Ishita Ramani
Quick Summary
Businesses that engage in specific forms of trade and supply or exceed the established turnover threshold in India are required to comply with the Goods and Services Tax (GST). Getting a new GST registration number within the allotted time is a crucial step for organizations. If you don't, you fear
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FAQ :
Penalties include a fine of 10% of the total tax liability with a minimum of ₹10,000, which can increase to 100% of the tax owed if intentional tax avoidance is detected. You may also face interest charges of 18% per annum on unpaid taxes.
Businesses operating without a GST registration number must still charge GST on taxable goods but cannot claim Input Tax Credit (ITC) on their purchases, increasing their overall tax burden. They may also face interest on late payments and potential legal action.
No, businesses without a GST registration number are not eligible to claim Input Tax Credit (ITC) on taxes paid on their purchases.
Legal actions can include the seizure of goods, cancellation of business licenses, and temporary or permanent closure of the business. Interstate sales and business with registered GST dealers may also be restricted.
Businesses should apply for a new GST registration number as soon as they meet the eligibility criteria, such as exceeding the annual turnover threshold (₹40 lakhs for goods, ₹20 lakhs for services) or engaging in specific taxable supplies like inter-state sales or e-commerce.
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