Business entities that are earning a turnover of INR 40 Lakhs or above shall get a mandatory registration under GST as they shall be held liable to pay GST on the supply of goods done by them. And in the case of special category states, for the sale of goods, the threshold limit for taking the registration under GST has been set as INR 20 Lakhs.
Coming to the supply of services, the threshold limit in the case of the business owners running their business in normal states shall be INR 20 Lakhs while the same in case of special category states shall be INR 10 Lakhs.
The list of special category states under the GST Act includes the following:
– Arunachal Pradesh
– Assam
– Jammu & Kashmir
– Manipur
– Meghalaya
– Mizoram
– Nagaland
– Sikkim
– Tripura
– Himachal Pradesh
– Uttarakhand.
The GST registration process shall take a maximum of 6 days. And this can be done using the GST online portal by filling up the registration form and submitting the documents that are mandatorily required by the GST law for registration. The carrying of supply of goods or services without taking GST registration even after the same becoming applicable on a mandatory basis shall be considered as a criminal offense. This shall also attract heavy penalties.
Registration under GST
GST registration can be understood as a process that is undertaken by a tax payer for getting registered under the GST Law. The business entity after getting registered under the GST shall be awarded a GSTIN which is a 15-digit number combining the PAN and other numbers assigned to the tax payer. It is a unique number and stands for Goods and Service Tax Registration Number. The Central Government is the issuing authority and shall help in determining the tax liability of the business owner.
Eligibility to take GST Registration
Following persons are considered to be holding the eligibility to gain registration under GST:
- Any individual or business owner who was registered under the tax laws that were in force prior to the GST Act
- A casual taxable person
- A non-resident taxable person
- Individuals who are liable to pay GST under the Reverse Charge Mechanism (RCM)
- E-commerce operators and individuals supply goods or services using such platforms.
- Business entities that have earned turnover exceeding INR 40 Lakhs or such amount above the prescribed threshold limit during a financial year.
- Individuals or persons who are functioning as agents of the suppliers
- Input tax distributors
- Individuals who provide database access and online information services from outside India to the unregistered persons living in India.
Types of Registration under GST
Under GST a business can obtain different types of registration and the same has been listed below:
Normal Taxable Person
Here the business takes registration under GST as a normal taxpayer. The business would here pay GST of any supply of goods and services made by them to the consumers and also claim the input tax credit of the GST which was paid by them on the purchase made for the furtherance or conducting of the supply or business. For the registration as a normal tax payer, there shall not be any expiry date and shall be applicable until the business closes down or come across such other applicable reason.
Casual Taxable Person
This is a person who sets up a business on a temporary or seasonal basis. The validity of such registration stands for 3 months and should either be renewed or extended on hitting the expiry. And for availing registration as a casual taxable person, the business should make a deposit of an advance which shall be equal to the GST liability that would arise to such business during the season or time of setting up and running the business.
Composition Tax Scheme
Under this, a business would be allowed to pay such a reduced percentage of GST on the supply made. But shall not be allowed to collect the same from the consumers nor shall be allowed to claim an input tax credit of GST paid by them on the purchase made for business. It shall expire if the turnover earned by the business crosses INR 1.5 Crores during the relevant financial year.
Procedure to avail GST Registration for Business
- Visit the official GST website, ‘www.gst.gov.in’.
- Click on the tab Register Now which is given under the tab namely Taxpayer.
iii. Select New Registration and fill in the details being asked by the website, namely:
– Taxpayer type from the drop-down menu
– State and district in which the business is being run
– Legal Name and the PAN details of the business
– Email ID and mobile number of the business should be filled in, which would then be verified using OTP by the website
- Continue with the OTP verification of the email and mobile number is given and then press the Proceed button.
- A Temporary Reference Number or TRN would be generated.
- Now visit the GST portal once more and click on the ‘Register’ option under the tab ‘Tax Payer’.
vii. Select the ‘Temporary Reference Number’ and fill in the details along with the captcha code.
viii. You will receive an OTP on email and mobile after clicking proceed. Fill in the same and finish the verification or authentication.
- The status of the given application shall be displayed by the website now, with an Edit button on the right, click the same.
- Now all the below details should be filled in:
– Photographs of promoters,
– Address proof of the business entity,
– Bank account details along with the name, branch, IFSC, and the account number,
– Form for Authorization,
– Business constitution details of the business entity.
- Now after visiting the Verification page, check for the declaration. And then submit the application by authorizing the same using:
EVC which is Electronic Verification Code, will be sent to the registered mobile number
E-sign method which will be done using OTP sent to the mobile number registered with Aadhar
In the case of business entities, using DSC or Digital Signature Certificate of the Authorized Signing Official.
Once this has been done with an ARN or Application Reference Number shall be generated and sent to the registered email ID and mobile number, which can be used for tracking the status of the application provided.
Documents Required by the Business for Registering under GST
Following are the documents required:
- PAN card copies of business
- Business premise address proof copy
- Bank account details of the business, like a bank statement, canceled cheque, or the front page of passbook
- Certificate of Incorporation or Registration of the business
- DSC of the Authorizing Signatory
- Director or Promoter photograph, address proof, and ID proof
- Board resolution passed or Letter of Authorization appointing the Authorized Signatory.
There shall not be any registration fees levied by the GST for taking registration under GST by the business. But there shall be a penalty for non-availing of registration under GST even after the same become applicable on a mandatory basis. This shall be levied at the rate of 10% of the amount due or a minimum penalty of INR 10,000 shall be levied.
In case of any evasion of tax brought in the light of attention of the GST officials, the penalty applicable shall be 100% of the tax amount which is due.
