1. You can reduce your purchase cost by availing the benefits of ITC.
A Product A which costs Rs. 100/- to a GST registered dealer, the same product costs another unregistered dealer Rs. 118/- (At general GST rate of 18%). This is because the registered GST dealer gets the ITC benefits. In this example, the GST registered dealer gets the credit of Rs. 18/-.
Hence, by just registering under the GST, you can reduce the cost of your supplies.
2. The GST Number helps in increasing the brand value of the business.
Practically speaking the serious businesses only deals with suppliers who are registered under GST. GST registered status helps to gain brand values.
3. With the help of a GST Number, a current bank account can be opened.
It is a practical issue that a business needs a current account for making and receiving day-to-day payments, but the current account cannot be opened without GST registration.
4. Only a GST Registered can sell online.
If you want to sell on eCommerce Marketplace then it is mandatory to get registered under GST. Without GST registration one cannot be get registered and sell under the eCommerce Marketplace. For eg. Amazon, Flipkart, eBay, etc.
5. GST registration shows valid proof as a legal entity registration.
While doing the business, what matters most is TRUST. Trust helps to gain clients and customers fast. GST helps to gain more trust than those who are not yet registered. Serious businesses only deal with the businesses which are registered under the GST.
It is because in GST portal anyone can get the details of registered dealers. Anyone can get the business registration information of any registered dealer. It helps to gain confidence in doing business.
6. ITC credit can be claimed only when you have GST Number.
The crux of GST is ITC credit. Under the GST Act tax charged by the seller can be claimed as ITC credit by the buyer. The ITC can be claimed only when the dealer is registered under GST. ITC reduces the cost of products & services. Due to ITC availability, the net GST is charged only on the value or profit added by the dealer.
For example, if X purchases goods from A for Rs. 100/- then A will charge GST of Rs. 18/- (assuming the GST rate of 18%). So, X will pay Rs. 118/- to A.
Now, when X will sell the goods to B for Rs. 150/- then X will charge Rs. 27/- (Rs. 150 x 18%).
Now, while paying the GST of Rs. 27/- charged to the government, X will claim the ITC of Rs. 18/- paid to A.
Now, the Net liability of X will be Rs. 9/- i.e., (27-18).
Or we can say that the Net liability comes at 18% of Rs. 50/- i.e., the net value/profit added by X.
7. Big projects can be accepted from Multinational Corporations (MNCs).
As earlier said MNCs or serious business players never deal with businesses that are not registered under the GST.
