The GST has brought a groundbreaking change to India’s indirect tax system by unifying several taxes into a single system. All businesses that exceed the given turnover threshold, including sole proprietorships, are to be registered under GST. GST registration for a proprietorship firm does not necessarily imply compliance with the law, but it is also an indicator of credibility and professionalism in business transactions.
This blog discusses the documents required to register for GST as a proprietor in India, the procedure, eligibility, and benefits in detail, using optimised keywords to help you understand everything about GST for a proprietorship firm.
What is a Proprietorship Firm?
The easiest type of business in India is a proprietorship, which a single individual manages. It is not a legal entity independent of its owner; that is, the owner is personally liable for all profits and losses.
Although it is simple to establish and run, a proprietorship is not exempt from taxation laws like the rest. Thus, if the firm’s turnover exceeds the GST registration threshold (40 lakh of goods and 20 lakh of services in most states), the proprietorship is required to register under GST.
Significance of GST Registration for Proprietorship
GST registration certificate is useful to a proprietorship in a number of ways:
- Allows the business to be recognized in the GST law.
- Enables the owner to receive GST on behalf of the customers and input tax credit.
- Eases the cross-state business processes.
- Establishes good relationships with customers and increases eligibility in tenders or business loans.
- Eliminates fines in case of non-compliance with GST.
GST registration is applicable irrespective of whether your proprietorship is trading in goods or services, or it is online, as this helps you to stay within the rules and gives your brand better credibility.
Documents Required for GST Registration for a Proprietorship Firm
To register a proprietorship firm under GST, one would need to provide certain documents to confirm that the owner of the business is who they say they are, the address of the business, and the bank details. The following is a list of all the documents that are needed when registering the proprietorship GST.
1. PAN Card of the Proprietor
The main document used for GST registration is the proprietor’s Permanent Account Number (PAN). A proprietorship firm is not a legal entity; therefore, the owner must obtain a PAN to register and file tax forms.
Note: The name and date of birth printed on the PAN card should be a perfect copy of your Aadhaar and other documents; otherwise, verification may be delayed.
2. Aadhaar Card of the Proprietor
The Aadhaar card is a necessary identity and address card for the proprietor. The GST portal verifies Aadhaar use during registration. OTPs (One-Time Passwords) depend on a mobile number associated with an Aadhaar number.
3. Evidence of Business Registration or Trade Name
- Shop and Establishment Act certificate or Business license.
- Instead of a company, an MSME (Udyam) registration certificate.
- Trade registration is issued by the local municipal authorities.
Although it is not an obligatory step to use in all cases, it will assist in proving the authenticity of your company identity.
4. Evidence of Business Place or Address
- Property that is owned: Electricity bill, property tax receipt or any utility bill in the name of the owner.
- Rental: Effective rental contract and electricity bill or NOC ( No Objection Certificate) of the owner of the property.
- Shared or co-working space: Rent agreement and NOC with the provider of space.
5. Bank Account Proof
- Cancelled Cheque with the name of the owner printed.
- Bank statement (last month).
- Copy of the passbook with the name of the proprietor, account number, and the IFSC code.
This is done to make sure that the funds, in terms of refunds or tax credits, are transferred to the appropriate bank account.
6. Photograph of the Proprietor
The owner needs a recent passport-sized photo. It should be clear and high-resolution and depict the identity of the owner since it is represented in the Aadhaar or PAN records.
7. E-Sign or Digital Signature (DSC)
Proprietors who submit their applications online do not need to use a Digital Signature Certificate (DSC); however, it may be used to apply securely. Alternatively, it is possible to expedite the GST registration process through Aadhaar-based e-signature, making it more convenient.
Optional Documents (Where Appropriate)
- Partnership Deed (in case of any co-ownership of any assets).
- Letter of Authorization or Board Resolution in case the GST compliance is being done by a person other than the proprietor.
- Professional License (doctors, lawyers or architects).
GST Registration for Proprietorship: Step-by-step Process
Knowing only the document requirements is half the process. You can register your proprietorship GST online in the following way:
Step 1: Visit the GST Portal
Visit the official GST registration portal at the site https://www.gst.gov.in, and use the button for New Registration.
Step 2: Fill in Basic Details
Enter details such as:
- Business name (as per PAN)
- PAN number of the proprietor
- OTP verification Email ID and mobile number.
Step 3: Issue Temporary Reference Number (TRN)
Upon successful OTP validation, you will receive a TRN that allows you to continue the application if it is disrupted.
Step 4: Fill in the Application Form.
Sign in using your TRN and complete all necessary information, including business address, bank account, business activity, and other place of business (where required).
Step 5: Submit Necessary Documents
Scanned copies of all the documents above should be attached in JPEG or PDF format. The maximum file size should be observed during upload.
Step 6: Checking and Submission
Apply Aadhaar e-verification or Digital Signature to send the application. The system generates a tracking number and an Application Reference Number (ARN).
Step 7: Verification and Approval of GST
The GST officer inspects your documents. Upon verification, the GSTIN (Goods and Services Tax Identification Number) and Registration Certificate will be provided via email within 7 working days.
Conclusion
Getting GST registration for a proprietorship firm is a simple yet important step for small business owners in India. The only requirement is to have the proper documents, such as a PAN, Aadhaar, proof of address, a bank statement, and a photo. Once you have the above document in order, you can continue registering on the GST portal.
A GST-registered proprietorship is not only legal in nature but also conducts business as a reputable entity that earns credibility in trade, input tax credit, and other assistance for trading nationally.
