Overview of GST Registration
With a view to abolish several other indirect taxes and to create a single taxation system, GST was introduced in India. Also, GST helps in the ease of collection and to enhance the efficiency of the process.
GST Registration is required for the businesses whose turnover gets over Rs. 40 lakhs* for sale of goods (Rs 20 lakhs for North Eastern – All hilly states for sale of goods). There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).
Imposition of GST Registration through Multiple Stages
Also, for certain businesses, GST registration is mandatory and if the entity or an individual carries on business without getting the GST Registration, it will be treated as an offence under GST Act and heavy penalties will be levied. GST Registration is an online process and GST is imposed at every step of the supply network to set off all the available tax benefits.
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-
In a nutshell, every goods and services go through multiple stages which include: - (a) Purchase and manufacturing of Basic material, (b) whole selling and retailing the goods & (c) final Sale to the consumer for Consumption. GST registration is required in the following cases-
- Threshold limit of aggregate turnover exceeds.
- In case of certain businesses, Compulsory Registration is required.
- Voluntary Registration.
The GST is comprised in the final price of all the goods/services before its purchase that eliminates all the indirect taxes that have been obligatory by the central government and the state government beforehand in India.
What are the Benefits of GST Registration?
The advantages of GST Registration are given bellow:-
- Simplifies Taxation Services
GST has combined a number of indirect taxes under one umbrella and integrated the Indian market.
- Reduction in Costs of Products & Services
With the introduction of GST, the cascading effect of a series of VATs and taxes has been erased which has resulted in the reduction of cost of goods and services.
- Helps in Avoiding Lengthy Taxation Services
GST Registration helps the small businesses in avoiding the lengthy taxation services. As the service providers with a turnover of less than 20 lakhs and goods provider with a turnover of less than 40 lakhs are exempt from paying the GST.
- Aimed at Reducing Corruption and Sales Without Receipts
GST was introduced with an aim of reducing corruption and sales without receipts. Also, it helps in reducing the need for small companies to comply with various indirect taxes.
- Uniformity in Taxation Process
GST Registration brings uniformity in the taxation procedure and allows centralized registration. This helps the businesses to file the tax returns every quarter through an online process.
- Minimizing Tax Evasion
With the introduction of GST, tax evasion is minimized to a great extent.
- Higher Threshold for Registration
Earlier, in the VAT system, any business with a turnover of more than Rs 5 lakh was liable to pay VAT in India. In addition, service tax was exempted for service providers with a turnover of less than Rs 10 lakh. Under GST regime, on the other hand, this threshold has been increased to Rs 20 lakh, which exempts lot of small traders and service providers.
- Composition Scheme for Small Businesses
Under GST, small business under turnover of Rs 20 to 75 lakh can benefit as it gives an option to lower taxes by using the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.
- Simple and Easy Online Procedure
The complete process of GST (from registration to filing returns) is done online, and it is super simple. This has been advantageous for start-ups mainly, as they do not have to run from pillar to pillars to get diverse registrations such as VAT, excise, & service tax.
- Compliances is Lesser in number
Previously, there was VAT & service tax, each of which had its own returns & compliances. Under GST, on the other hand, there is just one, unified return to be filed.
- Regulations of Unorganized Sector
In the pre-GST era, it was often observed that certain industries in India like building construction and textile were largely unorganized and unregulated. Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.
What are 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 year exceeds Rs 40 lakhs (Rs 20 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-payer under 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.
What are the Modes of GST in India?
For GST administration, a model was designed where the government (Central and State) have powers to impose and collect taxes through their respective legislations. The Modes of GST are given bellow:-
- Central GST
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.
- State GST
SGST is the tax levied on the Intra State supplies of goods and services by the State Government.
- Integrated GST
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.
- 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 Constituents of GST?
- Registration Number
- Legal Name and Constitution of business
- Trade Name
- Period of validity
- Types of taxpayer
- Date of Liability
- Signature of the applicant
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
Zero rate tax means the - nil tax is to be applied on the goods and/or services.
- Lower Rate
Lower tax rate determines the 5% tax rate which is applied on the CPI (Consumer Price Index) basket & mass consumption.
- Standard Rate
Standard rate includes 12% & 18% of the tax rates.
- Higher Rates
Higher rates tax includes 28% of the tax rate under GST Regulation.
What Documents are Required for GST Registration?
The documents required for the Online GST Registration varies with the type of business. The lists of documents required for GST Registration (based on the type of business) are listed below:-
For a Sole Proprietorship Business
- PAN card of the owner
- Aadhar card of the owner
- Photograph of the owner (in JPEG format, maximum size – 100 KB)
- Bank account details*
- Address proof**
For a Partnership Firm
- PAN card of all partners (including managing partner and authorized signatory)
- Copy of partnership deed
- Photograph of all partners and authorised signatories (in JPEG format, maximum size – 100 KB)
- Address proof of partners (Passport, driving license, Voters identity card, Aadhar card etc.)
- Aadhar card of authorised signatory
- Proof of appointment of authorized signatory
- In the case of LLP, registration certificate / Board resolution of LLP
- Bank account details*
- Address proof of principal place of business**
For a HUF
- PAN Card of HUF and the Passport size Photograph of the Karta.
- Id and Address Proof of Karta and Address proof of the place of business.
- Bank Account Details
For a Public or Private Limited Company
- Pan card of the Company
- Certificate of incorporation of Company
- MOA and AOA of the company.
- Identity Proof and address proof of all directors and Authorised signatory of the Company.
- Passport size photograph of the directors and authorized signatory.
- Copy of Board resolution passed for appointing authorized signatory.
- Details of Bank account opening.
- Address proof of the place of business.
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 Registration is mentioned below.
- Step - 1
The very first step for GST Registration is to fill the online application, and for the same, the taxpayer shall visit the GST portal www.gst.gov.in. Also, the taxpayer (Applicant) needs to create a username and password in the portal.
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.
- Step - 15
Before submitting the application, click on the ‘Verification’ page and check the declaration. The below-mentioned methods can be used for submitting the application:
• Electronic Verification Code (EVC).
• By e-Sign method.
• In case the applicant is a company, 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 registered by the GST Applicant.
- Step - 17
Check the status of the ARN on the GST portal.
What are the Penalties in Case of Non-Compliance in GST?
In case of Delay in Filing GSTR
- Late fee is Rs. 100 per day per Act. i.e., 100 under CGST & 100 under SGST.
- Maximum of Rs. 5,000.
- No late fee on IGST.
For not Filing GSTR
- Penalty 10% of tax due or
- 10,000 whichever is higher.
For Committing a Fraud
- 100% of tax due or
- 10,000 whichever is higher.
- Additionally, in case of high value fraud cases also have jail term.
For helping a Person to Commit Fraud
Penalty extending up to Rs. 25,000.
For Charging GST Rate Wrongfully
In case of charging higher rate-
- Penalty 100% of tax due or
- 10,000, whichever is higher (if the additional GST collected is not submitted with the govt).
For Not Issuing Invoice
- 100% of tax due or
- 10,000, whichever is higher.
Non-registration under GST-
- 100% of tax due or
- 10,000 whichever is higher.
In case of issuing Incorrect Invoice
- Penalty of Rs. 25,000
What is the Validity of GST Registration Certificate?
The validity of any GST registration certificate depends on 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 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, 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.
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 better-quality sales and satisfied clients. 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 “Taxation 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.