Finally a new tax law, GST has been come to India on 01.07.2017 that replaced all other indirect taxes. But the big question is,
Who need to register under GST ?
Hope you already known that all existing taxpayers of VAT, Service tax , CST & other indirect taxes are need to register under GST.
Taxpayers, whose annual turnover exceed Rs. 20 lakhs ( Rs. 10 Lakhs for some states ) are need to register under GST.
Before registration, please take a look on GST rate chart & exemption list of Goods & Services
But the discussion is not over. If you are thinking that all traders whose annual gross turnover is below 20 lakh are exempted from GST, you are wrong. Now the question is,
Are all the traders whose annual turnover is below 20 lakh, exempted from GST ?
A trader dealing only in exempted goods or where his turnover is below 20 lakh, but not engaged in inter-state supplies ( i.e. sale to another state) is not required to register under GST.
So, in case of intra-state transaction ( Sale within state ) if your annual gross turnover is below 20 lakh, you will no need to register under GST.
But, In case of Inter-state transaction ( Sale to another state ) you need to register under GST, even if your annual gross turnover is below 20 lakh.
Now a question arises that,
Do all the traders need to submit 3 types monthly returns ?
Hope you already heard that registered taxpayers need to submit 3 types of monthly returns at GST portal. You may worried to think about maintenance of detailed accounting records.
But if your annual gross turnover is below 1.5 cr and you are not engaged in Inter-state transaction, you do not need to worry. You just need to submit one return quarterly ( 1 return for 3 months ) in GSTR-4. This is called GST composition scheme.
If your income exceeds Rs. 1 Crore, you will not enjoy the composition scheme and in that case you need to file 3 types of monthly returns.
Now the question is,
*What is Composition scheme under GST ?
The government has introduced a simplified process for small and medium traders in the name of GST Composition Scheme.
According to this scheme, if your annual gross turnover is below 1 Crore (as per GST council's 22nd meeting) you need to file a summarized return in each quarter instead of three types monthly returns.
*Who are eligible for GST composition scheme ?
Businesses deal in goods, only eligible for composition scheme. Service providers are not eligible for composition scheme. However restaurant sector taxpayers are eligible for this scheme.
Remember, above rule is applicable only if your annual gross turnover is below 1 Crore (as per GST council's 22nd meeting)
*What is the tax rate for GST composition scheme ?
*How the taxation system is different for Composition scheme ?
A person registered with GST composition scheme are not allowed to
Who need to register under GST ?
Hope you already known that all existing taxpayers of VAT, Service tax , CST & other indirect taxes are need to register under GST.
Taxpayers, whose annual turnover exceed Rs. 20 lakhs ( Rs. 10 Lakhs for some states ) are need to register under GST.
Before registration, please take a look on GST rate chart & exemption list of Goods & Services
But the discussion is not over. If you are thinking that all traders whose annual gross turnover is below 20 lakh are exempted from GST, you are wrong. Now the question is,
Are all the traders whose annual turnover is below 20 lakh, exempted from GST ?
A trader dealing only in exempted goods or where his turnover is below 20 lakh, but not engaged in inter-state supplies ( i.e. sale to another state) is not required to register under GST.
So, in case of intra-state transaction ( Sale within state ) if your annual gross turnover is below 20 lakh, you will no need to register under GST.
But, In case of Inter-state transaction ( Sale to another state ) you need to register under GST, even if your annual gross turnover is below 20 lakh.
Now a question arises that,
Do all the traders need to submit 3 types monthly returns ?
Hope you already heard that registered taxpayers need to submit 3 types of monthly returns at GST portal. You may worried to think about maintenance of detailed accounting records.
But if your annual gross turnover is below 1.5 cr and you are not engaged in Inter-state transaction, you do not need to worry. You just need to submit one return quarterly ( 1 return for 3 months ) in GSTR-4. This is called GST composition scheme.
If your income exceeds Rs. 1 Crore, you will not enjoy the composition scheme and in that case you need to file 3 types of monthly returns.
Now the question is,
*What is Composition scheme under GST ?
The government has introduced a simplified process for small and medium traders in the name of GST Composition Scheme.
According to this scheme, if your annual gross turnover is below 1 Crore (as per GST council's 22nd meeting) you need to file a summarized return in each quarter instead of three types monthly returns.
*Who are eligible for GST composition scheme ?
Businesses deal in goods, only eligible for composition scheme. Service providers are not eligible for composition scheme. However restaurant sector taxpayers are eligible for this scheme.
Remember, above rule is applicable only if your annual gross turnover is below 1 Crore (as per GST council's 22nd meeting)
*What is the tax rate for GST composition scheme ?
*How the taxation system is different for Composition scheme ?
A person registered with GST composition scheme are not allowed to
- Avail Input Tax Credit: Input tax credit means the difference of output tax and input tax, that is need to pay to govt. Output Tax - Input Tax = Input tax credit. For example. if Input tax (Purchase) is Rs. 200 and Output tax (Selling item) is Rs. 400, then you need to pay Rs.(400-300)=Rs. 100 to the govt, as Rs. 300 has already been paid to govt at the time of purchase in the form of input tax. Composition scheme users are not avail input tax credit.
- Issue Tax Invoice: As a composition dealer is not avail input tax credit, he cannot issue tax invoice. Buyers from composition dealer will not be able to claim input tax. A composition taxpayer can issue a bill instead of tax invoice to the buyers.
- Collect Tax from Buyers: Composition dealer is not allowed to collect composition tax from buyer. He need to pay the percentage of tax on his sale value. The simple process is, he may increase the sale value of the product. Don't worry, composition scheme users have a chance to make more profit than normal taxpayers.
- Pay reverse Charge : Reverse charge means the liability to pay tax by the recipient of goods/supplies instead of supplier. Composition taxpayer are not liable to pay this reverse charge. This charges are applicable in case of normal taxpayer.
- Inter-state transaction : Composition scheme users are not allowed for inter-state transaction. Only they are allowed for intra-state transaction i.e. sale within state.
*Which returns are need to be file by Composition taxpayers ?
Composition taxpayers need to file only one return i.e. GSTR-4 per quarter and one annual return in GSTR 9You may also read about Digital Signature Certificate & e-sign for GST
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