In India, many youngsters are willing to start their own business but get confused at the starting stage of their business, whether they should get registered under GST Act or not. In this article, we will discuss some major benefits that a business will get when they are registered under GST.
Legally Requirement to get GST Registration:
In India, if your business turnover is more than Rs.20 Lakh/ 40 Lakh (Turnover limit may vary in some states) then it is mandatory for you to get GST registration. It ensures that your business is compliant with the tax laws in India. By obtaining GST registration, you avoid legal penalties and operate within the framework of the law. Because now a day’s Income Tax Department and GST Department are sharing financial details with each other. If there is mismatch between anyone of them, then it may invite penal action from departments.
GST registration enhances the credibility of your business. It signifies that your business is recognized by the government and follows transparent and accountable practices. This can attract more customers, suppliers, and business partners, thereby expanding your business opportunities. Anyone can search your details on GST Portal using your GST Number; it gives an overview of your GST return filing track records. Now, you will get input tax credits only, if you file your GST Returns before due dates. By visiting your GST Profile, a new dealer can get an overview of your business behavior towards legal compliances.
Seamless Input Tax Credit:
With GST registration, you can avail of input tax credit. This means that you can claim a credit for the GST paid on your purchases against the GST liability on your sales. It eliminates the cascading effect of taxes and reduces the overall tax burden on your business. This allows you to price your products or services more competitively, potentially attracting more customers and increasing your sales.
GST registration is essential if your business operates across different states in India. Without GST registration, you would not be able to undertake inter-state sales. Registering under GST enables you to expand your market reach and explore opportunities in different regions.
GST has simplified the taxation system by replacing multiple indirect taxes. Once registered, you need to file regular GST returns, which are relatively easier to manage compared to the earlier tax regime. This streamlines your compliance process, saves time, and reduces the administrative burden, allowing you to focus more on business growth.
Access to Government Tenders:
GST registration and GEM Registration is often a prerequisite for participating in government tenders and contracts. Many government departments and agencies require bidders to be GST registered. By obtaining GST registration, you can unlock opportunities to secure government contracts, which can significantly contribute to your business growth.
Seamless Online Platform:
GST operates on an online platform, making it convenient and efficient for businesses to comply with their tax obligations. The GST portal provides various services such as return filing, payment processing, and accessing compliance-related information. This digitization promotes ease of doing business and reduces the complexities associated with the traditional tax system.
GST registration can give your business a competitive edge. By being GST compliant, you can attract customers who prefer to deal with registered businesses. It showcases your commitment to transparency, efficiency, and professionalism, which can set you apart from unregistered competitors.
GST registration enables businesses to expand beyond their current size and geographical limitations. With a streamlined tax system, businesses can explore new markets, set up branches in different states, or establish online sales channels with ease. This can lead to business expansion, increased revenues, and greater market presence.
Access to Input Suppliers:
GST registration allows businesses to engage with registered suppliers. This ensures that you can avail input tax credit on your purchases, as suppliers need to comply with GST regulations. It promotes a transparent and organized supply chain, reducing the risk of dealing with unregistered or non-compliant vendors. If you are GST Registered dealers then you can take input tax credit of GST Paid on your business promotion activities, telephone/ internet expenses etc which helps in overall reduction of costs and increases our profit.
For businesses engaged in export activities, GST registration is a prerequisite for claiming various export benefits and incentives. It enables you to apply for export refunds and enjoy zero-rated supplies, making your products or services more competitive in the international market.
If your business operates in the e-commerce sector, GST registration is mandatory, regardless of your turnover. Being registered under GST allows you to comply with the specific tax obligations related to online marketplaces and ensures a level playing field for all e-commerce businesses.
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA. Shiv Kumar Sharma” can be reached at mail – email@example.com and Mobile/WhatsApp–9911303737