.

*Note: CGST and SGST also applicable in union territories such as Delhi & Puducherry.

SGST or UTGST also applicable on 12 nautical miles inside sea as it is a part of state or union territory. IGST is payable in case supply is in between 12 nautical miles and 200 nautical miles.

IGST is applicable in case of inter-state supply of goods or services. IGST rates are equivalent to addition of CGST and SGST. It is levied by the central government and revenue generated from IGST is distributed among union and state.

Source url – http://enterslice.over-blog.com/2018/05/concept-of-goods-service-tax-in-india.html

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