GST Council likely to Approve Two-year Extension of Compensation cess Levy

gst council

The introduction of Goods and Services Tax in the budget speech was presented on 28th February 2006. It was a significant step in laying the foundation for a complete reform in India’s indirect tax system – replacing all the previous state tax systems like VAT, service tax, excise duty, etc. GST also removes the cascading effect of tax-on-tax, earlier prevalent. This tax is applicable if you are into manufacturing, trading, e-commerce or providing services, and your annual turnover exceeds a prescribed limit.

The GST (Goods and Services Tax) Council is likely to approve a two-year extension of compensation levied on goods and services to allow Centre to pay the entire shortfall in GST tax collection by states till June 2022. Sources in the government stated that with 21 states expressing their preference for the Borrowing Option-1 to meet the GST compensation needs of states this year, the next course of action would be to extend the period of cess levy beyond the 5 year GST transition period ending in June 2022.

As the GST Council is likely to adopt the compensation formula suggested by the Centre of the challenging year of pandemic, sources said it might also decide the duration of compensation cess levy should be extended to clear all dues to states.

What is GST?

GST has been one of the most significant tax reforms this country has seen. It is a single tax that replaced all the multiple taxes that were applicable previously, such as Central Excise, Octroi, VAT, Entry Tax, Service Tax, etc. GST was introduced nationwide on July 1, 2017. The Goods and Services Tax is a destination-based tax that follows a dual model in which both the State as well as Central government levy tax on all the goods and services.

All businesses are required to register for a GST number for every State that specific company has been registered in. Under the GST regime, it is best to know whether the business is liable for GSTIN or Goods and Services Tax Identification Number registration and only then will it be registered accordingly.

GST Registration Online

The procedure to apply for GST Registration online is mentioned below:

  • Step 1: Visit the GST portal online at (https://www.gst.gov.in/).
  • Step 2: Click on ‘Register Now’ link which can be found under the ‘Taxpayers’ tab
  • Step 3: Select ‘New Registration’ and fill the below-mentioned details and click on ‘Proceed’.
  • Step 4: Now enter the OTP that was sent to the email ID and mobile number in the respective boxes.
  • Step 5: You will be shown the Temporary Reference Number (TRN) on the screen. Make a note of the TRN.
  • Step 6: Revisit the GST portal and click on ‘Register’ under the ‘Taxpayers’ menu.
  • Step 7: Select ‘Temporary Reference Number (TRN)’. Enter the TRN and the captcha details and Click on ‘Proceed’.
  • Step 8: You will receive an OTP registered mobile number and email id. Enter the OTP and click on ‘Proceed’.
  • Step 9: The status of your application will be available on the next page. On the right side, click on the Edit icon.
  • Step 10: Once completed, a message will be displayed on the screen, and the Application Reference Number (ARN) will be sent to you on your registered mobile number and email ID.

GST Registration Online for New Business

  • Step 1: Visit the GST portal online at (www.gst.gov.in)
  • Step 2: Start filling in part –A of the registration form 1
  • Step 3: You will now receive an application reference number on your mobile and via email
  • Step 4: Fill in the second part of the registration form and upload the required documents according to the business type
  • Step 5: Obtain a registration certificate from the GST portal.
  • Step 7: Submit the required documents along with GST REG-04
  • Step 8: Go through the email and look for errors. In case of any errors, your application may get rejected; you will be notified about the same in form GST REG-05.

Documents Required

The following are the primary documents required for GST registration:

  • PAN card of business
  • The business’ address proof
  • Bank account statements/cancelled cheque for proof of income
  • Aadhaar card if applicable
  • Documents for Proof of business registration or an incorporation certificate is required
  • Identity and Address proof of the Director/Promoters
  • Passport Size Photographs
  • Letter of Authorization/Board Resolution for Authorized Signature
  • Digital Signature
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