GST stands for Goods and Services Tax. It's a tax in India that replaced several older taxes like the tax on goods (excise duty) and the tax on services. The law for this tax was made official on 29th March 2017 and started being used from 1st July 2017. Simply put, GST is a tax added when goods or services are sold. It's added at each step of making or selling something and is based on where the item is finally used or bought. This tax is the same for the whole of India.
GST act mandates that all entities involved in selling goods or providing services or both are mandatorily required to get themselves registered under the GST only when the entity crosses a minimum threshold turnover limit or when an individual starts a new business that is expected to cross the prescribed turnover. Although a person can also voluntarily register itself under GST.
Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting taxes on behalf of the government and to avail Input tax credit for the taxes on his inward supplies.
GST registration is a crucial step in efficiently running your business. It not only enhances your brand's credibility and authenticity but also ensures your business complies with legal requirements. If a company's annual turnover surpasses Rs. 40 lacs, it is mandated to register as a regular taxable entity under the GST regulations.
Without registration, a person can neither collect taxes from his customers, nor claim any input tax credit of tax paid by him.
A ‘taxable person’ under GST is s a person who carries on any business at any place in India and who is registered or required to be registered under the GST Act. Any person who engages in economic activity including trade and commerce is treated as a taxable person.
