Procedure For Registration of GST in India
Under the GST rules, if your business has a turnover exceeding Rs. 40 lakhs, you must go through the Goods and Services Tax (GST) registration process. However, in hilly and Northeastern states, this turnover limit is lower at Rs. 10 lakhs. The whole GST registration in India procedure typically takes around six working days.
Registering for GST is a breeze with the online GST portal. All you need to do is fill out a form on the portal and provide the necessary documents. Businesses must complete this registration process because operating without GST registration is considered a criminal offence and can lead to hefty penalties.
What is GST Registration?
If your business’s turnover surpasses the threshold of Rs. 40 lakhs, Rs. 20 lakhs, or Rs. 10 lakhs, you’re obligated to register for Goods and Services Tax (GST), a process referred to as GST registration. It’s crucial for certain businesses, and not registering for GST when required is considered an offence.
Different Types of GST Registration
The GST Act offers different types of GST Registration to cater to various business needs. Before you decide which one suits your business, it’s important to understand the options. Here are the different types of GST Registration:
- Normal Taxpayer: The category of normal taxpayer is the most common and applies to the majority of businesses in India. Under this registration, businesses do not need to provide any deposit, and there’s no specified expiry date. This means that as long as your business operates, your GST registration remains valid. It’s a straightforward registration process and offers flexibility for businesses of all sizes.
- Casual Taxable Person: Individuals or businesses that intend to establish seasonal shops or stalls can opt for the casual taxable person category. When registering as a casual taxable person, you are required to make an advance deposit equal to the expected GST liability during the operational period of your seasonal shop or stall. This registration type is ideal for businesses that temporarily operate, such as during festivals or special events. It provides the flexibility to register for a specific duration, which is usually three months, and it can be extended or renewed as needed.
- Composition Taxpayer: Businesses looking to take advantage of the GST Composition Scheme should apply for composition taxpayer registration. Unlike normal taxpayers, those registered under the composition scheme are required to pay a flat rate of tax. However, one important restriction is that they cannot claim an Input Tax Credit (ITC). This type of registration is beneficial for small businesses with a turnover below a certain threshold that want a simplified tax structure.
- Non-Resident Taxable Person: Non-resident taxable person registration is for individuals or businesses located outside India that supply goods to customers in India. Similar to casual taxable persons, a deposit is required upon registration, which should be equivalent to the expected GST liability during the registration period. This type of GST registration typically lasts for three months, with the option to extend or renew before it expires. It is designed to facilitate foreign businesses engaged in temporary transactions within India.
Online GST Registration Process
Let’s break down the GST Registration process into simpler steps:
Step 1 – Get Started: Begin by visiting the official GST portal at https://www.gst.gov.in. Look for the ‘Register Now’ link under the ‘Services’ tab and click on it.
Step 2 – Choose ‘New Registration’: Select ‘New Registration’ and fill in the following details:
Part – A:
- Choose ‘Taxpayer’ from the ‘I am a’ drop-down menu.
- Select your respective state and district.
- Enter your business name.
- Provide the PAN of your business.
- Input an active email ID and mobile number. You’ll receive OTPs on these, so make sure they’re accurate.
- Enter the image shown on the screen and click ‘Proceed.’
- On the next page, input the OTP sent to your email ID and mobile number, then click ‘Proceed.’
- You’ll be given a Temporary Reference Number (TRN). Note it down, as you’ll need it for the next steps.
Part – B:
Step 1 – Revisit the GST Portal: Go back to the GST portal and select ‘Register’ under the ‘Services’ menu.
Step 2 – Use Your TRN: Select ‘Temporary Reference Number (TRN)’ and provide your TRN number along with the captcha details. Click ‘Proceed.’
Step 3 – Verify OTP: You’ll receive an OTP on your email ID and registered mobile number. Enter the OTP and click ‘Proceed.’
Step 4 – Check Application Status: Your application’s status will be displayed on the next page. Look for an Edit icon on the right side and click on it.
Step 5 – Fill in Details: In this step, you’ll need to fill in ten different sections and submit the required documents. The list of documents to upload includes:
- Proof of business address
- Bank details, including account number, bank name, branch, and IFSC code
- Authorisation form
- The constitution of the taxpayer Submit the documents and proceed to the next step.
Step 6 – Verification: Go to the ‘Verification’ page, check the declaration, and submit the application using one of the following methods:
- Electronic Verification Code (EVC): You’ll receive the code on your registered mobile number.
- Digital Signature Certificate (DSC): For companies registering.
- E-Sign method: You’ll get an OTP on the mobile number linked to your Aadhaar card. Once done, a success message will appear on the screen. The Application Reference Number (ARN) will be sent to your registered mobile number and email ID.
Note: You can always check the status of your ARN on the GST portal.
Eligibility to Register for GST
GST registration is essential for various categories of individuals and businesses, including:
- Pre-GST Registrants: Those who were registered under the previous tax system before GST came into effect.
- Non-Resident and Casual Taxable Persons: Individuals who pay tax under certain conditions, especially when their business is temporary or seasonal.
- Reverse Charge Mechanism: Individuals who are liable to pay tax under the reverse charge mechanism, where the recipient, not the supplier, is responsible for paying the tax.
- E-commerce Aggregators: All e-commerce aggregators must register for GST to ensure compliance with the law.
- Turnover Threshold: Any business with an annual turnover exceeding Rs. 40 lakh (or Rs. 10 lakh for Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states) must get GST registration.
- Input Service Distributors and Agents: Those acting as agents or distributors of a supplier, providing services related to input services.
- E-commerce Suppliers: Individuals who supply goods through e-commerce aggregators must register for GST.
- Database Access and Online Information Providers: Businesses or individuals offering database access and online information services from outside India to Indian residents are also required to register, except for those who are already registered as taxable persons.
- Annual Turnover of Rs. 20 Lakh or More: In general, any business with an annual turnover of Rs. 20 lakh or more must register for GST.
So, if you fall into any of these categories, GST registration is mandatory.
Documents Required for GST Registration
To register for GST, you’ll need to provide the following documents:
- PAN Card: Your Permanent Account Number card.
- Aadhaar Card: Your Aadhaar card.
- Bank Account Information: Details of your bank account, including the account number, bank name, branch, and IFSC code.
- Proof of Address: A document that serves as proof of your business address.
- Digital Signature: A digital signature certificate for online verification.
- Photograph: A recent photograph in JPEG format with a maximum size of 100 KB.
- Articles of Association/Memorandum of Association: For companies, these legal documents are necessary.
- Certificate of Incorporation: Issued by the Ministry of Corporate Affairs for companies.
- Proof of Appointment of Authorised Signatory: A document that proves the appointment of an authorised signatory.
- LLP Registration Certificate/LLP Board Resolution: If applicable, these documents are required for Limited Liability Partnerships (LLPs).
Having these documents ready will help streamline your GST registration process.
How to Get a GST Number?
Steps to obtain a GST number:
How to Get Your GST Number:
Step 1: Go to the official GST Portal at www.gst.gov.in.
Step 2: Under the “Services” tab, select “Registration.”
Step 3: Click on “New Registration” and fill in the required information, including a valid email address, mobile number, and your business’s PAN (Permanent Account Number).
Step 4: After entering the details, click “Proceed” to receive your GST Registration Number.
How to Check GST Registration Status Online?
- Go to the official GST portal: https://www.gst.gov.in/.
- Click on “Services,” then choose “Registration,” and select “Track Application Status.”
- Enter your ARN (Application Reference Number) and the provided Captcha code, and then click the “SEARCH” button.
- Your GST registration status will appear on the screen, and it could be one of the following:
- Provisional status
- Pending verification status
- Validation against error status
- Migrated status
- Cancelled status
GST Registration Via Authentication of Aadhaar
New Businesses Can Quickly Get GST Registration Using Aadhaar:
Starting from August 21, 2020, new businesses can easily register for GST using Aadhaar. Here’s how:
- When you apply for GST registration, you’ll have the option to choose Aadhaar authentication.
- Choose ‘YES,’ and an authentication link will be sent to your registered email ID and mobile number.
- Click on the authentication link.
- Enter your Aadhaar number and select ‘Validate.’
- After the details are matched, you’ll receive an OTP on your registered mobile number and email ID.
- Enter the OTP to complete the process. Your new GST registration will be ready within three working days.
How to Download the GST Registration Certificate?
To download your GST Registration Certificate:
- Go to https://www.gst.gov.in/
- Click on ‘Login’.
- Enter your username and password.
- Click ‘Login’.
- Now, click on ‘Services’.
- Choose ‘User Services’.
- Select ‘View/Download Certificates’.
- On the following page, click ‘Download’. Your certificate, containing details of your tax transactions, will be ready for download.
GST Registration Exemption
Here is a list of individuals and entities that are not required to register for GST:
- Businesses dealing with supplies are subject to reverse charges.
- Activities that are not considered as the supply of goods or services, like the sale of land or buildings, funeral services, or services provided by employees.
- Businesses involved in non-GST or non-taxable supplies, such as aviation turbine fuel, electricity, natural gas, high-speed diesel, and petrol.
- Businesses making exempt or nil-rated supplies.
- Businesses falling below the threshold exemption limit.
Features of GST Registration
Here are some key features of GST registration:
- GST registration is based on your PAN (Permanent Account Number) and is specific to each state.
- If you are registered in one state, you are considered an ‘unregistered person’ in another state.
- Suppliers are required to register in each state or union territory from which they provide services.
- Suppose a person has a unit in a Special Economic Zone (SEZ) and another unit in a domestic tariff area within the same state. In that case, separate registration is needed for the SEZ unit.
- All registered individuals must prominently display their registration certificates and GSTIN (GST Identification Number) at their main place of business and any additional business locations.
- Each PAN-based legal entity is assigned one GSTIN per state, so a business with branches in multiple states must register separately in each state. However, a person with multiple business locations in a single state or union territory may obtain separate registrations for each location.
- GST registration covers all taxes, including IGST (Integrated Goods and Services Tax), CGST (Central Goods and Services Tax), SGST/UTGST (State/Union Territory Goods and Services Tax), and various cesses.
Benefits of GST Registration
GST brings several benefits to the tax system, making it more efficient and business-friendly. Here’s how it achieves this:
- Eliminates Cascading Taxes: GST eliminates the cascading effect of taxes, where tax on tax is levied at different stages of a transaction. This is used to increase the cost of goods and services. With GST, taxes are directly incorporated into the price, preventing this additional burden.
- Transparency: GST is a transparent system with no hidden costs for registered businesses. This transparency reduces the overall expenses involved in business operations.
- Reduces Tax Evasion: The availability of input tax credits encourages suppliers to report accurate data in their returns. This, in turn, reduces the chances of tax evasion, promoting tax compliance.
- Composition Schemes for Small Businesses: Small businesses benefit from lower tax and compliance burdens under GST. Those with a turnover of Rs.20 lakh to Rs.75 lakh can take advantage of composition schemes, simplifying their tax procedures.
- Higher Registration Threshold: In the previous tax system, businesses with annual turnovers exceeding Rs.5 lakh were subject to VAT, with varying limits across states. With GST, the threshold is raised to Rs.20 lakh, providing relief for small businesses and service providers.
- Simplified Compliances: Instead of multiple returns and compliances for various taxes, GST introduces a single unified return, reducing the administrative burden for businesses.
- Equitable Treatment for E-commerce: Prior to GST, the e-commerce industry faced inconsistencies in the treatment of the supply of goods. GST has established clear guidelines, ensuring fair treatment for online retailers and avoiding exemptions from VAT.
- Regulation of Unorganised Sectors: Sectors like textiles and construction were largely unregulated before GST. With the introduction of GST, online compliance and payment options have brought these industries into the regulated fold, increasing accountability.
- Logistics Efficiency: GST has improved logistics efficiency by reducing barriers to the free movement of goods between states. Warehouses are now strategically located in major cities, optimising logistics operations.
Overall, GST streamlines the tax system, making it more efficient and organised, benefiting both businesses and the economy.
What are the benefits of GST registration for composition dealers, normal registered businesses, and businesses who opt for GST registration voluntarily?
Registering under GST offers various advantages based on the type of business. Let’s break it down:
Benefits for Composition Dealers:
- Reduced Working Capital Impact: Composition dealers experience a reduced impact on their working capital as they pay GST at a fixed rate.
- Lower Tax Liability: The tax liability is generally lower for composition dealers.
- Limited Compliance: These dealers have simplified compliance requirements, making it easier to manage their tax affairs.
Benefits for Normal Registered Businesses:
- Interstate Business: Normal registered businesses can engage in interstate transactions without restrictions, expanding their market reach.
- Input Tax Credit: They can claim input tax credit on taxes paid on inputs, helping reduce the overall tax burden.
Benefits for Voluntarily Registered Businesses:
- Competitive Advantage: Voluntarily registering under GST provides a competitive edge over other unregistered businesses, enhancing trust among customers.
- Input Tax Credit: These businesses can avail of input tax credit, reducing their tax expenses.
- Easy Online Registration: GST registration makes it easy to establish an online and e-commerce presence, reaching a wider audience.
- Interstate Business: Similar to normal registered businesses, voluntary registrants can engage in interstate transactions without limitations, opening up new market opportunities.