Understanding and Navigating GST: A Business Owner's Guide

What is GST?

Goods and Services Tax (GST) is a unified indirect tax levied on the supply of goods and services. It replaced a plethora of indirect taxes like VAT, Service Tax, Excise Duty, etc.

Why does Mool need your business’s GST information?

• Verification of Purchases: Like other businesses, Mool needs to verify authenticity of our B2B customers through GST information.
• Compliance and Auditing: Tax authorities may cross-verify the GST numbers to ensure compliance with GST regulations.
• Accurate Reporting: Businesses need to report the GST details of their suppliers and customers in their GST returns.
• Smooth Transactions: Sharing GST numbers facilitates smooth business transactions and reduces paperwork.
• Trust and Reliability: Having a GST number is a sign of a legitimate business.

Key GST Concepts for Businesses

• GST Registration: Businesses exceeding a certain turnover threshold must register for GST.
• GSTIN: A unique 15-digit number assigned to registered businesses.
• Input Tax Credit (ITC): Businesses can claim credit for the GST paid on their input supply of goods and or services.
• Output Tax Liability: GST payable on the supply of goods and services.
• GST Returns: Periodic filing of returns to report sales, purchases, and tax liability.
• GST Rates: GST is levied at various rates, including 0%, 5%, 12%, and 18%.

How To Get a GST Number?

Businesses with an annual turnover exceeding Rs. 20 lakhs (Rs. 10 lakhs for special category states, Rs 40 lakhs just for goods) are required to register for GST. 

Certain businesses, such as those involved in inter-state supply of goods or services, are mandatorily required to register, regardless of their turnover.

Steps To Get GSTIN:

1. Go to the official GST portal: https://www.gst.gov.in/.
2. Under the "Services" tab, select "Registration" and then click on "New Registration."
3. Fill in the required details, including: Legal name of the business, state, district, PAN number of the business, mobile number, and email address. Note: If contact details are linked with PAN, you can skip entering email address and phone number.
4. Verify your mobile number and email address via OTP.
5. Submit the form to receive a Temporary Reference Number (TRN).
6. Log in to the GST portal using your TRN.
7. Fill in detailed information about your business, such as: business address, principal place of business, bank account details, and authorized signatory details.
8. Upload necessary documents (PAN card, Aadhaar card, rental agreement, etc.)  
9. Pay the required fees (if any).
10. Submit the form to receive an Application Reference Number (ARN).

The tax authorities will verify the information provided. Once approved, you will receive your GSTIN (GST Identification Number).   

How To Download a GST Certificate?

A GST certificate is a crucial document for businesses registered under the GST system in India. It serves several key purposes like proof of registration, legal recognition, and tax compliance. 

Steps To Download GST Certificate:

1. Open your web browser and go to the official GST portal: https://www.gst.gov.in/
2. Enter your valid username and password in the login fields
3. Enter the captcha code and click on the "Login" button.
4. Once you're logged in, hover your mouse over the "Services" tab.
5. A dropdown menu will appear. Select "User Services" from the menu.
6. In the "User Services" section, click on the "View/Download Certificates" option.
7. A list of certificates issued to you will be displayed.
8. Find the GST registration certificate you want to download.
9. Click on the "Download" icon next to the certificate.
10. The certificate will be downloaded in PDF format.

How To Calculate GST?

To calculate GST, you need to know the cost of the product or service and the applicable GST rate. Here are the two main scenarios:  

Scenario #1 : Calculating GST on a product or service

• Determine the GST rate: The GST rate varies depending on the type of product or service. Common rates in India are 5%, 12%, 18%, and 28%.   
• Calculate the GST amount: Multiply the cost of the product or service by the GST rate.   
• Calculate the total cost: Add the GST amount to the original cost.  

Example:

• Cost of a product: Rs. 1000
• GST rate: 18%   
• GST amount: 1000 * 18/100 = Rs. 180
• Total cost: 1000 + 180 = Rs. 1180

Scenario #2: Calculating the original cost when the total cost (including GST) is known

• Determine the GST rate: Same as above.
• Calculate the original cost: Divide the total cost by (1 + GST rate/100).

Example:

• Total cost (including GST): Rs. 1180
• GST rate: 18%   
• Original cost: 1180 / (1 + 18/100) = Rs. 1000

Important Points To Note

• Time: The entire process may take a few days to a few weeks.   
• Fees: There may be a nominal fee for GST registration.
• Documents: Keep all relevant documents ready for uploading.
• Assistance: If you need help, consult a tax professional or visit a GST Suvidha Kendra: https://gstsuvidhakendra.org.in/login/?redirect_url=/ 

Tips for Effective GST Compliance

• Maintain Accurate Records: Keep detailed records of all transactions, invoices, and tax-related documents.
• Seek Professional Advice: Consult with a tax professional to understand GST rules and regulations.
• Stay Updated: Keep abreast of the latest GST notifications and amendments.
• Use GST Software: Utilize GST software to automate calculations, filing returns, and other compliance tasks.
• File Returns on Time: Prioritize timely filing of GST returns to avoid penalties.
• Resolve ITC Issues Promptly: Address any ITC-related issues with tax authorities to avoid delays and disputes.

By understanding and effectively implementing GST, businesses can streamline operations, reduce costs, and enhance overall compliance.