Description
GST Registration
GST is the biggest tax reform in India which has tremendously improved ease of doing business and increasing the taxpayer base in India by including millions of small businesses. Tax complications and hardships would be reduced due to the abolishing and subsuming of multiple taxes into a single system.
The new GST regime mandates that all entities involved in buying or selling goods or providing services or both are required to register and obtain GSTIN. Registration is mandatory once the entity crosses a minimum threshold turnover or when an individual starts a new business that is expected to cross the prescribed turnover.
Businesses are required to register for GST if they fall into one of the following criteria.
1- Aggregate turnover
Any service provider who provides a service value of more than Rs. 20 Lakhs aggregate in a year is required to obtain GST registration. In the special category states, this limit is Rs. 10 lakhs. Any entity engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs is required to obtain GST registration.
2- Inter-state business
An entity shall register for GST if they supply goods inter state, i.e., from one state to another irrespective of their aggregate turnover. Inter state service providers need to obtain GST registration only if their annual turnover exceeds Rs. 20 lakhs. (In special category states, this limit is Rs. 10 lakhs).
3- E-commerce platform
Any individual supplying goods or services through an e-commerce platform shall apply for GST registration. The individual shall register irrespective of the turnover. Hence, sellers on Flipkart, Amazon and other e-commerce platforms must obtain registration to commence activity.
4- Casual taxable persons
Any individual undertaking supply of goods, services seasonally or intermittently through a temporary stall or shop must apply for GST. The individual shall apply irrespective of the annual aggregate turnover.
5- Voluntary registration
Any entity can obtain GST registration voluntarily. Earlier, any entity who obtained GST voluntarily could not surrender the registration for up to a year. However, after revisions, voluntary GST registration can be surrendered by the applicant at any time.
The types of GST registration varies depending on the kind of business undertaken and the supply location of goods or services.
Normal scheme
This category applies to taxpayers operating a business in India. Taxpayers registering under the normal scheme do not require a deposit and are also provided with unlimited validity date.
Non-resident taxable person
The category applies to individuals located outside of India. The taxpayers should supply goods or services to residents in India. The registration remains active for a period of 3 months.
Casual taxable person
Any taxpayer establishing a stall or a seasonal shop has to register under the casual taxable person scheme. To register as a casual taxable person, the taxpayer shall pay a deposit equal to the amount of GST liability. The registration remains active for a period of 3 months.
Composition scheme
An entity should enrol under the GST composition scheme to register as a composition taxpayer. Any taxpayer whose turnover is less than rs. 1.5 Crore can avail this facility. Entities enrolled under this scheme can pay a flat GST rate. However, they will not be allowed to claim input tax credit.
The following documents must be submitted by regular taxpayers applying for GST registration.
1- PAN card of the business
GST registration is linked to the PAN of the business. Hence, PAN must be obtained for the legal entity before applying for GST Registration.
2- Identity proof along with photographs
PAN, passport, driving license, aadhar card or voter’s identity card can be submitted as identity proof. Photographs of the promoters/ proprietors also need to be submitted.
3- Address proof of promoter
Documents like passport, driving license, aadhaar card, voters identity card and ration card can be submitted as address proof.
4- Business registration document
Proof of business registration must be submitted for all types of entities. There is no requirement of submitting this document for a proprietorship as the proprietor and the entity are considered the same. In case of a partnership firm, the partnership deed must be submitted. In case of LLP or Company, the incorporation certificate from MCA must be submitted. The other types of entities like society, trust, club, government department or body of individuals must provide the registration certificate.
- Own property- Any document in support of the ownership of the premises like the latest property tax receipt or the municipal khata copy or copy of the electricity bill.
- Rented or leased property- A copy of a valid rental agreement with any document in support of the ownership of the premises of the lessor like the latest property tax receipt or the municipal khata copy or copy of the electricity bill. If the rental agreement or lease deed is not available, then an affidavit to that effect along with any document in support of the possession of the premises like copy of electricity bill is acceptable. Non objection certificate from the owner and Indentity proof of the owner from the list mentioned above.
- SEZ premises- If the principal place of business is located in an SEZ or the applicant is an SEZ developer, necessary documents/certificates issued by the government of India are required to be uploaded.
- All other cases- A copy of the consent letter of the owner of the premises with any document in support of the ownership of the premises of the consenter like the municipal khata copy or the electricity bill copy. The same documents can be uploaded for shared property as well.
GST Registration Plans
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6- Bank account proof
Scanned copy of the first page of bank passbook or the relevant page of bank statement or scanned copy of a cancelled cheque containing name of the proprietor or business entity, bank account no., MICR, IFSC and branch details including code needs to be uploaded.
General questions
PAN is mandatory for obtaining GST registration. In the case of proprietorship, the PAN of the proprietor can be used. In case of LLP or Company or Trust or other types of legal entity, PAN must first be obtained for the entity. However, PAN is not mandatory for GST registration of foreigners and foreign companies. For non-resident taxable persons, GSTIN with a fixed expiry date will be provided based on the other documents provided to prove existence.
GST registration does not have an expiry date. Hence, it will be valid until it’s cancelled, surrendered or suspended.Only GST registration for non-resident taxable persons and casual taxable persons have a validity period that is fixed by the authorities while issuing the GST registration certificate.
Small businesses registered under the GST composition scheme can pay GST at a fixed rate of turnover every quarter and file quarterly GST returns. Composition levy would generally be related to small taxpayers who are supplying goods and services or both to the end consumer with a lower turnover.
Any existing taxpayer whose annual turnover did not cross the Rs.1.5 crore threshold in the preceding financial year. However, service providers with the exception of restaurants and caterers are not eligible, neither are casual taxable persons nor non-resident Indians.
No input tax credit cannot be claimed by a dealer opting for composition scheme as he is out of the credit chain. He cannot take credit on his input supplies.
It will be computed on an all India basis and will include the value of all taxable supplies. It would exclude inward supplies under reverse charge as well as central, state/union territory and integrated taxes and cess.
Primary authorized signatory is the person who is primarily responsible to undertake tasks on the GST portal on behalf of the taxpayer. It could be the promoted of the business or any other trustworthy person nominated by the promoters of the business.
An entity liable to be registered under GST should apply for registration within 30 days of meeting the criteria. Casual taxable persons and non-resident taxable persons are required to be registered under GST prior to commencing business.
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