Overview of GST Registration
In GST jurisdiction, any business whose turnover crosses the limit of Rs 40 lakhs (Rs10 lakhs for NE and hill states) should register as separate taxable entity. This process is called GST registration. It takes 2-6 working days to get the GST registration done. Carrying out business without GST registration is considered as an offence under GST.
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.
According to the GST Regime, any business whose turnover is more than INR 40 lakh is required to register as a normal taxable person. However there is an exception for North East and hill states, the turnover is INR 20 Lakh for them.
NOTE: In order to give relaxation to the taxpayers, the CBIC (Central Board Of Indirect Taxes And Customs) on 1 April, 2017 introduced two threshold limits for exemption from registration. If the aggregate turnover of a Business increases more than INR 40 Lakh, then that business is required to have the GST Registration. Though, there is an exemption for the North Eastern states and other states which include Jammu and Kashmir, Himachal Pradesh and Uttarakhand. The limit for these states is INR 20 Lakh which was INR 10 Lakh earlier.
GST Registration is mandatory for businesses whose turnover fall under the criteria mentioned above. In case such business organization carries on business without registering under GST, it will be considered as a punishable offence and will be liable to pay heavy fine penalties.
How will GST Registration Transform the Present Indirect Structure?
GST is an indirect tax imposed in India which came into effect from July 1, 2017 in order to remove the geographical barriers and create a single market that is open to all to buy, sell, import, and export within our country.
Implementation of GST Registration will remove the cascading tax system such as CGST (Central Goods and Services tax) and SGST (State Goods and Services tax) which will eventually help the end-consumer.
Modes of GST Registration in India
- CGST (Central Goods And Services Tax)
CGST is the tax imposed on the Intra State supplies of goods and services by the Central Government. Intra-state supply of goods or services takes place when the location of supplier and location of buyer is in the same state. In this mode of GST Registration, a seller has to collect both CGST and SGST in which CGST gets deposited with Central government while the SGST gets deposited with State government.
- SGST (State Goods And Services Tax)
SGST is the tax imposed on the Intra State supplies of goods and services by the State Government. Here the tax imposed goes to the state government.
For example: A dealer in Noida sold goods to another seller in Ghaziabad worth INR 50000. A single tax GST will be imposed on the goods which will comprise of both CGST and SGST. The GST rate will be under 18% GST Slab in which both the CGST and SGST will be 9%. The dealer will have to pay INR 9000 in total in which 4500 will go to the Central Government and INR 4500 will go to the state government i.e the UP government.
- IGST ( Integrated Goods And Services Tax)
IGST is the tax imposed on the inter-state supplies of goods and services which will be governed by the IGST Act. Inter-state supply of goods takes place when the location of the supplier and the place of supply are in different states. In IGST, the seller has to collect IGST from the buyer. The tax collected will be shared between the Central and State Government.
For Example: A businessman from Kerala sold goods worth INR 5,00,000 to another businessman residing in Karnataka. The GST rate is 18% that means the businessman has to charge INR 90,000 as IGST. This amount will go the Central Government.
Documents for Online GST Registration in India
The Documents required for the GST Registration varies with the business type. The list of documents is listed below:
Id Proof such as PAN Card or Aadhar Card and address proof of proprietor.
- LLP (Limited Liability Partnership)
1. PAN Card
2. LLP Agreement
3. Partner’s name and Address Proof
- Private Limited Company
1. Incorporation Certificate
2. Pan Card
3. (AOA) Article of Association
4. (MOA) Memorandum of Association
5. Identity and Address proof of Director
6. Digital Signature
- Address Proof Of Directorship:
2. Voted ID Card
3. Aadhar Card
4. Telephone or electricity Bill
5. Ration Card
6. Driving license
7. Bank Account Statement
Who is Eligible for GST Registration?
- Individuals who are registered under Pre-GST law (i.e. Excise, VAT, Service Tax)
- Businesses whose turnover is above INR 40 Lakh and INR 20 Lakh for the North Eastern States, Jammu and Kashmir, Himachal Pradesh and Uttarakhand).
- Taxable person and Non-Resident Taxable person
- Agents of Supplier and Input Service Distributor
- Individuals paying taxes under the Reverse Charge Mechanism.
- Individuals who supplies through e-commerce aggregator
- Person supplying online information and database access from a place outside India to a person in India.
Recent Changes under GST
- Reduction in Interest Rate and Extension of Due date for GST3B
Registered persons whose turnover is more than 5cr: Date Specified to file return in form GST 3B for the month of February to April 2020 is 24.06.2020. No interest will be charged for the 15 days after due date, and thereafter 9% interest shall be charged.
Registered Persons whose turnover is more than 1.5 cr and up to 5cr: Date specified to file return in form GST 3B for the month of February and March 2020 is 29.06.2020 and for the month of April 2020 is 30.06.2020.
Registered Persons whose turnover is up to 1.5cr: Date specified to file return in form GST3B for the month of February 2020 is 30.06.2020, for the month of March 2020 is 03.07.2020 and for the month of April 2020 is 06.07.2020.
- Late fee Waiver
If the registered person fails to file within due date, GSTR 1 for the quarter ending March 2020 and for the month of April 2020 and may 2020; no late fees shall be charged if the return is furnished up to 30.06.2020.
- Extension of other due dates
The due date for filing form CMP-08 for the quarter ended March 2020 is extended till 07.07.2020, and for filing form, GSTR 4 is extended till 15.07.2020.
The time limit for completion of any action by any person or authority, the time limit for completion of any proceedings or passing of any order or issuance of any notice etc. by any authority, commission or tribunal shall be extended up to 30.06.2020.
- Extension of E way bill period
Any E way Bill generated whose period validity expires between 20.03.2020 and 15.04.2020, the validity shall be deemed to be extended till 30.04.2020.
- GST Composition Scheme Extensions
1. A Proviso is inserted in Rule 3 (sub-rule 3) to extend the time to opt for composition scheme under GST on or before 30.06.2020.
2. Intimation shall be filed electronically in form GST CMP-02.
3. Furnishing of a statement in form GST ITC-03 can be done up to 31.07.2020.
4. Input tax credit for the period February 2020- August 2020 shall be adjusted cumulatively in return GST 3B filed for the month of September 2020.
What is The GST Registration Process in India?
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.
Another Mode to Check Application Status
- 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.
Penalty if The GST Registration is not Done
Penalty is imposed in case any business entity is not registered.
- Due To Genuine Errors
Any Individual who does not register under GST has to pay a penalty of 10% of the tax amount or a minimum amount of INR 10,000 which is ever is greater.
- If Done Intentionally
In case the offender is purposely evading from paying the tax, the penalty will be 100% of the tax amount.
Frequently Asked Questions
GSTIN is a 15 digit Goods and Service Tax Identification number that is assigned to the applicant/businesses when they successfully register under GST.
The CBIC (Central Board of Indirect Taxes and Customs) on 1 April, 2017 introduced two threshold limits for exemption from registration. If the aggregate turnover of a Business increases more than INR 40 Lakh, then that business is required to have the GST Registration. While there is an exemption for the North Eastern states and other states which include Jammu and Kashmir, Himachal Pradesh and Uttarakhand. The limit for these states is INR 20 Lakh which was INR 10 Lakh earlier.
Yes, if any business operates in more than one state, a separate GST Registration is required. For Example, If a businessman manufactures its product in UP and sells in Delhi and Haryana, then he will require a separate GST Registration for these two sates (Delhi and Haryana).
Businesses whose turnover is less than INR 1.5 Crore can opt for Composition Scheme. While there is an exemption for the North Eastern states. If their turnover exceeds INR 75 Lakh, then they can opt for Composition Scheme.
Composition Scheme is not applicable to following:
- Service Providers
- Inter-State Sellers
- E-Commerce Sellers
- Supplier of Non-Taxable goods
- Manufacturer of Notified goods
Composition Dealers need to pay their taxes based on their business types.
- They need to file one return which is on quarterly basis while the normal taxpayers file the returns on a monthly basis.
- They cannot collect taxes from customers. The floor rate should not be less than 1%.
- These businesses cannot collect tax from its customers and are required to pay the taxes on their own.
- They cannot claim input tax credits.
ARN is the Application Reference Number which is generated after successful submission of the application to the GST servers.
Refer Section 2(6) of CGST Act. Aggregate turnover does not include value of inward supplies on which tax is payable on reverse charge basis.
He is liable to register if the aggregate turnover (all India) is more than 20 lacs (Rs. 10 lacs in Special Category States) or if he is engaged in inter-State supplies.
Not liable to tax means supplies which is not leviable to tax under the CGST/SGST/IGST Act. Please refer to definition under Section 2(78) of the CGST Act.
New registration would be required as partnership firm would have new PAN.
Outward supplies on which tax is paid on reverse charge basis by the recipient will be included in the aggregate turnover of the supplier.
A supplier of service will have to register at the location from where he is supplying services.
Exemption from registration has been provided to such suppliers who are making only those supplies on which recipient is liable to discharge GST under RCM.
Yes, you would be treated as a normal taxable person.
There will be only one registration per State for all activities. But, you have the option to be registered as a separate business vertical.
A person dealing with 100% exempted supply is not liable to register irrespective of turnover.