The Goods and Services Tax (GST) is a complete, multi-stage, destination-based tax that substitutes a variety of indirect taxes in India. If you recently opened a business, you must have a query: is GST required for small business? Yes, per the GST Act, all small enterprises that manufacture items and have an annual revenue of more than Rs. 40 lakhs are required to register for GST. Read on to know more about it.
Is It Mandatory to Have GST Number for Small Business?
The requirement for GST registration depends on the turnover and nature of the small business. GST is a unified tax system applicable to all businesses engaged in the supply of goods or services in India.
Small businesses with an annual aggregate turnover below Rs. 40 lakhs (for goods) and Rs. 20 lakhs (for services) are exempt from GST registration.
For businesses in special category states, the threshold is Rs. 20 lakh (goods) and Rs. 10 lakh (services).
Even if your turnover is below the threshold, you can voluntarily register for GST to avail input tax credit, improve business credibility, and expand to interstate markets.
GST registration becomes mandatory if:You are engaged in an interstate supply of goods or services.
You are an e-commerce operator or supply through e-commerce platforms.
You are involved in reverse charge transactions.
Your business deals with taxable supplies under GST, regardless of turnover.
Small businesses with turnover up to Rs. 1.5 crore can opt for the Composition Scheme, paying a reduced GST rate. However, such businesses cannot claim input tax credit.
This is all about is GST compulsory for small business.
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Is GST Required for Small Business?
ali
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2024-11-29T15:24:32+00:00 2024-11-29T15:24:33+00:00Comment
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