What is Goods and Service Tax (GST) ?

GST stands for Goods and Service Tax is one of the biggest tax reforms in India. In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. GST regime has replaced many indirect tax laws that previously existed in India. GST is introduced with an aim of ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India and abolishing and subsuming multiple taxes into a single system, reduction of tax complexities and increased tax base substantially.

Under the new GST regime, all entities involved in buying or selling goods or providing services or both are required to register for GST. Entities without GST registration would not be allowed to collect GST from a customer or claim input tax credit of GST paid or could be penalised. Further, registration under GST is mandatory once an entity crosses the minimum threshold turnover of starts a new business that is expected to cross the prescribed turnover.

In the GST Regime, businesses whose turnover exceeds Rs. 20 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. Entities required to register for GST as per regulations must file for GST application within 30 days from the date on which the entity became liable for registration under GST.