What beginners need to know about GST
If you are clueless on the Goods and Services Tax (GST) bill, this is what you ought to know as a beginner.
What is the GST bill?
The GST bill was implemented in July 2017. It is a new tax structure meant to replace the previous tax structure that included excise duty, entertainment tax, services tax, and so on. With the implementation of the GST, businesses that deal with goods and services need to first complete the GST registration process before they conduct their operations.
Going about GST Online Registration
Confusion around the process of GST online registration of business is understandable considering the new law in place. However, it is essential to ensure you have the documents required for a new GST registration. Here are the documents required for GST registration
- Pan card
- Partnership deed and incorporation certificate
- Proof of address such as rent agreement or utility bills
- Proof of identification like Aadhaar card or voter’s ID
- Bank statements
Now that you have the necessary documents in place, follow these steps to carry out the online GST registration:
- Head over to the GST website or GST portal.
- After this, hit the registration option, which you will find under the ‘services’ tab.
The GST new registration is divided into two parts.
- You start by selecting the ‘taxpayer’ tab that you can find on the ‘I am’ dropdown menu.
- Then fill in your business details on the GST REG-01 form for new registration.
- After this, you can expect to receive a One-time Password (OTP) on your registered mobile number to verify the authenticity of the individual in question, thereby reducing the chances of fraud.
- Once part one is complete, you will receive a Temporary Reference Number (TRN) that you will need to make a note of.
- Use your TRN and login to start the second part of the GST registration process. Enter the given CAPTCHA code and the OTP you receive on your phone.
- You will need to then provide your business details, including business name, PAN, date of commencement of business, and name of the state in which you are registering your business.
- After this, you will have to enter the names of up to ten sponsors or business partners.
- Be sure to include the details of the individual you have given the authority to file the GST returns.
- Then, include the primary business location and address, primary contact information, and the type of property ownership. Along with this, you will have to state the details of market locations, product and service descriptions, and finally, the bank account information of the company.
- Upload the required documents based on the type of organization you register as, hit ‘Save and Continue,’ and digitally sign the form.
- Then, hit the ‘Submit’ option to save the information. Once the submission is made, you will receive an Application Reference Number (ARN). Use this to verify and confirm your enrolment by E-mail or SMS.
What are the Benefits of GST?
Here are a couple of benefits of GST:
Removal of the Cascading Tax Effect
The introduction and implementation of the GST have resulted in the elimination of the cascading effect of taxes, including the inter-state tax, production costs, logistics expenses, and so on.
The initial tax structure would adversely affect the consumer since the overall cost of the goods and services would turn out to be much higher due to a variety of taxes. However, with the GST in place, the overall cost of goods and services has come down significantly.
Simplification of Indirect Taxes
The primary aim of the implementation of the GST was to subsume and replace the indirect taxes that were prevalent under the previous tax structure. The sheer number of charges made their calculation incredibly complicated since taxes were levied on services and goods, both at the state and the central level. However, the Goods and Services Tax bill has managed to remove most of these taxes and have one standard tax in the place.
If you are entirely new to the GST, and everything related to it, this is an excellent place to start as you try to navigate the world of GST and understand its framework.