Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services. It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. Multi-staged as it is, the GST is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer and as a destination-based tax, it is collected from point of consumption and not point of origin like previous taxes.
Threshold Limit for GST Registration
The GST registration is mandatory for the business entities based on the criteria of activities and turnover. The business dealing with goods have to apply for GST Registration if their aggregate turnover exceeds 40 Lacks and those in service industry have to apply for GST Registration if their aggregate turnover exceeds 20 Lacks. However, for business making supplies and providing services in the North Eastern States, the same is Rs. 20 lakhs and Rs. 10 lakhs respectively. To reap the benefits of GST Law, many dealers obtains voluntary GST Registration. A business having GST registration enjoys the rights of a registered supplier and by the registration the business affirms seamless flow of Input Tax Credit.