Shopping Without GST: Navigating the Rules for Businesses and Consumers

In India, businesses can operate without GST (Goods and Services Tax) if their turnover does not exceed a certain limit. This article aims to provide clarity on the current GST registration requirements and the implications for both businesses and consumers.

Running a Business Without GST

A business does not necessarily need to register for GST if its annual turnover is below the specified threshold. Currently, this limit is set at 10 lakh for Special Category States (Manipur, Mizoram, Nagaland, and Tripura) and 20 lakh for the rest of the states, with specific exceptions for Goods and Services.

Special Category States

States like Manipur, Mizoram, Nagaland, and Tripura are categorized as special category states, and for them, the GST turnover threshold is set at 10 lakh for both goods and services. Other states, including Jammu and Kashmir (JK) and Assam, have an even lower threshold at 20 lakh for both goods and services.

Latest GST Registration Limitations

States were provided with the flexibility to opt for the new or the old GST threshold limits. JK and Assam, being hilly states, have recently chosen to increase the limit to 40 lakh for both goods and services. This is a significant change, as these states could have continued with the previous threshold limits of 10 lakh for total turnover, which was initially set for special category states.

Implications of Not Registering for GST

For businesses not registered under GST, several implications exist:

No GSTIN Required: Businesses with turnover below the stated limit do not require a GSTIN (Goods and Services Tax Identification Number). No ITC on Purchases: Since businesses do not need to register for GST, they cannot claim Input Tax Credit (ITC) on their purchases. This means the cost of these purchases is not reduced, potentially increasing the overall expense.

The Scenario for Consumers

Consumers, on the other hand, are not impacted by GST registration limits. They can shop without any concerns regarding GST. However, they should be aware that the lack of GST registration on the part of the seller can affect the overall cost of the goods or services.

Additional Insights

Kerala, a state prone to natural calamities, now has the option to impose a calamity cess of up to 1% on all intra-state supplies of goods and services. This levy is designed to provide additional funding to cope with natural disasters.

Overall, the key points to remember are that businesses can operate without GST if their turnover is below the specified threshold, and they can choose to register for GST to avail the benefits of ITC. Consumers can shop without any impact from GST, but they should be mindful of the potential financial implications for businesses.

For more detailed information and guidance, it is advisable to consult the official GST portal or seek professional advice.