Eligibility Criteria for GST Registration:-
- Having a valid PAN (Permanent Account Number).
- Turnover above a certain threshold limited of Rs.20 Lakhs.
- Turnover below Rs.20 Lakhs, may choose to register for GST voluntarily.
- Being engaged in a taxable supply of goods or services.
- Business engaged in the supply of goods or services across state or national borders.
- Business that are required to pay GST on a reverse charge basis (like transportation of goods, legal services).
- Business seeking to claim input tax credits on their purchase of goods or services.
Benefits for SMEs of GST Registration:-
- Easy to start business.
- To establish the business as a legal entity in the eyes of the law.
- To claim input tax credit (ITC) and offset this against the GST collected on sales.
- To easily trace expenses and purchases.
- Helps to easily trace & manage our turnover.
- To take benefits of ITC on fixed assets (like computer and printers, furnitures etc.)
- Competitive advantage in market, as many customers prefer to deal with registered suppliers to avail ITC benefits.
- Credibility and trustworthiness of a business.
- Legal protection under the GST Law.
- Provides benefits for exporters, including a simplified and transparent tax structure.
- Avail GST start-ups
- Avail GST refunds schemes.
- Prerequisites for participating in government tenders and contracts.
GST Registration threshold limit
The threshold limit is Rs.40 lacs or higher for the trading & manufacturing sector. The service sector has a threshold of Rs.20 lacs or higher.
Penalty for not registering under GST
A penalty of Rs.10, 000 or 10% of the tax due, whichever is higher, for not registering despite being liable to do so.
A penalty of Rs.10, 000 or the tax amount, whichever is higher, for collecting GST but not depositing it to the government within three months.
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