The total number of businesses registered under the recently implemented GST may hit 1-crore mark by the end of the current financial year 2017-18.
The government expects that the total number of businesses registered under the recently implemented GST may hit 1-crore mark by the end of the current financial year 2017-18, The Times of India said citing unidentified government sources. This figure will include both, registration of old businesses, as well as the new ones, which were not registered under the previous tax regimes, and would thus lead to a significant growth in the tax base.
Earlier last week, the government had said that the new registrations under GST have crossed 10-lakh mark, with another 2 lakh applications pending for approval. The new registrations with more businesses coming under the tax net would result in greater compliance and likely a dramatic rise in the government’s indirect tax collections.
Earlier this month, the government implemented GST in a grand midnight ceremony, which is India’s most sweeping tax reform since independence. The new tax regime seeks to unite India into one single market with just one indirect tax subsuming over 17 different Centre and state levies on various products and services.
Registration under GST is mandatory for all businesses earning Rs 20 lakh or above in a year. For the existing businesses, the deadline for registering under GST was July 30. Businesses that later become liable under GST could register within 30 days of becoming liable for it.
Apparently, small businesses, notwithstanding the move to a more computerised ecosystem, which they might be tempted to resist initially, have much to benefit from GST. Businesses with annual turnover of less than Rs 75 lakh are allowed to register in the composition scheme, under which they would have to file only one return every four months. This scheme is applicable to startups involved in goods and restaurants. For even smaller service providers, GST is proving to be a boon. The turnover exemption limit for GST has been set at Rs 20 lakh per annum, which is double the earlier limit of Rs 10 lakh for service tax. This has meant that more small service providers are now not in the tax net at all.
On the other hand, small manufacturers are the ones bearing the brunt of the same turnover tax limit. The earlier turnover exemption limit for excise registration was at Rs 1.5 crore per year. Most of those businesses would now come under the GST net with their turnover crossing Rs 20 lakh.