GST

GST

What is Goods and Services Tax (GST)?

  • GST is a single tax that will replace all the existing indirect taxes levied in India. These taxes include Sales tax (VAT), Excise duty (CENVAT), Service tax, Entertainment tax, Luxury tax etc.
  • GST is proposed to have a dual structure. It will have two components: Central GST and State GST. Central GST will replace Central excise duty, services tax and additional customs duties etc. and will be levied by the centre. State GST will replace VAT, Central State Tax, entertainment tax, luxury tax, lottery tax, electricity duty etc. and will be levied by the states.
  • GST will be charged on the value-added at each stage of sale/ purchase in the supply chain. 
  • State GST will follow the destination principle that is it would be applied in the state where the product is sold.
  • GST will replace all indirect taxes and will be levied on all goods and services. The exceptions are: petroleum product, Entertainment and amusement tax levied and collected by Panchayat/ Municipality/ district council, alcohol, stamp duty, customs duty, tax on consumption and sale of electricity.

What are the benefits of GST?

GST has been adopted by around 140 countries around the world. It’s benefits are:

  • Simplified tax regime: Currently there are multiple indirect taxes (around 15) levied by the Central and the State Government and they differ across states. GST will simplify and rationalise the tax structure of India by bringing in a regime of a single and uniform tax.
  • Increased revenues: A simple tax regime will reduce the cost of compliance and hence increase the number of taxpayers. This will help increase tax revenues. Also, the tax base will be comprehensive as all goods and services will be taxed with a few exemptions.
  • Reduce the cascading effect of taxation: As mentioned earlier, GST is a uniform tax levied on value-added. Levy at each stage of sale/ purchase will be set-off against taxes paid by the supplier in the previous stage. Through this set-off mechanism, GST is levied only on value-added. 
  • Improve ease of doing business: Currently, doing business across state borders is very difficult due to differences in tax procedures. GST will lead to a unified economy and allow businesses to expand its operations with ease. It will also improve manufacturing in India, attract foreign investment and lead to job creation.
  • Boost GDP: The economists forecast that the roll-out of GST will boost GDP by 0.5%-2%. This is because of the positive impact on tax revenues and economic effects of a unified tax regime.
  • Optimal supply chain decisions: Currently, all supply chain decisions are guided with the view to reduce the burden of indirect taxes. GST will do away with the interest rate differentials and lead to seamless movement of goods and services between states.

The following are the documents required for fresh enrolment for GST:

In case of Individual:

1) PAN card

2) ID proof and address proof of Individual

3) Photo (JPG – 100 KB)

4) Bank Details – Copy of cancelled cheque or first page of Pass Book (JPG, PDF – 100 KB) or first page of recent bank statement (JPG, PDF – 500 KB)

5) Registered Office Documents- Copy of electricity bill/landline bill, water Bill etc. (JPG, PDF – 100 KB) , also in case the premises is rented, Rent agreement (JPG, PDF – 200 KB) will be required.

In case One Person Company/ Private Limited Company/ Public Company:

Documents of Company:

1) Company PAN card

2) Memorandum of Association (MOA) /Articles of Association (AOA) (JPG, PDF – 1 MB)

3) Registration Certificate/ Incorporation Certificate of the company (JPG, PDF – 1 MB)

4) Bank Details – Copy of cancelled cheque or first page of Pass Book (JPG, PDF – 100 KB) or first page of recent bank statement (JPG, PDF – 500 KB)

5) Copy of resolution passed by BOD / Managing Committee. (JPG, PDF – 100 KB)

6) Registered Office Documents- Copy of electricity bill/landline bill, water Bill etc. (JPG, PDF – 100 KB), also in case the premises is rented, Rent agreement (JPG, PDF – 200 KB) will be required.

7) Director related Documents- PAN and ID proof of directors& Photo (JPG – 100 KB)

8) Proof of Authorized Signatory (PDF, JPEG - 1MB)

9) DIN No of Partners & Digital Signature

In case of Partnership & Limited Liability Partnership (LLP)

Documents of Partnership & LLP:

1) Partnership / LLP PAN Card (as the case may be)

2) Partnership Deed/ LLP Agreement

3) DIN No of Partners & Digital Signature (in case of LLP)

4) Bank Details – Copy of cancelled cheque or first page of Pass Book (JPG, PDF – 100 KB) or first page of recent bank statement (JPG, PDF – 500 KB)

5) Registered Office Documents- Copy of electricity bill/landline bill, water Bill etc. (JPG, PDF – 100 KB), also in case the premises is rented, Rent agreement (JPG, PDF – 200 KB) will be required.

6) Partner’s related Documents- PAN and ID proof of designated partners& Photo (JPG – 100 KB)

7) Proof of Authorized Signatory (PDF Or JPEG - 1MB)

Further in case of principle place of business if the premises is owned than any document in support of the ownership of the premises like Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill. If the said premises is rented/ leased a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill. If the premises is neither owned nor rented than consent letter (JPG, PDF – 100 KB) would be required with any supporting document of the premises.