An individual running a business in India who is registered or needs to register under the Goods and Services Act is a taxable person. You are considered a taxable individual if you are involved in any economic activity like trade and commerce. Any business with an annual turnover above the threshold value must register under the regular GST scheme. As a result, one must maintain digital records, file returns, claim input tax credits, and more. Let’s understand what a regular GST scheme is, who is liable to register under GST, the difference between GST schemes, and more.
What Is Meant By Regular GST Scheme?
Regular Goods and Services Tax is a GST registration type. Regular taxpayer GST requirements involve paying GST when a business’s turnover exceeds a threshold value in a specific fiscal year. A supplier must register with the state or union when supplying goods and services.
The GST registration threshold limit is Rs. Twenty lakhs / Rs. Forty lakhs. Besides, the threshold limit is only Rs. 10 lakhs in certain jurisdictions. GST compliance for regular taxpayers requires them to file quarterly returns for up to Rs. 5 crore in turnover besides paying monthly taxes.
Businesses with a turnover above Rs. 5 crore must file returns on a monthly basis. In certain states with revenue of a certain lesser amount, like Rs. 75 lakhs, taxpayers are allowed to use this scheme. Mizoram, Meghalaya, Nagaland, Manipur, and Sikkim are a few examples.
Individuals and businesses subject to regular GST must file their returns on time. Then, they can avail of input tax credit perks while buying goods and services.
Who Must Register Under GST?
- Any business with an annual turnover of Rs. 40 lakh, Rs. 20 lakh, and Rs. 10 lakh, depending on the category of states, must register under GST.
- Any business or individual earlier registered under VAT, excise, services tax, etc., must do the same for GST.
- A person or business performing interstate trade.
- If a business has been transferred or demerged, it must be registered under GST based on the transfer date.
- Non-resident taxable individual.
- Casual taxable individual.
- Individuals paying taxes under the reverse mechanism.
- A supplier’s agent.
- E-commerce distributors.
Also Read: Address Proof Requirement for GST Registration
Difference Between Regular And Composite GST?
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Regular GST |
Composite Scheme |
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The output taxes are paid based on the standard GST plans. It takes into account the applicable input tax credit. |
The Composite Scheme is simpler for small taxpayers. Taxpayers pay a fixed amount under this scheme to avoid challenging legal compliance. |
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GSTR 9 and GSTR 9C are filed annually, GSTR 3B monthly, and GSTR-1 on a monthly or quarterly basis. |
GSTR 4 annually, GSTR 9A annually, and FORM CMP-08 every quarter. |
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Supply of goods and services can be both interstate and intrastate in this category. |
The supply is only intrastate under this category. |
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GST Threshold is Rs. 20 lakhs/Rs. Forty lakhs, depending on the state and business. |
Rs. 1.5 crore for suppliers of goods and restaurants. Rs. Fifty lakhs for service providers. |
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The checklist for compliance under GST for regular taxpayers says no exceptions fall under this category. |
Persons carrying interstate trade, suppliers of non-taxable goods, pan masala, ice, tobacco producers, etc., cannot opt for this scheme. |
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You are required to issue a tax invoice under this scheme. |
The bill of supply is issued here. |
Benefits Of Regular Taxpayers Under GST
Unlimited Territory Of Business
Under the regular or traditional GST scheme, a business has the advantage of an unlimited territory. The scheme allows businesses to conduct trade across different states and national borders. There are no geographical restrictions within the country where GST is applicable. It promotes economic growth and allows businesses to expand their reach and enter a larger market area.
Availability Of Input Tax Credit
Another fundamental feature of this GST scheme is the availability of input tax credits. It means businesses can claim credits on inputs like raw materials, goods, and services against the GST collected on the sales. Besides eliminating the cascading effect, it also reduces the overall tax burden. It promotes efficiency, reduces operational costs, and also reduces tax liability.
Selling Via E-Commerce Portal
One can sell goods and services via an e-commerce portal by fulfilling essential requirements for regular GST taxpayers. Online platforms have become a crucial center for enabling trade and results in providing a wider customer base. E-commerce platforms also significantly benefit from GST. They facilitate compliance by sellers on their platforms and ensure appropriate tax collection and remittance.
Conclusion
Choosing a regular GST scheme can be a beneficial decision for businesses. Businesses with complex operations or those dealing with goods and services will find the regular scheme more straightforward. It is a comprehensive solution to handle tax obligations. The regular GST scheme reduces the cascading effect and allows businesses to offset their tax liability. It simplifies tax management and allows businesses to streamline their financial operations. One should carefully review their business needs, the nature of the business, and the GST regulations applicable to the industry to determine which scheme will best suit their needs.
FAQs
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Who is eligible for regular GST?
If the annual turnover of a company exceeds Rs. 40 lakh, they can register under the regular scheme. Factors to consider while registering include the threshold limit, necessary documents, registration eligibility, etc.
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Is GST composite or regular?
The composition scheme is a GST registration type offered to small businesses. The regular scheme offers perks like unlimited business territory and ITC. Besides, a composite scheme reduces paperwork and lowers tax liability.
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What are the different types of taxpayers in GST?
The different types of taxpayers under GST are regular, composite, and exempted taxpayers.
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What is the difference between regular and composite dealers?
A normal dealer can perform both local and interstate trades, while a composition dealer only allows interstate trades.
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Who is an unregistered dealer in GST?
A person whose aggregate turnover does not exceed Rs. 45 lakh is not required to undergo GST registration. These are unregistered vendors, and purchasing from them does not attract GST.
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What is the regular limit for GST?
The regular limit for GST registration is Rs. 40 lakhs for goods and Rs. 20 lakhs for services. While businesses under Rs. 40 lakh turnover and not required to register under GST authorities can opt for voluntary registration.
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How do I know if my GST is regular or composite?
Go to the GST portal’s homepage and select “Navigation Search Composite Taxpayer.” A taxpayer can identify the registration type from here by entering the GSTIN or state.
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What happens if you don’t have a GST number?
A business doesn’t need to register under GST if the annual turnover is below Rs. 20 lakh. However, a business cannot charge GST if it is not registered.
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Can a GST return be skipped?
If a GST return is skipped, one cannot file the subsequent returns.
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Which businesses don’t need GST?
A business dealing with goods like fabrics, printed items, pottery, hand tools, etc. is included in the list of GST exemptions on goods.
