GST (Goods and Services Tax) is an Indirect and multi-stage Tax system, applicable to PAN India.
In India, it came into enforcement from 1st July 2017 and it is mandatory for all eligible businesses to register under GST in order to remain functional legally, avoid heavy penalties, and avail several benefits.
If you are eligible to get register under GST and looking for GST Registration step-by-step guidance, then you are at the right place. Let’s understand all about GST registrations from certified and experienced finance and chartered accountant services providing company in India.
Contents of this article
- GOODS AND SERVICES TAX IN INDIA
- WHO ARE REQUIRED TO GET GST REGISTRATION?
- DOCUMENTS REQUIRED FOR GST REGISTRATION
- GST REGISTRATION PROCEDURE
- TRACK GST REGISTRATION APPLICATION STATUS
- DOWNLOAD GST REGISTRATION CERTIFICATE
- GST REGISTRATION FEE
- CAN YOU HAVE MORE THAN ONE GST REGISTRATION?
- PENALTIES AND OFFENSES
Goods and Services Tax in India
On 29th March 2017, the Goods and Services Act was passed in Lok Sabha and it came into force on 1st July 2017. GST is a comprehensive tax that is levied on the supply of goods and services.
Basically, GST is a multi-stage taxation system, implemented at every value addition stage, starting from buying raw materials and up to the final stage i.e. sale to the consumer. The tax is introduced with the purpose to curb the cascading impact of indirect taxes which was experienced in earlier taxation systems prior to GST.
In other words, GST has subsumed taxes like VAT, Entertainment Tax, Excise, Service Tax, etc., and gives an easy and single tax system to follow, aiming for a simplified and effective process for taxation.
Let us understand with an example, a cloth manufacturer buys raw material fabrics and manufactures the shirts from that fabric. Afterward, he sells this to the wholesalers. The wholesalers sell these shirts to the retailer who finally sells the cloth to the consumer. At each stage, GST is applied, which is the reason behind calling GST a multi-stage tax system.
There are three components of GST in India according to the nation’s federal structure i.e. Central GST (CGST), State GST (SGST), and Integrated GST (IGST). CGST and IGST are collected by Central Government, and SGST is collected by State Government.
In the case of Union territories such as Chandigarh, instead of State govt. the GST is collected by the Central administration and is referred to as UGST (Union-GST). Following are the taxes that are being abolished at the central and state level respectively:
At Central level:
1. Central Excise Duty,
2. Additional Excise Duty,
3. Service Tax,
4. Additional Customs Duty is commonly known
At State level:
1. Subsuming of State Value Added Tax/Sales Tax,
2. Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
3. Octroi and Entry tax,
4. Purchase Tax,
5. Luxury tax, and
6. Taxes on lottery, betting, and gambling.
Also it is important to know that GST is a destination-based tax, which means if the goods are manufactured in Punjab and finally sold to the consumer in Maharashtra; the entire revenue of tax will go to Maharashtra state.
Who are required to get GST registration?
Now you must be thinking, is it mandatory to get goods and services tax (GST) registration, and who needs to get registered under GST…?
The answer to 1st question is, It is not mandatory to get registered under GST till and unless you fall under the conditions mentioned under the GST Act.
The answer to 2nd question is mentioned below.
Following persons are required to get registered under GST:
• Any person who is involved in the supply of goods and services and whose aggregate annual turnover is more than Rs 20 lakhs (in case of a supply of corporate services or corporate finance services) and Rs 40 lakhs ( in case of a supply of goods), mandatorily register under GST.
• The threshold limit is Rs 10 lakhs for the businesses in the North-eastern state, Jammu & Kashmir, Uttarakhand, and Himachal Pradesh.
• Any business or enterprise which is already registered under previous taxation provisions like service tax, VAT, etc.
• A person engaged in the inter-state taxable supply of goods other than specifically exempt persons.
• Any casual taxable person engaged in taxable supply.
• A Non-resident taxable person engaged in providing taxable supply.
• If the person supplies goods and services via an e-commerce portal i.e. e-commerce operator.
• Person liable to pay tax under the reverse charge mechanism
• Electronic Commerce Operator who is required to collect tax at source under section 52 of CGST Act. However, persons who are suppliers of service and supplying services through e-commerce operators are not required to register under GST if their aggregate turnover is less than Rs 20 lakhs per annum
• Input Service Distributor
• Persons who are required to deduct tax under section 51 of the CGST Act
• Businesses providing online information and databases access or retrieval (OIDAR) services from a place outside of India to a person residing in India, other than a registered taxable person.
Documents required for GST registration
The Goods and services tax registration process of GST is purely online and does not need any manual intervention. Documents for GST registration vary and depend on the type of entity. Refer to the below-mentioned table to know the document’s prerequisites according to your business legal structure.
GST Registration Procedure:
Here is the step-by-step procedure that can guide you towards successful GST registration, hassle-free.
The registration process can be divided into two parts:-
Part 1 is to generate the TRN and Part 2 is to proceed after getting the TRN.
Step 1: Open the GST portal (www.gst.gov.in) on a web browser
Step 2: Select ‘Registration’ from the Services tab
Step 3: Then, choose ‘New Registration’
Step 4: Enter the details under New registration:
• Choose the type of registration.
• Choose the state in which you want to get registered.
• Enter the Legal name of the Business (as mentioned in PAN) and PAN.
Step 5: Verify the Email id and mobile number with OTP
You will receive a Temporary reference number (TRN) on the email address & mobile number entered. And you can proceed to Part 2.
Step 1: Visit GST portal again
Step 2: Open new registration under services tab
Step 3: Choose Temporary reference number (TRN) under new registration
Step 4: Proceed by entering TRN sent on your mobile number and email address, and CAPTCHA
Step 5: Verify the TRN through OTP
Step 6: Choose the edit button under action from dashboard displayed
Step 7: Mention the following details of business:
• Legal Name of the business
• PAN of the proprietor, in case of Sole proprietorship or PAN of the body corporate in other cases
• Constitution of business
• Whether applying for registration as a casual taxable person
• Whether opting for composition Scheme (i.e., require to pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crores.)
Step 8: Attach the proof of constitution;
• No proof required in case of sole proprietor & HUF
• Partnership Deed/Any proof sustaining constitution, in case of partnership firm
• Certificate of incorporation, in case of Company, LLP, or Public Sector Undertaking
• Certificate of establishment, in case of a foreign company or Foreign LLP
• Registration Certificate/Any proof sustaining constitution, in case of others, Society, Club, Trust, or AOP
• Any proof sustaining constitution, in case of Govt dept., Local Authority, or Statutory body
Step 9: Enter the details of:
• Proprietor, in case of Sole proprietor
• Designated Partner, in case of LLP
• Karta, in the case of HUF
• Managing & Authorised partner, in case of Partnership firm
• MD, WTD, or KMP, in case of Company
• Members of the managing committee, in case of Society, Club, Trust, or AOP
• Authorised person in India, in case foreign company
• Person in charge, in case of the government unit
• CEO or equivalent, in case of local authority
Step 10: Enter the details of Authorized Signatory, in case authorized signatory is other than proprietor, partner, promoter, as the case may be.
Step 11: Enter the details of the principal place of business or additional place of business
Step 12: Attach the document of nature of possession
• Consent letter, in case of Consent.
• Lease agreement, in case of Lease.
• Electricity bill, Municipal khata copy, or property tax receipt, in case of Own.
• Rent agreement or rent receipt with NOC, in case of Rent.
• Legal ownership document, in case of others
Step 13: Specify top 5 commodities supplied by the business (Minimum 1)
Step 14: Select whether you want to opt for Aadhar Authentication or not
In case, you opt for Aadhar Authentication, Aadhaar validation links shall be forwarded on the emails/ mobile No. provided by you.
If you have opted ‘No’ for Aadhaar authentication. So you upload E-KYC documents of Primary Authorized Signatory and one Promotor/ Partner. Further, the Registration shall be issued after site verification
Step 15: Complete the verification and submit it with DSC or EVC.
After completing all steps, you will receive ARN (Application Reference Number) via SMS on Mobile number and on Email id, for future reference.
After applying for goods and services tax (GST) registration, you can track your application on the GST portal by following below mentioned steps:
Step 1: Log on GST Portal at www.gst.gov.in
Step 2: Now choose the ‘Services’ tab
Step 3: Select ‘Registration’ from the options
Step 4: Then select ‘Track Application Status’ from the list
Step 5:Under Track Application Status, you have to provide your ARN and then click on the Search button.
Now, you get the updated status of your application.
GST Certificate is the proof of GST registration. You can easily download your GST Certificate by logging in on GST portal.
Follow the below steps, to download your GST Certificate:
Step 1: Visit on www.gst.gov.in
Step 2: Now, Login to your account
Step 3: After login, choose Services -> User Services -> Download Certificate
Step 4: Now, click on ‘Download’ button to download the GST registration certificate.
No GST registration fees has been charged by the Government.
According to the CGST Act,2017, “Every person who is liable for GST Registration under this Act shall apply for registration in every such state or union territory, in which he is liable for registration.” Single GST Registration can be obtained by a person in a state or union territory.
A person having multiple places of business can get separate registration for each place of business, however, the conditions prescribed under Rule 11 of the Central Goods and Service Tax Rules, 2017 must be fulfilled.
If a person liable to pay GST, not pay tax or make short payments, has to pay 10% of the tax amount (subject to the minimum Rs 10,000/-). If a person has evaded tax or involved in fraud deliberately then he has to pay a penalty of 100% of the tax amount.