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GST REGISTERATION

 

What is a GST registration?

GST Registration is a process by which a taxpayer gets himself registered under GST. Once a business is successfully registered, a unique registration number is assigned to them known as the Goods and Services Tax Identification Number (GSTIN). This is a 15-digit number assigned by the central government after the taxpayers obtain registration. 

In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for North Eastern and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.

 

Who is eligible to register under GST?

All the businesses supplying goods whose turnover exceeds Rs 40 lakhs in a financial year are required to register as a normal taxable person. However, the threshold limit is Rs 10 lakh if you have a business in north-eastern states like J&K, Himachal Pradesh and Uttarakhand. 

The turnover limit is Rs 20 lakh, and in case of special category States, Rs 10 lakh, for the service providers. 

Also, here is the list of certain businesses for which GST registration is mandatory irrespective of their turnover: 

  • Casual taxable person / Input Service Distributor (ISD)

  • Non-resident taxable person

  • Inter-state supplier of goods and services

  • Supplier of goods through an e-commerce portal 

  • Any service provider

  • Liable to pay tax under the reverse charge mechanism

  • TDS/TCS deductor

  • Online data access or retrieval service provider


Types of GST Registration

GST Registration

  1. Compulsory Registration

Under certain situations, the dealer must take Compulsory Registration under GST irrespective of the turnover. For eg: inter-state sales of taxable goods, e-commerce operator, e-commerce seller, etc

   

    2.Voluntary Registration

A business that does not need to apply for compulsory registration can apply for registration on a voluntary basis. It is called Voluntary Registration under GST.

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    3.Registration under Composition Scheme

If the aggregate turnover exceeds the prescribed threshold limit of Rs.40 lacs (Rs.20 lacs for special category states) for goods or Rs.20 lacs (Rs.10 lacs for special category states) but is less than Rs.1.5 Cr (Rs.75 lacs for special category states), the dealer can register under Composition Scheme.

In case of services, if the aggregate turnover exceeds Rs.20 lacs (Rs.10 lacs for special category states) but it is less than Rs.50 lacs, the dealer can register under the Composition Scheme. Under this scheme, the taxpayer should pay GST at a fixed rate on turnover and the compliance is lesser than in case of normal registration.
 

 

  1. No registration

  • The business for which aggregate turnover during the financial year does not exceed Rs.40 lacs for goods (Rs.20 lacs for special category states) or Rs.20 lacs for services (Rs.10 lacs for special category states).

 

  • The business that does not fall under the provisions of compulsory registration.

 

  • Persons selling goods or services that are exempt under GST or not covered under GST.

 

  • Agriculturists for the supply of crops produced from the cultivation of land.

 

Documents necessary for GST registration

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Take a look at the list of documents that you will need for registering your business under GST: 

  • Permanent Account Number (PAN) of the applicant

  • Copy of the aadhaar card

  • Proof of business registration or incorporation certificate

  • Identity and address proof of promoters/directors with a photograph

  • Bank account statement/cancelled cheque

  • Authorisation letter/board resolution for authorised signatory

  • Digital signature

 

Tabular Brief regarding for GST Registration Documents for Different Entities

GST Registration 1

Steps to complete GST registration process online

 

The step-by-step procedure that individuals must follow to complete GST Registration is mentioned below:

  • Step 1: Visit the GST portal - https://www.gst.gov.in

  • Step 2: Click on the ‘Register Now’ link which can be found under the ‘Taxpayers’ tab

  • Step 3: Select ‘New Registration’.

  • Step 4: Fill the below-mentioned details:

    • Under the ‘I am a’ drop-down menu, select ‘Taxpayer’.

    • Select the respective state and district.

    • Enter the name of the business.

    • Enter the PAN of the business.

    • Enter the email ID and mobile number in the respective boxes. The entered email ID and mobile number must be active as OTPs will be sent to them.

    • Enter the image that is shown on the screen and click on ‘Proceed’.

  • Step 5: On the next page, enter the OTP that was sent to the email ID and mobile number in the respective boxes.

  • Step 6: Once the details have been entered, click on ‘Proceed’.

  • Step 7: You will be shown the Temporary Reference Number (TRN) on the screen. Make a note of the TRN.

  • Step 8: Visit the GST portal again and click on ‘Register’ under the ‘Taxpayers’ menu.

  • Step 9: Select ‘Temporary Reference Number (TRN)’.

  • Step 10: Enter the TRN and the captcha details.

  • Step 11: Click on ‘Proceed’.

  • Step 12: You will receive an OTP on your email ID and registered mobile number. Enter the OTP on the next page and click on ‘Proceed’.

  • Step 13: The status of your application will be available on the next page. On the right side, there will be an Edit icon, click on it.

  • Step 14: There will be 10 sections on the next page. All the relevant details must be filled, and the necessary documents must be submitted. The list of documents that must be uploaded are mentioned below:

    • Photographs

    • Business address proof

    • Bank details such as account number, bank name, bank branch, and IFSC code.

    • Authorisation form

    • The constitution of the taxpayer.

  • Step 15: Visit the ‘Verification’ page and check the declaration, Then submit the application by using one of the below mentioned methods:

    • By Electronic Verification Code (EVC). The code will be sent to the registered mobile number.

    • By e-Sign method. An OTP will be sent to the mobile number linked to the Aadhaar card.

    • In case companies are registering, the application must be submitted by using the Digital Signature Certificate (DSC).

  • Step 16: Once completed, a success message will be shown on the screen. The Application Reference Number (ARN) will be sent to the registered mobile number and email ID.

  • Step 17: You can check the status of the ARN on the GST portal.

 

What are the Advantages of GST Registration?

Business entities can enjoy several benefits under GST. These include –

  • Abolition of cascading effect – Introduction of GST has eliminated the previously noted cascading effect in indirect taxation, causing double taxation in every step. This measure has lowered the tax liability of business entities.

  • Convenient application procedure – The application procedure for GST registration online as well as filing of GST can be conveniently done through the GSTN portal, making it time-efficient and easy.

  • Lesser compliance – Under the previous tax regime, businesses had to file multiple returns accorded with different indirect taxes – VAT, excise, and service tax. As GST is a unified and singular tax regime, the number of filings has come down, making it less hassling for entities to file a return.

  • The benefit of composition scheme – SMEs with annual turnover less than Rs. 1 Crore can enjoy lower tax rates and less stringent terms of compliance if registered under the GST Composition Scheme.

  • Less stringent terms on logistics – Under GST, the terms for logistics are comparatively less strict than under the previous tax regime.

  • Regulation of unorganised sector – Registration under GST comprises several provisions such as compliances, payment of taxes, and benefit of input credit, ensuring transparency in the tax collection system.

 

Penalty for Not Registering under GST

According to the section 122 of CGST Act, any taxable person who fails to register under GST even if he/she is legally bound as per the GST Act needs to pay the following amount of penalty:

10,000 INR or amount of tax evaded whichever is higher.

Let us understand this with an example;

  1. If Mr. A fails to obtain GST registration and the total tax evaded by him amounts to 30,000 INR then in this case 30,000 INR penalty will be applicable.

  2. If Mr. A fails to obtain GST registration and the total tax evaded by him amounts to 8,000 INR then in this case he needs to pay 10,000 INR as a penalty.

 

DISCLAIMER-These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.

It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.

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