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GST REGISTRATION

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What is GST?

  • The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. Goods and Services Tax (GST) is an indirect tax levied in India on the supply of goods and services.
  • GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; It is expected to remove the cascading effect of tax-on-tax which is prevalent presently.
  • Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST.
  • In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person.
  • For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.
  • CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification will come into effect from 1st April 2019.

What are the components of GST?

There are 3 taxes applicable under this system: CGST, SGST & IGST.

  • CGST: Collected by the Central Government on an intra-state sale (Eg: transaction happening within Maharashtra)
  • SGST: Collected by the State Government on an intra-state sale(Eg: transaction happening within Maharashtra)
  • IGST: Collected by the Central Government for inter-state sale (Eg: between 2 states)

GST Rates: The GST council has decided on a four-tier structure. The GST rate will depend on the type of goods and services. Currently, the slab rates are 5%, 12%, 18% and 28%. The rate for gold is yet to be decided, and will likely to be the lowest of all.

Benefits of GST

  • Removing cascading tax effect.
  • Regulating the Unorganised Sector.
  • Lesser Compliances.
  • Composition scheme for smaller business.

Mandatory GST Registration Criteria

  • Persons making any inter-state taxable supply
  • Persons who are required to pay tax under reverse charge
  • Persons who are required to deduct tax under GST
  • Input Service Distributor
  • Person supplying online information and database access or retrieval services (OIDAR)
  • Persons Having Service Tax or VAT or Central Excise Registration
  • Casual taxable persons making taxable supply
  • Non-resident taxable persons making taxable supply
  • Persons who make taxable supply of goods or services on behalf of other persons
  • Electronic Commerce Operator
  • Persons who supply goods or services through electronic commerce operators
  • Transferee or Successor of a Business

Who Needs a GST Registration?

  • Any business with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
  • Every person who is registered under an earlier law (i.e., Excise, VAT, Service Tax etc.) needs to register under GST, too.
  • Anyone who drives inter-state supply of goods
  • E-commerce operator or aggregator*
  • Casual taxable person/Non-Resident taxable person
  • Agents of a supplier & Input service distributor
  • Those paying tax under the reverse charge mechanism
  • 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

Documents Required for GST Registration.

For Sole Proprietorship /Individual/HUF/partnership/LLP/Pvt. Ltd Company etc.

  • PAN card, adhaar card and a photograph-sole proprietor/HUF/partner/director/company.
  • Bank account details- a copy of cancelled cheque or bank statement
  • Address proof of office:
  • Own office - Copy of electricity bill/landline bill/water bill/ property tax receipt
  • Rented office - Rent agreement and No objection certificate (NOC) from the owner
  • Additionally
  • In case of LLP - Copy of board resolution, Registration Certificate of the LLP
  • In case of Private limited / Public limited / One-person company- Registration Certificate of the company, MOA and AOA, Copy of Board resolution.

GST Registration Process

There are two ways to register for GST after which GSTIN will be provided which are:

  • GST online portal or
  • GST Seva Kendra set up by Government of India.

The process of GST registration is online through a portal maintained by Central Govt. of India. The process includes:-

  • GST Application Preparation with all required documents.
  • GST Application Filing
  • Registering your digital signature Certificate
  • Verification and submission of your GST Application
  • GST Registration Certificate

Detailed Process

  • The applicant will need to submit his PAN, mobile number and email address in Part A of Form GST REG– 01.
  • The PAN, Mobile number and E-mail address are verified with a one-time password (OTP). Once the verification is complete, applicant will receive ARN on the registered mobile number and via E-mail. An acknowledgement should be issued to the applicant in FORM GST REG-02 electronically. You are expected to acknowledge the same through the GST REG-02 form on the portal.
  • Applicant needs to fill Part- B of Form GST REG-01 and specify the application reference number. Then the form can be submitted after attaching required documents.
  • If additional information is required, Form GST REG-03 will be issued. Applicant needs to respond in Form GST REG-04 with required information within 7 working days from the date of receipt of Form GST REG-03.
  • If you have provided all required information via Form GST REG-01 or Form GST REG-04, the registration certificate in Form GST REG –06 for the principal place of business as well as for every additional place of business will be issued to the applicant.
  • If the person has multiple business verticals within a state, he can file a separate application for the registration in Form GST REG-01 for each business verticals.
  • If the details submitted are not satisfactory, the registration application is rejected using Form GST REG05.
  • The applicant who is required to deduct TDS or collect TCS shall submit an application in Form GST REG – 07 for registration.

GST Return Filing

  • Returns to be Filed by Regular Taxpayers:
  • GSTR-1 (monthly)
  • GSTR-9 (annual return)
  • Regular taxpayers who have more than one registration for business in a state would have to file the following returns:
  • GSTR-1 (monthly)
  • GSTR-2 (monthly)
  • GSTR-3 and 3B (monthly)
  • GSTR-8 (annual return)

Note: First three forms, i.e. GSTR-1, GSTR-2 & GSTR-3 need to be filed separately for each registration while GSTR-8 is a common return. Those taxpayers who must get their account audited u/s 44AB of I-T Act should also file a reconciliation statement certified by a CA.

  • Returns to be Filed by Composition Taxpayers Composition taxpayers, i.e. those who are registered under composition scheme are required to file the following return:
  • GSTR-4(quarterly)
  • Simple annual return

Note: Composition taxpayers can opt out of composition scheme to take benefit of ITC.

  • Returns to be Filed by Casual and Non-Resident Taxpayers

Casual and Non-Resident taxpayers other than foreigners are required to file the following returns for the period they are registered:

  • GSTR-1
  • GSTR-2
  • GSTR-3

Non-Resident taxpayers who are foreigners need to file the following returns for the period they are registered:

  • GSTR-5

Note: Monthly returns must be filed if registration period exceeds one month.

With effect from 1st July 2017, GSTR-5 Form is needs to be filed by these non-resident taxpayers to carry out their operations. GSTR-5 is a periodic return to be filed by Non-Resident Taxable Person. The form GSTR-5 contains the details of income and expenses related to the business of the taxpayer who is residing out of India.

This should be done within twenty days after the end of a calendar month or within seven days after the last day of the validity period of registration, whichever is earlier.