Still looking around accounting services in Delhi NCR or elsewhere, to understand what to take care of when registering for GST? To those who are not yet aware of what GST means, it stands for Goods and Services Tax, a tax imposed on the sale of goods and services. It is levied on the value added to the goods or services of the supply chain, from manufacturer to consumer.
Things to consider when registering for GST
Here are tips for businesses during GST registration:
- Determine if a business qualifies – Businesses whose annual turnover exceeds Rs. 40 lakhs (Rs. 20 lakhs for businesses in special category states) are required to register for GST. Even if your business turnover is less than the threshold, it may be beneficial to register voluntarily with any GST registration in Delhi NCR or across India, as it can provide you with benefits such as claiming input tax credit.
- Keep records intact and accurate – It’s important to keep accurate records of your sales, purchases, and expenses, which is critically important for filing income tax return in Delhi or any other city. This will help you in determining GST liability, filing returns, and claiming input tax credit.
- Obtain GST registration within prescribed time – If your business is required to register for GST, it’s important to obtain registration within the prescribed time, which is generally within 30 days of crossing the threshold limit. Failing to do so can result in penalties and interest.
- Ensure proper classification of goods and services – GST rates vary depending on the type of goods or services. It’s important to ensure that you have classified your goods and services correctly to avoid any errors in filing returns and paying taxes.
In addition, GST registration in Delhi NCR or wherever you choose to do, is quite beneficial. For instance, by registering for GST, you can claim input tax credit on your purchases. This means that you can reduce the amount of GST you need to pay on your sales by the amount of GST you have paid on your purchases.Â
Practical Examples to Prove the Need of GST
Let’s discuss a hypothetical scenario to understand the importance of registering for GST, in relevance to income tax return in Delhi NCR or nationally. Imagine you run a small clothing store and your turnover for the previous financial year was Rs. 50 lakhs. This means that you are required to register for GST.Â
However, you failed to do so within the prescribed time. As a result, you are liable to pay a penalty of Rs. 10,000 or 10% of the tax due, whichever is higher. This penalty could have been avoided if you had registered for GST within the prescribed time with GST registration service provider in Delhi NCR.
There are a lot more real-life examples to prove the benefits of GST, as any accounting services in Delhi NCR would tell you:
- A small restaurant in Mumbai that sells food and beverages decides to register for GST voluntarily, even though their annual turnover is below the threshold. By doing so, they are able to claim input tax credit on their purchases of food and other supplies, which reduces their overall tax liability and a competitive pricing.
- A startup that manufactures and sells mobile phone accessories crosses the annual turnover threshold of Rs. 40 lakhs within their first year of operations. They register for GST within the prescribed time and begin collecting and remitting GST to the government. By doing so, they are able to participate in tenders and business opportunities that require GST registration.Â
- A small business that provides consulting services to clients in the IT sector is not required to register for GST as their annual turnover is below the threshold. However, they decide to register for GST voluntarily as many of their clients are registered for GST and require GST-compliant invoices. By doing so, they are able to provide their clients with compliant invoices and streamline their billing processes.
In all of these examples, the businesses are able to benefit from registering for GST, either by reducing their tax liability, accessing business opportunities, or streamlining their operations. While registering for GST may seem daunting at first, but can ultimately provide businesses with a range of benefits and help them grow and succeed in the long term, as advisable by any accounting services in Delhi NCR.
Conclusion
Businesses should ensure that they should go for GST registration and other compliances within the prescribed time to have a smooth sail with income tax return. In addition, businesses should take care of accurate records, classify goods and services correctly, and take advantage of the GST system. By following these tips, businesses can avoid penalties and take advantage of the opportunities provided by the GST system.
