Since its implementation on 1st July 2017, the Goods and Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers operating in India. GST was introduced to simplify the indirect taxation system by replacing multiple Central and State-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT. The unified tax structure aims to streamline compliance, reduce cascading taxes, and create a common national market. GST registration charges can vary based on the nature of the business and its annual turnover.

For taxpayers with an annual turnover of less than ₹1.5 crore, the GST framework offers an option for the composition scheme. This scheme allows eligible businesses to follow simplified GST procedures and pay taxes at a predetermined rate based on their turnover, making compliance easier and more affordable.

The GST mechanism functions throughout various stages of the supply chain, including the procurement of raw materials, production, wholesale distribution, retail, and the final sale to the end consumer. Importantly, GST is levied at each of these stages. For instance, if a product is manufactured in West Bengal and later consumed in Uttar Pradesh, the GST revenue generated from the sale is allocated entirely to Uttar Pradesh. This highlights the consumption-based nature of GST, where tax revenue is directed to the state where the goods or services are consumed.

Persons who are required to take compulsory GST registration

1. Businesses with Annual Turnover above the Threshold Limit (₹40 lakhs for goods (₹20 lakhs for special category states or ₹20 lakhs for services (₹10 lakhs for special category states).

2. Interstate Suppliers

3. E-commerce Operators and Suppliers

4. Casual Taxable Persons

5. Non-Resident Taxable Persons

6. Persons Making Interstate Supply of Goods or Services

7. Persons Supplying Goods or Services on Behalf of Others

8. Input Service Distributors (ISD)

9. Businesses Covered Under Reverse Charge Mechanism (RCM)

10. Goods and Services Tax (GST) on Non-Exempt Products

11. Providers of Online Information and Database Access or Retrieval Services (OIDAR)

12. TDS/TCS Deductors.