Sunday, December 3, 2023
Home > Business > GOODS AND SERVICES TAX (GST) : A Brief


In India, we as a citizen have to pay two types of taxes i.e. Direct tax and Indirect tax. Goods and Services Tax (GST) is a type of Indirect tax which has replaced many other indirect taxes in India.  The Goods and services tax act was passed by the parliament on March 29th, 2017 which came into effect on July 1st, 2017. In the year 2000, a committee was set up to draft GST law and it took its final form in 2017, therefore it took 17 years to come into its real application in India.

It is basically levied on the sale of goods and services. Now it is the only indirect tax charged on the sale of goods and services on its value addition replacing various other previously existing indirect tax laws in India.

Goods and Services Tax is a multi – stage and destination based tax law which is levied at every point of sale of goods and services. Central GST (CGST) and State GST (SGST) is charged in case of transactions occurring intra – state while in case of inter – state, Integrated GST (IGST) is charged.

The production of goods and services goes through many stages from manufacturer to final sale to the customer. Thus GST is levied at each stage, making it the multi – stage tax. Goods and Services Tax is charged only to the value added at each stage by the seller. Also, Goods and services Tax is levied at the point of consumption, hence it is destination based.

  • What is CGST, SGST & IGST?
  1. CGST means Central Goods and Services tax and SBST means State Goods and Services tax. When there is a transaction that takes place intra state i.e. within a state, CGST & SGST is levied. A transaction where buyer and the seller are located in the same state, seller collects CGST & SGST from the buyer. The Central and the State governments, both agree to combine the charges in an appropriate proportion for sharing the revenue on a sale of goods and services that takes place intra-state but the tax rate should not exceed 14% each.
  1. IGST means Integrated Goods and Services Tax which is charged on sales that take place between two or more states. This is levied when the location of the buyer and the seller is in different states. When an export or import of goods or services takes place and when the supply of goods or services is done to or by a SEZ unit, the deal is presumed to be Inter-State and IGST is charged. A seller collects IGSTfrom the buyer in case of inter – state transactions. The taxes have been segregated for the fact that both central and state government need to raise funds for their development and offering services and responsibilities.
  • Why I need for GST Registration in India? 
  1. A person carrying out taxable activities in India need to register for GST.
  2. Anyone who performs business in any part of India needs to register for Goods and Services Tax.
  3. Any person who is engaged in trade and commerce activities in India are needed to register for it
  4. Any firm, company, individual, LLP government company, etc. are under obligation to register under it.
  5. Goods and Services Tax registration is necessary to continue the commercial activities in India.
  6. Registration under GST is mandatory for few businesses. If the organization undertakes a business without registering under the same, it will be considered to be a crime under the law and heavy penalties are charged on non GST registered companies.
  7. Generally, GST registration takes 4-6 working days for the completion of registration process. Company Vakil can help you to get registered under GST in 2 working days charging a nominal fee
  • Who should register for GST?
  1. Person who is already registered under previously established laws (i.e., Excise, VAT, Service Tax etc.)  is needed to register under GST as well.
  2. If the turnover of the business in a financial year exceeds Rs. 20 lakhs (Rs. 10 lakhs for North Eastern and hill states), they need to register under GST.
  3. In case of transfer of business, the person to who it is transferred will have to register under the same.
  4. Anyone who supplies online information and database access or other services from a place outside of India to the person residing in India, other than a registered taxable person also has to register himself under the laws.
  5. Person driving inter-state supply of goods will be required to register for GST.
  6. A casual taxable person who irregularly supplies goods or services in a territory where GST is applicable has to register for the same.
  7. Non-Resident taxable person
  8. Agents of a supplier are also needed to register under Goods and Services tax norms.
  9. People who are paying tax under the reverse charge mechanism will be required to get themselves registered under it.
  10. Supplier of the goods/services which receives tax invoices on receipt of input services and issues tax invoices for the purpose of distributing the credit of CGST/SGST/IGST paid on the said services to the branch with same PAN is required to register for it.
  11. E-commerce operator or aggregator needs to register for GST if the total sales exceed Rs. 20 lakhs.
  12. Person who supplies through e-commerce aggregator
  • GST Registration Process in India

At, you may avail services to get your business registered under The Goods and Services Tax Law and get your Goods and Services Identification Number (GSTIN).

Experts at Company Vakil guides you on its applicability and guidelines to be followed under GST for the business. Registration process for the same is online through a Central Govt. of India portal. Following is the GST registration Process in India:

  1. Applicant will have to submit his PAN number, valid email id and phone number in the PART – A of the GST REG – 01 form on the GSTN portal.
  2. After submitting the details, verification of PAN, Phone Number and Email id is done and the application reference number is sent to the registered mobile number and email id. In the GST REG – 02 form, an acknowledgement is issued electronically.
  3. After filing the required details and reference number in PART – B of GST REG – 01 form, applicant will have to submit the form.
  4. For additional information GST REG – 02 form is required to be filled further.
  5. After this, GST REG – 04 form needs to be submitted in 7 working days with required information after receiving GST REG – 03 form.
  6. In the form of GST REG – 06, the registration certificate will be provided.
  • Documents Required for GST Registration 

Following are the necessary documents required to be submitted while GST registration process:

  1. Scanned copy of first page of bank account passbook mentioning few transactions and address is to be submitted.
  2. Another most important document is the address proof where the business is needed to be conducted. It can be rent agreement or sale deed along with NOC from the owner.
  3. A business registration document/ certificate need to be submitted for authentication like MoA, AoA or partnership deed.
  4. PAN card of the applicant.
  5. Address proof of the owners or promoters and list of directors with their address proof.
  6. Cancelled cheque of the bank having IFSC Code, bank branch details, MICR code or account holder’s details.
  • Fee for GST Registration

GST Registration is lengthy and time consuming 11 step process which involves filling various details, submitting documents and scanned certificates.

Company Vakil charges a nominal fee of Rs. 1799 to register for GST. You can opt for the expert advice from Company Vakil and their experts will be there to assist you at each step.

  • Penalty for Not Registering under GST
  1. Those who are not registered under it are subject to the penalty of 10% of the total of the tax amount to a minimum of Rs.10,000.
  2. The penalty will be charged at 100% of the tax amount due if the lawbreaker has purposely evaded from paying taxes.