The much awaited, much debated GST is now a reality. From the midnight of 30th June leading into 1st of July, most businesses across India were able to seamlessly continue their business, since they had taken the necessary steps to welcome the GST era.
But in case you haven’t, don’t worry, it isn’t too late yet. Here are 4 quick steps you can take to get back on track, and make your business ready for GST.
Step 1: Find out whether you are liable to compulsorily register
As per the GST registration guidelines, you will need to take mandatory GST registration, if you fall under any of the following category of suppliers:
- Taxable person with turnover exceeding INR 20 lakhs (INR 10 lakhs in Special Category States)
- Taxable person carrying on interstate supplies
- Casual and non-resident taxable persons
- Businesses liable to pay tax under reverse charge
- Agents supplying on behalf of a taxable person
- Input service distributor
- All e-commerce operators
- Person supplying online information and database access or retrieval services from outside India to an unregistered person in India
- Persons responsible to deduct TDS
Note – Earlier, all sellers on e-commerce, irrespective of turnover were liable to take GST registration. However, as per the latest ruling, suppliers with turnover below INR 20 lakhs will not be required to register themselves under the GST for selling goods or services through e-commerce portal. Also, the government has deferred the implementation of TDS and TCS provisions for two categories of deductors – government, including local authorities, and e-commerce companies and their suppliers.
Step 2: Get registered under GST
Once you are clear about whether you are liable to register or not, you will fall under one of the following 2 cases:
Case 1: Liable to register under GST
In this case, you will need to carry forward your registration under the previous taxation laws, into the GST era. You can do that by taking the following steps –
- Access the common GST portal (http://www.gst.gov.in/) and enrol by validating your e-mail ID and mobile number. It is an extremely user friendly portal, which will enable you to seamlessly take online GST migration registration.
- Upon enrolment for GST, you will be allotted a provisional certificate of registration in Form GST REG-25. Please note, that even If you have obtained multiple registrations on the basis of a single PAN under the existing taxation laws, you will still be granted only one provisional registration under GST. In the case of centralized registration under Service Tax, you will be granted with a single provisional registration in the state or union territory in which you were registered earlier. However, if you are into the business of supplying services in multiple states, you will need to take separate registration for all such states, where you will be providing your services.
- Within 3 months, you will be required to submit Form GST REG-24 in the GST Portal along with information and documents as prescribed. If the information provided is complete and satisfactory, final registration certificate will be issued to you in Form GST REG-06.
Case 2: Not liable to register under GST
GST, since your turnover is below the threshold limit. In such a circumstance, you will have an option to cancel the provisional registration issued by submitting the Form GST REG-28, within a period of 30 days.
In either case, the GST Enrolment / Registration process has re-opened at the GST Portal (www.gst.gov.in) from 25 June 2017 and will remain open till 30 Sept. 2017, to give another opportunity to remaining taxpayers, who could not migrate to GST so far. Also, if you have enrolled prior to 1st July, but were not able to digitally sign the enrolment form, you can now utilise this window to complete the process of enrolment.
Step 3: Identify your HSN Codes / SAC Codes & Tax Rates
Since the 18th of May, 2017, the GST Council has met 4 times to declare the rates of various goods and services, which included amendments which happened along the way. At the same time, the HSN codes (for goods) and SAC codes (for services) have also been declared. It is super critical for you, to not only to be aware of the tax rates of the supplies you make, but also the HSN / SAC codes – primarily for 2 reasons.
One, it will have an impact on your GST invoicing – if your turnover is above INR 1.5 crores but below INR 5 crores you need to use 2-digit code and if your turnover is INR 5 crores and above, you need to use 4-digit code. If your turnover is below INR 1.5 crores, you are not required to mention HSN Code in their invoices at all.
Two, there needs to be a high level of consistency to be maintained as far as the names of goods / services are concerned. Different businesses will be using different names, and the government has a standard name for all goods / services which are specified. For seamless business and compliance, it is better that a uniform code is used across, which is why knowing your HSN / SAC code becomes so important.
The second and important task is now, to know the GST rates for your products.
Click here to access the final GST tax rates booklet for goods and here for the final GST tax rates booklet for services.
Step 4: GSTIN of both your vendors and customers
Probably one the most important steps for your business in the GST era is to ensure that you are able to take the right and timely input tax credit, and similarly, your customer is availing his input credit on your supply. For that to happen, you need to ensure that you have provided your GSTIN to your vendor, so that the same is recorded in your purchase ‘tax invoice’. Likewise, ensure that you are capturing the GSTIN of your customer on the sales ‘tax invoice’, so that your customer is able to claim input credit. This will allow you to continue your business in a seamless manner, and also allow you to manage your vendors and customers effectively.