GST Registration for Business in India

In addition to fulfilling statutory obligations like GST and Income Tax, private limited companies are mandated to adhere to certain regulatory requirements outlined in the Companies Act. These obligations are crucial for maintaining transparency, accountability, and legal standing. Failure to comply with these obligations can lead to penalties and legal repercussions. Here are the key compliance requirements that a private limited company must address without delay:

Mandatory GST Registration Categories

As per Section 24 of the CGST/SGST Act, the following categories of persons are required to be registered compulsorily, irrespective of the threshold limit:

• Individuals engaging in inter-State taxable supply of goods and services.
• Casual taxable persons.
• Individuals liable to pay tax under reverse charge mechanism.
• Electronic commerce operators required to pay tax under sub-section (5) of section 9.
• Non-resident taxable persons.
• Individuals required to deduct tax (TDS) under section 51.
• Individuals supplying goods and/or services on behalf of other registered taxable persons, whether as an agent or otherwise.
• Input Service Distributors, whether or not separately registered under the Act.
• Individuals required to collect tax (TCS) under section 52.
• Every electronic commerce operator (e.g., Flipkart, Ola, Bigbasket, etc.).
• Individuals supplying online information and database retrieval services from a place outside India to a person in India, other than a registered person.
• Any other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

In addition to fulfilling statutory obligations like GST and Income Tax, private limited companies are mandated to adhere to certain regulatory requirements outlined in the Companies Act. These obligations are crucial for maintaining transparency, accountability, and legal standing. Failure to comply with these obligations can lead to penalties and legal repercussions. Here are the key compliance requirements that a private limited company must address without delay:

Normal Scheme

Every business entity in India liable to pay GST under the Act must obtain registration and remit regular GST on taxable turnover. They can avail Input Tax Credit (ITC) benefits and pass on the benefits to their customers, as well as fulfill their obligations to deduct TDS and collect TCS.

Composition Scheme

Registration under the Composition Scheme is voluntary. Small taxpayers with an aggregate turnover of up to Rs. 50 lakhs in the preceding financial year are eligible for the composition levy. Under this scheme, taxpayers pay tax as a percentage of their turnover in a state during the year, without the benefit of Input Tax Credit (ITC). The minimum rate of tax for CGST and SGST/UTGST is not less than [1% for manufacturers and 0.5% for others; 2.5% for specific services as mentioned in para 6(b) of Schedule II, such as serving food or any other article for human consumption. Taxpayers opting for the composition levy are not allowed to collect any tax from their customers. The government may increase the turnover limit from Rs. 50 lakhs to up to one crore rupees, based on the recommendation of the GST Council. Taxpayers making inter-state supplies or supplying through e-commerce operators required to collect tax at source are not eligible for the composition scheme. Customers cannot claim Input Tax Credit (ITC) for goods purchased or services taken from businesses registered under the Composition Scheme. There is relaxation in return filing compliance, with quarterly filing required.