Is GST Registration Mandatory for a Company?
In this blog post, we will explore whether a corporation must register for the goods and services tax (GST) for the benefit of interested readers.
Definition of goods and services tax
GST registration in India is a process that allows businesses to legally conduct business in the country. It is a system of taxation that is applied to all goods and services sold or consumed within the country. The GST registration process is handled by the Central Board of Indirect Taxes and Customs (CBIC). The process involves the registration of the business as well as the filing of GST returns.
The GST registration process and its importance
The GST registration process is relatively simple and can be completed online. The process involves filling out an application form, submitting supporting documents, and making the payment. Once the registration is complete, the business will be issued a registration certificate and a GST number. This registration certificate is valid for a period of five years and must be renewed every five years.
Eligibility criteria for GST registration
All individuals and organizations selling goods or services in India are required to register for GST. When the total cost of providing goods exceeds Rs. 40 lakh, GST registration is required. To make the process of reporting taxes simpler, the Ministry of Finance (MoF) has simplified the GST registration process. If the value exceeds Rs. 20 lakh per year and the firm operates in a special category state, GST registration is required.
The following mentions the categories and eligibility for GST registration:
Any service provider who offers services worth more than Rs. 20 lakhs in total per year must register for GST. This cap is Rs. 10 lakhs in states that fall under the special category. Any business that exclusively supplies commodities and has a combined annual revenue of more than Rs. 40 lakhs must register for GST.
Regardless of their overall revenue, a company must register for GST if they supply goods interstate, that is, from one state to another. Only when interstate service providers have an annual revenue of more than Rs. 20 lakhs are they required to register for GST. This cap is Rs. 10 lakhs in states that fall under the special category.
Any person who engages in the supply of goods or services via an online marketplace must register for GST. Regardless of turnover, the person must register.
Casual taxable persons
Any person who supplies products or services through a temporary stand or shop on a seasonal or irregular basis must register for GST. The person must apply regardless of the total annual turnover.
Procedures for GST registration
Entities must register for GST if their yearly revenue is Rs. 20 lakh or more. For firms located in the North-Eastern states, the cap is 10 lakhs.
Both an individual without a physical place of business and an organization with branches all across the nation may use it.
Process of online GST registration
- Go to https://www.gst.gov.in/ to access the GST login page.
- Your permanent account number (PAN), mobile number, and email address must be included on Part-A of the form.
- By providing an one-time password (OTP) and verification message, the portal would confirm the mobile number and email address.
- You will receive the temporary reference number (TRN) via email and mobile after verification.
- Using the TRN you got, complete Part-B of the GST registration form.
- The application would then be verified by the GST officer, who would then approve it in three working days.
- You will receive the GST registration certificate once it has been authorized.
- If the GST officer rejects the application and requests more documentation to back up the claims made in the application, you must submit the requested materials within seven working days.
Documents required for GST registration
For GST registration, many entities would need to provide documents that can be uploaded on the GST portal. The GST portal itself contains a list of the necessary documents.
Step 1: You can access this page by clicking “Documents Required for Registration” in the “Help Section” at the bottom of the page.
Step 2: Make a decision regarding the kind of your company.
Step 3: Choose the type of property in your possession.
In order to complete the GST registration process, businesses must provide certain documents. These documents include the following:
- PAN card of the business
- Address proof of the business
- Bank account details
- Cancelled cheque
- Details of the business owners
- Details of the directors
- Memorandum of Association
- Articles of Association
The deadline for registering for GST
Within 30 days of becoming required to obtain GST registration, applicants may submit their applications. When the entity reaches the threshold for aggregate revenue, when the person starts doing business with another state, or when they engage in e-commerce activities, they must register for GST.
Casual taxpayers are required to register for GST even though they have no minimum annual revenue criterion.
Non-resident taxpayers must register for GST on a mandatory basis and do not have an aggregate turnover threshold.
Fees for GST registration
Taxpayers should be aware that there are no registration fees for the GST. As a result, there is no fee associated with GST registration.
Compliance with GST laws and regulations
The following are the ways to submit a GST return online:
Step 1: Register for GSTIN
If you are a taxpayer who isn’t registered, you must do so in order to obtain a GSTIN number. Your state code of operation and PAN are used to generate the 15-digit number.
Step 2: Log in to the GST portal
You must enter your username and password to access the GST website (https://www.gst.gov.in) before selecting the “Services” page.
Step 3: Returns dashboard
The “Returns Dashboard” option will be available for you to select. Toggle that. A financial year for which you are filing the GST return will be presented to you. Select the suitable option from the available drop-down menu.
Step 4: Prepare online
The next step is to choose the return you want to file. You will have a choice of filing methods. Select “Prepare Online” to begin the GST return procedure online.
Step 5: Enter details
You must correctly input all the information in the designated fields.
Step 6: Check submission status
You must confirm that the GST return’s status has been updated to “filed” after the form has been submitted.
Step 7: Tax payment
Once the status indicates that the return has been submitted, you must select “Payment of Tax.” You need to click the “Check Balance” option that will appear. The credit and cash balances are displayed in the balance.
Step 8: Offset liability
To quickly make the GST payment online, you must select the “Offset Liability” option. Then, you must check the appropriate boxes for your declaration needs. After that, make the payment by clicking “File Form with DSC” or “File Form with EVC.”
Payment of GST
For the most part, the GST payment process is the same for all taxpayers. Payment is not necessary if the electronic cash ledger has enough cash on hand. In other words, the taxpayer must use a challan to deposit money into the cash ledger using the approved methods of payment if there is not enough cash on hand. Here is a summary of the payment procedures for various taxpayer categories or types:
When filing GSTR-3B, they must use the PMT-06 challan to make any GST payments to the electronic cash ledger. The GSTR-3B form will contain the specifics. Additionally, customers can generate a challan and make payments toward it when submitting GSTR-3B returns or after logging in.
These tax payers are GST participants in the quarterly returns with monthly payment (QRMP) program. The first two months of a quarter must be used for direct tax deposits utilizing the PMT-6, and the third month of the quarter must be used for payment while filing GSTR-3B.
Which mode should I choose for making a GST payment?
The following methods of payment for GST are accessible on the GST portal:
In this regard, the modes of online payment include net banking, debit card or credit card (not activated), Immediate Payment Services (IMPS)*, national electronic fund transfer or real-time gross settlement, popularly known as NEFT or RTGS, and unified payment interface (UPI)*.
*Vide CGST Notification number 14/2022 dated 5th July 2022.
Over the counter (cheque/demand draft/cash)
Keeping of GST records
Every GST-registered taxpayer is required to keep all records at their place of business.
Every registered person must maintain records of:
Production or manufacture of goods
Inward and outward supply of goods or services or both
Stock of goods
Output tax payable and paid and other particulars as may be prescribed
Consequence of non-maintenance of the books of accounts
The proper official will decide the tax due on unaccounted products or services in accordance with Section 73 or Section 74 rules in the event that books of account are not kept as required by Section 35(1).
Additionally, failing to retain or maintain the books of accounts would result in a penalty that is the higher of INR 10,000 or the amount of tax implicated, according to Section 122(1)(xvi).
Non-maintenance of books of accounts vis-à-vis confiscation provisions
The Central Products and Services Tax Act of 2017’s Section 130 provisions give authorities the authority to seize goods and impose fines. If a person fails to account for any goods on which they are required to pay tax, as per the terms of Section 130(1)(ii), they will be subject to confiscation of goods and a fine under Section 122.
Prosecution and imprisonment for non-compliance
The amount of tax avoided, as shown in the following table, will determine the length of a prosecuted person’s sentence:
|Types of Offence||Amount of tax evaded/ ITC wrongly availed/utilized/refund wrongly taken||Period of maximum imprisonment & fine|
|Certain offenses specified in the Act||Exceeding Rs 500 lakhs||5 yrs* and fine (non-bailable)|
|Certain offenses specified in the Act||Exceeding Rs 200 lakhs up to Rs 500 lakhs||3 yrs* and fine|
|Any other offense||Exceeding Rs 100 lakhs up to Rs 200 lakhs||1 yr* and fine|
|Commits/assists in the commission of certain specified offenses||6 months and/or fine|
|Repetition of offense
(i.e., second and every subsequent offense)
|5 yrs* and fine|
*Without any specific or special justification, as stated in the court’s ruling, the sentence should not be less than six months.
Government’s initiatives to make GST registration easier
Our government has taken various initiatives to make the process of GST registration simpler and more efficient. Some of these initiatives include the following:
- Setting up of the GST common portal: The government has set up the GST common portal, which is an online platform for businesses to complete their GST registration. The portal is user-friendly and makes it easy for businesses to complete the registration process.
- Introducing GST Suvidha Providers (GSPs): The government has also introduced GSPs. These are third-party providers who can help businesses with their GST registration. GSPs can help businesses with the registration process, the filing of GST returns, and other GST-related services.
A corporation should register for GST for the following reasons:
Credibility: Customers and suppliers will naturally view you as trustworthy if you are a registered individual or corporation. It demonstrates your reliability as a person.
Benefit of ITC: If suppliers choose the ITC option and transact with people and businesses that are GST-registered, they may claim the ITC. Compared to someone who isn’t registered for GST, you have a higher chance of getting a supplier’s business.
Avoid unnecessary hurdles: If you are not GST-registered, you may encounter some obstacles. A chain structure governs how the GST regime operates. From manufacture to supplier to wholesaler to retailer, and ultimately the consumer, a product can be monitored. The government can monitor your actions if you or your company is not registered for GST. This could make it more difficult for you to conduct business.
Legal strength: If you have a GST registration and someone sues you for some reason, you will be able to defend yourself legally and fight back if you are registered under GST. You cannot be regarded as a legal business without the GST registration, and this could be used against you in court.
Avoid penalties: According to Section 122 of the CGST Act, the penalty for a taxable entity or individual who chooses not to register under GST is either Rs. 10,000 or the amount equal to the tax avoided or the tax liability, whichever is larger. Additionally, it gives the impression that you are not trustworthy to the authorities, which could lead to more frequent inspections or unintended problems.
Losses may occur: If you are not registered for GST, the authorities may seize your items. Products may be confiscated under Section 130 of the CGST/SGST Act if it is determined that a taxable business or individual is not registered for GST.
The role of a professional consultant in GST registration and compliance
GST registration in India can be a daunting task for businesses, especially for those who are not familiar with the process. To make the process easier, businesses can connect with experts who can help with the process.
The major duties of a qualified consultant for GST registration and compliance include the following:
- Examining the client’s accounting information and determining whether GST conformity with tax rules is present
- Helping customers classify transactions using the appropriate harmonized system of nomenclature (HSN) or service accounting code (SAC) for products and services
- Analyzing the potential effects of GST rules on the client’s various business processes
Registering for GST with Kanakkupillai can be a smart move for any business looking to comply with government regulations and take advantage of the benefits of GST. With their expertise in GST registration and filing, Kanakkupillai can ensure that the process is smooth and hassle-free for their clients. By registering for GST, businesses can also gain access to input tax credit, reduce the cascading effect of taxes, and improve their competitiveness in the marketplace. Overall, GST registration with Kanakkupillai can help businesses save time and money while ensuring compliance with government regulations.
FAQ on GST Registration
The fees for GST registration of business can sign up for free through the GST Registration Portal. The whole process is done online for free.
SGST for state GST or SGST applies to intrastate sales of goods and services, per the SGST Act. It is administered by each state's government. Only SGST liability can be offset by SGST or IGST input tax credit.
GSTIN or Goods and Service Tax Identification number is a 15 digit number which is assigned to the applicant or businesses when it is successfully registered under GST.
ARN in GST Registration or Application Reference Number is generated once the submission of the application is successful to the official GST servers.
PAN card mandatory for registering GST - The short answer is "yes," PAN cards are required for GST filing. Except for TDS registration, which can be done with a TAN, GST registration cannot begin without a PAN card.
The threshold limit for GST registration if your company's annual sales are more than 40 lakhs (20 lakhs for north-eastern and hill states), you must register as a regular taxable person and pay taxes. A minimum of 20 lakhs is required from service providers (10 lakhs in northeastern and hill regions).
To get a GST number entire GST registration process, including receiving the GST number, takes 7 to 10 working days.
No, current account is not required for a company to register for GST.
Yes, get multiple GST registrations within a state. The company may file for as many GST registrations as desired within a state. For ease of doing business, the process of holding multiple GST registrations only for different industries within a state has been eliminated.
If the GST application is rejected, you will have the opportunity to respond to the rejection notice. However, you would need to wait for a final rejection, which will take about 10 days, if you wanted to submit a fresh application.