Applicability of Goods and Service Tax (GST) on your Business
by Paras Mehra 8.45K
Background
Goods and Service Tax (GST) is one of the most awaited amendments of this era and no doubt, it will impact every person in India, whether he is a business man or a salaried person, this act will impact you in any case. Most of the current taxes including State sales tax, VAT, excise, service tax, luxury tax etc, shall subsume into this act and only GST shall be applicable throughout India.
Hence, every person shoul d know more about this tax and its applicability.
Applicability – Is my business is liable for registration under GST?
This is a whole new tax and hence, if you have created any thought process for this act, then we request you to forget it for a while and try to answer the questions mentioned below, to know the applicability of this act. Let us first understand this by way of diagram, then we will understand the details later on:
- Are you a Service provider or a supplier of any good?
GST has created the charge on supply of goods and services i.e. if you are a service provider or a dealer in any type of goods other than specifically exempted by government of India, then you are covered under this act.
If you are covered under question one, then move to question 2.
- Did you cross the threshold limit prescribed under GST?
Earlier, we have to see the threshold exemption limit for every act that has been applicable on us like VAT, service tax or excise. However, now the threshold has been defined in the act itself. There are two types of threshold limit:
- Threshold Limit for Tax Payment: The assessee is required to pay the taxes if the turnover exceeds the following limits:
|
Gross Turnover |
Area of Operation |
|
10 lakh |
Anywhere in India excluding North eastern states |
|
5 Lakh |
If a person conducts his business in north eastern states including sikkim |
- Threshold limit for Registration under CGST/SGST: A person is required to be registered under CGST/SGST only if its turnover exceeds:
|
Gross Turnover |
Area of Operation |
|
9 lakh |
Anywhere in India excluding North eastern states |
|
4 Lakh |
If a person conducts his business in north eastern states including Sikkim |
If you are crossing the prescribed limit in any case, then you are liable to register and pay the taxes.
Conclusion
The above article has been a basic test to know the basic applicability on your business. However, laws are dynamic and hence we recommend you to consult the professional before forming any decision.
You can drop your query in our contact form.