It is regarded as among the country’s most significant tax reforms, and tax reforms like the Goods and Services Tax (GST) encompass various indirect taxes levied by the Centre and State, such as VAT, excise, as well as service tax. The Tax is charged on both services and goods offered in the country.
GST Day is celebrated on July 1st each year. From July 1st, 2018, let’s look to see how GST registration online has been doing over the last year.
Every reform will offer advantages and drawbacks. Here, we’ll examine both the benefits and drawbacks of GST:
Advantages of GST
GST will stop the cascading effect that Tax has on
GST is a broad indirect tax created to unite all indirect taxes under one roof. In addition, it will eliminate the impact of Tax on other people, which was apparent earlier.
Cascading tax effects can be described as Tax on Tax’. Let’s take this instance to comprehend what is Tax on tax.
A higher threshold for registration
Before the VAT system, any company with a revenue of more than 5 lakhs (in most states) was subject to VAT. It is important to note that this threshold was different from state to state. In addition, the service tax was exempted for providers with an annual turnover of less than 10 lakh rupees.
Under the online GST registration regime, however, the threshold has been raised to Rs . 20 lakh, which exempts small-scale service providers and traders.
Composition scheme for small-sized businesses
Under GST, small-sized businesses (with an annual turnover of between 20-75 lakh) can benefit since it allows them to reduce taxes through tax-saving strategies like the composition scheme. This has reduced the tax burden and compliance burden on small businesses.
The simple online process
The entire procedure for GST (from online GST registration to filing tax returns) is done online, and it’s straightforward to follow. This has been advantageous for new businesses since they don’t have to travel from post to pillar to obtain additional registrations like VAT, excise, or Tax on services.
The amount of compliance needs to be higher.
Under theonline GST registration system, however, only one uniform return must be submitted. Thus, the number of tax returns that must be filed has decreased. There are approximately 11,011 returns filed under GST; of these, four are the basic returns applicable to everyone who is taxed under GST. GSTR-1 is the primary return that is manually completed, and GSTR-2 and GSTR-3 will be automatically filled in.
The treatment of E-commerce companies is clearly defined.
Before the GST regime, the provision of products through the e-commerce industry needed to be clearly defined. There were different tax laws. Let’s take a look at the following example:
Online stores (like Flipkart and Amazon) which deliver goods to Uttar Pradesh had to file a VAT declaration and mention the number for registration of the delivery vehicle. Tax authorities may sometimes confiscate products if the VAT declaration is not filed.
These e-commerce companies were viewed as mediators or facilitators by states such as Kerala, Rajasthan, and West Bengal, which did not require VAT registration.
The various treatment options and confusion-causing compliances are now gone under GST. For the first time in history, GST has mapped out the rules applicable to the online-based sector. Since they are applicable across India and the world, there will be clarity regarding the interstate movement of goods. Find a more thorough review of the effect of GST on online shopping.
Increased efficiency of logistics
In the past, the logistics industries in India required several warehouses across states to avoid CST and state-specific entry tax on interstate movements. The warehouses had to work at a reduced capacity, which allowed for an increase in operational costs.
Under GST, however, the restrictions on the interstate movement of goods have been loosened.
The unorganized sector is subject to regulation under GST.
Before the introduction of GST, it was commonly believed that some industries in India, such as textiles and construction, were generally non-regulated and unorganised.
Under GST, however, there are provisions for online compliance and payments and the use of input credit only if the provider has accepted the amount. This has led to accountability and regulation for these sectors.
Conclusion
There are several advantages of GST registration online. If you are facing issues and need suggestions then, Legalpillers is the best choice. They provide online CA services. You can get their help and be associated with them for the long term.
