Goods and service Tax:
GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect
taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was
passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
In the earlier indirect tax regime, there were many indirect taxes levied by both the state and the
centre. States mainly collected taxes in the form of Value Added Tax (VAT). Every state had a
different set of rules and regulations.
Inter-state sale of goods was taxed by the centre. CST (Central State Tax) was applicable in case of
inter-state sale of goods. The indirect taxes such as the entertainment tax, octroi and local tax
were levied together by state and centre. These led to a lot of overlapping of taxes levied by both
the state and the centre.
For example, when goods were manufactured and sold, excise duty was charged by the centre. Over and
above the excise duty, VAT was also charged by the state. It led to a tax on tax effect, also known
as the cascading effect of taxes.
The following is the list of indirect taxes in the pre-GST regime:
GST Registration:
In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and
hill states) is required to register as a normal taxable person. This process of
registration is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on
business without registering under GST, it will be an offence under GST and heavy penalties
will apply.
GST registration usually takes between 2-6 working days. We’ll help you to register for GST
in 3 easy steps.
*CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The
notification will come into effect from 1st April 2019.