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What is GST Registration?
GST registration is the process by which a business obtains a unique identification number, known as a GSTIN (Goods and Services Tax Identification Number), making it liable to pay Goods and Services Tax (GST) in India. According to the Central Goods and Services Tax Act of 2017, businesses with an annual turnover exceeding ₹40 lakh (or ₹20 lakh in specific special category states) are required to register as taxable entities. The GSTIN, a 15-digit number, uniquely identifies each taxpayer under the GST framework and allows authorities to monitor transactions and related data effectively.
GST, or Goods and Services Tax, is a destination-based, multi-stage, indirect tax that replaces various other taxes, including VAT and excise duties. Under the GST Act of 2017, businesses that previously paid service tax, excise duty, or VAT must now register for GST. Additionally, GST registration is mandatory for eCommerce sellers regardless of turnover.
GST apply online through the official portal allows businesses and individuals to complete their GST registration without visiting government offices. This online process ensures a smooth and hassle-free experience, making it convenient for taxpayers to comply with GST regulations efficiently.. After submitting an application, the portal generates an ARN (Application Reference Number) status immediately, allowing applicants to track their registration progress.
GST ACT
The Central Goods and Services Tax Act of 2017, implemented to streamline taxation and curb tax evasion, establishes the framework for the Goods and Services Tax (GST) levied on intra-state and inter-state supplies of goods and services in India.
Who Should Apply for GST Registration?
GST registration is essential for certain businesses and individuals to ensure compliance with the law. Here’s who should apply:
- Service Providers: Service providers offering services with a turnover exceeding ₹20 lakhs (₹10 lakhs in special category states) must register for GST. This includes freelancers, consultants, and agencies.
- Previously Registered Entities: Businesses registered under VAT, Service Tax, or other previous indirect tax regimes need to transition to GST registration.
- E-commerce Providers: Platforms or individuals selling goods or services online through marketplaces such as Amazon or Flipkart must register regardless of turnover.
- Inter-State Suppliers: Businesses supplying goods or services across state borders must mandatorily register for GST, irrespective of turnover.
- Casual Taxable Persons: Entities occasionally supplying goods or services in taxable areas without a fixed place of business must register under GST.
- Agents of Suppliers: Agents representing or supplying goods or services on behalf of others are required to register for GST.
- Input Service Distributors (ISD): Entities distributing GST input tax credit to other branches must register as ISD.
- Non-resident Taxable Persons: Foreign entities or individuals supplying goods or services in India need to register as non-resident taxable persons.
- Reverse Charge Mechanism (RCM) Entities: Businesses liable to pay GST under RCM, where the recipient pays tax instead of the supplier, must register.
- Specialized Categories: Entities like TDS deductors, TCS collectors, and Online Information and Database Access Retrieval (OIDAR) service providers require GST registration.
GST Registration Threshold Limits
Eligibility to Register for GST registration online must be verified before registration. Individuals registered under the Pre-GST law should also opt for online GST registration. It is mandatory for businesses that have a turnover of ₹40 lakhs for the sale of goods in normal category states and ₹20 lakhs for the sale of goods in special category states. A company must register as a regular taxable entity under GST law if its annual threshold limit exceeds ₹40 lakhs. The GST council recommends GST rates, tax exemptions, and other tax-related policies. Here is a complete outline for the same
| Aggregate Turnover | Registration Required | Applicability |
|---|---|---|
Earlier Limits for Sale of Goods/Providing Services |
||
| Exceeds ₹20 lakh | Yes – For Normal Category States | Upto 31 March 2019 |
| Exceeds ₹10 lakh | Yes – For Special Category States | Upto 31 March 2019 |
New Limits for Sale of Goods |
||
| Exceeds ₹40 lakh | Yes – For Normal Category States | From 1 April 2019 |
| Exceeds ₹20 lakh | Yes – For Special Category States | From 1 April 2019 |
New Limits for Providing Services |
||
| Exceeds ₹40 lakh | Yes – For Normal Category States | Upto 31 March 2019 |
| Exceeds ₹20 lakh | Yes – For Special Category States | Upto 31 March 2019 |
For Service Providers |
||
| Exceeds ₹20 lakh | Yes – For Normal Category States | From 1 April 2019 |
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Turnover Limits for GST Registration
GST registration is optional and can be obtained voluntarily by any person or entity, regardless of turnover. However, it becomes mandatory when aggregate turnover exceeds ₹20 lakh for service providers or ₹40 lakh for goods suppliers in most states. For special category states, the limit is ₹10 lakh. Aggregate turnover includes all taxable supplies, exempt supplies, exports, and inter-state supplies calculated on a PAN-India basis. Businesses that need to register can GST apply online through the official portal for a quick and convenient process. To clarify the GST registration thresholds based on sectors and states, here is an overview of the limits:
| Sector/Category | Threshold Limit for GST Registration |
|---|---|
| Manufacturing Sector | ₹40 lakhs or higher |
| Service Sector | ₹20 lakhs or higher |
| Special Category States | ₹10 lakhs or higher |
- Special Category States include Assam, Arunachal Pradesh, Manipur, Jammu & Kashmir, Meghalaya, Nagaland, Mizoram, Sikkim, Tripura, and Uttarakhand.
- All employees earning below this wage limit must be registered under the ESI scheme, which provides benefits like medical care and social security for both the employee and their family.
- Any factory or establishment employing 10 or more employees is liable to register under ESIC and ensure that contributions are made for each employee’s welfare.
Mandatory GST Registration for Specific Businesses
Irrespective of the threshold limit GST registration is mandatory for the following:
- 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.
Benefits of Registering for GST
Registration under GST is an important step towards a unified tax system in India. It offers many advantages to registered businesses. A taxpayer who registers under the GST Act of 2017 will receive the following benefits:
Legal Recognition
A firm can obtain legal recognition as a supplier of goods or services by registering for GST. This validates the company’s legal status as an official entity.
Input Tax Credit (ITC)
Businesses that are registered can deduct the GST they pay on purchases from the GST they collect on sales by claiming the Input Tax Credit. Consequently, the entire tax liability is decreased.
Simplified Process
The GST system has reduced the complexity and time needed for compliance by streamlining the process for submitting taxes and making payments. With the help of a single online platform, businesses can more effectively manage their tax obligations.
Composition Scheme
Composition Scheme Under GST for Small Businesses allows them to pay tax at a lower, fixed rate. This reduces their tax burden and compliance requirements, making it easier to manage their finances.
Higher Threshold for Online GST Registration
With a higher registration threshold, only businesses with an annual turnover above ₹40 lakh are required to register for GST. This excludes many small businesses from mandatory registration, easing their operational processes.
Eliminates the Cascading Effect of Taxes
GST eliminates the cascading effect of taxes by allowing input tax credit across the supply chain. This means that businesses can claim credit for the taxes paid on purchases, reducing the overall tax burden on end consumers.
Types of GST Registration
The Indian Goods and Services Tax (GST) system is structured around four types of GST to streamline taxation and ensure efficient revenue collection. These types are designed to cover various aspects of interstate and intrastate transactions and are as follows:
- Central Goods and Services Tax (CGST) applies to the supply of goods and services within a single state
- State Goods and Services Tax (SGST) is applicable to the sale of goods or services within the confines of a state
- Integrated Goods and Services Tax (IGST) is imposed on transactions involving goods and services across state boundaries
- Union Territory Goods and Services Tax (UTGST) is levied on the supply of goods and services in Union Territories such as Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is charged in conjunction with CGST.
Voluntary GST Registration for Businesses
Businesses generating a turnover of less than ₹20 lakhs can do the GST apply online voluntarily. By doing so, they can benefit from advantages such as availing input tax credits, conducting unrestricted inter-state sales, becoming eligible to list on e-commerce platforms, and gaining a competitive edge over non-GST-registered businesses. While this registration is not mandatory, it opens the door to enhanced growth opportunities and the potential for increased profitability.
Documents Required for GST Registration
The table below outlines the GST registration documents required for different types of entities. Ensuring that all necessary documents are submitted correctly can help speed up the registration process and avoid delays.
| Entity Type | Documents Required |
|---|---|
| Sole Proprietor / Individual | 1. PAN card of the proprietor 2. Aadhaar card 3. Bank account details (cancelled cheque/passbook copy) 4. Address proof (electricity bill/rent agreement) |
| LLP and Partnership Firm | 1. PAN card of the partnership/LLP 2. Partnership deed 3. PAN and Aadhaar cards of partners 4. Bank account details 5. Proof of business address |
| HUF (Hindu Undivided Family) | 1. PAN card of HUF 2. PAN and Aadhaar card of the Karta 3. Bank account details 4. Proof of principal place of business |
| Company (Public and Private) | 1. PAN card of the company 2. Incorporation certificate 3. PAN and Aadhaar cards of directors 3. Bank account details 4. Proof of business address 5. Authorization letter or board resolution |
| Foreign Companies | 1. Registration certificate issued by the foreign authority 2. Taxpayer identification number 3. Passport of the authorized signatory 4. Bank account in India 5. Business address proof in India |
GST Registration Fees
Below are the details of GST registration fees:
| Type of Applicant | Registration Fee on Government Portal | Additional Requirement |
|---|---|---|
| Most Regular Businesses | ₹0 (No Fees) | None |
| Casual Taxable Persons | ₹0 (Registration) + ₹500–₹10,000 (Deposit) | Security deposit based on business type and state regulations |
| Non-Resident Taxable Persons | ₹0 (Registration) + ₹500–₹10,000 (Deposit) | Security deposit mandatory for temporary/foreign business setups |
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Step-by-Step GST Registration Process
Here are 4 steps to complete your online GST registration process:
Step 1
Get in touch with our experts
Step 2
Provide Business Information
Step 3
Filing for GST Registration
Step 4
Get your GSTIN
1. Get in touch with our experts
Book a slot with our GST experts and resolve all your queries.
2. Provide Business Information
To initiate the registration process, provide the required GST registration documents and fill in essential business details. These include the business name, SEZ unit (if applicable), principal place of business, additional business locations, mobile number, email address, state, and PAN card details.
Ensuring that all details are accurate and complete will help streamline the GST registration process and avoid delays.
3. Filing for GST Registration
Our team will help you GST apply online by filing your GST registration application on the official portal. Once the application is submitted, you will receive an OTP for verification to proceed further.
4. Get your GSTIN
Our team will provide you with the Application Reference Number (ARN) (also called as temporary reference number) after successful verification. You can track application status using the number. GST registration certificate will be available on the official GST website after the process is completed.
All the documents should be submitted within the specified time frame and as per government guidelines to avoid delays. Although there are no GST registration fees, understanding any applicable security deposits for casual and non-resident taxable persons can help businesses plan their registration process efficiently. The GST certificate will be delivered directly by the Central government. Taxmaan will initiate and guide you through the process.
What is Form GST Reg 01?
Form GST REG-01 is an application form for obtaining Goods and Services Tax (GST) registration. Anyone who wants to get a GST registration should file it. The form is submitted by taxpayers who have just registered under GST5 in order to obtain the input tax credit (ITC). This form must be submitted in order to receive ITC on such stock.
[See rule 8(1)] Application for Registration. (Other than a non-resident taxable person, a person is required to deduct tax at source under Section 51, a person is required to collect tax at source under Section 52, and a person is required to supply online.
GSTIN and It’s Significance
A GSTIN number is a 15-digit code that identifies a registered taxpayer (mainly dealers, suppliers, or any business entity across India) registered under the GST regime. GSTIN is an abbreviation for Goods and Services Tax Identification Number. This provides greater transparency in the GST system, helps in collecting all the GST-related data from the vendors, and prevents tax evasion. Having a GST number provides many advantages for small enterprises. It gives businesses access to different government assistance and relief programs, allows them to claim input tax credit on their purchases, and increases their credibility with suppliers and consumers.
You will receive a GSTIN after successfully submitting the application through the GST apply online portal. The GSTIN plays a crucial role in activities such as availing loans, claiming refunds, simplifying verification processes, making corrections, and understanding one’s GST identification number.
Understanding Your GST Identification Number
A GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit alphanumeric code assigned to businesses registered under the GST system in India. Here is an example of a GSTIN:
- Let’s break down the structure of a GSTIN:
- First two digits (State Code): 22 – Represents the state code where the business is registered
- Next ten digits (PAN): ABCDE1234F – PAN (Permanent Account Number) of the business
- Next one digit (Entity Code): 1 – Represents the entity code for the PAN holder
- Next one digit (Blank): Z – Currently kept blank for future use
- Last one digit (Check Code): 5 – A check code for verification purposes
GST Compliance Rating
The GST compliance rating is a score given by the government to a business based on parameters such as timely filing of monthly and annual returns, furnishing details of input credits used, and taxes paid. This compliance rating shows customers and other firms how compliant they are with the tax department. Businesses with high compliance ratings are bound to receive Input Tax Credit (ITC) and refunds in a timely manner. The GST authorities prioritise processing ITC claims and refund requests from high-rated businesses, ensuring swift disbursement of credits and funds.
GST Certificate
A GST certificate is a legal document issued to businesses registered under the Goods and Services Tax (GST) regime. It serves as proof of GST registration and includes essential details such as the GSTIN (Goods and Services Tax Identification Number), legal name, trade name (if applicable), type of registration, principal place of business, and any additional places of business.
The certificate ensures compliance with GST laws, enabling businesses to operate legally while enhancing their credibility in the market. It is mandatory for businesses exceeding the prescribed turnover threshold or engaged in interstate supply of goods or services.
Importance of GST Certificate:
- Legal authority to collect GST.
- Enables claiming input tax credit.
- Builds trust and market reputation.
- Required for government tenders and contracts.
Penalties for Non-Compliance
It’s important to note that while there are no GST registration fees, penalties for non-compliance can be significant. Here are the penalties for failing to comply with GST regulations:
- Filing GST returns beyond the deadline incurs a late filing penalty
- Interest is assessed on the outstanding tax amount when GST liabilities are not paid on time
- Failure to comply with GST regulations may result in the suspension or cancellation of your GST registration
- If an offender fails to pay tax or makes a short payment, they must pay a penalty of 10% of the tax due, with a minimum penalty of ₹10,000
- The maximum penalty for breaking the GST is 10% of the total tax amount due. However, there may be a penalty for each non-compliance. Apart from this, the taxpayer is also be responsible for paying interest on any overdue taxes
Consequences of Not Registering for GST
Here are some consequences for not registering for GST. The Goods and Service Tax Act of 2017 states that failure to obtain GST registration in India carries a direct penalty that applies even in cases where the registration is submitted after the deadline:
- Any taxable person who neglects to obtain GST registration despite being required to do so by the act faces a penalty of ₹10,000 or the amount of tax evaded or any short tax due, whichever is greater as per Section 122 of the CGST Act
- The penalty for not registering for GST is ₹2 lakh or ₹10,000, whichever is higher
- ₹2 lakh is assessed if an individual does not register for GST.
Advantages for Businesses with GST Registration
GST registration online offers businesses numerous advantages, establishing legitimacy and ensuring compliance with tax regulations:
- Registered businesses can claim Input Tax Credit (ITC), reducing overall tax liability, and benefit from simplified interstate transactions under the unified tax system
- The online filing and payment processes save time and reduce paperwork, while the increased threshold for tax liability exempts small businesses until their turnover surpasses specified limits
- GST registration enhances credibility, provides access to a wider market, and fosters a competitive edge
- It streamlines the supply chain, promotes legal protection, and facilitates easier refund processes, contributing to a more transparent and business-friendly environment in India.
Common Mistakes to Avoid During GST Registration
Wrong Documentation
A fundamental error involves neglecting proper record-keeping, whether it pertains to invoices, bills of supply, or purchase records. Maintaining well-organised documentation is crucial for precise GST filing.
Invoice Detail Inaccuracies
Mistakes in invoices, such as incorrect Goods and Services Tax Identification Number (GSTIN), wrong invoice numbers, or inaccurate tax calculations, may result in compliance issues and penalties.
GSTR-2A and GSTR-3B Discrepancies
Failure to reconcile purchase data (GSTR-2A) with field data (GSTR-3B) can lead to inconsistencies and compliance issues.
Missing GST Return Deadlines
Late GST return filing incurs penalties. Staying informed about due dates and filing returns punctually is crucial.
Unverified GSTIN of Suppliers
Validating suppliers’ GSTIN through the GST portal is essential. Incorrect or fake GSTINs can result in denial of input tax credit.
Inadequate Understanding of GST Composition Scheme
Lack of comprehension about the intricacies of the GST Composition Scheme can lead to inaccurate filings.
Neglecting GST Notices and Compliance
Ignoring GST notices or compliance requirements can result in legal issues and substantial penalties. Addressing them promptly is essential.
Different Categories Which Requires GST Registration
Below listed categories are required to register GST
- Education and Learning
- Health and Wellness
- Electricity, Water and Local services
- Money and Taxes
- Jobs
- Justice, Law and Grievances
- Travel and Tourism
- Business and Self-employed
- Births, Deaths, Marriages and Child care
- Pension and Benefits
- Transport and Infrastructure
- Citizenship, Visas & Passports
- Agriculture, Rural and Environment
- Science, IT and Communications
- Youth, Sports and Culture
- Essential Government Services during Pandemic
- Art & Culture
- Communication
- Defence
- Home Affairs & Enforcement
Get GST Registration Online with Quick Approval with Taxmaan
1. Get in Touch with Our Experts: Contact Taxmaan and provide your name, phone number, and email to begin the process.
2. Expert Consultation: Our GST expert will connect with you to understand your business activity, operational state, and answer any queries.
3. Submit Necessary Documents: Provide and verify the required GST registration documents to ensure a smooth registration process.
4. Application Filing: Once the payment is made, we will process your GST registration online and submit your application to the GST Portal.
5. Receive Your GSTIN: Get your GST registration within 2 to 6 working days without any physical office visits.
6. Access Kitaab Platform: Start using Kitaab for GST invoicing and GST return filing seamlessly.
GST Return Filing
GST return filing is a mandatory process where taxpayers report their sales, purchases, and tax liabilities to the government. In India, every GST-registered taxpayer must file returns regularly, even in the absence of transactions for a specific period. While GST registration itself is free, accurate and timely return filing is essential to avoid penalties. For seamless compliance, our experts are available to assist you throughout the GST return filing process.
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