The name Goods and Services Tax (GST) itself reflects that it is a taxation system that takes into account – the goods and the services. This means GST is applicable on both the tangible goods as well as the intangible services while maintaining the balance of both the Central and the State Government independent revenues through a dual mechanism of GST.
On 1st July, 2017 marked the commencement of the GST regime that brought a comprehensive, multi-stage, and destination-based tax that is charged on every value addition. GST regime shall enhance transparency in the indirect tax framework and is expected to bring down the rate of inflation and cascading effect of tax. It will also be a hike to investment inflows, e-commerce and “Make in India” approach.
So, to claim the ITC and to collect the GST from customers, GST registration is compulsory. GST, therefore is a destination-based tax applicable on all transactions, involving supply of goods / services for a consideration.