GST Registration – An Overview
The Goods and Services Tax, popularly known as GST, was introduced on July 1, 2017, as a replacement for various central and state-level taxes, including Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT. GST introduction has since ensured the streamlining of the tax process in India. GST registration is mandatory for traders, service providers, manufacturers, and freelancers.
Taxpayers with a yearly turnover of not more than INR 1.5 Crore have the option to avail themselves of the benefits of a composition scheme. This scheme paves the way for a simplified GST process, facilitating the payment of taxes at a prearranged rate in line with their turnovers.
GST has united various indirect taxes, including VAT, service tax, and excise duty, into a unified single tax system. The consolidation of multiple taxes restructured as GST has streamlined compliance, lowered tax evasions, eliminated the domino effect of taxes, promoted the ease of doing business, and boosted the efficacy of the country’s economy.
What is a GST Registration Certificate?
GST registration certificate is an official document issued by the Government of India to business entities registered under the Goods and Services Tax (GST) framework. This certificate stands as a testimony to the entity’s legal standing and legitimate registration under GST.
This GST registration certificate displays critical information, including the GST identification number, business name, and the official address of the business.
GST Certificate plays a critical role for entities for the following reasons:
- Tax Collection Authority – This certificate legally allows businesses to levy and collect GST from their customers.
- Tax Credit Claims- This certificate authenticates businesses' ability to claim credits for the GST paid on their purchases and operational expenses.
Besides the tax-related functions, the GST Certificate also helps in areas including:
- Loan Applications- Entities with GST certification find it easy to apply for and secure loans from financial institutions, as it serves as proof of their legitimacy.
- Government Tenders- Businesses with a GST certificate is authorized to participate in government tenders, as they represent adherence to tax compliance.
- Goodwill- The GST Certificate not only boosts its goodwill but also earns the trust of consumers owing to its adherence to national tax laws.
Overall, the GST Certificate is important for accomplishing tax obligations and crucial in cementing an entity’s credibility and operational legality. Furthermore, the GST registration verification is of utmost importance for any business.
What is GSTIN?
Goods and Services Tax Identification Number, better known as GSTIN, is a distinctive 15-digit alphanumeric code assigned to every taxpayer who is registered under the GST regime in India. The GSTIN is the primary identifier for individuals and businesses in GST-related matters for seamless transactions and regulatory compliance.
After the applicants successfully apply for GST registration, they are issued GSTIN, which is mandatory for smooth business operations and executing tax obligations.
Benefits of GST Registration
GST registration offers a variety of benefits to individuals and business entities, and these include the following:
Types of GST Registrations in India
The Goods and Services Tax (GST) in India is classified into three significant categories. Let us understand all the three types of GST registrations:
Eligibility Criteria for New GST Registration
GST registration is essential for certain businesses and service providers. The eligibility criteria for applying for mandatory new GST registration include the following:
Documents Required for GST Registration
In order to ensure successful GST registration, several documents are required. The documents required for GST registration in India are showcased below:
GST Registration Procedure
The process of GST registration is now easy and simple. The step-by-step GST registration procedure is as follows:
The applicant must visit the GST portal to login and begin the registration process.
As part of the registration process, the applicant must provide all the relevant details, such as the legal business name, PAN, email ID, mobile number, district, and state.
Once the details are submitted, the applicant receives an OTP on their registered mobile number and email ID. Once this is verified, a TRN number is generated, which is sent via email.
After receiving the TRN, the applicant needs to click on the new registration tab and select the TRN.
Next, the applicant needs to submit the details related to the promoters/partners, place of business, business details, authorized signatory, state, Aadhar authentication and verification.
The applicant needs to click Save and Continue to proceed further.
The applicant receives the ARN confirmation via SMS.
Penalty for Violating GST Registration Norms
It is mandatory for certain businesses to obtain GST registration. Violating the regulatory and legal GST norms attack the following penalties:
- Non-Payment or Underpayments – In the case where a taxpayer fails to pay tax or underpays accidentally, a penalty equal to 10% of the pending tax is imposed. GST regulations on tax violations draw penalties for non-compliance. Therefore, it is advisable to make the tax payments within stipulated time limits. However, this violation draws a minimum penalty of INR 10,000.
- Deliberate Tax Evasion – In case an individual or a business avoids paying taxes intentionally, they draw a penalty equivalent to 100% of the amount evaded as tax.
GST Registration Fees
The expert consultants at Corpbiz help you streamline your GST registration process by offering end-to-end guidance. Our GST registration fees stays in the range of INR 2000 to INR 5000.
Completing the entire registration process takes around 30 days.
GST Registration Timeline
GST registration is mandatory for certain businesses to maintain legal, regulatory, and operational transparency in India. The timeline for getting GST registration approval is 7 to 10 working days. Completing the entire registration process takes around 30 days.
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Frequently Asked Questions
The Goods and Services Tax, better known as GST, is one single indirect tax structure in India that came into effect after replacing multiple taxes, which were earlier levied on various goods and services.
Yes, GST registration is mandatory for businesses in India that meet certain criteria set up by the authorities. Some of the criteria defined under the GST framework include an annual turnover threshold, interstate supply of goods and services, and operating an e-commerce platform. However, certain specific categories, such as casual taxable persons and non-resident taxable persons, are also mandated to apply for GST registration irrespective of their annual turnover.
Yes. It is mandatory for businesses in India to obtain a GST certificate to be able to register for GST. It is noteworthy to mention that businesses without a GST certificate will not be able to levy GST on the goods and services they sell.
No. Any person without a legitimate GST registration is neither allowed to levy GST nor collect it from customers. Such persons can’t even claim the input tax credit on the GST paid.
In terms of absolute numbers, Maharashtra holds the top spot. It is followed by Karnataka, Gujarat, Tamil Nadu, Haryana, and UP.
Late Shri Arun Jaitley was the first chairman of the GST Council.
Indirect taxes such as Value-Added Tax, central excise duty, central sales tax, Countervailing Duty, Service Tax, Additional Custom Duty, etc., have been subsumed under goods and service tax.