When GST registration becomes mandatory for my business ?

 

When GST registration becomes mandatory for my business ? 

Are you a frequent UPI user or someone who engages in high-value transactions? You may need to consider obtaining GST registration.

Are you a frequent UPI user or someone who engages in high-value transactions? You may need to consider obtaining GST registration.

Under the Goods and Services Tax (GST) system, businesses are required by law to register with the GST framework to adhere to regulations governing indirect taxation on the supply of goods and services in India. Once registered, businesses receive a unique 15-digit GST Identification Number (GSTIN), which allows them to collect and pay GST to the government as part of their business activities.

The GST Department acts as a vigilant authority, closely monitoring businesses' financial transactions, including bank transfers, UPI, credit card payments, and other financial instruments, to ensure strict adherence to tax regulations. Recent reports of GST notices being issued to unexpected entities highlight the intense scrutiny by tax authorities on financial dealings across the country. If your business transactions through banking channels exceed the threshold of Rs. 20 lakh in a financial year, GST registration may become mandatory.

Suppliers engaged exclusively in the supply of goods may qualify for an exemption from mandatory GST registration if their annual turnover does not exceed Rs. 40 lakh in a financial year. However, suppliers of goods or services whose turnover surpasses this threshold and continue operating without obtaining GST registration are considered to have committed offences under Section 122(1)(xi) of the Central Goods and Services Tax Act, 2017, as well as corresponding state GST laws.

Offenders may face a penalty of Rs. 10,000 or 10% of the tax amount evaded, or the tax not properly deducted, whichever is higher.