GST Registration
GST Registration
GST is a multi-stage tax system which is comprehensive in nature and applied on the sale of goods and services. The main aim of this taxation system is to curb the cascading effect of other Indirect taxes and it is applicable throughout India.
GST is referred as Goods and Services Tax. It was implemented to replace a variety of previous indirect taxes, including the value added tax, service tax, purchase tax, excise duty, and others. GST is a tax that India imposes on the supply of specific products and services. There is only one tax that is imposed in India.
How GST Works?
- Manufacturer: The manufacturer will have to pay GST on the raw material that is purchased and the value that has been added to make the product.
- Service Provider: In this case, the service provider will be responsible for paying GST on both the product's purchase price and the value added to it. However, the manufacturer's tax payment may be deducted from the total GST that must be paid.
- Retailer: It must be paid by the retailer on both the product they bought from the distributor and the margin they added. However, the retailer's tax payment may be deducted from the total amount of GST that must be paid.
- Consumer: GST must be paid on the product that has been purchased.
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There are four different components of GST such as CGST, SGST, IGST, and UTGST.
- CGST: Central Goods and Services Tax is charged on the intra state supply of products and services.
- SGST: State Goods and Services Tax like CGST, is charged on the sale of products or services within a state.
- IGST: Integrated Goods and Services Tax is charged on inter-state transactions of products and services.
- UTGST: Union Territory Goods and Services Tax is levied on the supply of products and services in any of the Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied along with CGST.
Objective of GST
The following are the key objectives of Goods and Services Tax:
To minimize the cost
To enhance the productivity and efficiency
To make taxation simple by eliminating multiple tax system
Enhances the compliances with businesses
To improve the country’s revenue
To make ‘One Nation, One Tax’
To widen taxpayer base in India
To decrease the cascading effect of taxes
History of GST
On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing the new tax regime commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a committee to draft the GST law. In 2004, a task force concluded that the new tax structure should put in place to enhance the tax regime at the time.
In 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing Committee started discussions about GST, and tabled its report on GST a year later. In 2014, the new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and passed the bill in Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.
GST went live in 2016, and the amended model GST law passed in both the house. The President of India also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime implemented on 1st July 2017.
Tax Laws Before the Implementation of GST
The Centre and the State used to collect tax separately. Depending on the state, the tax regimes were different.
Even though import tax was levied on one individual, the burden was levied on another individual. In the cases of direct tax, the taxpayer must pay the tax.
Prior to the introduction of GST, direct and indirect taxes were present in India.
Who Should Register for GST?
The below mentioned entities and individuals must register for Goods And Services Tax:
E-commerce aggregators
Individuals who supply through e-commerce aggregators
Individuals who pay tax as per the reverse change mechanism
Agents of input service distributors and suppliers
Non-Resident individuals who pay tax
Businesses that have a turnover that is more than the threshold limit
Individuals who have registered before the GST law was introduced
Registration of GST
Any company that is eligible under GST must register itself in the GST portal created by the Government of India. The registered entities will get a unique registration number called GSTIN.
It is mandatory for all Service providers, buyers, and sellers to register. A business that makes a total income of Rs.20 lakhs and more in a financial year must be required to do GST registration. It takes 2-6 working days to process.
How to know the GSTIN - GST Identification Number?
A 15-digit distinctive code that is provided to every taxpayer is the GSTIN. The GSTIN will be provided based on the state you live at and the PAN. Some of the main uses are mentioned below:
Loans can be availed with the help of the number
Refunds can be claimed.
The verification process is easy.
Corrections can be made.
Verify GST Number Online by visiting GST official Page. Enter the GSTIN mentioned on the invoice in the search box and followed by captcha, Final click "enter" to view the details.
GST Registration Certificate
A GST Certificate is a legal document that the relevant authorities issue to a company that has registered for the GST system. Under this system, enterprises having a yearly revenue of at least Rs. 20 lakhs and some special businesses must register. Form GST REG-06 is used to issue the GST registration certificate. From the official GST Portal, you can download the GST Certificate if you are a registered taxpayer under this system.
The certificate is not physically handed out. It is only accessible digitally. GSTIN, Legal Name, Trade Name, Business Constitution, Address, Date of Liability, Validity Period, Types of Registration, Particulars of Approving Authority, Signature, Specifications of the Approving GST Officer, and Date are all included on the GST Certificate.
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GST Registration in India
Complete guide to GST registration, turnover limits, eligibility, documents required, GSTIN details, types of registration, benefits, penalties, filing returns, and compliance process in India.
GST Registration
GST (Goods and Services Tax) registration is a mandatory tax registration for businesses engaged in the supply of goods or services in India. It has replaced several indirect taxes levied by the central and state governments. Here are the key points regarding GST registration in India:
1. Eligibility:
- Threshold Limit: As of my last update in September 2021, businesses with an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for special category states) are required to register for GST. However, this threshold limit can change, so it's important to check the latest regulations.
2. Types of GST Registration:
- Regular GST: For businesses with a turnover above the threshold limit.
- Composition Scheme: Available for businesses with a turnover up to a certain limit. Businesses under this scheme are taxed at a nominal rate and are required to file simplified returns.
3. Documents Required:
- PAN Card of the Business
- Proof of Constitution of Business (Partnership Deed, Certificate of Incorporation, etc.)
- Identity and Address Proof of Promoters/Directors
- Address Proof of the Place of Business
- Bank Account Details
- Digital Signature
- Letter of Authorization/Board Resolution for Authorized Signatory (in case of companies)
- Photographs of Promoters/Directors/Partners
- Specimen Signature
4. Application Process:
- Online Application: The application for GST registration is done online through the GST portal.
- GST Common Portal: The GST Common Portal (www.gst.gov.in) is used for all activities such as registration, return filing, payment of taxes, etc.
- GSTIN: After successful verification, a unique GST Identification Number (GSTIN) is issued to the applicant.
5. Input Tax Credit (ITC):
- Claiming ITC: GST registered businesses can claim input tax credit on the taxes paid on their purchases, which helps in avoiding the cascading effect of taxes.
6. Filing Returns:
- Regular Filing: GST-registered businesses need to file monthly, quarterly, and/or annual GST returns based on their turnover.
7. Late Fees and Penalties:
- Compliance: Timely filing of returns and payment of taxes is crucial to avoid late fees and penalties.
8. GST Rates:
- Different Slabs: Goods and services are categorized under different tax slabs (0%, 5%, 12%, 18%, and 28%). It's important to charge the correct GST rate on your supplies.
9. Audit and Assessment:
- Audit: GST audits can be conducted by tax authorities to ensure compliance.
- Assessment: Tax authorities can assess a business's GST liability and compliance.
10. Cancellation of Registration:
- Voluntary or Mandatory: Registration can be canceled voluntarily by the business or mandatorily by the tax authorities under certain circumstances.
GST Registration Turnover Limit
GST registration can be obtained voluntarily by any person or entity irrespective of turnover. GST registration becomes mandatory if a person or entity sells goods or services beyond a certain turnover.
- Service Providers: Any person or entity who provides service of more than Rs.20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers has been fixed at Rs.10 lakhs.
- Goods Suppliers: As per notification No.10/2019 any person who is engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs in a year is required to obtain GST registration.
- Should not be providing any services.
- The supplier should not be engaged in making intra-state supplies in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.
- Should not be involved in the supply of ice cream, pan masala or tobacco.
If the above conditions are not met, the supplier of goods would be required to obtain GST registration when the turnover crosses Rs.20 lakhs and Rs.10 lakhs in special category states.
- Special Category States: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
- Aggregate Turnover: Aggregate turnover = (Taxable supplies + Exempt Supplies + Exports + Inter-State Supplies) – (Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies).
Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover.
Types of GST Registration
There are various types of GST registration like regular, casual taxable persons, non-resident taxable persons and eCommerce operators.
- Casual Taxable Persons: Temporary businesses in fairs or exhibitions or seasonal businesses fall under this category.
- Non-resident Taxable Persons: Foreign businesses supplying goods or services in India require GST registration.
- E-Commerce Operators: Any person owning or operating an electronic commerce platform requires GST registration irrespective of turnover.
What is GSTIN?
GSTIN or Goods and Services Tax Identification Number (GSTIN) is provided to entities having GST registration number. GSTIN is 15 characters in length.
Voluntary GST Registration
Any person or entity that wishes to supply goods or services can obtain GST registration voluntarily, irrespective of business turnover.
Penalty for NOT Obtaining GST Registration.
Any person or entity that crosses the aggregate turnover limit must obtain GST registration within 30 days. Delay can lead to a penalty of Rs. 10,000.
Benefits of GST Registration
- Bank Loans: GST returns help create business credibility.
- Supplier Onboarding: GST is mandatory for many supplier registrations.
- eCommerce: GST is required for selling on platforms like Amazon and Flipkart.
- Input Tax Credit: GST helps businesses reduce tax burden.
Documents Required for GST Registration
Sole proprietor / Individual
- PAN card of the owner
- Aadhaar card of the owner
- Photograph of the owner
- Bank account details
- Address proof
LLP and Partnership Firms
- PAN card of all partners
- Copy of partnership deed
- Photograph of partners and signatories
- Address proof of partners
- Proof of appointment of authorized signatory
- Bank account details
- Address proof of principal place of business
HUF
- PAN card of HUF
- PAN card and Aadhar card of Karta
- Photograph of the owner
- Bank account details
- Address proof of principal place of business
Company (Public and Private)
- PAN card of Company
- Certificate of incorporation
- Memorandum of Association / Articles of Association
- PAN card and Aadhar card of authorized signatory
- PAN card and address proof of all directors
- Photograph of directors and authorised signatory
- Board resolution appointing authorised signatory
- Bank account details
- Address proof of principal place of business
