Goods & Service Tax Registration
GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
Goods & Service Tax Registration is a tax registration required for businesses providing services in India. Service tax registration is an indirect tax wherein the service provider pays the tax and recovers the same from the recipient of the taxable service. At present, Goods & Service Tax is levied at 5% to 28% on the value of the taxable service. This includes Education Cess @ 2% on the service tax amount, and Secondary and Higher Education Cess @ 1% on the service tax amount.
- Common return would serve the purpose of both Centre and State Government.
- There are eight forms provided for in the GST business processes for filing for returns. Most of the average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return.
- Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis.
- Filing of returns shall be completely online. All taxes can also be paid online.
The major features of the proposed registration procedures under GST are as follows:
- Existing dealers: Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST.
- New dealers: Single application to be filed online for registration under GST.
iii. The registration number will be PAN based and will serve the purpose for Centre and State.
- Unified application to both tax authorities.
- Each dealer to be given unique ID GSTIN.
- Deemed approval within three days.
vii. Post registration verification in risk based cases only.
- For business and industry
- The Additional Duty of Excise or CVD and the Special Additional Duty or SAD presently being levied on imports will be subsumed under GST. As per explanation to clause (1) of article 269A of the Constitution, IGST will be levied on all imports into the territory of India. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.
o Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
o Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
o Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
o Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.
o Gain to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
- For Central and State Governments
o Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far.
o Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
o Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.
- For the consumer
o Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
o Relief in overall tax burden: Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.
At the Central level, the following taxes are being subsumed:
- Central Excise Duty,
- Additional Excise Duty,
- Service Tax,
- Additional Customs Duty commonly known as Countervailing Duty, and
- Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed:
- Subsuming of State Value Added Tax/Sales Tax,
- Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
- Octroi and Entry tax,
- Purchase Tax,
- Luxury tax, and
- Taxes on lottery, betting, and gambling.
Service Tax registration is mandatory for every person or business in India that has provided a taxable service of value exceeding Rs.9 lakhs, in the previous financial year. Service Tax Registration is required for identification of the assessee, deposit service tax, file service tax returns and undertakes various processes required under the Finance Act, 1994. Failure to obtain service tax registration would attract penalty in terms of section 77 of the Finance Act, 1994.
Goods & SERVICE TAX HIGHLIGHTS
Small Scale Service Providers
Small scale service providers who provide taxable services of less than Rs.20 lakhs in a year is wholly exempted from service tax and service tax registration.
Goods & Service Tax Registration
Goods & Service tax registration must be obtained by any person who provided a taxable service of value exceeding Rs.20 lakhs, in the previous financial year. Failure to obtain service tax registration can result in penalty
Goods & Service Tax Return Filing
Service Tax Return Form ST-3 must be filed twice in a month. Return for the half year ending 30th September and 31st March are required to be filed by 25th October and 25th April, respectively.
Goods & Service Tax Payments
Service Tax Payments must be deposited in designated banks quarterly in case of Proprietary Firms or Partnership Firms and monthly in the case of Companies, Trusts, Societies, etc.,
NO Service Tax on Exports
For services exported from India, service tax is not applicable. Therefore, exporters of service are not required to pay service tax. However, it is advisable for service exporters to obtain service tax registration.
Automatic Registration
In the case of Form ST-2, Registration of Goods & Service Tax is not issued within seven days of the filing of Form ST-1 with all the relevant documents, the service tax registration is automatically deemed to be granted.