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GST Registration

The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It was implemented on July 1, 2017, with the aim of simplifying the previous complex and fragmented tax structure, reducing tax cascading, and promoting economic integration.

Here's a breakdown of GST and its registration process:

 

What is GST?

  • Comprehensive Indirect Tax: GST replaced a multitude of central and state indirect taxes like VAT, excise duty, service tax, etc., into a single tax.

  • Destination-Based Tax: GST is levied at the point of consumption, meaning the tax revenue goes to the state where the goods or services are finally consumed.

  • Dual Model: Indian GST is a dual model, comprising:

    • Central GST (CGST): Levied by the Central Government on intra-state (within the same state) supplies.

    • State GST (SGST)/Union Territory GST (UTGST): Levied by the State Governments/Union Territories on intra-state supplies.

    • Integrated GST (IGST): Levied by the Central Government on inter-state (between different states) supplies, including imports. It's essentially a sum of CGST and SGST/UTGST.

  • GST Council: The GST Council, composed of the Union Finance Minister and state finance ministers, governs the operations of GST, including rate changes, legislative amendments, and guidelines.

  • Tax Slabs: GST rates are categorized into four main slabs: 5%, 12%, 18%, and 28%, with 18% being the general rate for most supplies. Some goods and services are exempt, while certain items like vehicles and aerated beverages may be subject to a compensation cess.

 

Who needs to register for GST?

GST registration is mandatory for businesses exceeding certain annual turnover thresholds:

  • General Threshold: For businesses exclusively supplying goods, the threshold is Rs. 40 lakh.

  • Special Category States: For businesses in special category states (e.g., Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Tripura), the threshold is typically Rs. 20 lakh for goods and services. However, some special category states like Assam and Jammu & Kashmir have adopted the Rs. 40 lakh limit for goods.

  • Service Providers: For businesses providing services, the general threshold is Rs. 20 lakh.

  • Compulsory Registration: Certain categories of suppliers are required to register for GST irrespective of their turnover, including:

    • Inter-state suppliers (though there are exemptions for certain inter-state service providers with turnover below Rs. 20/10 lakhs).

    • E-commerce operators.

    • Casual taxable persons.

    • Non-resident taxable persons.

    • Input Service Distributors (ISD).

Even if your turnover is below the threshold, voluntary registration is possible and can offer benefits like claiming input tax credit.

 

Benefits of GST Registration

  • Elimination of Cascading Effect: Reduces "tax on tax," making goods and services cheaper.

  • Input Tax Credit (ITC): Registered businesses can claim credit for taxes paid on inputs (purchases) used in their business, reducing their overall tax liability.

  • Higher Threshold Limit: Exempts many small traders and service providers from GST compliance.

  • Composition Scheme: Small businesses (with turnover up to Rs. 1.5 crore, Rs. 75 lakh for some special category states) can opt for the composition scheme, paying a lower fixed rate of tax and having simpler compliance.

  • Simplified Online Process: The entire GST process, from registration to return filing and tax payment, is online, making it easier for businesses.

  • Lesser Compliances: Replaced multiple taxes and their individual compliance requirements with a unified system.

  • Legal Recognition and Credibility: Provides legal recognition as a taxpayer, enhancing business credibility and allowing participation in B2B transactions where customers often prefer dealing with GST-registered vendors.

  • Expansion Opportunities: Facilitates interstate trade without dealing with varying state tax regulations.

  • Defined E-commerce Operations: Clearly defines the tax framework for online businesses.

  • Avoid Penalties: Ensures compliance with Indian tax laws, preventing hefty fines for non-registration.

 

GST Registration Process (Online)

The GST registration process is entirely online via the official GST portal (www.gst.gov.in). It generally involves two parts:

Part A: Generating a Temporary Reference Number (TRN)

  1. Visit the GST Portal: Go to https://www.gst.gov.in/ and click on Services > Registration > New Registration.

  2. Select "New Registration" and "Taxpayer": Choose "New Registration" and select "Taxpayer" from the "I am a" dropdown list.

  3. Enter Basic Details:

    • Select your State/UT and District.

    • Enter the Legal Name of the Business as per your PAN.

    • Enter your Permanent Account Number (PAN).

    • Provide the Email Address and Mobile Number of the Primary Authorized Signatory (OTPs will be sent here).

    • Enter the captcha text and click PROCEED.

  4. OTP Verification: Enter the separate OTPs received on your registered mobile number and email address. Click PROCEED.

  5. TRN Generation: A Temporary Reference Number (TRN) will be generated and displayed on the screen. Make a note of this TRN as it's crucial for the next steps. You will also receive the TRN acknowledgment via email and SMS.

Part B: Completing the Application using TRN

  1. Log in with TRN: Go back to the GST Portal, click Services > Registration > New Registration, and select the Temporary Reference Number (TRN) radio button.

  2. Enter TRN and Captcha: Enter your TRN and the captcha, then click PROCEED.

  3. OTP Verification (Again): Enter the OTP received on your mobile number and email address (this OTP will be the same for both). Click PROCEED.

  4. Fill in Application Details: You will now access the main application form (Form GST REG-01). This form has several sections where you need to provide detailed information about your business:

    • Business Details: Nature of business, constitution of business, business activity details.

    • Promoters/Partners Details: Personal details, PAN, Aadhaar, address, and photograph of all directors/partners/proprietors.

    • Authorized Signatory Details: Details of the person authorized to act on behalf of the business.

    • Principal Place of Business: Address of your main business location, and proof of address.

    • Additional Places of Business: If applicable, details of any other business locations.

    • Goods and Services Details: HSN/SAC codes of the goods and services you deal in.

    • Bank Account Details: (Can be added later via amendment, but usually required).

    • State Specific Information: Any specific information required by your state.

  5. Upload Documents: Upload the necessary documents (see below).

  6. Verification and Submission: Verify all the details and submit the application using a Digital Signature Certificate (DSC) (mandatory for companies and LLPs) or Electronic Verification Code (EVC) (for proprietorships and others).

Post-Submission:

  • Acknowledgement: An acknowledgement in Form GST REG-02 will be issued.

  • Clarifications (if any): The GST officer may issue Form GST REG-03 if any additional information or documents are required. You must respond in Form GST REG-04 within 7 working days.

  • Approval/Rejection: If all details are satisfactory, the department will issue a Certificate of Registration in Form GST REG-06. If errors are found, the application may be rejected (Form GST REG-05).

  • GSTIN: Upon successful registration, you will be allotted a 15-digit Goods and Services Tax Identification Number (GSTIN).

 

Documents Required for GST Registration

The documents required vary slightly depending on the type of business entity, but common requirements include:

  • PAN Card: PAN of the business entity (e.g., Company PAN, LLP PAN, Proprietor's PAN) and PAN of all promoters/partners/directors/proprietor.

  • Proof of Identity and Address of Promoters/Partners/Directors/Proprietor:

    • PAN card

    • Aadhaar card

    • Passport

    • Driving License

    • Voter ID

    • Photographs

  • Business Registration Document (Proof of Constitution of Business):

    • Sole Proprietorship: No separate registration document, but PAN and Aadhaar of the proprietor.

    • Partnership Firm: Partnership Deed.

    • Limited Liability Partnership (LLP): Certificate of Incorporation, LLP Agreement.

    • Private Limited Company/Public Limited Company: Certificate of Incorporation, Memorandum of Association (MOA), Articles of Association (AOA).

    • Trust/Society: Trust Deed or Registration Certificate.

  • Proof of Principal Place of Business Address: Any one of the following:

    • Owned Property: Electricity bill, property tax receipt, municipal khata copy, ownership deed.

    • Rented/Leased Property: Rent/Lease agreement along with an electricity bill, property tax receipt, or municipal khata copy.

    • Consent Letter/NOC: If the property is used by a third party, a no-objection certificate (NOC) from the owner.

  • Bank Account Details:

    • Copy of cancelled cheque, first page of passbook, or bank statement.

    • Bank name, account number, IFSC code.

  • Proof of Appointment of Authorized Signatory:

    • Letter of Authorization or Board Resolution (for companies/LLPs).

    • PAN and Aadhaar of the authorized signatory.

    • Photograph of the authorized signatory.

  • Digital Signature Certificate (DSC): Mandatory for companies and LLPs for online submission. For proprietorships and others, EVC (OTP based) is also accepted.

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