The GST Council recently notified that E-commerce sellers supplying goods with a turnover of up to Rs 40 lakh and services with a turnover of up to Rs 20 lakh but unregistered under the Central Goods and Services Tax (CGST) Act will be allowed to make intra-state supply with effect from October 1, 2023. The time is required for the development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the e-commerce operators. This decision will encourage small traders who are below the GST threshold limit to expand their business through e-commerce platforms.
As of 2022, the Goods and Services Tax (GST) is five years old and people celebrate it by flagging the ease it brought to businesses and the relief on tax burden to consumers.
The implementation of GST in India was a historical move, as it marked a significant indirect tax reform in the country. The amalgamation of a large number of taxes which was levied at a central and state level into a single tax had expected to have big advantages. Four years ago, on this day, GST had replaced 17 local levies like excise duty, service tax, VAT and 13 cesses. Currently, as per the rules, every business/entity that is involved in the buying and selling of goods/services have to register for GST. It is mandatory to get registered under GST if the turnover exceeds the threshold limit of Rs 40 lakhs for trading and manufacturing or 20 lakhs for service industry (Rs 10 lakhs for special category states)
One of the most important benefits of GST are the lessening of double taxation ITC claiming facility, Reduction in number of filing, and unified indirect tax framework. GST is now paving the way for a common national market and Indian goods are also expected to be more competitive in international and domestic markets.
The GST Act prescribes various types of registration under its ambit. The main ones are discussed briefly below -
Normal Taxpayer: This category holds most of the businesses of India. No need to put down any money as deposits for Normal Taxpayers. There is also no expiration date of registration under this category.
Casual Taxable Individual: Individuals who wish to set up an occasional/seasonal shop can opt for this category. For instance, say Mr X has a place of business in Delhi and supplies taxable consulting services in Patna where he has no place of business. He would be treated as a casual taxable person in Patna.
In this case, you have to deposit an advance sum of money that is expected to be equal to your GST liability during the operational time-period of the seasonal shop or business. The registration under this category is active for 3 months which can be renewed.
Composition Taxpayer. In the GST composition scheme, businesses/individuals have to deposit a fixed yearly payment irrespective of their actual earnings.Small taxpayers can get rid of tiesome formalities and pay GST at a fixed rate of turnover. Entities having a yearly turnover of up to Rs. 1 Cr are eligible to get registered as composition taxpayers. It is also imperative to note that they will not be able to claim Input Tax credit under this category.
Non-Resident Taxable Individual: People who reside outside India, but supply goods to individuals who stay in India, can opt for this type of GST Registration. As per the GST rules, when a non-resident occasionally supplies goods/services in a GST applied region and does not have a fixed place of business, he will be treated as a non-resident taxable person. It is similar to a casual taxable individual, just that in this case the non-resident has no place of business in India.
You have to deposit a sum equal to the expected GST liability during the operational time-period of registration. Usually, the normal tenure of registration is 3 months, but can be extended or renewed by the taxpayer.
There are more than 8 crore small traders in the country, but a large number of traders are conducting business activities without GST registration since their annual sale is below the GST threshold limit. Such traders will now be able to trade on e-commerce. This step is in line with the objective of promotion and regulation of e-commerce in India and to ease MSMEs towards e-commerce adoption.