GST Registration

What GST Registration?

On 1st July 2017, the registration process GST system came into effect in India. This tax system, known as GST (Goods & Services Tax), is applicable to all service providers in the country, including freelancers, traders, and manufacturers. The GST consolidates various Central taxes such as Service Tax, Excise Duty, CST, and state taxes like Entertainment Tax, Luxury Tax, Octroi, and VAT. To simplify GST formalities and taxation, businesses with a turnover of less than ₹1.5 crore have the option to choose a composition scheme, allowing them to pay GST at a fixed rate of turnover. Throughout the supply chain, products undergo multiple stages, including procurement of raw materials, manufacturing, wholesale and retail sales, and final consumer purchase. Notably, GST is levied at each of these three stages. The introduction of GST in India aimed to eliminate various indirect taxes and establish a unified taxation system, enhancing collection efficiency and streamlining the process. Businesses with a turnover exceeding Rs. 40 lakhs for the sale of goods (Rs. 20 lakhs for North Eastern and all hilly states for the sale of goods) are required to register for GST. The threshold limits for service providers have not been altered, and they are required to register if their total turnover exceeds Rs. 20 lakhs (for normal category states) or Rs. 10 lakhs (for special category states).

What is GST Registration Process?

Registration is mandatory for the following individuals:

1. Any supplier making taxable supplies of goods or services or both in a State or Union territory (excluding special category States) shall be required to register under this Act if their aggregate turnover exceeds twenty lakh rupees in a financial year.
2. Every individual who is currently registered or holds a license under an existing law as of the day before the appointed day shall be obligated to register under this Act starting from the appointed day.
3. In situations where a person registered under this Act, who is subject to taxation, transfers their business as a going concern to another individual, whether it be through succession or for any other reason, the transferee or successor will be obligated to register from the date of that transfer or succession.
4. However, notwithstanding the provisions in subsections (1) and (3), in the event of a transfer resulting from the approval of a scheme or an arrangement for the amalgamation or demerger of two or more companies by order of a High Court, Tribunal, or any other authority, the transferee shall be liable to register from the date on which the Registrar of Companies issues a certificate of incorporation to give effect to the said order of the High Court or Tribunal.

Person Not Liable For GST Registration Process

Registration is not mandatory for the following individuals:

1. Any person exclusively engaged in the business of supplying goods or services, or both, that are not taxable or fully exempt from tax under this Act or the Integrated Goods and Services Tax Act.
2. Agriculturists, concerning the supply of produce from their cultivated land.
3. The Government has the authority to specify, through a notification based on the Council’s recommendations, the category of persons eligible for exemption from registration under this Act.

What is the Eligibility for GST Registration?

The Eligibility of GST Registration are as follows:

• Individuals previously registered under the Pre-GST law (e.g., Excise, VAT, Service Tax, etc.)
• Businesses with turnover exceeding the specific threshold limits of Rs. 40 lakhs, Rs. 20 lakhs, or Rs. 10 lakhs, as applicable.
• Taxable Casual person or Non-Resident person.
• Agents of a supplier and Input service distributor.
• Taxpayers paying tax under the reverse charge mechanism.
• Suppliers who utilize an e-commerce aggregator.
• Every e-commerce aggregator.
• Individuals offering online information and database access or retrieval services to an individual in India from a location outside the country, except for a registered taxable person.

What are the Benefits of GST Registration?

Benefits of GST Registration Process:

1. Improved Credit Access: GST registration and return filing provide evidence of business activity, establishing a track record for businesses. This data is often used by banks and NBFCs to assess creditworthiness, making it easier to obtain loans.
2. Supplier on Boarding Opportunities: Many reputed companies require suppliers to have GST registration during the onboarding process, making it essential for expanding business opportunities.
3. E-commerce Enablement: To sell products online through platforms like Amazon, Flipkart, Snapdeal, Zomato, and Swiggy, GST registration is mandatory, enabling businesses to tap into the digital marketplace.
4. Simplified Taxation: GST replaces multiple indirect taxes with a unified system, streamlining the Indian market and simplifying tax procedures for businesses.
5. Cost Reduction: The elimination of cascading effects of VAT and multiple taxes under GST leads to reduced costs for goods and services.
6. Avoidance of Lengthy Taxation Processes: Small businesses with turnovers below specific thresholds are exempt from GST, saving them from lengthy taxation services.
7. Curbing Corruption and Improper Sales: GST was introduced to reduce corruption and unrecorded sales, enhancing compliance for small businesses.
8. Uniform Taxation Procedure: GST Registration enables centralized registration and a uniform taxation process, facilitating quarterly tax returns filing through an online process.
9. Minimized Tax Evasion: GST implementation has effectively minimized tax evasion.
10. Higher Threshold for Registration: Under GST, the threshold for registration is raised, exempting many small traders and service providers from taxation.
11. Composition Scheme for Small Businesses: Small businesses with turnovers between Rs. 20 to 75 lakhs can opt for the Composition scheme, reducing their tax and compliance burden.
12. Simple and Easy Online Procedure: GST procedures, including registration and return filing, are done online, benefiting start-ups and eliminating the need for multiple registrations.
13. Reduced Compliances: With GST, businesses only need to file a single, unified return instead of separate returns for VAT and service tax.
14. Regulation of Unorganized Sectors: GST has brought accountability and regulation to previously unorganized industries like building construction and textiles through provisions for online compliances and input credit acceptance.

How many Tpyes of GST Registration?

In GST registration, there exist distinct categories, namely regular, casual taxable persons, non-resident taxable persons, and eCommerce operators. It is essential to note that casual taxable persons, non-resident taxable persons, and eCommerce operators are obligated to obtain GST registration regardless of their turnover. The types of GST Registration are as follows:

1. Casual Taxable Persons: As per the GST Act, a casual taxable person refers to an individual who sporadically supplies goods or services in a State or Union territory where they lack a fixed place of business. This encompasses individuals running temporary businesses at fairs, exhibitions, or those engaged in seasonal operations, all falling under the umbrella of casual taxable persons within the GST framework.
2. Non-resident Taxable Persons: A non-resident taxable person (NRI) under GST is defined as any person, business, or not-for-profit entity supplying goods or services in India but devoid of a fixed place of business or residence within the country. Consequently, any foreign individual, business, or organization involved in the supply of goods or services to India becomes subject to the classification of a non-resident taxable person, necessitating compliance with all relevant GST regulations.
3. E-Commerce Operators: An individual who owns, operates, or oversees a digital or electronic platform for conducting electronic commerce is known as an e-commerce operator. As per the requirements, anyone involved in selling goods or services through the internet falls under the category of an e-commerce operator and must register for GST, regardless of their business turnover.

What is the Components of GST Registration?

The components of GST are as follows:

1. Central Goods and Services Tax (CGST): CGST is administered by the central government and pertains to transactions within a specific state or union territory.
2. State Goods and Services Tax (SGST): The state component of GST, known as SGST, is levied by individual states or union territories on all transactions occurring within their jurisdiction.
3. Integrated Goods and Services Tax (IGST): When a transaction takes place between two different states, the Integrated Goods and Services Tax (IGST) is imposed by the central government.

What is GST Tax Rates?

The GST Tax Rates Are Structured As Follows:

• 0%: This rate is applied to essential items like food grains, fresh vegetables, and medical supplies.
• 5%: Items such as processed food, packaged food, and certain household goods fall under this rate.
• 12%: Goods like mobile phones, laptops, and television sets attract a GST rate of 12%.
• 18%: Products such as air conditioners, refrigerators, and washing machines are subject to an 18% GST rate.
• 28%: Luxury cars, tobacco, aerated beverages, and similar items are charged at a GST rate of 28%.

What are the Documents Required for GST Registration?

Documentation requirements for different types of entities under GST registration process are as follows:

Sole Proprietor / Individual:

• PAN card of the owner
• Aadhar card of the owner
• Photograph of the owner
•  Latest Utility Bill i.e. Electricity Bill/ Gas Bill (not older than 2 months) as Address proof

LLP and Partnership Firms:

• PAN card of all partners
• Copy of partnership deed
• Photograph of all partners and authorized signatories
• Address proof of partners
• Aadhar card of authorized signatory
• Proof of appointment of authorized signatory
• Registration certificate / Board resolution of LLP Registration (in the case of LLP)
• Latest Utility Bill i.e. Electricity Bill/ Gas Bill (not older than 2 months) as Address proof

HUF (Hindu Undivided Family):

• PAN card of HUF
• PAN card and Aadhar card of Karta (head of the HUF)
• Photograph of the owner
• Latest Utility Bill i.e. Electricity Bill/ Gas Bill (not older than 2 months) as Address proof

Company (Public and Private):

• PAN card of the Company
• Certificate of incorporation obtained from MCA
• MOA/AOA
• PAN card and Aadhar card
• PAN card and address proof of all directors of the Company
• Photograph of all directors and authorized signatory
• Board resolution appointing authorized signatory / Any other proof of appointment of authorized signatory
• Latest Utility Bill i.e. Electricity Bill/ Gas Bill (not older than 2 months) as Address proof

What are the Steps for GST Registration?

To successfully complete the GST registration process, every taxpayer must adhere to the prescribed steps outlined below:

Step 1: Commence the GST Registration by filling the online application on the GST portal. 

Step 2: Click the Services > Registration > New Registration option

Step 3: On the GST portal, furnish the requisite details as follows:

• Choose ‘Taxpayer’ from the drop-down menu.
• Select the respective state and district.
• Enter business details (Name and PAN card).
• Provide an active email ID and mobile number (as OTPs will be sent to these details).
• Enter the displayed Captcha and click ‘Proceed’.

Step 4: Enter the OTP received on your email ID and mobile number, then click ‘Proceed’.

Step 5: Upon successful OTP verification, click on the ‘Proceed’ button.

Step 6: You will receive a Temporary Reference Number (TRN) on the screen. Save the TRN for future use; it is necessary for accessing PART-B in GST registration and logging into the application.

Step 7: Using the received TRN, open the GST portal again and select ‘Register’ under the ‘Taxpayers’ menu.

Step 8: Choose ‘Temporary Reference Number (TRN)’ and enter the TRN along with the Captcha details.

Step 9: Click ‘Proceed’ after entering the Captcha.

Step 10: An OTP will be sent to your email ID and registered mobile number. Enter the OTP and click ‘Proceed’.

Step 11: The application status will be displayed on the next page. Click on the Edit icon located on the right side of the page.

Step 12: On the subsequent page, fill in all the relevant details and submit necessary documents in various sections.

Step 13: Before final submission, review the ‘Verification’ page and check the declaration. Choose among the following methods:

• Electronic Verification Code (EVC).
• e-Sign method.
• For company applicants, use the Digital Signature Certificate (DSC).

Step 14: Upon completing the above steps, a successful completion message will be shown on the screen and the Application Reference Number would be received in the registered mobile number and email ID.

Step 15: Check the ARN status on the GST portal.

By following these steps, taxpayers can successfully complete the GST registration process.

What is the Validity of GST Registration Certificate?

The validity of a GST registration entirely depends on the type of taxpayer. For regular taxpayers, the certificate remains valid until cancelled by the GST authority or voluntarily surrendered by the taxpayer.

However, for certificates issued to casual taxpayers or Non-Resident Indian (NRI) taxpayers, the validity is limited to 90 days from the date of registration or the period specified in the registration application, whichever is earlier. Additionally, the validity period can be extended by the appropriate authorities as per the provisions of Section 27(1) of the GST Act.

What is the Penalty for not Registering for GST?

Penalties and consequences for various GST-related infractions are as follows:

Delay in Filing GSTR:

• Late fee: Rs. 100 per day per Act (CGST & SGST), with a maximum of Rs. 5,000.
• No late fee on IGST.

Not Filing GSTR:

• Penalty of 10% of tax due or Rs. 10,000, whichever is higher.

Committing a Fraud:

• Penalty of 100% of tax due or Rs. 10,000, whichever is higher.
• High-value fraud cases may also lead to a jail term.

Assisting in Committing Fraud:

• Penalty extending up to Rs. 25,000.

Wrongful Charging of GST Rate:

• In case of charging a higher rate, penalty of 100% of tax due or Rs. 10,000 (whichever higher).

Not Issuing Invoice:

• Penalty of 100% of tax due or Rs. 10,000, whichever is higher.

Non-registration under GST:

• Penalty of 100% of tax due or Rs. 10,000, whichever is higher.

Issuing Incorrect Invoice:

• Penalty of Rs. 25,000.

Please note that adherence to GST regulations is essential to avoid these penalties and maintain compliance.

How Can ApkaTax Assist you?

What is the GST Registration Fees?

Are you looking for GST Registration Fees then here the details for you. The GST Registration cost start from ₹1000 to ₹10000 along with Government Fee ₹0 and Professional Fee ₹1000.

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