Your annual turnover must exceed ₹40/20 lakhs to be eligible for GST registration. You must offer products and services across state lines or through an e-commerce platform to be eligible for GST registration. Read this article to know more.
The establishment of the Goods and Services Tax (GST) in India has significantly impacted how new businesses are established and run. As you lay the groundwork for your new venture, remember that GST registration is mandatory for startups, ensuring your company starts on the right foot. Your annual turnover must exceed ₹40/20 lakh to be eligible for GST registration. You must offer products and services across state lines or through an e-commerce platform to be eligible for GST registration. It is mandatory to register for GST for startups. With the new tax reforms in place, it’s important for founders to note that GST registration is mandatory for startups.
The Goods and Services Tax (GST) has eliminated certain indirect taxes and consolidated everything under a single, broader roof. It was implemented under the slogan “One Nation, One Tax” to simplify compliance procedures for enterprises, particularly for startup companies. Being aware that GST registration is mandatory for startups can save new businesses from potential penalties and legal complications down the line
Examine how the Goods and Services Tax (GST) has impacted entrepreneurs and whether there are any new GST status requirements including the GST registration documents that startups must adhere to. In terms of tax rates, they range from 0% to 28%, depending on the sort of goods and services being sold.
When does India’s GST registration become obligatory?
India’s GST registration becomes obligatory in the following situations;
- All taxpayers with a yearly turnover of more than ₹40 lakhs must register for GST again
- It’s essential to register for GST if you want to sell goods and services at events or exhibitions that don’t require a fixed location for your business. Such a dealer must pay GST based on a 90-day estimate of sales. Temporary GST Registration status is valid for 90 days
- If a non-resident Indian (NRI) wants to start a business in India, they will need to register for GST registration in India. A new GST registration status is only valid for 90 days after the creation
- Supplier agents and input service distributors: GST registration is required for all input service distributors who wish to carry forward the benefit of the input tax credit
- GST Registration is required for businesses that use the reverse charge system
The GST Registration Barrier has been Raised
Taxes were previously required for businesses that made more than ₹5 lakhs in a year before introducing Goods and Services Tax (GST). Companies with more than ₹40 lakhs yearly are obliged to register with the Goods and Services Tax (GST). For service providers, the maximum is ₹20 lakhs.
Many small enterprises, especially startups, in India have benefited from the increased GST threshold.
GST in India has also established a composition system for Indian small enterprises. Businesses with annual sales of less than ₹1.5 crores are eligible for a lower tax rate under this plan.
Before registering, you may figure out how much GST you owe by using our GST Calculator.
Purchases are Eligible for a Tax Credit
The service sector accounts for a sizable portion of Indian startups. They had to collect and pay service tax to the Government before introducing the GST. One of the main fears was that VAT paid on corporate purchases would not be put to good use. There was no way to deduct the state VAT paid from the service tax.
The issue has been remedied due to the introduction of the Goods and Services Tax (GST). For example, a startup can deduct the GST tax they pay on purchases (such as office supplies) from the tax they pay on their sales.
Why Should I Register for GST?
There are a lot of benefits for businesses that register for GST, including the fact that they are officially recognized as legitimate business entities, and GST registration status keeps the company legally updated. There are several benefits to being a GST-registered firm, including:-
- As a result of your tax registration, you’ll be able to compete more effectively with your unregistered rivals
- You can’t sell goods or services on an e-commerce site until you’ve registered for GST such as Flipkart, Amazon, Paytm, Shopify, or your website; you must have a GSTIN number
- Only registered GST holders can claim input tax credits on purchases and save money.
- There are no restrictions on where you can sell in India
- You can’t trade over state lines when you don’t have your GSTIN. Only a GST-registered firm can accomplish this. It is required to apply for some government tenders that require a GSTIN number. There is a risk of missing out on a business opportunity if you do not have GST in India
What is the Purpose of the GSTIN Number?
The abbreviation GSTIN stands for Goods and Service Tax Identification Number. There are 15 letters and numbers in all. Following successful GST registration, the Government generates this document.
The Process of Registration & Filing Tax Returns
People no longer have to hurry from one tax office to another to submit paperwork and get an identification number. The GST registration and return filing process are now online, making it speedy and straightforward. A registration number can be obtained in seconds if all required paperwork is readily available.
With the introduction of the Goods and Services Tax (GST), cash-strapped startups are in for a financial windfall. The introduction of the Goods and Services Tax (GST) in India has given startups and small businesses a much-needed break.
Documents that are Needed to Register for GST
The following documents are needed to register for GST.
- The PAN Card of the business or person who wants to get a loan: is linked to the business’s PAN number: – The GSTIN is the same as the PAN number. To get a GST certificate, you need to have a PAN number
- Identity Proof: People who start a business must show proof of their identity and address, like a PAN card, passport, driving licence or voter ID card
- Address Proof: If you’re applying for GST, you’ll need to show that your address is where your business is going to be. This could be a rental agreement, a sale agreement, copies of your electricity bill or the most recent property tax receipt or municipal khata
- Bank Account Proof: If you want to start a business, you’ll need to show proof of your bank account. You’ll need to send in a scan of the first page of your bank passbook, which offers a few transactions and your business’s address and helps you with GST status.
How can Small Businesses Streamline the Billing Process?
An innovative product that can help you generate GST-compliant invoices in minutes
- Invoice creation: Making an invoice by creating multiple invoices is simple because of the platform’s intuitive design. Only the value and GST applicable must be entered, and the information of products or services is given. The forum will generate an invoice for you as soon as you click the “Create Invoice” button
- Send a message to your client: Sending an SMS or email to your consumers with a unique link to your GST-compliant invoice is an option
- Payments will be sent to your account: After that, your clients can go ahead and make the amount right away. Your customers can download and save the invoice for their records as an added convenience. To ensure that your business procedures are being followed appropriately, you can even make partial payments on an invoice transparently.
There is several helpful consumer information, like the GST status of a customer’s bills and how quickly they’ve been paid
