Frequently Asked Questions
1. What is GST?
Goods and Service Tax is a tax proposed to be levied on supply of goods and services right from the point of manufacturing to final consumption by user. In short it is a destination based tax accruing at the place of sale/supply.
2. Do I need to get registered under GST law?
A business entity that is currently registered under any of the existing tax regimes then you are compulsorily required to migrate under GST law irrespective of the threshold limits.
But if you are supplying goods and services and not registered under any existing tax legislative then you are liable to register only if the aggregate turnover in any financial year exceeds the threshold limit.
3. What are the threshold limits for registration?
Every supplier of goods and services is required to get registered under GST if his aggregate annual turnover during the financial year exceeds 20 lakhs (for North Eastern States the threshold limit is 10 lakhs).
4. Who is exempted from registration even if threshold limit is reached?
Suppliers who are engaged in supply of following goods or services listed below:
- Exempted Goods (list will be notified by GST Council)
- Goods like liquor for personal consumption, petroleum products etc
- Importing services for personal use as reverse charge will not be applicable.
5. Is Threshold limit for registration applicable for everyone?
No, the below listed category of suppliers will have to get registration even if they do not exceed the threshold limit:
- Casual Taxable Person
- Non Resident Person
- Business engaged in inter-state supply of goods and services.
- Those who are required to deduct TDS u/s 46 or collect TCS u/s 56
- Input Service Distributor
- Electronic commerce operator supplying goods and services directly or acting as intermediary to promote exchange (list of specific goods and services will be prescribed for this purpose).
- Person supplying data management services irrespective of whether located in India or not.
Thus above person will have to get registered even if their aggregate turnover during a financial year does not exceed the threshold limit.
6. If have business establishments in different states can I apply for a central registration?
No, there is no concept of central registration under GST. Every person will have to obtain a separate registration for every state in which he has a business establishment whether by same name or a different name. Even if person is having same PAN number and has operations in different states every operational unit will have to apply for separate registration.
7. If I have multiple business units within the same state will I be liable to get separate registrations?
Yes, business units even though registered with the same name and under the same PAN will have to apply for separate registration for each such unit within the same state.
8. What is composition scheme?
This scheme is introduced for small tax payers to reduce the compliance burden on them. Business registered under composition scheme will be liable to pay tax only to a maximum of 2.5% for manufacturers and 1% for other than manufacturers. They would not be part of credit chain and hence cannot collect any tax from consumers.
9. Am I eligible for registration under composition scheme?
Only those persons whose annual turnover is below 50 lakhs in preceding financial year and who is supplying goods and services within the same state only are eligible to apply for composition scheme. If supply of goods and services are effected inter-state then this scheme won’t be available for that person.