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FAQ On Goods and Services Tax

Most frequent questions and answers

Yes, you can apply for GST Registration online. You can simply register your business on the official GST portal and then scan and upload all the required documents. You will then receive an acknowledgement. A GSTIN will be generated on acceptance of the application and a temporary password and login will be sent. GSTIN is a unique 15-digit ID.

A GSTIN Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura must get a GST registration if their supply turnover exceeds Rs. 10 lakh. As mentioned above, this threshold limit applies only to businesses that operate within their home state. A business that conducts trade with another state must seek registration regardless of turnover.

The exemption limit is a supply turnover of Rs. 20 lakh for businesses in all except for the Indian states in the northeast region. Businesses in Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, and Tripura must get a GST registration if their supply turnover exceeds Rs. 10 lakh. As mentioned above, this threshold limit applies only to businesses that operate within their home state. A business that conducts trade with another state must seek registration regardless of turnover.

The composition scheme under GST would be applicable to businesses with a turnover of up to Rs. 50 lakh. Small businesses with turnover less than Rs. 1 crore* (Rs. 75 Lakhs for Northeastern states) can opt for composition scheme. Such taxpayers would pay a fixed percentage of its turnover and cannot avail of the benefits of input tax credit. Such businesses cannot collect tax from its customers. The floor rate of tax cannot be less than 1%.
*GST Council has decided to increase the limit to Rs. 1.5 crores but official notification is awaited.

Composition dealers are required to pay tax based on their business types.

  • They need to file only one return on a quarterly basis. Whereas normal taxpayers are required to file three returns on a monthly basis.
  • Composition dealers cannot collect taxes from customers
  • They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
  • No input tax credits can be claimed

Persons who are not eligible for GST composition scheme include:

    • Service providers (except restaurant owners)
    • Non-taxable goods suppliers
    • Sellers operating through an e-commerce platform
    • Suppliers involved in the inter-state supply of goods
    • Manufacturers of notified goods

Yes, GST applies to all service providers, manufacturers, and traders. It extends to any dealers, bloggers, and writers, earnings from Google AdWords through PayPal, import-export businesses, all kinds of startups and companies, whether they are LLPs, proprietorships, partnerships or private limited companies. It also applies, regardless of the threshold limit,

  • Businesses operating outside their home state
  • A business not registered to the state
  • Businesses paying a reverse charge
  • Input service distributor
  • E-commerce operators
  • Aggregators selling services under own brand name (Ola, for example)
  • Online sellers
  • Suppliers or agents
  • Under the GST regime, only one registration is allowed against one PAN. However, businesses, which operate in more than one state must have
  • When a person runs a business in more than one state, then he must have a separate GST registration for each state.
  • If the business has multiple verticals within a state, then the registration has to be done for each business vertical.

ARN which stands for Application Reference Number is generated
ARN stands for Application Reference Number. It is the conclusive proof of successful submission of the application to the GST servers. It is generated after the TRN (Temporary Reference Number) & uploading of requisite documents.

No. Jobaaj.com completely provides the GST registration service online. So, you need not have to be physically present during the registration process. All we need is just a computer or laptop or phone, Internet connection, and the required papers. We can get the job done for you, even if you are at the remotest location in India.

GST comprises of five laws:
  • Central GST (CGST) law
  • State GST (SGST) law
  • Union Territory GST (UTGST) law
  • Integrated GST law
  • Goods and Services (Compensation to State) law
CGST

CGST is imposed by the Central government and is payable to the Centre. CGST subsumes all central taxes like Central Excise duty, sales tax, service tax, countervailing duty (CVD), special additional duty (SAD), additional excise duties, excise duty levied under the medical and toiletries preparation act and other indirect taxes. The applicable GST rate for goods and services is equally divided among CGST and SGST.

SGST

Taxes under SGST are imposed by the state or union territory and is applicable to all goods and services wherever the transaction happens. The SGST is levied on all states, and two union territories Delhi and Puducherry as they have their own legislature, along with the CGST. The SGST subsumes State VAT, Central sales tax, Luxury tax, etc.

Union Territory GST

In GST, there are two types of taxes, namely intrastate and interstate taxes which are levied on the supply of goods and services by the central and state governments, respectively. In addition, within the Union Territories, there is a separate tax called Union Territory GST according to the UTGST Bill. The state GST will not be applicable.

The UGST is levied on all the seven Union Territories within India. They are:

  • Puducherry
  • Delhi
  • Daman and Diu
  • Lakshadweep
  • Dadra and Nagar Haveli
  • Andaman and Nicobar islands
  • Chandigarh

As Delhi and Puducherry are known as semi-states and have their own legislature, the state GST is only levied and not the UTGST. This is in line with the Constitution’s definition of “states”, where any union territory that has its own legislature is a state.

Here when a trade supplies goods within the states of Delhi or Puducherry, the central and state GST shall be applied. If the supply happens from Delhi or Puducherry to another state or a union territory then the interstate GST shall be applied.

Integrated GST

The tax that is levied on the interstate supply of goods and services is known as IGST. Earlier, the trade or commerce between the states was regulated as per the Central Sales Act 1956 and it was then replaced by the IGST Act. IGST is applicable for both – goods and services that are imported into India and exported from India. Exports would be zero rated and the tax will be equally divided among the Central and State government.

 

The GST Compensation Bill was passed on August 2018 to provide compensation for states that might have faced any loss in revenue due to GST implementation. Under this act, the central government levies a GST Compensation Cess on the supply of certain goods and services and the receipts from the cess go to the GST Compensation Fund. This amount is then used to compensate the states for any loss in their revenue due to GST. After five years from the date, the state enforces the SGST, any unutilized money in the Fund is dispersed in such a way that 50% goes to the states in proportion to the total revenue; the remaining 50% goes to the centre’s pool of taxes.

If at any time during the transition period, there is any unutilized amount in the Fund, then 50% of it will be distributed between the states in proportion to their revenue in a base year. The remaining half will go to the centre’s pool of taxes.