The implementation of the Goods and Services Tax or GST regime in India in 2017 was aimed at replacing various existing indirect taxes with one comprehensive tax.
GST is levied at the stage of manufacturing and sales of diverse goods and services in our country. Being a destination-based tax, it is applicable for both manufacturers and customers.
GST has helped many Indian business owners in filing their taxes without facing many hassles. Its positive impact on the Indian economy can be gauged in terms of tax structure simplification, reduced burden of taxes, SME support, to name a few.
However, it has also made it crucial for people to understand the GST registration process and get the registration done online.
Let’s get into the details of GST registration and how it impacts your business.
What is GST Registration?
GST registration refers to the process in which businesses involved in buying and selling goods and services need to register for GST. Following this process is mandatory for business entities having turnover above Rs. 20 Lakhs (for services) and Rs. 40 Lakhs (for goods supply).
Besides this, businesses who are involved in the interstate supply of goods or those making taxable supplies on other’s behalf also need to go through the GST registration process.
For most businesses, GST registration is mandatory. Generally, it takes two to six days for the registration process to be completed. Continuing with the business without registering it under GST is an offence and can lead to hefty penalties.
Who All Should Register for GST?
The following business entities/individuals are eligible for GST registration:
- Businesses having turnover beyond the threshold limit of INR 40 Lakhs (this limit is lower in the North-Eastern states, Himachal Pradesh, J&K, and Uttarakhand)
- Individuals who are registered under various tax laws (excise, service tax, VAT) before the GST regime came into being
- Casual taxable person
- Agents who work for a supplier or a service distributor
- Individuals paying tax under the reverse charge mechanism
- E-commerce aggregators
- Suppliers who work with e-commerce aggregators
- Non-resident taxable person
- TDS/TCS deductor
- Online data retrieval or access service providers
What are the Benefits of GST Registration?
GST registration comes with several benefits for individuals/business entities. Given below are some of the benefits of registering as a GST taxpayer:
- GST registration serves as proof that acknowledges your business as a certified one for the provision of goods and services.
- You get the right to collect tax from your customers and pass on the credit of the paid taxes to the customers/suppliers.
- You can also get the benefit of a composition scheme under GST to reduce the burden of compliance, being a small taxpayer.
About GST Registration Process and Fees
GST registration can be done online through the government portal – https://www.gst.gov.in/, or a GST Seva Kendra. Given below are the steps in the online GST registration process:
- Visit the GST portal using the link – https://www.gst.gov.in/.
- Under the ‘Services’ tab, click ‘Registration’ -> ‘New Registration’.
- The online GST registration form is divided into two parts – Part A and Part B.
In Part A,
- Select ‘Taxpayer’ from the drop-down options.
- Select your state and district in which you want to use for GST registration.
- Enter various details, including the legal name of the business, email address, PAN, and mobile number in the respective fields.
- Verify the entered information via OTP.
- On completing Part A, note down the TRN or Temporary Reference Number that you receive after verification.
In Part B,
- To start GST registration with Part B, log in using your TRN and validate the process by entering the correct CAPTCHA code.
- Verify the process by entering the OTP sent to the registered mobile number or email address. This will redirect you to the GST registration page.
- Submit business-related information, including the company name, PAN, the state chosen for GST registration, and the date when you started the business.
- Enter the required information in the given horizontal tabs of Promoters/Partners, Authorised Signatory, Authorised Representative, and others.
- After you are done with entering the required information and uploading documents, click ‘Save and Continue’.
- After successful submission of your application, sign it digitally and proceed further.
- An ARN or Application Reference Number will be sent to you, confirming your GST registration.
Since GST registration involves several steps, many individuals believe there must be a cost associated while registering under the GST regime. You should know that the government does not charge any fee to allot GSTIN.
However, there can be charges involved if you get the GST registration done through tax professionals or similar other service providers.
What are the Documents Required for GST Registration?
Given below is the list of documents needed for GST registration:
- Applicant’s PAN Card
- Partnership deed or certificate of incorporation
- Address proof of the business place
- Aadhar Card
- Bank statement or canceled cheque of the firm, individual, or company
- Address and identity proofs of partners and/or promoters along with photographs
- Digital signature
- Resolution signed by board members
What are the Penalties Charged for not Opting for GST Registration?
Any offender who deliberately avoids registering under the GST regime has to pay a penalty of 100% of the tax due or ten thousand rupees, whichever is higher.
Similarly, those who avoid filing GST returns are liable to pay a penalty of tax due, subject to a minimum penalty of ten thousand rupees.
GST Registration FAQs
#1. Is it mandatory to get GST registration done?
GST registration is mandatory for all individuals or business entities whose turnover exceeds the threshold limits specified in the related tax laws.
#2. Who is eligible for GST registration?
The eligibility criteria for GST registration is based on the turnover of a business. If the turnover for a business exceeds Rs. 40 Lakhs, it needs to be registered under the GST regime.
#3. How can I register for a GST number?
You need to follow the above-mentioned GST registration process to get a GST number for your business.
#4. Is the GST registration process free of cost?
You need not pay any amount to the government while following the GST registration process online. However, consultation fees or charges may come up if you hire a tax professional to get the registration done on your behalf.
#5. Can I get GST registration without registering a company?
You can get a GST number without registering a company. It can be obtained when you register yourself as a sole proprietorship or being a part of a partnership business.
#6. Do I need a GST number for my small business?
You need to consider the turnover of your business before you apply for GST registration online.
#7. Can an individual apply for multiple GST registrations?
For businesses that operate in more than one Indian state, separate GST registration is needed for each state.
#8. Can an individual apply for several GST registration within an Indian state?
You can apply for several GST registrations within a state-provided business spread across different business verticals. It would be best to ask a tax professional to understand the finer nuances in such cases.
#9. What are some of the primary benefits of GST registration?
The benefits of registering under GST vary from one business to another. For example, normal registered businesses are allowed to conduct interstate business without facing restrictions.
On the other hand, registered composition dealers enjoy limited compliance and lesser tax liability with GST registration.
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In compliance with the guidelines laid by the government, you need to submit your GSTIN along with other documents to enjoy an upgraded account.
In case the annual turnover of your business is less than Rs. 20 Lakhs, you can provide us a declaration of GST non-enrollment.
For the complete list of documents required, click here.