Goods and Services Tax (“GST”) an indirect tax that is collected for different products and services in India helps encompass all different taxes such as excise duty, service tax, customs duty, etc into one tax regime. The complications that arise due to the complexities of taxes is much reduced after the introduction of GST. Registering a business under GST, is nothing but obtaining a unique number from the relevant tax jurisdiction with the objective of collecting tax from the consumers on Government’s behalf and also to benefit tax credits on the domestic supplies.
Once the GST registration is obtained certain steps are required to be followed as per the regulations of receiving the GST Registration. When certain businesses are implemented in various states in India, every branch should be separately registered under GST and must comply to the rules of GST.
Visibility, Supply Location and Invoicing Procedures after GST Registration
The establishment that has received the GST certification must present it in a prominent place somewhere inside the facility. Every branch associated with the business should also comply with the same. Upon receiving the GST Identification Number (GSTIN), the same must be displayed at the entrance of the organisation’s registered office.
Depending on the essence of the operation and place from where the product or services is supplied, state internal or external, taxes such as CGST, IGST or SGST are accordingly charged. It is to be noted that the supply location regulations are different for Services and Products.
The Input Tax Credit of a buyer will depend on the GST invoice, which is provided by the seller. Thus after receiving the GST Registration it is a must to start issuing bills that comply to invoicing regulations. Bills issued between the actual Registration date to the issuance date of certificate must be reissued by the company under the GST invoicing act within one month of receiving the GST certificate after registration.
Invoice Mandatories and GST Collection after GST Registration
Every invoice billed after GST Registrationrequires certain mandatory field to be filled as per the CGST requirements. They are as follows
- Date of Issue
- GSTIN of the Vendor
- GSTIN of the recipient with his or her complete details
- Unique serial number that is 16 digits, alphanumeric
- Value of the goods
- Quantity of the goods
- Explanation on the good and services
- Tax value that’s being charged
- HSN code
- Breakup in taxes such as CGST & SGST or IGST
- Location of supply
- Finally, Authorised Signature of the Company supplying
There is an invoicing time limit that is required to be followed, such as while delivering the products, an invoice with tax inclusion is produced but if it’s a service rendered then 30 days is the timeline within which an invoice needs to be issued.
When it comes to the actual GST charges and rates on all sales made, there are four GST rates that are being followed according to the GST laws. Depending on the grade of goods and services and the HSN code the GST percentages are allotted. Every taxpayer is required to know the tax rate and put in the same while raising a GST invoice as an error can lead to heavy penalties. GST tax is generally debited from the purchaser in most cases.
Role of Input Tax Credit post GST Registration
Once the GST Registrationis completed and the certificate is received, the company becomes eligible for Input Tax Credits claims. The dealer will not be able to claim ITC on the Products and Services purchased. The digital credit log will save all the accumulated ITC amounts with the GSTIN. The same amount that gets saved because of ITC is used to eliminate the burden caused by GST. ITC helps the seller to reduce the overall price on the products, in turn benefitting the consumer with lesser price. Every business is required to maintain records and accounts post GST Registration is a very tough law that GST abides to. Almost all transactions done by the seller is GST taxable and the charge is then credited to the government by the seller. Whereas the GST registered company or individual will deposit the GST charges to the government if it falls under the reverse charge mechanism.