Goods and Service Tax (GST) Registration

Under Goods and Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration. For certain businesses, registration under GST is mandatory. If the organisation carries on business without registering under GST, it is an offence under GST and heavy penalties will apply. GST registration usually takes between 2-6 working days. Tej and Associates offers GST Registration along with other essential tax services like TAN, TDS, TRC, Shops Act, MSME registration, Profession Tax ,Employee Provident Fund .  Employee State Insurance, Non STPI and STPI, Import Export Code, and Trade Licence.   

Who should obtain the GST registration?

• Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
• Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be Casual taxable person / Non-Resident taxable person
• Agents of a supplier & Input service distributor
• Those paying tax under the reverse charge mechanism
• A person who supplies via an e-commerce aggregator
• Every e-commerce aggregator
• Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

 

Documents Required for GST Registration

• PAN of the Applicant
• Aadhaar card
• Proof of business registration or Incorporation certificate
• Identity and Address proof of Promoters/Director with Photographs
• Address proof of the place of business
• Bank Account statement/Cancelled cheque
• Digital Signature
• Letter of Authorization/Board Resolution for Authorised Signatory

 

Penalty for not obtaining GST registration

An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10, 000. The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes  

Benefits of registering under GST

 

• Beneficial for customers, businesses and government.
• Fully online process.
• Helps reduce tax evasion
• Provides legal recognition to a business.
• Helps to bring in uniformity in accounting of taxes.
• Regularise the unorganised sectors such as construction.

 

A. For normal registered businesses:

• Take input tax credit
• Conduct interstate business without restrictions

 

B. for Composition dealers:

• Limited compliance
• Lesser tax liability
• Less impact on working capital

 

1. For businesses that voluntarily opt-in for GST registration (Below Rs.40 lakhs*)

• Avail input tax credit
• Conduct interstate business without restrictions
• Easily register on online & e-commerce websites
• Get a competitive advantage compared to other businesses

  Under the Goods and Services Tax (GST) norms, every individual or business who clocks a yearly turnover of more than INR 40 lakh or INR 20 lakh or INR 10 lakh, depending upon which state their business operates in, they have to register for the GST.  The GST registration is an online process which is carried out by the government via its GST website.  Once a business is registered under the GST, they are provided with a unique registration number known as the Goods and Services Tax Identification Number (GSTIN), which is a 15-digit number given by the government to the taxpayers after attaining the GST registration. However, if any business is operating from more than one state, they need to have the GST registration from those specific states as well. Remember, it is a heavy offence to carry out business operations without registering under the GST. The registration process of the GST is quite simplified and generally takes up to fifteen working days. 

Key Features of the GST Registration

• Any businesses whose turnover is more than INR 40 lakh (for entities involved in trading of goods and services) or INR 20 lakh (for entities involved in service sector) are required to register for GST under normal taxable individuals. Each state has their own threshold limit.
• The limit is INR 10 lakh if you have a business operation in the north-eastern states, Jammu and Kashmir, Himachal Pradesh and Uttarakhand, Tripura.
• Businesses having a yearly turnover of up to INR 1 crore, eligible for registration under composition scheme. Here, businesses have to pay a fixed amount of GST irrespective of their turnover.
• No registration fees for GST.
• If one is unable to file for GST will have to bear a fine of INR 10, 00 or 10% of the due amount.

 

Who Should Apply for the GST Registration?

• Businesses with turnover above the threshold limit of INR 40 lakh or INR 20 lakh or INR 10 lakh as the case may be.
• Casual taxable person
• Non-resident taxable person
• Individuals who are registered under pre-GST law such as excise, VAT or service tax.
• Inter-state supplier and input service distributor
• Individuals paying tax under the reverse charge mechanism.
• Anyone who supplies via an e-commerce aggregator.
• Every e-commerce aggregator.
• Tax deductor or collector at source.
• Any entity can obtain GST registration voluntarily.

 

Documents Required For GST Registration

Below is a list of documents that one needs for registering their business under the GST:

• Permanent Account Number (PAN).
• Aadhar Card.
• Business incorporation certificate.
• Identity and address proof of each promoter.
• Cancelled cheques.
• Bank account statement.
• Digital signature.

Online Process of GST Registration

The whole process of the GST registration is fully online and very simple and straightforward. Below is the step-wise-step process of the online GST registration.

• Visit the GST portal.
• Go to the “services” tab, click on “registration” and then click on “new registration”.
• Select the “taxpayer” from the dropdown list. The registration is divided into Part A and Part B.

 

Part A Process: 

• Select your state and district for which GST registration is required from the State/Union Territory and district drop-down list.
• Fill in the details such as the legal name of the business/ entity as mentioned in the PAN database.
• Enter the details of the permanent account number (PAN) of the business or PAN of the proprietor.
• Enter more details such as registered email address and mobile number.
• Enter the captcha code and click the “proceed” button.
• After successfully submitting Part A of the registration process, move to Part B. Part B process has to be finished within 15 days.
• Post verification, you will receive a temporary reference number (TRN). The TRN will be sent to the registered email address and mobile number.

 

Part B Process:

• Go to “services”, then “registration” and the click on “new registration” option.
• Select “TRN” to log in and fill the required details to proceed further.
• Enter OTP sent on mobile or email and click on the “proceed” tab.
• On the dashboard, “my saved application” page will be displayed. Go to the ‘action’ column, click the edit icon.
• Then, the registration form will appear with 10 different tabs. Click on each tab to enter the details such as business details, promoter and partner details, authorised signatory, state information, Aadhaar authentication and verification and so on.
• Click on “save and continue”. Once the application is submitted, sign it digitally and click on “proceed”.
• Then, you will receive an Application Reference Number (ARN) via email or SMS to confirm your registration process.
• Remember, the GST registration application will be processed post 15 days of submission. To check your registration status, you can visit the GST portal.

 

Who should register for GST?

All the businesses supplying goods whose turnover exceeds INR 40 lakh in a financial year are required to register as normal taxable persons. However, if you have a business in the northeastern states, J&K, Himachal Pradesh and Uttarakhand, the threshold for goods suppliers is INR 20 lakh and service providers INR 10 lakh. Also, here is the list of certain businesses for which registration under GST 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

 

Documents required for GST registration

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
• Authorization letter/board resolution for authorised signatory
• Digital signature

 

Types of GST registration

 

1. Normal taxpayers

Most businesses in India fall under this category. Businesses whose turnover exceeds Rs 40 lakh in a financial year are required to register as normal taxable people. However, the threshold limit is Rs 10 lakh if you have a business in the northeastern states, J&K, Himachal Pradesh and Uttarakhand.  

2. Casual taxable individual

Occasional or seasonal businesses need to register their businesses under GST for this category. Businesses need to make a deposit equal to the GST liability from the occasional operations. The tenure for registration is 3 months. However, businesses can apply for renewal and extensions.  

3. Non-resident taxable individual

Individuals who reside outside India but occasionally supply goods or services as agents, principals or in other capacities to Indian residents are liable to file for registration under this category. The business owner must pay a deposit equal to the expected GST liability during the GST active tenure. The normal tenure is 3 months. However, individuals can extend or renew the registration if required.  

4. Composition registration

Businesses with an annual turnover of up to Rs 1 crore are eligible for registration under the Composition Scheme. Under this scheme, businesses have to pay a fixed amount of GST irrespective of their actual turnover.  

GST REGISTRATION FEES

According to the GST law, no fees are prescribed for obtaining GST registration through the portal independently. That means you can register your business under GST for free without paying any charges to the government. However, you may need to pay some fees to a professional who can help you with the GST registration process, especially if you are still familiar with the online portal and the required documents. Alternatively, you can opt for a do it yourself approach if you have the necessary knowledge and skills to complete the GST registration independently.  

GST REGISTRATION TURNOVER LIMIT

  GST registration is obtaining a unique identification number for a person or entity that supplies goods or services in India. GST registration is voluntary for any person or entity, irrespective of turnover. However, it becomes mandatory when the turnover surpasses specific thresholds, depending on the category of the state and the nature of the supply.   The turnover limit for GST registration is the aggregate turnover of a person or entity in a financial year. Aggregate turnover is the overall value of all taxable supplies, exempt supplies, exports, and inter-state supplies of a person having the same PAN, excluding taxes under GST. For service providers, the aggregate turnover also includes the value of inward supplies on which tax is payable under the reverse charge mechanism.   The states and union territories in India are classified into two categories under GST: normal category states and special category states. The special category states are those states that have been granted special status under Article 370 or Article 371 of the Constitution of India or are located in the country’s North-Eastern region or the Himalayan region.   The special category states under GST rules are:

• Arunachal Pradesh
• Assam
• Jammu and Kashmir
• Ladakh
• Manipur
• Meghalaya
• Mizoram
• Nagaland
• Sikkim
• Tripura
• Uttarakhand
• Himachal Pradesh

  The turnover limits for GST registration differ for normal and special category states. The following table summarises the turnover limits for different types of supplies and states:  

Type of Supply	Normal Category States	Special Category States
Goods	Rs 40 lakhs	Rs 20 lakhs
Services	Rs 20 lakhs	Rs 10 lakhs
Both Goods and Services	Rs. 20 lakhs	Rs 10 lakhs

    The aggregate turnover is calculated by adding the value of all supplies made by a person or entity in a financial year, excluding the following:

• Value of inward supplies on which tax is payable under reverse charge mechanism
• Value of supplies on which tax is collected at source under section 52
• Value of exempt supplies
• Value of non-GST supplies
• Taxes under GST

  The formula for calculating aggregate turnover is: Aggregate Turnover = (Value of all outward supplies + Value of all inward supplies liable to reverse charge) – (Value of inward supplies + value of supplies taxable under reverse charge + Value of exempt supplies + Value of non-GST supplies + Taxes under GST)   It is important to calculate the aggregate turnover based on PAN, even for businesses with multiple locations. This is because GST registration is required for each state or union territory from where a person or entity makes a supply if the aggregate turnover exceeds the threshold limit. Therefore, a person or entity may have to obtain multiple GST registrations for different states or union territories, depending on the turnover in each state or union territory.  

 EXEMPT FROM GST REGISTRATION

  There are some categories of persons who are exempt from GST tax rate slabs and registration, either by law or by notification.

•         Persons engaged in exempt or nil-rated supplies: No GST registration is needed for persons who only supply tax-free goods or services. For instance, fresh fruits and vegetables sellers are exempt from GST.

• Agriculturists: An agriculturist is a person who cultivates land personally to produce agricultural produce. Such a person is exempt from GST registration due to the size of the supply of produce out of land cultivation. This is because agricultural activities are considered as neither a supply of goods nor a supply of services under the GST law. However, if an agriculturist engages in any other taxable activity, such as processing, packaging or trading of agricultural produce, then he or she will be liable to register under GST.
• Persons below the threshold exemption limit: The GST law provides a threshold exemption limit for businesses based on their annual turnover. The turnover is the aggregate value of all taxable supplies made by a person in a financial year. The threshold exemption limit is Rs. 20 lakhs for most states and Rs. 10 lakhs for special category states, such as the northeastern and hilly states. If a person’s turnover does not exceed the threshold exemption limit, then he or she is not required to register under GST. However, some persons are not eligible for this exemption and have to register under GST regardless of their turnover. These include persons who supply goods or services across state borders, persons who occasionally undertake taxable transactions, and persons who are not residents of India but make taxable supplies in India.

 

Features of GST registration

  GST registration has some key features that are important to understand before applying.   These features are:  

•         PAN-Based and State-Specific Registration: GST registration is based on the applicant’s Permanent Account Number (PAN) and is valid only for the state or union territory where the business operates. Therefore, a business entity with multiple branches across different states or union territories must obtain separate GST registrations for each state or union territory using the same PAN.

 

•         Registration for Each State or Union Territory: If a business operates in multiple states or union territories, it must register separately in each location where it has a business establishment, regardless of its turnover. This is to ensure that the GST is collected and distributed among the states or union territories according to the place of supply rules.

   

•         Separate Registration for SEZ Units: A business entity with a unit in a Special Economic Zone (SEZ) or an SEZ developer will have to obtain a separate GST registration for the SEZ unit or the SEZ area, as the case may be. This is because the SEZ units or areas are treated as separate territories for GST and are eligible for certain exemptions and concessions.

   

•         Display of Registration Certificates: A registered person is required to display his GST registration certificate prominently at his principal place of business and every additional place of business. The registration certificate contains the GSTIN, the registered person’s name, the address of the place of business, and the date of validity of the registration.

   

•         Single GSTIN for Each State: A registered person is allotted a single GSTIN for each state or union territory where he is registered. It uniquely identifies the registered person, the state or union territory and the PAN of the registered person. The GSTIN can be verified online through the GST portal or a GSTIN verification app.

   

•         Non-Tax-Specific Registration: GST registration is not specific to any particular tax, such as Central GST, State GST, Integrated GST or Cess. A registered person is liable to pay all the applicable taxes under the GST regime, depending on the nature and location of the supply. A registered person can also claim input credit for the taxes paid on the purchases, subject to certain conditions and restrictions.

   

Advantages of GST registration

 

• Legal recognition of a business
• Uniform accounting of taxes
• Businesses will be eligible to avail of several benefits under the GST regime
• Legal authorization of collecting tax from sales made

 

Penalty for not registering under GST

Failing to register under GST can attract severe penalties and consequences. Some penalties involved are:

• A penalty of Rs. 10,000 or 10% of the tax due, whichever is higher, for not registering despite being liable to do so.
• A penalty of Rs. 10,000 or the tax amount, whichever is higher, for collecting GST but not depositing it to the government within three months.

 

Benefits of GST registration for businesses who opt for GST registration voluntarily

Businesses that have registered for GST can enjoy several benefits, such as:

• Working capital reduction for composition dealers: Composition dealers are small businesses with a turnover of Rs.20 to 75 lakh who can pay a lower tax rate under GST. By registering for GST, they can reduce their working capital requirement by claiming input tax credit.
• Decreased tax liability: GST registration allows businesses to collect GST from their customers and avail input tax credits. This reduces their tax liability and avoids double taxation. It also simplifies the compliance process, as businesses only need to file one consolidated return instead of multiple returns for different taxes.
• Advantage of engaging in interstate business without restrictions: GST registration enables businesses to engage in interstate trade without any restrictions or barriers. They can sell their goods and services across the country without paying additional taxes or obtaining any permits. This expands their market reach and customer base.

Competitive advantage: Businesses not liable to register for GST can also opt for voluntary GST registration to gain a competitive edge in the market. By registering for GST, they can enhance their credibility and legitimacy among their customers and suppliers.