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GST Rates and Registration

GST is a comprehensive indirect tax that has replaced many levies from the manufacturer to supplier to customer. The Goods and Service Tax Act, which was passed in the Parliament on March 29, 2017, came into effect on July 1, 2017. India has adopted a dual GST model, where both states and central government levy tax on goods and/or services.

Below are the three types of GST implemented in the country:

  • CGST: This is imposed by the central government of India.

  • SGST: This is imposed by the state government.

  • IGST: This is imposed by the state and central government together, but collected by the central government.

Under the new tax regime, tax will be charged at every point of sale. Central GST and State GST will apply in case of intra-state sales, while Integrated GST will be levied for inter-state sales. Goods imported will come under IGST as they will be regarded as inter-state supply.

GST Rates

Most of the products and services that are subject to the new tax regime have been categorized under four tax slabs - 5%, 12%, 18% and 28%. However, GST rates will not apply on some goods and services, like fresh meat, milk, chicken, curd, fresh fruits, jute, fish, eggs, butter milk, vegetables, natural honey, bread, salt, besan, bindi, judicial papers, newspapers, handloom, prasad, sindoor, bone grist, horn meal, hoof meal, palmyra jaggery, printed books, bangles, horn cores, bone meal, cereal grains hulled, etc.

The rates for essential food items have been kept either nil or very low. The reason to do this is because food items make up for about 50% of the consumer basket and contribute rather significantly to ensuring that widespread inflation is kept in check. Luxury goods and negative items are, however, taxed at a higher rate so as to maintain revenue neutrality for state and central governments.

Some of the commodities and services subject to 5% GST are:

  • Apparel below Rs. 1000

  • Packaged food items

  • Branded paneer

  • Frozen vegetables

  • Cream

  • Skimmed milk powder

  • Coffee

  • Tea

  • Spices

  • Pizza bread

  • Rusk

  • Sabudana

  • Cashew nut

  • Cashew nut in shell

  • Raisin

  • Fish fillet

  • Kerosene

  • Coal

  • Medicine

  • Agarbatti (incense sticks)

  • Postage or revenue stamps

  • Fertilizers

  • LPG supply to household consumers by private LPG distributors

  • Rail and economy class air tickets

  • Small restaurants

Some of the commodities and services subject to 12% GST are:

  • Butter

  • Cheese

  • Ghee

  • Almonds

  • Dry fruits in packaged form

  • Animal fat

  • Sausage

  • Umbrella

  • Sewing machine

  • Cellphones

  • Ketchup & Sauces

  • Sugar boiled confectionery

  • Bio-diesel

  • Pasta

  • Bio-pesticides

  • Mechanical sprayer

  • Air tickets by business class

Some of the commodities and services subject to 18% GST are:

  • Biscuits (All categories)

  • Cornflakes

  • Pastries and cakes

  • Jams

  • Sauces

  • Soups

  • Ice cream

  • Instant food mixes

  • Tissues

  • Camera

  • Speakers

  • Printers (other than multifunction printers)

  • Shampoo, hair cream and hair dye

  • Restaurants in hotel premises where room tariff is Rs 7500 or more,

  • Telecom services

Some of the commodities and services subject to 28% GST are:

  • Pan masala

  • Aircraft for personal use

  • Gambling and race club betting

  • 5-star hotels

  • Cigarette

  • Small cars

  • High end motor cycles

  • Consumer durables such as AC, Fridge,

  • Luxury and Sin items

GST Registration

GST registration is mandatory for businesses whose annual sales are more than Rs. 20 lakhs (Rs. 10 lakhs for North-Eastern states). GST registration is also a must for the following categories of suppliers, irrespective of their turnover:

  • Agents supplying on behalf of a taxable person

  • Input service distributor

  • E-commerce operators and sellers on e-commerce platforms

  • Taxable person carrying on interstate supplies

  • Casual and non-resident taxable persons

  • Businesses who have to pay tax under reverse charge

  • Persons engaged in the provision of online information or database access or retrieval services

  • Persons responsible to deduct TDS

Entities who are not mandated to get GST registration done are advised to do so on a voluntary basis, as they can benefit from gaining legal recognition as a supplier of goods and/or services. This allows such entities to charge GST on consumers who make purchases from them. Those who have completed GST registration online are eligible to avail input tax credit.

Step-By-Step Guidelines for Online GST Registration

The procedure for online registration of GST can be a little tedious. Here are the steps you need to take to complete GST registration on the GST portal.:

  • Step 1: Go to the GST portal and click on the ‘Services’ tab.

  • Step 2: You will have four options under Services ‘Registration’, ‘Payments, ‘User Services’ and 'Refunds'.

  • Step 3: Select ‘Registration’ and press on ‘New Registration’.

  • Step 4: You will be redirected to a new page. Select 'New Registration' and enter your details in the empty columns (Part A).

  • Step 5: Once you are done, click on 'Proceed'

  • Step 6: Enter the OTP sent to your email ID and mobile number. Press 'Continue'.

  • Step 7: You will get a Temporary Reference Number (TRN). Take a note of this number.

  • Step 8: Go to GST portal once again and click on 'Register Now'.

  • Step 9: Click on 'Temporary Reference Number (TRN)' and enter the details. Click on 'Proceed' after you are done.

  • Step 10: Enter the OTP sent to your email ID and mobile number. Select 'Proceed' afterwards.

  • Step 11: You will be able to view the status of the application, which will be shown as draft. Press on the edit icon.

  • Step 12: Part B will contain 10 sections. You will need to enter the necessary details and submit the required documents.

  • Step 13: Head to the verification page. Tick on declaration and submit the application via any of the following means – DSC, e-Sign and EVC.

  • Step 14: You will get a success message and an Application Reference Number (ARN) on your registered email ID and mobile number. To track the status of your registration, enter the ARN on the GST Portal.

Documents Required For GST Registration

The following documents will be required for GST registration:

  • PAN card of the company

  • Identity proof and address proof of CEO/Proprietor/Karta etc.

  • Proof of constitution - Memorandum of Association, partnership deed, etc.

  • Address proof of place of business

  • Bank account proof - cancelled cheque of bank

Penalty for Not Registering Under GST

An offender who is not paying tax or fails to make full payment (genuine errors) will be penalized 10% of the tax amount due. The minimum penalty will be Rs. 10,000 if the 10% amounts to a lesser figure. In case the offender has intentionally evaded payment of taxes, the penalty levied will be 100% of the tax amount due.

FAQs

What items are exempted from GST?

GST on certain essential goods and services have been kept at 0% to benefit the masses. Such items include fresh meat, milk, chicken, curd, fresh fruits, jute, fish, eggs, butter milk, vegetables, natural honey, bread, salt, besan, bindi, judicial papers, newspapers, handloom, prasad, sindoor, bone grist, horn meal, hoof meal, palmyra jaggery, printed books, bangles, horn cores, bone meal, cereal grains hulled, etc.

What is the GST rate for tamarind?

Fresh tamarind attracts 0% GST, while dry tamarind attracts 12% GST.

For whom is GST registration mandatory?

GST registration is mandatory for businesses whose annual sales are more than Rs. 20 lakhs (Rs. 10 lakhs for North-Eastern states). GST registration is also a must for the following categories of suppliers, irrespective of their turnover:

  • Agents supplying on behalf of a taxable person

  • Input service distributor

  • E-commerce operators and sellers on e-commerce platforms

  • Taxable person carrying on interstate supplies

  • Casual and non-resident taxable persons

  • Businesses who have to pay tax under reverse charge

  • Persons engaged in the provision of online information or database access or retrieval services

  • Persons responsible to deduct TDS

What is the GST rate for filters or water purifiers?

Filters or water purifiers attract 18% GST.

What is the penalty for not registering under GST?

An offender who is not paying tax or fails to make full payment (genuine errors) will be penalized 10% of the tax amount due. The minimum penalty will be Rs. 10,000 if the 10% amounts to a lesser figure. In case the offender has intentionally evaded payment of taxes, the penalty levied will be 100% of the tax amount due.

What are the documents required for GST registration?

The following documents are required to complete GST registration:

  • PAN card of the company

  • Identity proof and address proof of CEO/Proprietor/Karta etc.

  • Proof of constitution - Memorandum of Association, partnership deed, etc.

  • Address proof of place of business

  • Bank account proof - cancelled cheque of bank

What are the different GST slab rates applicable on goods and services produced in India or imported from other countries?

The GST council has fitted various goods and services under four tax slabs - 5%, 12%, 18% and 28%. Certain essential items like vegetables, fresh meat, milk, chicken, curd, fresh fruits, jute, etc. have been placed under 0% GST.

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