Overview of GST Registration
GST is an indirect tax that was introduced to abolish several other indirect taxes in India, to create a single taxation system for the ease of collection and to enhance the efficiency of the process. According to the GST Regimes, businesses whose turnover gets over Rs. 40 lakhs* (Rs 10 lakhs for North Eastern – All hilly states) is required to obtain the GST Registration as a“Normal taxable person”.
However, for certain businesses, GST registration is compulsory and if the organization or a person carries on business without GST Registration, it will be treated as an offence under GST and heavy penalties will apply. It takes 2-6 working days to get the GST registration done.
What is GST (Goods and Service Tax)?
GST is the biggest tax reform in India levied on the goods and services which subsumes both the State (VAT, Entertainment Tax, Luxury Tax, Octroi) and Central taxes (CST, Service Tax, Excise Duty). This will help the end consumer like us to bear only GST charged by the last dealer in the supply chain. After all, One Nation One tax is the slogan of our PM Sri Narendra Modi.
On 1st July 2017, The GST was introduced with certain rules and regulations, and a lot many modifications have been implemented since then. Due to a large number of amendments in the Act, people still have perplexed thoughts as regards to threshold limit for registration and implementation under the Act.The procedure for GST is online and requires no physical medelling and to set off all the available benefits, GST is imposed at every step of the supply network.
Every product goes through multiple stages which includes the purchase of basic materials, manufacturing, whole selling, and the retailing the products, and then the final sale to the consumer for consumption/usage. In a nutshell, GST will be levied on all of these 3 stages-
A person is required to take GST registration in the following cases-
- If the threshold limit of aggregate turnover exceeds.
- Compulsory Registration, in case of certain businesses.
- Voluntary Registration.
When the consumer pays the GST, it transmitted to the government by the organizations selling the goods and services. As a result, GST gives revenue to the Govt. The GST is comprised in the final price of all the goods/services before its purchase. This tax eliminates all the indirect taxes that have been obligatory by the central government and the state government beforehand in India. The businesses require going for GST registration to be applicable for this.
Need for GST Registration in India
The Goods and Services Tax (GST) was implemented in Indiato improve the process of collecting the tax. Moreover, the main reason for implementing the GST in India is to reduce the tax burden that comes on both the entity and consumers. There were numerous taxes included at each phase of the production with the previous tax system, without mentioning that tax has been paid at earlier stages. Consequently, the end cost of the item doesn't obviously show the item's genuine price and how much tax was made upon. It is noteworthy that this cascading effect is excessively unbelievable and unproductive, which sometimes garnered a lot of confusion and repeatedly led to double taxation.
Taking into consideration the above reasons, a wise initiative was taken by the government to assimilate whole India at one central point through the uniform taxation system instrument in the form of GST (Goods and Service Tax).
- It helps in developing the common national market.
- Helps in distinguishing between Goods and services no longer required.
- Increasing the employment opportunities.
- Build a transparency in taxation system.
Elucidate the Eligibility Criteria for GST Registration?
The below mention person/entities are required to get registered under GST-
- Any business entity whose aggregate turnover in a financial yearexceeds Rs 20 lakhs (Rs 10 lakhs for special category states in GST). Note-This clause does not apply if the entity is only dealing in supply of goods/services which are exempt under GST,
- Every entity who is registered under an earlier law of taxation (i.e., Excise, VAT, Service Tax, etc.)needs to get register under Goods and Service Tax.
- Any entity or supplier dealing in inter-state supply of goods.
- Casual taxable person
- A tax payerunder the reverse charge mechanism
- Input service distributor and its agent
- E-Commerce operator or aggregator*
- Non-Resident taxable person
- Agents of a supplier
- A Person who supplies through E-commerce aggregator.
- Entities who are providing online information, acquiring database, or retrieval services from a place located outside India to a person in India, other than a registered taxable person.
Modes of GST
To administer GST in India, a model was designed where both the Central and States government have powers to impose and collect taxes through their respective legislations. The Modes of GST are:
CGST is the tax imposed on the Intra State supplies of goods and services by the Central Government. When the place of the seller and the buyer is in the same state it is termed as an Intra-state supply of goods or services. Here, a seller has to collect both CGST and SGST in which CGST remains with the Central government while the SGST is collected by the State government.
SGST is the tax levied on the Intra State supplies of goods and services by the State Government.
Integrated GST is governed by the IGST Act, where the seller has to collect IGST from the buyer, and the tax collected will be divided between the Central and State Governments.Note-When the location of the supplier and the buyer are in different states,the Inter-state supply of goods or services takes place.
Union Territory GST-
Union Territory GST is applicable when any goods and services are used in the Union territories (UTs) of India and the revenue is collected by the government of union territory.
What are the Benefits of GST Registration?
The advantages of GST Registration are-
What Documents are required for GST Registration?
The entire process of GST Registration is online, and thedocuments required for the Online GST Registration varies with the business type. Depending upon the type of business, the list of documents required for GST Registration are listed below:
The following documents are required for A Sole Proprietorship-
- Id and Address Proof (PAN Card, Aadhar Card, Bank Account Details)
- Passport Size Photograph
The Following documents are requiredfor A Partnership Firm:-
- Id and Address Proof of all partners and authorized signatory (PAN Card, Aadhar Card, Bank Account Details)
- Passport Size Photograph
- Copy of the partnership deed
- Registration Certificate/ Board resolution in case of LLP firms
- Address Proof of working place.
The following documents are required for A Public Or Private Limited Company:
- PAN Card and Certificate of incorporation of Company
- MOA and AOA of the company.
- Identity Proof and Address Proof of authorized signatory. Note-The authorized signatory must be an Indian even in case of foreign companies/branch registration.
- Identity Proof and address proof of all directors of the Company.
- Photograph of the directors and authorized signatory.
- Board resolution appointing authorized signatory.
- Bank account details.
- Address proof of the working premise.
The following documents are required for A HUF:
- PAN Card of HUF
- Photograph of the owner
- Id and Address Proof of Karta
- Address proof for the place of business
What is the Structure of 5 slabs under GST?
GST regimes were made by considering all the layman and inflation rates in mind. To make it simpler and easier, the GST was structured following the four tiers structure. These four zones are given below, which are as follows:
- Zero Rates:
0% Zero rate tax means the - nil tax that is applied to the goods and/or services.
- Lower Rate:
Lower tax rate determines the 5% tax rate which is applied to the CPI (Consumer Price Index) basket & mass consumption.
- Standard Rate:
Standard rate includes 12% & 18% of the tax rates. Moreover, the council has finalized two standard rates to maintain the check on the rates of inflation.
- Higher Rates:
Higher rates tax includes 28% of the tax rate under GST Regulation.
GST Tax Rate under Different Tax Rate Slabs
What is the procedure for GST Registration Process in India?
To successfully finish the GST registration, process every taxpayer must follow the requisite process. The procedure for GST Registrationis mentioned below.
Step - 1:
The very first step for GST Registration is to fill the online application, and for the same, the tax payer shall visit the GST portal www.gst.gov.in. Also, the taxpayer (Applicant) needs to create a username and password in the portal.
Step - 2:
The Applicant need to click the link on the GST portal, and click on to the ‘New User Login’. By clicking on ‘New User Login’ accept the window on the displayed declaration form and press ‘Continue’ to register yourself for GST Registration.
Step - 3:
The applicant is required to Select ‘New Registration’ and Login to start the GST registration procedure.
Step - 4:
The applicant shall fill the required details asked on the GST portal:
- Select ‘Taxpayer’ under the drop-down menu.
- Select the respective state and district.
- Enter the details of the business (Name and PAN card).
- Provide the email ID and mobile number (that must be active as OTPs will be sent on the details) in the respective boxes.
- Enter the Captcha shown on the screen and click on ‘Proceed’.
Step - 5:
The next step after filing the required details is to enter the OTP sent to your email ID and mobile number in the respective boxes.
Step - 6:
Click on the ‘Proceed’ button once the details have been entered.
Step - 7:
An applicant will receive the Temporary Reference Number (TRN) on the screen. Save the TRN for further process.Note- TRN is used to open PART-B in GST registration and to log in to the GST registration application.
Step - 8:
After receiving the TRN, an applicant is required to open the GST portal again and click on ‘Register’ under the ‘Taxpayers’ menu.
Step - 9:
Select the ‘Temporary Reference Number (TRN)’.
Step - 10:
Enter the TRN selected and the captcha details.
Step - 11:
Once the Captcha details are entered, click on the ‘Proceed’ button.
Step - 12:
An applicant will receive an OTP on the email ID and registered mobile number. Click on ‘Proceed’ Button by entering the OTP received.
Step - 13:
The status of your application will be displayed on the next page. Click on the Edit icon, mentioned on the right side of the page.
Step - 14:
On the next page there will be various sections, where all relevant details are required to be filed along with the necessary documents.Below-mentioned documents must be uploaded for the GST Registration-
- Photographs of the Applicant
- Details and Principal place of the business
- Business address proof
- HSN Code of the business
- Bank details of the GST Applicant
- Authorization form
- The constitution of the taxpayer.
Step - 15:
Before submitting the application, click on the ‘Verification’ page and check the declaration. The below-mentioned methods can be used for submittingthe application:
- Electronic Verification Code (EVC).
- By e-Sign method.
- In case the company of GST Registration, the application must be submitted by using the Digital Signature Certificate (DSC).
Step - 16:
Once the process is completed, a successful completion message will be shown on the screen. The ARN will be sent on the mobile number and email ID registeredby the GST Applicant.
Step - 17:
Check the status of the ARN on the GST portal.
How an applicant will get the GST Registration Certificate Online?
- Once the ARN is generated, an applicant needs to visit the GST portal.
- Consequently, an applicant needs to Login into his/her respective GST account, by entering the username and password created by you. Along with that, an applicant needs to fill the right captcha mentioned in the box and select the login button subsequently.
- Select “User services”in the “Services” option from the drop-box, where an applicant needs to select the “View/Download Certificates” in the options displayed in the image.
- The registration certificate will automatically start downloading when you will select the download option.
- For downloading the GST Certificate,what an applicant needs to do is to visit the GST common portal “https://Www.Gst.Gov.In/”
After that, you need to Log in to your GST account utilizing the username and password created by you while registering your name for GST Registration in the GST Portal. Along with, you need to enter the captcha correctly and select the login button afterwards.
A new page will open once the login is successful. After that, click on the “Services” option and select “User services” from the drop-box. You need to choose the “View/Download Certificates” in the options displayed in the picture.
You must note that the Registration certificate will automatically start downloading, when you select the download option while proceedings.
The Registration certificate shall be downloaded to your device and can be accessible to view the same when required. You need to take a printout this downloaded certificate and accordingly must display prominently in the place of your business.
What are the Constitutions of GST Certificate?
What is the validity of GST Registration Certificate?
The validity of any GST registration certificate depends and conditional to the type of taxpayer who is receiving the certification. It is valid throughout when the certificate is issued to a regular taxpayer. In such cases, it only invalidates if it is canceled by the GST authority or surrendered by the taxpayer himself.
Though, the validity is restricted to a period of 90 days from the date of registration or for the period specified in the registration application, whichever is earlier in cases certificates issued for the casual taxpayer or Non-Resident Indian (NRI) taxpayer. Moreover, the validity period can also be extended under the provisions of Section 27(1) of the GST Act by the appropriate authorities.
How to Track GST Registration Application?
By following method, you can track your GST Registration application
- Firstly, log on to http://gst.gov.in
- Now click on the ‘service’ option available
- After clicking on the service option, a dropdown will provide a result of 'registration.'
- Now choose the ‘track application status’ option
- After choosing the option, you have to enter your ARN in a new window and click on search
- Here, you can see your application status and the same information will be shared on your registered mobile number and email ID.
- Firstly, log on to http://gst.gov.in with the help of credential provided to you
- After selecting the Service tab for a drop-down, select option, 'registration.'
- Now click on the option, 'track application status' and after entering the ARN number, click on search.
Offences & PenaltiesOffences
There are 21 offenses recognized under the GST. However, we have mentioned a few major offenses below for your understanding. Please consult our experts on offenses for the entire list of 21 offenses which differs from case to case basis.
The Offenses recognized under the GST are as follows:-
- Not registering under GST when eligible and required by law
- Supply of any services/goods issuing a false invoice or without any invoice
- Issuance of invoices by a taxable person by means of the GSTIN of another bona fide taxpayer under GST
- Compliances and submission of false information while registering under the law of GST
- Submission of fake financial documents/records or files, or fake returns to avoid tax
- Obtaining Fraudulent Refunds
- Intentional suppression of sales to avoid tax
- Choosing for composition scheme even though a taxpayer is not entitled
A penalty will have to be paid under GST if in case any of the offenses are committed. The principles are also mentioned by law on which these penalties are based.
For Late Filing
It is a well-known fact that late filing attracts late fee penalty. According to the late fee is Rs. 100 per day. Therefore, it is Rs. 100 under CGST and Rs.100 under SGST. Total will be Rs. 200/day (Subject to changes announced via Notifications). However, there is a limit for maximum penalty, which is Rs. 5,000. Nevertheless, there is no late fee on IGST in case of belated filing. Interest has to be paid at 18% per annum along with late fee. It has to be calculated determining on the tax to be paid by the taxpayer. The duration will be from the next day of filing to the scheduled date of payment.
For Not Filing
The consequent returns cannot be filed in case you don’t file any GST return. For example, the next return GSTR-3 and subsequent returns of ‘September’ cannot be filed if GSTR-2 return of August is not filed. As a result of this, late filing of GST return will have a cascading effect leading to heavy penalty and fines.
CorpBiz Procedure for GST Registration
Kindly utilize the steps given above to integrate legally and securely a GST Registration and get the benefits in the form of Taxation. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning GST Registration and its compliance for the smooth functioning of your business in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.
It is advisable that an attorney with “Tax experience” must be appointed to overwhelm many of the potential pitfalls that creep around within GST Registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
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Frequently Asked Questions
GSTIN, known as Goods and Service Tax Identification Number, consists of 15 digits. This number is generated by the government when an individual or a company has successfully applied for GST Registration.
Yes, Digital Signature Certificate (DSC) is required if you are a Public Limited Company, Private Limited Company, Limited Liability Partnership (LLP), or One Person Company (OPC).
Yes, anyone can voluntarily get GST Registration even if the annual turnover does not exceed the threshold limit of 40 lakhs or 20 lakhs in the case of the northeast.
Any business is required to get more than one GST Registration number if:
- the business entity is supplying goods & services from multiple States; then, it is mandatorily required by the business to get GST Registration in different States.
- Further, any business entity can get multiple GST Registration number even if they are operating from a single State under several verticals to avoid accounting complications between various businesses.
Composition Scheme under GST is a secure scheme made to decrease the compliance burden for the small taxpayers. Small taxpayers can pay GST at fixed rates and can get rid of tedious GST formalities under this Composition Scheme under GST. The annual turnover of any business, if, is less than ₹1.5 Crore, can choose for a composition scheme under application for GST Registration.
Composition scheme under GST Registration in India does not apply to:
- Supplier of non-taxable goods
- Manufacturer of Notified Goods
- Service providers
- E-commerce sellers
- Inter-state sellers
- Less tax liability;
- Not require maintaining detailed records;
- Need to file a single quarterly return. Four returns in a year;
- Limited compliances;
- A small amount of tax on turnover can be paid (1% for traders & 5% for restaurant);
- Can provide an auxiliary service up to 5 lakhs Rupees annually under the composition scheme.
- Cannot avail input tax credit of any purchases made;
- Cannot charge any composition tax on an invoice from the customer as usual practice in case of a normal GST scheme.
- Cannot issue tax invoice;
ARN is known as the Application Reference Number. After the successful submission of the application of GST Registration, the ARN number is generated. The ARN number is generated after uploading of the necessary documents.
HSN is known as the Harmonized System of Nomenclature. This is an internationally accepted product coding system to maintain uniformity in the classification of goods.