How to do GST Registration for Proprietorship Firm
A proprietorship firm is a sole proprietorship entity or a sole trading entity that is set up by one individual and run or managed by him. The ownership of such an organization will be lying with the single person who has set up the business and therefore is not considered to be a separate legal entity. The owner here would hire employees who would work for him and help him run the business by carrying on different activities and tasks that are required for the normal and easy running of the business. Majorly this type of business is running as small business entities and would be engaged in the grocery business, printing presses, studio, or IT consultation services which are easy to set up and run.
Despite being small, like any other business proprietorship concerns are also required to comply with various regulatory requirements and other tax-related requirements as per the law which is in force during the time. GST or Goods and Service Tax is one among this and the proprietorship concern would be expected to take registration under GST.
This is the very point of discussion under this article, and we discuss the procedure for registration of GST along with the documents which are required to be kept ready by the proprietorship entity prior to taking the registration.
When should Proprietorship Entity take GST registration?
A proprietorship entity should obtain registration under GST when it satisfies any of the conditions which are given below:
– The turnover made by the entity during the previous year exceeds the allowed threshold limit of INR 40 Lakhs.
– The proprietorship entity is engaged in the selling of products or services out of the state or interstate.
– The proprietorship entity is engaged in the e-commerce business.
– The proprietorship entity has made payment of GST during purchases made for the business and would want to claim the Input Tax Credit (ITC) of the same.
– The entity and its owner would want to take registration under GST on a voluntary basis.
Hence, we can say that when any of the above conditions are met with or are satisfied then proprietor shall make GST registration for the entity under his PAN with the GST. This is because, in the case of a proprietorship entity, there won’t be a separate PAN taken for the business and it would be the same as that of the owner or the sole proprietor.
Documents Required for GST Registration
For availing registration under GST, the proprietorship entity should be having the following documents ready with them such that they can be submitted for the perusal of the GST authorities prior to and for the easy granting of the GST registration.
- A copy of the PAN Card of the proprietor as this will be the PAN for the business as well.
- A copy of the Aadhar Card of the Proprietor of the entity.
- Proof of business location, for which telephone bill, electricity bill, property tax receipt or water bill or such other bills can be presented.
- A copy of the rental agreement of the business premise if the same has been rented.
- The proprietor should also present a copy of the bank statement or copy of the front page of his Bank Passbook or a canceled cheque. If there is a current account opened in the name of the entity, then a copy of the current account statement shall be provided, which would be preferred over the saving account.
- Passport size photographs of the proprietor shall also be presented.
Procedure for taking GST Registration
Following is the procedure to be followed by the proprietor for availing registration under GST:
- Go to the GST Portal namely, https://www.gst.gov.in/. Then select, ‘Services’ and click the option named, ‘New Registration’.
- Now select the type of Tax Payer from the options that were provided. Then select the state and district of the entity as well. And enter the legal name of the business (if mentioned on the PAN so) and give the PAN of the proprietor.
iii. The mobile number and email address shall also be given which would then be verified for validation.
- Once the process has been done, the OTP verification shall be done which shall be valid for 10 minutes. Here the validation shall be done for both mobile number and email address.
- Once the verification and validation using OTP has been done, TRN (Temporary Reference Number) shall be generated. And this can be used for the completion and submission of the GST Registration Application.
- Now using this temporary reference number, the applicant should log in and enter the captcha text shown on the website screen. And on completion of OTP verification to mobile and email, the registration procedure should be started with.
vii. The business information’s should be submitted, which would include the following:
– Tarde name of the business
– Proprietor or Promoters details
– Principal place of business
– Any additional place of business available
– Authorised signatory of the entity
– Authorized representative if any appointed by the proprietor
– Goods and services dealt with by the business
– Bank account details of the business
– Give district, circle, ward, or range code of the entity under GST
– Opting for Composition Scheme of GST or not
– Date of incorporation or date of birth as on the PAN
– The date on which the liability to register arises should also be given.
viii. Verify the form before submission and then submit the same by signing of Authorised Signatory using DSC or E-Signature or EVC.
- On successful application submission an ARN shall be generated which is the Application Reference Number. And this shall be sent to the email address and mobile phone as well. ARN can be used for tracking the status of your GST Registration application.
On completion of registration and bestowing of GST registration number, the proprietorship entity shall be expected to file monthly GST returns and also pay the taxes as applicable, the failure of which shall attract fines, interest, and a penalty from the concerned authorities. So, it is always healthy that the same have complied with such that there is no additional burden or cost levied upon the business.