In India, an individual is required to register under the Goods and Services Tax (GST) if his/her aggregate annual turnover of taxable supplies exceeds the specified threshold limit. The threshold for mandatory GST registration is Rs 20 lakh for most states and Union Territories, except for special category states where it is Rs 10 lakh.
“The threshold for GST registration and payments is Rs 20 lakh for service providers and Rs 40 lakh for traders and manufacturers of goods. This remains the same for individuals and corporates,” says MS Mani, partner, Deloitte India.
Certain categories of individuals, such as those providing inter-state supplies, are required to register for GST, irrespective of their turnover. After registration, individuals need to collect GST on their supplies, file regular returns, and adhere to GST compliance regulations set by the Indian tax authorities.
Says Krishan Arora, partner, Grant Thornton Bharat: “Failure to comply with the registration requirements may lead to legal consequences. So, it is important to understand the significance of GST and adhere to the stipulated provisions under the GST laws.”
In India, individuals engaged in economic activities exceeding the prescribed turnover threshold are required to file GST returns. The process begins with GST registration, where individuals obtain a unique GSTIN. Once registered, they can access the GST portal to log in and choose the appropriate GST return form based on their business nature.
Individuals then fill in the necessary details in the selected return form, including information on sales, purchases, and input tax credit. After completing the form, they must verify it using a digital signature or an Aadhar-based OTP. Upon verification, the return is submitted on the GST portal. If there is any tax liability, individuals need to pay the taxes due through available online modes.
After successful submission, the GST portal generates an acknowledgment receipt. Individuals must keep this acknowledgment and maintain records of invoices and other supporting documents for future reference. Filing GST returns within the specified due dates is essential to avoid penalties and ensure compliance with GST regulations. Seeking professional advice can further assist individuals with inaccurate filing and adherence to GST norms.
Eligibility for GST refunds arises under specific circumstances, and the process is delineated under Section 54 of the CGST Act, 2017, read in conjunction with the applicable rule.
Says Arora: “Businesses or individuals are typically eligible for a GST refund when the input tax credit (ITC) accumulated exceeds the output tax liability, resulting in a surplus.”
This situation commonly occurs when the rate of GST on input supplies is higher than the output tax on the final goods or services.
“Refunds can be claimed for various scenarios, including zero-rated exports, inverted duty structure, or deemed exports. The process involves filing a refund application through the GSTN portal, specifying the relevant details, and attaching the required documents,” says Arora.
GST authorities scrutinise the claim, and upon approval, the refund amount is credited to the taxpayer's bank account.
Do note that it is essential to adhere to the procedural requirements outlined in the CGST Act and Rules to facilitate a smooth and successful GST refund process.
