How to Apply for GST Number?

Apply for GST Number

The Goods and Services Tax, commonly known as GST, was introduced in India on July 1, 2017. It is a comprehensive and uniform indirect tax levied on the supply of goods and services across the country. GST replaced a complex system of multiple taxes, including Service Tax, Excise Duty, Value Added Tax (VAT), and more. The implementation of GST aimed to simplify the tax structure, promote ease of doing business, and create a unified market within India.

The first step for any business dealing with GST is to get a GST Registration Number. This number is based on your PAN card and where your business is located.

Decoding the GST Number

When you register your business for GST (Goods and Services Tax), you get something called a GST Registration Number, which is also known as GSTIN. It’s a special 15-digit number that the tax department gives you after they approve your application.

This number has different parts:

1. The first two digits tell you which state your business is in.
2. The next ten digits come from your PAN (Permanent Account Number), which is like your business’s unique ID.
3. The two digits after that show something called the Entity code.
4. And finally, the last digit is like a secret code that’s used to make sure your GSTIN is accurate and complete.

So, your GSTIN is like a secret code that helps the government keep track of your business in a unique way.

Types of GST

In some cases, businesses must register for GST, even if they don’t make a lot of money. This is called “Required Registration.” On the other hand, if a business is not required to register, it can still choose to do so voluntarily.

There’s also something called the “Composition Scheme.” It’s an option for businesses with a turnover of less than Rs. 1.5 crore. It simplifies the tax process for them.

Now, let’s talk about those who don’t need to register for GST at all. This group includes:

1. Businesses with a yearly turnover under Rs. 40 lakhs for goods or Rs. 20 lakhs for services. They are exempt from GST registration.
2. Businesses that are already exempt from mandatory registration.
3. People who provide goods or services that are either GST-exempt or not subject to GST.
4. Farmers who grow crops through land cultivation are also exempt from GST registration.

So, whether it’s required, voluntary, or you qualify for an exemption, GST registration rules have options to suit different types of businesses.

Benefits of GST Registration

When you’re registered for GST (Goods and Services Tax), you get some great benefits:

1. Simplified Tax Filing: With GST, you only need to file one consolidated return instead of multiple returns for things like VAT and Service Tax. This makes the whole tax process much easier.
2. Official Recognition: Being a GST-registered business means you’re officially recognized as a provider of goods or services. It adds a level of credibility to your business.
3. Smooth Interstate Trade: If you’re in e-commerce, GST makes it super easy to move your goods between different states. There are fewer complications and restrictions, which can save you a lot of time and money.
4. Lower Transportation Costs: GST has relaxed the old rules on moving goods across state lines. This means you can reduce unnecessary transportation costs, which is great for your bottom line.
5. Access to Advantages: By following the GST laws and registering, you open the door to a range of benefits and advantages that can help your business grow and thrive.

So, being a part of the GST club comes with these perks that can make your business life simpler, more efficient, and potentially more profitable.

Why is GST Registration Necessary?

GST registration in India is a mandatory requirement for businesses that meet certain criteria. It is essential for businesses engaged in the supply of goods and services. The primary reasons for GST registration are:

1. Legal Requirement: As per the GST law, any individual, firm, company, or entity involved in the supply of goods and services and meeting the prescribed turnover criteria must register for GST.
2. Input Tax Credit: GST registration allows businesses to claim input tax credit on the GST paid on their purchases. This helps reduce the overall tax liability.
3. Legitimacy and Compliance: Registering for GST makes your business legitimate in the eyes of the law. It also ensures compliance with tax regulations.

Eligibility Criteria for GST Registration

GST registration is necessary for various categories of businesses. The criteria for mandatory GST registration are as follows:

1. Aggregate Turnover: For businesses involved in the supply of goods, GST registration is mandatory if their aggregate turnover exceeds Rs. 40 lakhs. For businesses providing services, registration is required if their turnover exceeds Rs. 20 lakhs.
2. Special Cases: Certain businesses, irrespective of their turnover, must register for GST. These include inter-state suppliers, e-commerce operators, and businesses involved in the supply of specific goods.
3. Voluntary Registration: Businesses that do not meet the mandatory turnover criteria can choose to register for GST voluntarily. This can be advantageous for businesses seeking to claim input tax credits or operate more transparently.

Steps to Apply for GST Registration Number:

Applying for GST registration involves a series of steps, and it’s essential to follow them meticulously to ensure a smooth registration process. Here is a detailed explanation of the steps:

• Visit the GST Portal: 

Access the official GST portal, which can be found at https://www.gst.gov.in/. The GST portal is the primary platform for all GST-related activities, including registration.

• Navigate to the Registration Section: 

On the GST portal’s home page, locate the “Services” tab in the main menu. Click on it and select the “Registration” option from the dropdown menu.

• Choose “New Registration”: 

You will see various options related to registration. For new businesses looking to obtain GST registration for the first time, choose “New Registration.”

• Fill in Basic Details: 

The first step in the registration process involves providing essential information about your business. This includes:

• Legal Name of the Business
• Trade Name (if applicable)
• PAN (Permanent Account Number)
• Email Address
• Mobile Number

• Verification through OTP: 

After entering your contact information, you will receive an OTP (One-Time Password) on both your mobile number and email address. This OTP is used to verify your contact details and ensure that the information you provide is accurate.

• Receive the Temporary Reference Number (TRN): 

Upon successful verification of your contact details, you will be assigned a Temporary Reference Number (TRN). It is crucial to note down this TRN as you will need it to continue the registration process.

• Fill Out the GST Registration Application: 

To complete the registration process, you need to log in to the GST portal again, using the TRN provided. The application form will ask for more detailed information about your business, such as:

• Place of Business: You will need to provide details about the location of your business, including the address and contact information.
• Bank Account Information: Information about your business bank account, including the account number and IFSC code, is necessary for GST registration.
• Type of Registration: You will need to select the type of registration applicable to your business. The most common types are Regular and Composition.

• Upload Required Documents: 

To support the information provided in your application, you must upload specific documents. The documents required for GST registration include:

• Proof of Business Address: This could be a utility bill, rent agreement, or any other valid document that confirms the address of your business.
• Identity and Address Proof of the Primary Authorized Signatory: This could be a PAN card, Aadhar card, passport, or any government-issued ID.
• Bank Account Proof: A copy of a cancelled check or a bank statement validates the business’s bank account.
• Photographs: Recent passport-sized photographs of the primary authorized signatory.

• Submit the Application: 

After completing all the required fields in the application form and uploading the necessary documents, you can review the information provided. Once you are satisfied that all the details are accurate, you can submit the application.

• Wait for Verification: 

The GST authorities will process the GST registration application. The verification process may take a few days, and it involves checking the information provided and ensuring compliance with GST rules and regulations.

• Respond to Queries (if any): 

In some cases, the GST authorities may have queries or require additional information to complete the registration process. If this happens, it is essential to respond promptly and provide the requested information.

• GST Registration Certificate: 

Upon successful verification and approval of your application, you will receive a GST Registration Certificate. This certificate contains your unique GSTIN (Goods and Services Tax Identification Number). You can download the certificate from the GST portal.

Penalty for not obtaining GST registration

If someone makes a mistake or doesn’t pay their taxes in full, they might have to pay a penalty. This penalty is 10% of the amount of tax they owe, but it can’t be less than Rs.10,000.

Now, if someone is purposely trying to dodge paying their taxes, the penalty gets much more serious. In that case, they have to pay 100% of the tax they were supposed to pay. So, it’s really important to be honest and pay your taxes correctly to avoid these penalties.

Conclusion

Applying for GST registration is a crucial step for businesses operating in India. It is a legal requirement for eligible businesses, and it offers various advantages, including the ability to claim input tax credit and ensure compliance with tax laws. The process involves providing detailed information about your business, submitting relevant documents, and undergoing verification by the GST authorities. It is essential to follow the steps carefully and ensure accurate information to facilitate a smooth registration process. Once registered, businesses can enjoy the benefits of the GST system and participate in the nation’s unified tax regime, contributing to the country’s economic growth and development.

FAQ

1. Is GST registration mandatory? 

Yes, you need to get GST registration once your business turnover goes beyond certain limits. To find out the latest limits, click here.

2. Can I apply for multiple GST registrations? 

If your business operates in more than one state, you’ll need a separate GST registration for each state. For example, if you sell goods in both Karnataka and Tamil Nadu, you must apply for separate GST registrations in each state.

3. Can I have multiple GST registrations within a state? 

Yes, you can apply for as many GST registrations as you need within a single state. The old rule about different business verticals no longer applies, making things easier.

4. Who can register for the Composition Scheme under GST? 

Small business owners looking for reduced compliance and lower tax rates can opt for the Composition scheme. If your turnover is under Rs. 1.5 crore (or Rs. 75 lakh in some states), you’re eligible. The Composition scheme is also available for service providers with a turnover of up to Rs. 50 lakhs.

5. What turnover is considered for the GST registration threshold? 

The threshold considers your aggregate turnover, which includes the total value of all taxable supplies (excluding reverse charges and exempt supplies, exports, and inter-state supplies). Don’t forget to exclude CGST, SGST, UTGST, IGST, and cess while calculating it.

6. What are the benefits of registering under GST?

• For regular businesses: Enjoy input tax credit and conduct interstate business without restrictions.

• For Composition dealers: Experience limited compliance, reduced tax liability, and a lighter impact on working capital.

• For businesses with voluntary registration (below Rs. 40 lakhs*): Avail input tax credit, conduct interstate business, easily register on online platforms, and gain a competitive edge.

7. What is a GST Identification Number (GSTIN)?

GSTIN is a unique 15-digit ID assigned to every taxpayer for each state they operate in. It’s based on their PAN and is part of the GST registration process.

8. How long can I wait to register under GST? 

You must get GST registration within 30 days from the date you become liable to obtain it.

9. What if my GST registration application is rejected? 

If your application is rejected, you’ll have a chance to respond to the rejection letter. However, if you want to reapply, you must wait for a final rejection, which takes about 10 days.

10. Do I need a PAN card for GST registration? 

Yes, a PAN card is essential for GST registration. If you don’t have one, you need to get it before applying unless you’re applying for TDS registration under GST with a TAN.

11. What happens after I get GST registration? 

Once you have GST registration, you’ll receive a GST registration certificate and a valid GST Identification Number. This allows you to claim input tax credit, issue GST-compliant invoices, and start filing GST returns regularly, either monthly or quarterly.