Goods and Services Tax refers to a system of indirect taxation which was introduced by the Indian parliament on 1st July 2017 through the 101st amendment to the constitution. It refers to a single tax system for entire country, unlike multiple taxes that were imposed prior to this such as service tax, VAT, sales tax, purchase tax, entertainment tax, luxury tax, and excise duty and now it has become a necessity for seller to have online GST Registration in Ahmedabad Gujarat . The main objective of this was to create a single indirect tax structure for the entire country as far as practicable, to remove geographical barriers and to ensure free movement of goods between states which were otherwise hindered due to the varied number of taxes imposed, now there are several online GST registration portal across India at service one such portal is Online GST registration in Ahmedabad Gujarat Portal. It is a ‘comprehensive’ system of indirect taxes levied at ‘multiple levels’ of production and distribution of goods and services. The tax is imposed as per the value addition at each stage. As we know, any particular product has to go through multiple levels of manufacturing and distribution before it reaches the consumer as a final product. In GST, the tax is applied on the value added to the existing goods by the manufacturer and therefore it is much more important to have online GST registration in Ahmedabad Gujarat. For example, if the manufacturer buys cloth to make a shirt and the cost of the cloth is 100 whereas the value added to convert it into a shirt is 50, the tax is applicable on this 50 and not the total of cost and value added which is 150.
In order to understand the above example better we need to know about the input tax credit mechanism which deals with the problem of cascading taxes or tax on tax. Input tax credit refers to a mechanism where in purchase tax and tax on sales is adjusted and this difference amount is paid to the government. Therefore, the tax paid on purchase of a certain product is deducted from the tax that is to be payable on the sale of that product after adding some value to it. For example, if manufacturer purchases raw materials for a particular good and he pays 100 tax on this purchase, upon the manufacturing of that product through processing or other necessary steps certain value would be added it. Now if the tax that has to be paid on this manufactured product is 150, this will be deducted from the tax paid to the raw materials purchased (purchase tax). Hence, the tax payable would be 50(150-100). Through this method eligible businesses can reduce their respective tax liability that needs to be paid. In the period pre GST, this input tax credit system could not be claimed on taxes such as central sales tax and luxury tax.
In order to understand the mechanism of GST better, a comparison between the prior tax structure and GST can be considered. In the previous tax system a cascading effect of tax was observed because there was no scope for deducting the input credit or tax already paid on purchase of goods by the manufacturer. This was because input credit system does not permit cross claims of credit between different taxes such as VAT and Excise duty. For example, if a manufacturer purchases wood at the cost of rupees 50 to make furniture and a 10% tax is applied on this, he would have to pay 55. Further if he adds a value of 10 to the wood by manufacturing furniture out of it, the cost to the wholesaler would be 65 and a 10% tax which makes the value of the good 71.5. The wholesaler further adds a value of 10 to the furniture and sells it to the retailer at 10% tax. Therefore, the total cost of the good for the retailer is 78.6. Further if the retailer adds a value of 10, the final cost borne by the consumer would be 86.4. However, through the GST system the price would be lower since the input tax credit is deducted and there is no overlapping of taxes.
For example, If ‘A’ is a furniture manufacturer, he purchases wood as raw material and the cost of the same is rupees 200 which is inclusive of 10% GST that he has paid to buy this raw material. Further, he spends rupees 100 on adding value to the wood and turning it into furniture. Now the value of the product is 300. Applying 10% tax on this value, the tax that needs to be paid is 30. However, under GST this can be set off by using the input tax credit mechanism. The purchase tax paid is rupees 20 and the output tax is 30. Finally the manufacturer has to pay rupees 10 (30-20) as tax. Further, this furniture is sold to the wholesaler at rupees 300 inclusive of GST and if he adds a value of 100, the total value of the product is 400. The tax that is to be paid by the wholesaler is 10(10% of 400 which is 40- 30 which is purchase tax). Similarly of the retailer adds a further value of 100 to the furniture, the value of it to the consumer is 500 and the tax that is to be paid by the retailer is rupees 10 again. Finally, the consumer has to pay rupees 550 which includes a 10% tax on the purchase price.
The implementation of GST is introduced in furtherance of various steps taken in the past to change the indirect tax structure in the country. It was first proposed by Atal Bihari Vajypayee in the year 2000. In 2004 a tax force headed by Vijay Kelkar was appointed to check the fallacies of the tax system and the committee reported by stating that these fallacies would be mitigated through the introduction of GST. Finance minister P Chidambaram set 2010 as the year of implementation of GST. In 2011, the bill was objected to by the opposition and hence it was sent to the standing committee for consideration. Gujarat opposed to the bill because it stated that it would have a huge impact on the income of the state because GST imposed taxes at the destination of consumption and not supply. The bill lapsed and in 2014 the Modi government was brought into power. Arun Jaitly, the then finance minister introduced the GST bill in the parliament which was opposed and then sent to the standing committee. The opposition finally agreed to the bill after certain amendments. GST council was set up to finalize the rate structure and other rules that would be applicable for implementation of the Act.
What are the differences between direct and indirect tax? By GST Registration in Ahmedabad Gujarat Portal
In the introduction to the basic concept of GST we have observed that the tax reform is under the category of indirect taxes. It becomes important to know the differences between direct and indirect taxes so as to understand the applicability of GST. The payment of tax as we know is not voluntary; rather it is enforced by the law. The tax which is paid by the person directly on whom such obligation to pay is vested is known as a direct tax. The best example of direct tax is income tax. The law prescribes different slabs of taxes that need to be paid by the persons or organizations belonging to different income levels and this tax is directly paid by the person who obtains the income to the imposing entity which is the government. Therefore, the burden of direct taxes cannot be shifted by the person who has the duty to pay the same to another person.
In the case of indirect taxes, the categories under consideration are goods and services that is manufactured and delivered by various business entities. Here the burden of tax is ultimately transferred to the consumer as part of the price of goods. Even though the intermediaries who are a part of the production and distribution chain pay taxes, the ultimate burden is shifted to the consumer. The tax burden is shifted by the supplier to the consumer who buys the goods.
In direct taxes, the percentage of tax charged is proportional to the income level of the individual or the organization. Therefore, there is progressive taxation. However, in the case of indirect taxes the paying capacity of the consumer is not taken into consideration and a uniform tax is imposed on the price of the good. This is regressive taxation. If the tax on daily use commodities such as petrol is increased, it is bound to affect the poor rather than the rich. This is not considered in indirect taxes. The exception to this is luxury products because only the rich have the capacity to afford the same.
One of the effects of direct taxes is that it reduces inflation which is the presence of more money in the market than there are goods and services. When the taxes increase the consumption capacity of the individuals decreases thereby reducing inflation. However, if the indirect taxes on goods are services are increased then the price of it also increases thereby causing cost-push inflation.
Indirect taxes help curb consumption because the price of the goods increases. Therefore, the government revises the tax imposed on products such as cigarettes, alcohol and raises its prices to reduce consumption. This reduction in money spent increases savings. However, direct taxes reduce savings and investments.
A Brief – GST registration in Ahmedabad Gujarat
Chapter 6 of the GST Act talks about GST registration in Ahmedabad Gujarat. If a business entity in Gujarat has a turnover more than 20 lakhs then online GST registration in Ahmedabad Gujarat is mandatory. In certain states if the income is more than 10 lakhs, it is mandatory to register. The northeastern states and hilly regions such as Himachal Pradesh and Jammu & Kashmir come under the category of special states and the GST registration in these states must be done if the annual turnover is higher than 10lakhs. The term aggregate turnover is inclusive of all supplies made by a person on his own account or on behalf of the principal for a financial year. Post the GST registration in Ahmedabad Gujarat is completed, a Unique Identity Number is given.
The act exempts people engaged in agriculture from GST registration in Ahmedabad Gujarat if the supply is only from cultivation of their own land. The Act lists out the categories of persons that have to be registered under GST. The persons having registrations under the previous tax regime such as VAT and excise duty would automatically have to register under GST as well. Apart from the income criterion there are other categories of taxable persons who need to register even if they do not fall under the 20 lakhs or 10 lakhs bracket. These categories are-
- A person who supplies goods to various states has to mandatorily register
- A person who does not continuously engage in a business but rather it is seasonal and he occasionally undertakes to supply goods has to register.
- GST registration is mandatory if there is no fixed place of business or residence in the country.
- Persons who are required to pay tax on reverse charge- Generally the suppliers are the persons who pay tax, whereas in reverse charge the receiver becomes liable to pay tax. This applies when a person registered under GST buys goods from an unregistered person, then the buyer who is a registered tax payer has to pay GST on reverse charge. The Government has categorized certain goods and services such as tobacco leaves, silk yarn to fall under reverse charge.
- If a person owns and supplies goods through online portal or e-commerce, then GST registration in Ahmedabad Gujarat is mandatory irrespective of turnover.
- There is also a provision to voluntarily register GST even though the business does not qualify the criterion mentioned.
According to the Act, the GST registration in Ahmedabad Gujarat certificate is issued to a casual taxable person or a person who does not have a constant place of business establishment is valid until the date specified in the application or 90 days whichever is earlier and it is subject to an extension of maximum period of 90 days upon sufficient cause shown.
The GST registration in Ahmedabad Gujarat is cancelled in case of death upon application by the legal heirs or the officer in charge can do so on his own accord. This takes place only when the business is discontinued or transferred or there is change in the constitution of the business. The registration can be cancelled by the concerned officer if registered taxable person has done anything which is contrary to the provisions of the act or if he has not submitted returns for a period of 3 months. The GST registration in Ahmedabad Gujarat is also cancelled when the business is not commenced within 6 months of registering voluntarily or if it has been obtained through fraud.
Different Types of GST Explained By Online GST Registration In Ahmedabad Gujarat Portal
GST is divided into Central Goods & Services Tax (CGST), State Goods &Services Tax (SGST), Integrated Goods &Services Tax (IGST) and Union Territory tax (UTGST). These taxes are applicable based on the location of manufacturer who sells the goods and the buyer who buys the goods. If the goods and services are supplied and bought within a particular state (intra state) then CGST and SGST will apply. However, if the goods and services are supplied and bought in different states (inter-state) then IGST will be applied. State tax would be called UTGST in union territories where there is no legislature.
The IGST is the result of a dual GST model adopted due to the federal characteristics of our country where even states have the power of collecting certain taxes. Prior to GST, inter-state supply of goods and services was governed by the Central Sales Tax of 1956(CST). The problem with this Act was that tax was collected only at the place of supply and not at the place of consumption, even though the tax burden is ultimately shifted to the consumer. For example, if a supplier from Karnataka supplies goods to a person in Uttar Pradesh, the CST allowed collection of tax only by Karnataka even though the point of consumption was elsewhere. Since Input Tax Credit was not allowed, it resulted in cascading effect of taxes to the consumer. In the IGST mechanism SGST is given at the point of consumption because GST is a destination based tax. The rate of IGST would be more or less equal to the CGST rate plus the SGST rate. Import and export comes under this category. Know more about IGST and other types of GST registration in Ahmedabad Gujarat by Online GST Ahmedabad Gujarat Portal.
In the situation where is the goods are supplied within a particular state, the SGST and CGST are applied simultaneously at equal rates to the transaction. If the GST rate is 18%, the CGST and SGST would be 9% respectively. For example, if ‘A’ is a manufacturer of certain goods in Bangalore worth rupees 5 lakhs and he sells this to the supplier ‘B’ at Hyderabad who further sells the goods within his state. Here, the movement of goods from Bangalore to Hyderabad is interstate transfer. Hence B would be paying IGST on the 5 lakhs to A. This tax paid by B can be deducted through the input tax credit method upon further distribution of goods within his own state for which SGST will apply.
Various GST rates By Online GST Registration In Ahmedabad Gujarat Portal
|Nil||Curd, lassi, buttermilk put up in unit container; Unbranded natural honey, tea, wheat, rice, flour, children drawing books, khadi fabric sold through village industries, sanitary napkins.||Charity, chargeable services offered on savings bank deposits accounts opened under PM Jan Dhan Yojana.|
|5%||Milk powder, ultra-high temperature milk, raisin, spices, cashew nut, soya bean oil, groundnut oil, coconut oil, other vegetable oils, Sugar, sweetmeats, Agarbatti, kites, footwear upto rupees 500, Kerosene lantern, coal, desiccated coconut, ayurvedic medicines other than those bearing a brand name, coir products.||Transportation like railways, tour operators, taxi, print media like newspaper and ad space, leasing aircrafts|
|12%||Ketchup and sauces, Tooth powder, LED, Xrays and diagnostic kits for medicinal use, Fixed speed diesel engines up to 15 HP, sewing machine, noodles, kitchenware, drip irrigation system and sprinklers, kerosene brass stove, spectacle frames, handbags and shopping bags.||Rail transportation of goods from a third party other than in Indian Railways, Food at restaurants without AC, Movie tickets less than or equal to 100, construction for the purpose of sale, airfare excluding economy.|
|18%||Sugar confectionery, mineral water, hair oil, toothpaste, soap, other footwear, LPG stove, aluminum foil, printers, staplers, tractor rear tyres, safety and security gadgets, chocolates and food preparations containing cocoa, cosmetics, detergents, washing machine, vacuum cleaners, television up to 68 cm, static converters(UPS), paints and varnishes.||Food/Drinks at restaurant with AC and liquor license, accommodation ranging between 2500 and 5000 per day, catering and party arrangement, theatre and drama.|
|28%||Cement, luxury items, AC, refrigerator, cigarettes, aerated drinks.||Gambling, amusement parks and entertainment events such as IPL, Food/drinks and accommodation at AC 5 star hotels.|
Process of Online GST registration in Ahmedabad Gujarat
The process of online GST registration in Ahmedabad Gujarat has to be done through the online portal. The steps to be followed are-
- The first step is to enter the official GST portal on the browser- https://www.gst.gov.in/ or online GST registration in Ahmedabad Gujarat Portal.
- In the services tab on the portal, ‘registration’ and then ‘new registration’ needs to be selected by the applicant to proceed further.
- The user credentials such as state/UT, district, name of the business, PAN, email address, mobile number and whether the applicant is a tax payer or comes under the categories mentioned has to be selected. OTPs will be sent to the email address and the mobile number.
- The next step is OTP verification. The OTP number that is received on the email ID and mobile number needs to be entered. After this, a temporary reference number (TRN) will be sent to the email and the mobile number. This number has to be recorded by the applicant.
- The next step is to enter into the GST registration in Ahmedabad Gujarat portal again and select the TRN tab within the new registration menu. After entering the TRN number, an OTP will be sent to the email and mobile number after which ‘proceed’ has to be clicked.
- Further in the ‘track application’ menu it will be shown as draft and edit option has to be clicked.
- In the next step the relevant documents have to be uploaded. The documents needed are photographs, proof about the place of business, bank account details, authorization form, identity and address proof of promoters, aadhar card, PAN card, digital signature.
This is an 11 step process wherein the relevant documents as asked must be scanned and uploaded.
- After the submission of relevant documents, the declaration must be signed through uploading the electronic signature on the verification menu. Digital signature certificate (DSC) is mandatory for a company or LLP. At the end, it shows that the application has been submitted successfully.
Major reasons for online GST registration in Ahmedabad Gujarat
One of the most important reasons for introducing online GST registration in Ahmedabad Gujarat is to ensure transparency in the indirect taxation system which was laden with multiple taxes which had to be paid at different times during the year. Since it has brought in voluntary compliance mechanisms by the businesses it widens the tax base. It also increases exports and improves India’s stand in the international market.
Online GST registration in Ahmedabad Gujarat is in consonance with the flagship ‘digital India program’ which focused on transforming India into a ‘digitally empowered society and knowledge economy’. It is a bold step towards realizing the goal of e-governance that was introduced way back in the 1990s. Online GST registration in Ahmedabad Gujarat is a citizen concentric approach which seeks to achieve maximum compliance from business operators and taxable persons in the country. For those people who are not tech savvy, the policy provides for a GST network of IT services which can be provided by various registered institutions.
Online GST registration in Ahmedabad Gujarat and e-filings would ensure that the documents have been submitted in the prescribed form itself and the information given are not incomplete. Since, the process prescribed has to be compulsorily adhered to; there is less scope for circumventing the process and indulging in corrupt practices. If the information given is malafide or false, suitable penalties have been imposed and online registration helps in tracking these irregularities.
Benefits of GST registration in Ahmedabad Gujarat
- Through GST registration it is possible to be legally recognized as a supplier or manufacturer of goods and services. This enables proper accounting of the taxes to be paid and input credit can be claimed for that part of the tax which is already paid.
- Recognizes the power of individual states to impose tax concurrently and simultaneously by clearly demarcating powers between CGST and SGST, thereby being in consonance with the constitutional provisions of federalism.
- Simplifies the system of indirect taxes by subsuming numerous taxes that existed such as excise duty, central sales tax, octroi,VAT etc.
- It does not increase the cost of registered retailers. Hence they would not want to hide any taxable income. It also reduces the cost of business.
- Since the cascading effects of tax or tax on tax is removed through set offs and input credit, it will benefit the final consumer because the prices of goods will be lower
- The distribution of goods over various channels involves different types of services. The previous indirect tax system separated the two channels and imposes different taxes for these two interdependent channels. Through GST registration in Ahmedabad Gujarat, the two systems of production and distribution have been integrates into one system of indirect taxation.
- Unlike the previous system of VAT wherein it was mandatory to register of the turnover was more than 5 lakhs, under the GST registration scheme the threshold has been increased to 20 lakhs and 10 lakhs in some states.
- The composition scheme enables taxpayers who turnover is lesser than a crore and in north-eastern states 75 lakhs to register and pay a fixed rate of turnover. Through GST registration in Ahmedabad Gujarat by this method, the rates of tax are low and there is higher liquidity.
- Through GST registrations, certain provisions have been made for unorganized sectors such as construction and textiles so as to ensure accountability.
- GST registration in Ahmedabad Gujarat also targets e-commerce portals. Their position under the previous indirect tax law such as VAT was not clear since it was not at par with the development in technology.
- It has enabled free trade between states and there is no need to maintain multiple warehouses by the producers or distributors so as to avoid tax, thus reducing the cost of logistics.
- Through GST registration in Ahmedabad Gujarat, compliance with the tax norms have been made easier since it is only through one channel. Previously, the returns for every type of indirect tax had to be paid at different time intervals. Streamlining the system has enabled better and easier way to ensure that the rules are being followed.
- There is a verified channel through which all the tax payers can be tracked after the GST registration process is complete because a unique GST number is provided.
- Since there are punitive provisions in the Act if persons or businesses that are required to register GST do not do so, it ensures uniformity and compliance with the law.
- It is easier for new businesses to start and operate in multiple states. This is because the procedures for online GST registration in Ahmedabad Gujarat is uniform throughout the country unlike the previous system where in multiple compliances were required with VAT regulations to operate in different states.
- GST registrations in Ahmedabad Gujarat have also improved the ease of doing business in India.
- It has the potential of boosting the economy and enables the export of Indian manufactured goods and services as per international standards. This will also give a boost to the make-in India program as initiated by the government because it provides concessions to new start-ups which do not have to mandatorily register unless their annual turnover is more than 20 lakhs.
- Implementation of GST registration in Ahmedabad Gujarat discourages arbitrage which is the practice of buying and selling something immediately due to the higher cost of that commodity in the place sold. This used to happen before because of numerous state taxes that varied from one another, thereby negatively impacting the consumers by imposing a higher cost.
- It boosts domestic demand for goods and services. It also improves the job prospects.
- It enables the citizens to be more aware about the costs that they are paying for buying a particular commodity. Since the entire process is streamlined it reduces the confusion about the money paid towards tax on a particular commodity.
Documents required for Online GST registration in Ahmedabad Gujarat
- GST registrations in Ahmedabad Gujarat are linked to the PAN card of the applicant; therefore it has to be submitted.
- The documents such as driving license, PAN card, aadhar card, passport, voters ID can be submitted for the purpose of address and identity proof. In case of a proprietary concern the details of the proprietor needs to be given. In a partnership firm or an LLP the personal details of 10 partners including that of the Managing partner needs to be submitted. In a Hindu Undivided Family the details of the karta needs to be given. In a company the personal details of Managing director, directors and other authorized persons need to be submitted.
- Proof that the business has been registered needs to be submitted. However, this is not essential for a sole proprietorship or partnership because the business establishment and the person who establishes it are considered to be the same. In case of a company, the registration proof of business needs to be submitted because it is a separate legal entity and it is distinct from the persons who manage it. Certificate of incorporation will function as a proof for this.
- In cases where it is not a casual business and there is a fixed place where the business operates, address proof has to be submitted for the place of business. Documents such as khata and property tax receipt have to be given to prove ownership over the property. In case of rent, the rental agreement must be attached.
- Information and proof about the permanent bank account needs to be provided. Bank account number, first page of the pass book, IFSC number needs to be provided.
- Digital signature is necessary from the person who manages the business such as the karta of HUF, managing partner of a proprietorship or CEO of a local authority.
- In the case of a non-registered taxable person (NRTP) who supplies goods to India occasionally, an Indian who would be an authorized signatory has to be appointed, NRTP and visa details have to be provided.
Know About GST registration certificate By GST Registration in Ahmedabad Gujarat
Since the registration process of GST is online on GST registration in Ahmedabad Gujarat Portal, the government does not issue any hard copy of the certificate. Therefore, after GST registration the certificate for the same has to be downloaded from the website itself. After the login into GST portal, under services menu ‘user services’ has to be selected and the certificate can be downloaded from ‘view/download certificate’ menu. It contains all the requisite information about the business.
This entire mechanism of online GST registration in Ahmedabad Gujarat brings in uniformity within the system and it benefits the businesses, consumers as well as the government. Since the mode through which the GST registration in Ahmedabad Gujarat has to be made and the payment of taxes is online it reduces discrepancies and increases transparency in the system of indirect taxes. Since compliance can be ensured and it is easier for the business entities to pay tax and claim input credit, it reduces transaction costs of a business. This increases efficiency and competitiveness. Even for the consumer, there are no hidden taxes and prices of commodities are lower than before.
FAQs Related to GST Registration In Ahmedabad Gujarat
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