GST (Goods and Services Tax) is a value-added tax applied to the supply of most goods and services. It is an indirect tax that has replaced almost all the indirect taxes such as VAT or Sales Tax, Service Tax, Excise, Octroi, etc.that were applicable earlier in India. This comprehensive, multi-stage taxation system was implemented on 1st July 2017.GST is of four types viz CGST, SGST, IGST and UGST.
REGISTRATION UNDER GST
Businesses whose turnover exceeds Rs. 40 lakhs (Rs 10 lakhs for North-Eastern states and hill states) is required to register for GST. However, For certain businesses, registration under GST is mandatory. GST Registration is critical to each business entity to avail of benefits available under the GST Regime.
GST Registration is a tedious process that involves submission of various business details and uploading of scanned documents. Registration under GST can be done on the online portal for GST. To start a process, one must have a valid email address, phone number and Business documents mentioned here separately.
Every business must be registered separately under GST if the business is carried out in different states and state-wise GST rules must be followed by business in such cases.
Business entities who are required to register under GST Act obtain a unique 15 digit GST Identification Number – GSTIN. This GSTIN issued to each taxpayer is based on State and PAN.
Who Should Register for GST?
GST Registration is compulsory for the following:
- Individuals registered under any Indirect Tax Act prevailing before GST law (i.e., Excise, VAT, Service Tax etc.)
- Businesses with turnover above the threshold limit of Rs. 40 Lakhs (Rs. 10 Lakhs for North-Eastern States and hill states)
- Casual taxable person and Non-Resident taxable person
- Agents of a supplier & Input service distributor
- The person who pays tax under the reverse charge mechanism
- Every e-commerce aggregator
- A person who supplies through e-commerce aggregator
- The person supplying online information and database access or online information services from a place outside India to a person in India, other than a registered taxable person
Documents Required for GST Registration
To complete your GST Registration, following documents are required:
- PAN of the Applicant
- Aadhaar card
- Proof of business registration or Incorporation certificate
- Identity and Address proof of Promoters/Director with Photographs
- Address proof of the place of business
- Bank Account statement and Cancelled cheque
- Digital Signature
- Letter of Authorization or Board Resolution for Authorized Signatory
Checking the registration Status:
After Applying for GST Registration you will get an Application Reference Number (ARN). A GST Registration Application is processed after 15 days of application. One can check the GST registration status online on the GST Portal and take action based on the status of ARN.
The portal can show one of the following results based on the status of the application:
- Provisional – This means that application has not been filed yet but Provisional ID has been issued.
- Pending for Verification – Application has been successfully filed but verification is yet to be completed.
- Validation against Error – PAN details provided by you does not match with the details provided by IT Department. You need to resubmit the form.
- Migrated – The application for migration to GST is successful.
- Cancelled – Registration has been canceled.
GST Registration Certificate
Upon successful registration, every registered person is gets a Certificate in FROM GST REG-06 that can be downloaded from the GST portal itself. This certificate is not issued by the government in form of physical certificate. This certificate contains all the details of the business and comes with 2 annexures. On the first page, basic details like name, address, and date of registration of the business are displayed.The second page is ‘Annexure A’ which contains details of additional place of business. ‘Annexure B’ contains information of the Person-in-Charge of the business.
The registration shall be effective from the date on which a person becomes liable to registration in case the application for registration has been submitted within a period of thirty days from such date. However, where the application is submitted after the 30 day period is over, and then registration shall be effective from the date of the grant of registration.
Once the GST registration is obtained, there are certain rules that should be followed. These include:
After obtaining GST registration, a business must issue revised invoices against those invoices that were already issued for the period starting from the effective date of registration till the date of issuance of GST registration certificate. The time limit to complete this task is one month from the date of issuance of the certificate of registration.
Taxpayers registered under GST must note the tax rates and declare this in the GST invoice raised by them. Any failure to do so can attract penalties.
GST law strictly outlines maintenance of certain documents and records that affirms the transactions carried out by a business registered under GST.
On obtaining the GST registration, taxpayers must file the particular GST returns that applies to them. Returns must be filed within stipulated due dates to avoid interest and penalties.
Display GST Registration details in place of business
Every business must display the GST Registration certificate at a prominent or noticeable place inside the premise of the principal place of business and every other place of businesses.
Once the GST identification number(GSTIN) is obtained, every registered business must display this number on the name-board placed at the entry of its registered office or factory
Penalty for not registering under GST
As already discussed, a business whose turnover is above Rs. 40 lakh has to register for GST. Also, some special businesses are also required to register for GST.If the Person, which is required to register for GST, carries on business without registering, it will be an offence under GST and penalties will be levied.
Any person who is required to register under the Act, fails to do so has to pay a penalty of 100% of the tax amount due subject to a minimum of Rs.10,000.
If you do not submit registration application within 30 days from the date you become liable for registration, then registration will be effective from the date application is filed. Until getting registered one cannot collect GST, issue GST invoice or claim credits.