Tax Registration in Business

Many business owners today operate service-based enterprises like online marketplaces for e-commerce, apps, classified websites, and more, but they are unaware of the requirement to register for the applicable service tax.

Service Tax:

According to the Finance Act of 1994, service tax is an indirect tax assessed on a variety of services that the Central Government has designated. The service provider, such as a restaurant or tour company, pays the tax and collects the money from the patrons.

 If the previous fiscal year’s turnover was more than Rs. 9 Lakh, the service provider must be registered with the Central Government in order to pay this tax. However, collection can only begin at a rate of 15% (Updated) when the company’s annual revenue exceeds Rs. 10 Lakh. Once you reach this threshold, you are obligated to always collect the tax, even if your turnover is lower in subsequent years.

The recipient of the service is responsible for paying service tax. Service taxes, however, are an example of indirect taxation. As a result, the service tax part must be paid to the government by the person who renders the taxable service in exchange for service fees and the service tax. Additionally, service tax is not applicable to small-scale service providers who render taxable services worth less than Rs. 10 Lakhs annually.

A copy of the PAN card, evidence of the business address, and documentation of at least one business location’s address such as a partnership deed, incorporation certificate, etc. are needed to get service tax registration.

Professional Tax:

The state governments impose profession taxes on workers, employers, traders, and professionals (CA, CS, lawyers, doctors, etc). All types of business entities are covered. Under this Act, employers are required to register both themselves and their employees. The employer is responsible for filing taxes and registering. Because it is a state tax, each state has a separate tax rate, registration requirements, deadlines, penalties, and late fees.

Everyone who owns a business or offers a professional service should register with PT. The tax is computed using slabs of gross income. The maximum amount of profession tax that an employer and each employee are each liable for is Rs 2,500. A company must register for professional taxes in each state where it has employees if those employees work in several states. Regardless of the number of employees or the revenue from a business or profession, profession tax is applicable.

There are certain persons who need to register under professional tax. These are:

1. Employers (Company, LLP, sole proprietor, HUF, clubs, etc) (Company, LLP, sole proprietor, HUF, clubs, etc)
2. Paying personnel
3. Individuals who are self-employed
4. Professionals
5. Directors or partners

There are certain documents required in for registration:

1. Certificate of incorporation, MOA, and AOA in the case of a company
2. In the case of an LLP, the LLP agreement and certificate of incorporation
3. Partnership Deed in the event of a Partnership Firm
4. a scanned copy of the entity’s pan card
5. Address rental agreement, electricity bill, and rent receipts are evidence of the business.
6. Identity documentation for the director, partner, or business owner: Aadhaar card, passport, or driver’s license Address proof of being a director, partner, or owner
7. a passport-size photo of the owner, partner, or director
8. Employee information and a wage register
9. Bank statement or canceled check
10. Business information
11. Beginning date of the business
12. Assesses email address and mobile number

Goods and Service Tax:

The benefits listed below will be granted to the business upon registration under the Goods and Service Tax (GST) regime:

1. Formally acknowledged as a provider of goods or services
2. Accurate accounting of taxes paid on input goods and services that can be used to pay GST since the business is supplying goods, services, or both.
3. Legally able to charge his customers taxes and give customers or beneficiaries a tax credit for taxes paid on the goods or services they received.

According to the CGST Act of 2017’s section 22(1). Except for special category States, all suppliers in the State or Union Territory who make taxable supplies of products, services, or both must register under this Act if their combined annual revenue exceeds 20 lakh rupees. According to the information provided, if a person’s total annual revenue exceeds 10 lakh rupees and they make taxable supplies of products, services, or both from one of the special category States, they must register.

The Central Government of India’s portal will be used for the online GST registration process. In order to assist enterprises with the registration process, the government will also select GSPs (GST Suvidha Providers). A person cannot claim an input tax credit for taxes paid by him without first registering, nor can they collect taxes from their clients.