Last Updated on May 26, 2022 by rabiamuzaffar
The government of India rolled out a new tax regime in 2017 that subsumed all the previous indirect taxes. This new regime, otherwise known as Goods and Services Tax, offers a series of benefits, including a seamless registration process.
Taxpayers can opt for the GST registration online from the GST portal or register themselves by visiting GST Seva Kendra. Here are some of the advantages of registering under GST.
Benefits of GST registration
Registration under this scheme offers several perks to taxpayers. Any individual who is a supplier of goods and services with an annual turnover of more than Rs.20 lakh must register under the GST system and enjoy the following benefits –
Elimination of cascading effect of taxes
As GST unifies all the indirect taxes under one heading, it eliminates the scope of a “Tax on Tax” effect or cascading effect. Previously, an individual, after buying goods, had to pay a certain amount to finance supplies, which increased his net spending. However, under GST, a single tax is levied on the goods and supplies, decreasing the net value.
Read More: TAX PREPARATION SERVICES AND THEIR ADVANTAGES
Benefits for small traders
GST scheme allows small businesses whose threshold value is less than Rs.20 lakh to enjoy full tax exemption. Under the previous tax regime, the threshold value was Rs.10 lakh. In this regard, small business owners can also improve their financial health by opting for high-value unsecured credits.
Small business owners can avail of a business loan to utilise funds to meet various expenses. Top financial institutions offer a high-value loan amount to eligible borrowers and help them in reducing financial stress.
Additionally, some NBFCs like Bajaj Finserv provide pre-approved offers to facilitate an easy loan application process. These offers are applicable on various financial products, including business loans, personal loans, etc. Individuals can check their pre-approved offer by entering their name and contact number. You may read our registration process which may be helpful for you and your business.
Composition scheme
An effective way by which small traders and business owners ease their tax compliance is by registering under the Composition scheme. GST enables entities with a turnover of less than Rs.1.5 crore to avail of the benefits of this scheme. Registration on GST is very easy and quick.
Easy registration procedure
One can register for GST online in a few seconds and obtain an Application Reference Number from the comfort of his/her home. Furthermore, applicants can check their registration status online from the GST portal itself.
Reduction in the number of compliances
Under the previous taxation system, taxpayers had several compliances and returns to file under VAT and services taxes. However, the GST scheme facilitates a unified tax system where a taxpayer has fewer returns to file post GST registration online. This simplifies the entire system.
Regulation of the unorganised sector
Industries like construction and textile were highly unorganised before GST was rolled out. With the provision of online compliances and payments, these sectors are witnessing proper regulation in recent times.
Defined e-commerce sector
E-commerce sectors had variable VAT laws, which made the compliances confusing and unclear. As GST has brought all these taxes under one bracket, the sector has become more defined. This scheme has mapped out the provisions concerning these sectors, which are applicable across India. Therefore, GST has appreciably toned down the level of confusion.
After knowing everything about GST, one can easily chalk out the benefits and how registering under it can be convenient in the long run. According to the GST registration guide, one must also be aware of all the relevant documents necessary during the application process.
Documents required for GST registration
Depending on the business type, one needs to furnish certain documents during the GST registration process. Following are some documents required for GST registration of proprietorship:
- Aadhaar card
- PAN card
- Valid proof of partnership deed or certificate of incorporation
- Applicants must provide relevant address proof of their business. Some valid address proof documents are electricity bills, rent agreement,s etc.
- Presenting bank account statements of a company or firm is mandatory.
On presenting these documents, an applicant will be one step ahead in the registration process. Therefore, it is imperative from the aforementioned points that whether one opts for GST registration online or offline, he/she can enjoy varied benefits going forward.
