GST registration is mandatory for individual businesses with annual turnover above Rs. 40 Lakhs. All existing registered companies under central excise, service tax or VAT need to register under GST using a new GST registration process. The online procedure makes it easier for business owners to fill a form on the GST portal and submit the set of required documents to register for GST online. Individual businesses must complete the GST registration process. A GST registered company can enjoy benefits by voluntary registration under GST. The complete registration process can be completed within 2-6 working days.
GST has been one of the most significant tax reforms this country has seen. It is a single tax that replaced all the multiple taxes that were applicable previously, such as Central Excise, Octroi, VAT, Entry Tax, Service Tax, etc. GST was introduced nationwide on July 1, 2017. The Goods and Services Tax is a destination-based tax that follows a dual model in which both the State as well as Central government levy tax on all the goods and services. All businesses are required to register for a GST number for every State that specific company has been registered in. Under the GST regime, it is best to know whether the business is liable for GSTIN or Goods and Services Tax Identification Number registration and only then will it be registered accordingly.
Know about the various components of GST.
While it is mandatory for a business owner whose turnover exceeds Rs. 40 Lakhs to register for GST, registration should also be done by the following entities:
Any individual who has registered under the Pre-GST law of Exercise, VAT or Service Tax.
Individuals who are paying taxes under the reverse charge mechanism. Reverse charge is a mechanism where the recipients of goods/services have to pay the GST.
If any individual is supplying online information to anyone, who is a non-taxable person in India.
Agents of supplier and input supply distributor.
Individuals who are supplying inputs through e-commerce aggregators.
Here are some essential factors that you must understand about GST registration. Read on:
There is no payable fee upon registering for GST.
Every business with an annual aggregate turnover of over Rs. 20 Lakhs must register for GST.
There are 11 states in India that are configured with the special status. These states include Arunachal Pradesh, Jammu and Kashmir, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh, Assam, and Meghalaya. A business must register in these given states if the annual turnover is Rs. 10 Lakhs.
In case of supply in more than one state, it must be registered in each of the states.
In case of multiple branches across states, one of the branches must be registered as the main branch and the rest as additional. However, this does not apply to businesses that have separate verticals as listed in Section 2(18) of the GST Act, 2017.
A minimum penalty of Rs. 10,000, or 10% of the due amount, is levied on those businesses that fail to register for GST. If the authorities flag intentional tax evasion, a penalty of 100% is levied on the total taxes owed.
These facts are extremely important and must be followed to ensure a hassle-free GST experience.
The procedure to apply for GST Registration is mentioned below:
Step 1: Visit the GST portal online at (https://www.gst.gov.in/).
Step 2: Click on ‘Register Now’ link which can be found under the ‘Taxpayers’ tab
Step 3: Select ‘New Registration’ and fill the below-mentioned details and click on ‘Proceed’.
Step 4: Now enter the OTP that was sent to the email ID and mobile number in the respective boxes.
Step 5: You will be shown the Temporary Reference Number (TRN) on the screen. Make a note of the TRN.
Step 6: Revisit the GST portal and click on ‘Register’ under the ‘Taxpayers’ menu.
Step 7: Select ‘Temporary Reference Number (TRN)’. Enter the TRN and the captcha details and Click on ‘Proceed’.
Step 8: You will receive an OTP registered mobile number and email id. Enter the OTP and click on ‘Proceed’.
Step 9: The status of your application will be available on the next page. On the right side, click on the Edit icon.
Step 10: Once completed, a message will be displayed on the screen, and the Application Reference Number (ARN) will be sent to you on your registered mobile number and email ID.
Step 1: Visit the GST portal online at (www.gst.gov.in)
Step 2: Start filling in part –A of the registration form 1
Step 3: You will now receive an application reference number on your mobile and via email
Step 4: Fill in the second part of the registration form and upload the required documents according to the business type
Step 5: Obtain a registration certificate from the GST portal.
Step 7: Submit the required documents within 7 working days along with GST REG-04
Step 8: Go through the email and look for errors. In case of any errors, your application may get rejected, and you will be notified about the same in form GST REG-05 of registration under GST.
Also know about the E-way Bill.
Here are the documents required to complete the GST Registration:
Business address proof.
Bank account statement and cancelled cheque.
Incorporation Certificate or proof of business registration.
Director’s or Promoter’s ID proof, proof of address, and photographs.
Letter of Authorisation or Board Resolution for Authorised Signatory.
The government does not charge any GST registration fees for GST registration online through the government portal. Once the relevant documents have been uploaded, you will receive the Application Reference Number (ARN) via SMS and email to confirm the registration. However, if you seek professional help from any CA, you have to pay their fees.
If the individual does not register for GST, they have to pay a penalty of 10% on the tax due subject to the amount of Rs. 10,000, the penalty levied is 100% of the unpaid tax amount.
Know about the various pros and cons of a single unified GST rate.
GSTIN (Goods and Service Tax Identification Number) is a 15-digit alpha-numeric PAN-based unique code, which is allocated to every GST-registered person. The government mandates a GSTIN for businesses that have an annual turnover that exceeds Rs.20 lakh.
Under Section 25(1) CGST Act, 2017, a business owner can register their business under GST in every State or Union territory in which he/she is liable to be registered. In case if you have your business set up from two different locations, you need to obtain a separate GST registration for your business for each place.
The composition scheme under GST is a simple and easy scheme for small businesses. This scheme was introduced to bring relief to SMEs to lift the burden of compliance provisions under the law. Under the composition scheme, the small business owner can pay a fixed percentage of turnover and be relieved from the detailed compliances.
A taxpayer with business turnover below Rs 1.5 crore* can opt for the Composition Scheme. In the North-Eastern states and Himachal Pradesh, the limit has come down to Rs 75* lakh.
The following are the benefits of registering under the Goods and Service Tax (GST) regime :
Take input tax credit
Make interstate sales without restrictions
Less tax liability
High working capital
Register on an e-commerce website
Registered businesses have a competitive advantage compared to other companies that don't have GST
The registration helps a company get legally recognized as a supplier of goods or services.
Ensures proper accounting of taxes paid on the input goods or services which can be used for the GST payment due on the supply of goods or services or both by the business.
A registered individual is legally authorized to collect tax from purchasers and pass on the credit of the taxes paid to the purchasers or recipients of the goods or services.