What is GST?
GST stands as goods and service tax. It is the biggest tax reforms in the country and greatly improving easy of doing business and increasing the taxpayers base simply by bringing in millions of small businesses in the country. Businesses without GST registration would not be permitted to collect GST from a client or customer or claims input tax credit of GST paid or that person can be penalized as well.
Different Types of GST
Before getting into top 10 benefits of GST registration, here is an overview of the four different types of GST.
- CGST– The CGST (Central Goods & Services Tax).
- SGST– The state government of each state in India imposes the State Goods & Services Tax (SGST).
- UTGST– This tax is only meant for the five Union Territories in India.
- IGST– It refers to the application of the tax on the transaction of goods and services between two states. It is also known as the Integrated Goods & Services Tax, IGST is applicable
GST registration under composition scheme
The composition scheme acts as an alternative way for levying a tax under GST. Also, small businesses registered under the GST composition scheme can pay GST at a fixed rate of turnover quarterly and file quarterly GST returns. Additionally, the composition levy would be related to small taxpayers who are supplying goods and services or both to end consumers with low turnover.
Remember, everyone is not eligible to register for GST filing under Composition Scheme. People whose yearly turnover to INR 1.5 crore in a financial year. Except Jammu & Kashmir and Uttrakhand, the turnover for special category states. The limit is now increased to Rs. 75 lacs. The turnover threshold for Jammu and Kashmir and Uttrakhand will be Rs. 1 crore must register under the GST composition scheme.
Top 10 Key Benefits of GST Registration
There are several benefits GST registration in India for company. Top 10 key benefits of GST registration are explained below. Let’s take a look at them.
1) Market Competiveness Increased
Every company that has a GST number has the authority to do trading and business on a broad scale easily. So, a GST registered company has an advantage over the non registered business entities.
2) Procedural Advantages
Some of the procedural benefits include lesser tax filings and uniform formats, lesser revenue leaks and generation of better revenues, clear and transparent rules, ease of bookkeeping, refund of taxes, common tax base and universal system of classification of goods and services.
3) Online Business Expansion
The acquisition of the GSTIN by a company would assist it in competing with larger brands and e-commerce platforms.
4) Get Input Tax Credit
If your company has GST registration number, then it has tax advantages too. You can benefit from input tax credit when you file for GST return online in India.
5) Technology Friendly
Being technology friendly, the whole process of GST registration online and filing it is accelerated. Apart from this, it makes sure the process is clean and tax collection is done legitimately. Some of key activities supported by online GST portals.
6) No Restriction on Interstate Sales
If your company has a GST registration, then you have the benefits of providing your services and products in other states. It will boost the sales of your company and increased the profits tremendously.
7) Proper Accounting of Taxes
It also enables correct accounting of taxes paid on the input goods and services that can be used for payment of GST due on supply of goods and services m or even both the business.
8) Transportation and Logistics Costs Reduced
With the incidence of GST, there is a huge reduction in boarder checks that will reduce transportation time greatly. Also, the interstate movement of goods has become easy now, minimizing transportation and logistics costs. Start-ups and small size businesses have time to improve on their business as well as explore new opportunities after the implementation of GST in India.
9) Ease of e-Commerce Business Operation
For any e-commerce business, the supply of goods across the border cane under variable tax laws. Also, the delivery vehicles crossing borders were needed to produce the essential documents along with the VAT declaration and registration number. If they don’t have required documents, then they have to face a lot of problems like confiscation of goods. GST has more or less eradicated all these issues and paving the way for smooth transactions.
Good and service is a crystal clear tax structure that will help to build a transparent and corruption-free tax administration. Also, licensed retailers do not have a cost or hidden taxes.
The company that does not register under the GST has to face penalty and fine. When the company does not pay taxes, then it is considered as a deliberate error. The business owner has to pay a fine of 10% of the due tax amount. If the person deliberately evades tax, then the penalty amount will be 100% of the due task. If you need any help related to GST registration in India, contact ExpertBells today.