All businesses with a turnover of Rs. 20 Lakhs, Rs. 10 Lakhs (under specific conditions) or more must register for GST. Businesses involved in the supply of goods or services that fall under GST taxation governance must mandatorily get their businesses registered. Registering on time will eliminate any sort of interference from tax authorities and business will be smoothly proceeded.
The Importance of GST Registration
Under the jurisdiction of GST, there are many benefits which is why it is important that any business providing goods and services should obtain the GST registration at the earliest. A particular advantage of having a GST registration is, availing a seamless input tax credit. The overflowing of taxes from different sources which are currently faced by goods or service provider will no longer prevail because under GST multiple taxes can be clubbed together.
Entities that Must Register for GST
Entities falling under the following list must register for GST under the GST Act:
- Those who perform inter-state supply (irrespective of their threshold limit).
- Casual taxpayers (irrespective of the threshold limit).
- Individuals who are mandated for taxation under reverse charge.
- Non-resident Indians.
- Taxpayers applicable for a tax deduction, under Section 37 (TDS).
- Information Technology service distributors.
- Those performing supply of goods or services via any electronic commerce operator, apart from branded services.
- All electronic commerce operator.
- IT service provider who supplies services under its brand name or trade name.
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Uncommon Situations when GST Registration is Required
- Suppliers involved in the supply of goods or services that are taxable and have a turnover of Rs. 9 Lakhs or above in a financial year.
- Suppliers involved in supply of goods or services that are taxable and have a turnover of Rs. 4 Lakhs or above in a financial year (for NE states including Sikkim)
- Businesses that have transferred or relocated to another city.
Classifying the Benefits of GST
Under GST there are numerous benefits. Some of them are as follows:
- GST has removed the cascading nature of taxes.
- Under GST the tax rates will become considerably lower as the tax base will be bigger.
- Taxpayers will experience a flawless flow of Input tax credit.
- There will be a drop in the prices of goods and services.
- Taxpayers will enjoy an efficient supply chain system.
- GST will also promote the shifting of the unorganized sector to organized sector.
The Documents that are Required for GST Registration
The following documents must be produced while registering for GST:
- PAN card of the business.
- Proof of constitution either, partnership deed, Articles of Association (AOA), Memorandum of Association (MOA) or certificate of incorporation.
- Address proof of the business establishment (rent agreement or electricity bill will suffix).
- A canceled cheque of the company’s bank account with the name of account holder, IFSC, MICR code and bank branch details.
- Authorized signatory, identity and address proof of the partners (if applicable) or identity and address proof of directors in case of company.
The Process of Registering for GST in India
The procedure of GST registration is done online, via the official GST website, authorized by the Central Government of India. The government has appointed GST Suvidha Providers (GSPs) to assist businesses with the registration process.
The step by step process for GST registration are as follows:
- Either on the GSTN portal or via a facilitation center (approved by the board or commissioner), the applicant’s PAN, email address and mobile number must be submitted in Part A of Form GST REG–01.
- The Personal Account Number will be verified on the GST Portal, while the mobile number and e-mail address will be verified through a one-time password (OTP).
- Upon the completion of the verification, the applicant will receive an application reference number on their registered mobile number as well as via the registered e-mail.
- An electronic acknowledgment will be issued to the applicant in FORM GST REG-02.
- While filling Part- B of Form GST REG-01 the applicant must specify the application reference number after which the form will be submitted along with all the required documents.
- Form GST REG-03 will be issued if there is a need for additional information.
- From the date Form GST REG-03 has been received, the applicant needs to respond to Form GST REG-04 within 7 working days.
- On successful provision of all the information required in Form GST REG-01 or Form GST REG-04, the registration certificate will be issued in Form GST REG –06. The registration certificate is applicable for both the principal place of business and for every additional place of business.
- For individuals who own multiple businesses within a state, separate application in Form GST REG-01 for each business must be done for the registration.
- If the application doesn’t meet the criteria for successful registration then Form GST REG-05 rejects the application.
- Applicants who deduct TDS or collect TCS have to submit an application stating the same in Form GST REG – 07 at the time of registration.
GST for Smaller Dealers
Small businesses who are not too familiar with the Income Tax rules can follow either of the following:
Tax Return Preparer
Individual taxpayers can prepare for the GST registration or returns on their own or seek the assistance of Tax Return Preparer (TRP). The TRP will prepare the registration application or application for return in the prescribed format as per the information submitted to him/her by the taxpayer. The taxpayer must provide an error-free information so that the TRP can prepare the form and the applications do not get rejected.
The Facilitation Centre (FC) will be responsible for the digitization and for uploading the forms. The taxpayer must submit all documents (inclusive of the summary sheet with Authorized Signatory) to the FC. Once the data is uploaded on the GST portal with the ID and password of the FC, an acknowledgment will be printed out, signed by the FC and given to the taxpayer for record purpose. The summary sheet which has been signed by the Authorized Signatory will be scanned and uploaded by the FC.
Recognizing when the Registration is Rejected
If the registration is refused, the applicant will be verbally informed, stating the reasons why the application was rejected. In this case, the applicant can also go forward with an appeal against the decision of the Authority, as per the rules of the Act. Under sub-section (10) of section 19 of MGL, rejection of an application for GST registration by an authority (CGST Act / SGST Act) will be considered as rejection by the other tax authority (under the SGST Act / CGST Act).
Penalties for Evading GST
As per the GST law, any tax offender not paying the tax due or paying less than what is charged will be imposed a penalty of 10% of the total tax amount. In the case of a fraudster who evade GST, the penalty will go as high as 100% of the total tax amount.
GST Registration System
A taxpayer who owns multiple business establishments within a state must obtain separate GST registration for each of the business. It is mandatory that during GST registration the applicant must produce his/her PAN card. For Non-Resident Indians who do not have PAN cards, any other verification document will suffix.