GST is the biggest tax reform in India, tremendously improving ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. By abolishing and subsuming multiple taxes into a single system, tax complexities would be reduced while tax base is increased substantially. Under the new GST regime, all entities involved in buying or selling goods or providing services or both are required to register for GST. Entities without GST registration would not be allowed to collect GST from a customer or claim input tax credit of GST paid or could be penalised. Further, registration under GST is mandatory once an entity crosses the minimum threshold turnover of starts a new business that is expected to cross the prescribed turnover.
How GST Works?
GST is basically a unified and consumption based tax for everything what you purchase, sell or provide services at the different rates (basically depend upon the nature of product or services) at different point of places throughout India. If the purchase was made by a business for sale to its prospective customer, then the business can put its difference of tax amount as set-off amount against any liability, if arises.