GST Registration

Under Goods And Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offence under GST and heavy penalties will apply.

GST registration usually takes between 2-6 working days.

Overview GST Registration online

Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover.

For those taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.

The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.

Who should obtain the GST registration?

Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be
Casual taxable person / Non-Resident taxable person
Agents of a supplier & Input service distributor
Those paying tax under the reverse charge mechanism
A person who supplies via an e-commerce aggregator
Every e-commerce aggregator
Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

Key Components of GST Registration

Central Goods and Services Tax (CGST): This tax is levied by the Central Government on the supply of goods and services within a particular state. CGST applies to transactions carried out entirely within the boundaries of one state.
State Goods and Services Tax (SGST): SGST is charged by the State Government on the supply of goods and services within its jurisdiction. Similar to CGST, SGST is also limited to transactions happening within a specific state.
Integrated Goods and Services Tax (IGST): This tax is imposed by the Central Government on the supply of goods and services that occur between different states or between a state and a Union Territory. IGST is relevant for transactions where goods or services cross state or Union Territory boundaries.

GST Registration Turnover Limit

Service Providers: Any person or entity who provides service of more than Rs.20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers has been fixed at Rs.10 lakhs.

Goods Suppliers: As per notification No.10/2019 any person who is engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs in a year is required to obtain GST registration. To be eligible for the Rs.40 lakhs turnover limit, the supplier must satisfy the following conditions:

Should not be providing any services.
The supplier should not be engaged in making intra-state (supplying goods within the same state) supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripur and Uttarakhand.
Should not be involved in the supply of ice cream, pan masala or tobacco.

If the above conditions are not met, the supplier of goods would be required to obtain GST registration when the turnover crosses Rs.20 lakhs and Rs.10 lakhs in special category states.

Special Category States: Under GST, the following are listed as special category states – Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

Aggregate Turnover: Aggregate turnover = (Taxable supplies + Exempt Supplies + Exports + Inter-State Supplies)*(Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies).

Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover

Advantages of GST Registration for Businesses

Legal Compliance: Ensures that businesses remain compliant with tax regulations, thus avoiding any potential penalties.
Input Tax Credit: Businesses can claim credits for the GST they’ve paid on purchases, which can then be set off against the GST charged on sales, leading to a reduction in tax liability.
Inter-State Trade Ease: Encourages businesses to transact across state boundaries without facing tax-related challenges.
Elimination of Cascading Effect: By removing the effect of tax being levied on an already taxed amount, the overall cost of products or services is reduced.
Competitive Edge: Being GST compliant can instil trust in potential customers, opening up more business opportunities.
Access to Larger Markets: Major corporations often prefer collaborating with GST-registered vendors.
Optimized Cash Flow: Efficient management and lower tax liability can enhance the cash flow within a business.
Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record can boost a business’s credit profile.
Legal Safeguard: A GST registration protects businesses and ensures their rights are upheld.
Simplified Compliance: The GST process is streamlined, enabling businesses to file returns and make payments online easily.
Transparent Operations: Ensures businesses maintain accurate records, promoting a sense of trustworthiness and professionalism.

GST Registration Documents Requirements

Sole proprietor / Individual	PAN card of the owner Aadhar card of the owner Photograph of the owner (in JPEG format, maximum size 100 KB) Bank account details* Address proof**
LLP and Partnership Firms	PAN card of all partners (including managing partner and authorized signatory) Copy of partnership deed Photograph of all partners and authorised signatories (in JPEG format, maximum size 100 KB) Address proof of partners (Passport, driving license, Voters identity card, Aadhar card etc.) Aadhar card of authorised signatory Proof of appointment of authorized signatory In the case of LLP, registration certificate / Board resolution of LLP Bank account details* Address proof of principal place of business
HUF	PAN card of HUF PAN card and Aadhar card of Karta Photograph of the owner (in JPEG format, maximum size 100 KB) Bank account details Address proof of principal place of business
Company (Public and Private) (Indian and foreign)	PAN card of the Company Certificate of incorporation given by Ministry of Corporate Affairs Memorandum of Association / Articles of Association PAN card and Aadhar card of authorized signatory. The authorised signatory must be an Indian, even in case of foreign companies/branch registration PAN card and address proof of all directors of the Company Photograph of all directors and authorised signatory (in JPEG format, maximum size 100 KB) Board resolution appointing authorised signatory / Any other proof of appointment of authorised signatory (in JPEG format / PDF format, maximum size 100 KB) Bank account details Address proof of principal place of business

Penalty for Not Obtaining GST Registration

For Non-Payment or Underpayments: If a taxpayer either neglects to pay the requisite tax or mistakenly underpays, an acceptable equivalent of 10% of the outstanding tax amount is levied. It’s important to note that while there are no GST registration fees, penalties for non-compliance can be significant.
Intentional Tax Evasion: If an individual or business willfully avoids paying the due taxes, the penalty equals 100% of the evaded tax amount.

Mandatory GST Registration for Specific Businesses

Individuals engaging in interstate taxable supply (with a threshold of ₹20 lakhs/₹10 lakhs applicable for interstate supply of taxable services, specified handicraft goods, and handmade goods)
Casual taxable persons involved in taxable supply
Individuals obligated to pay tax under reverse charge for received inward supplies
Non-resident taxable persons engaged in taxable supply
E-commerce entities (inclusive of every e-commerce operator and individuals supplying goods and/or services)
Individuals required to deduct tax under Section 51
Input service distributor
Individuals making taxable supply of goods or services on behalf of other taxable persons, whether as an agent or otherwise
Individuals required to pay tax under Section 9(5)
Any other individuals or categories notified by the government.

FAQs

What is the GST Annual Return?

The GST Annual Return is a summary of a taxpayer’s financial activities for a fiscal year, including details of sales, purchases, and taxes paid. It provides a comprehensive overview of the taxpayer’s GST transactions.

What is the difference between the effective date of GST registration and the date of GST registration?

The effective date of GST registration is when you become liable to pay GST, while the date of registration is when you are officially registered. Understanding this difference is important for determining when your GST obligations commence.