GST Registration

GST registration is mandatory for enterprises in India. If your company’s revenue exceeds specified thresholds or falls into one of the groups that requires GST registration, you must register in accordance with the GST requirements. BizRegistro can help you obtain your GST registration easily.

Overview of Online GST Registration

Since its implementation on July 1, 2017, the Goods and Services Tax (GST) has been necessary for all service providers, traders, manufacturers, and even freelancers in India. The GST system was established to replace central and state-level taxes such as service tax, excise duty, CST, entertainment tax, luxury tax, and VAT, thereby streamlining the tax process. The GST registration fee varies according to the type of business and turnover.

For taxpayers with an annual turnover of less than 1.5 crore, the GST framework offers a composition scheme. This arrangement enables them to follow simplified GST processes and pay taxes at a predetermined rate based on their turnover.

The GST system acts at numerous points of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.

Key Components of GST

The GST (Goods and Services Tax) in India is organized on three basic components:

Central Goods and Services Tax (CGST):
The Central Government collects this tax on the supply of goods and services within a state. CGST applies to transactions that take place wholly within the boundaries of one state.
State Goods and Services Tax (SGST):
is levied by the state government on the supply of goods and services within the limits of its authority. SGST, like CGST, is confined to transactions inside a given state.
Integrated Goods and Services Tax (IGST):
The Central Government imposes this tax on the supply of goods and services between states or between a state and a union territory. IGST is relevant for transactions where goods or services cross state or Union Territory boundaries.

Who is Required to Register for GST?

GST registration is necessary for the following individuals:

Business Entities: Any firm with a total yearly revenue of more than Rs. 40 lakh. The threshold for special category states under GST is Rs. 20 lakh.
Service Providers: Those having an aggregate annual turnover of more than Rs. 20 lakh. For special category states, the maximum is Rs. 10 lakh.
Exemptions: It’s worth noting that these thresholds do not apply to organizations who only sell GST-exempt goods or services.
Previously Registered Entities: Entities that were registered under previous tax systems (such as Excise, VAT, and Service Tax) must migrate and register under the GST regime.
Inter-State Suppliers: Any company or individual involved in the supply of commodities across state lines.
Casual Taxable Entities: Those who make taxable supplies on occasion. Entities subject to the Reverse Charge Mechanism: Businesses compelled to pay tax via the reverse charge.
Input Service Distributors & Agents: Distributors of input services and their representatives.
E-commerce Platform: Operators or Aggregators
Non-Resident Taxable Entities: Nonresident individuals or entities that make taxable supplies in India.
Supplier’s Agents: Individuals who supply on behalf of a primary supplier.
E-Commerce Suppliers: People or businesses who sell goods or services through an e-commerce aggregator.
Online Service Providers: Entities that provide online information, database access, or retrieval services from outside India to individuals in India, excluding those already registered for GST.

GST Registration Turnover Limit

GST registration can be obtained freely by any individual or entity, regardless of turnover. If a person or company sells more than a particular amount of goods or services, they must register for GST. GST application online makes it easy and quick for businesses to register.

Service Providers: Any person or company that performs services with an aggregate revenue of more than Rs.20 lakhs per year is needed to seek GST registration. In special category states, the GST turnover limit for service providers is set at Rs.10 lakhs.

Goods Suppliers: Under notice No.10/2019, every person engaged in the exclusive supply of goods with an aggregate turnover of more than Rs.40 lakhs per year is required to seek GST registration. To qualify for the Rs.40 lakhs turnover cap, the supplier must meet the following requirements:

Should not provide any services.

The provider shall not be involved in intra-state (supplying commodities within the same state) supplies in the following states: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.

Should not supply ice cream, pan masala, or tobacco.

If the above standards are not met, the provider of products will be compelled to seek GST registration when the turnover exceeds Rs.20 lakhs.

Special Category States: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand are classified as special category states under the GST law.

Aggregate Turnover: Is calculated as (taxable supplies + exempt supplies + exports + inter-state supplies) minus (taxes + value of inward supplies + value of goods taxable under reverse charge + value of non-taxable supplies).

Aggregate turnover is calculated using the PAN. As a result, even if a single person owns many businesses, the total revenue must be calculated.

Advantages of GST Registration for Businesses

Businesses can profit from registering for GST in the following ways:

Legal Compliance: Ensures that firms comply with tax requirements, so avoiding potential penalties.

Tax Credit: Businesses can claim credits for GST paid on purchases, which can subsequently be offset against the GST imposed on sales, resulting in a reduction in tax payment.

Inter-State Trade Ease: Encourages enterprises to transact across state lines without encountering tax problems.

Elimination of the Cascading Effect: By reducing the effect of taxation on a previously taxed sum, the entire cost of goods or services is decreased.

Competitive Advantage: Being GST compliant can build trust with potential clients, leading to greater business chances.

Access to Larger Markets: Major organizations frequently prefer to work with GST-registered vendo Optimized Cash Flow: Efficient management and lower tax liabilities can improve a company’s cash flow.

Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record might help a company’s credit score.

Legal Safeguard: A GST registration serves as a legal safeguard, ensuring that businesses rights are protected.

Simplified Compliance: The GST procedure has been streamlined, allowing businesses to simply file returns and make payments online.

Transparent Operations: Ensures that businesses keep correct records, fostering a sense of trust and professionalism.

GST Certificate

The GST Certificate is an authorized document issued by the Indian government to firms that are registered under the Goods and Services Tax (GST) system. This certificate certifies a business’s GST registration and clearly shows crucial information such as the GST identification number, business name, and official address.

Having a valid GST Certificate is important for businesses because:

The Tax Collection Authority authorizes businesses to charge and collect GST from their customers.

Tax Credit Claims: With this certificate, businesses are able to claim credits for GST paid on procurement and operational costs. Furthermore, aside from its tax-related tasks, the GST Certificate is significant in several other domains

Loan Applications: When applying for financial help or loans, firms may be asked to submit their GST certificates to verify their authenticity.

Government Tenders: To be qualified for and participate in formal government tenders, the GST Certificate must frequently be presented as proof of tax compliance.

Market Reputation: The certificate raises a company’s profile in the market by demonstrating its adherence to national taxes.

GSTIN

GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit alphanumeric identifier assigned to each taxpayer registered under the GST framework in India. This number serves as the key identifier for both organizations and people in the context of GST transactions and compliance. You will obtain your GSTIN after successfully completing your application through the GST apply online portal.

Voluntary GST Registration for Business

Businesses with a turnover of less than Rs.20 lakh can actively apply for GST online. By doing so, they can take advantage of benefits such as input tax rebates, unrestricted interstate sales, eligibility to list on e-commerce platforms, and building a competitive edge over enterprises that are not GST-registered. Although this registration is not a requirement, it paves the way for enhanced growth prospects and the potential for increased profitability.

GST Return Filing

GST return filing is a formal process in which a taxpayer informs the government about their sales, purchases, and taxes collected and disbursed. In India, every GST-registered taxpayer is required to submit these returns on a continuous basis, even if no sales or transactions occurred during a certain time. While there are no GST registration fees, establishing a compliant and accurate registration is critical to avoiding fines.

Consequences of Not Securing GST Registration

For Non-Payment or Underpayment: If a taxpayer fails to pay the required tax or incorrectly underpays, an acceptable equivalent of 10% of the outstanding tax amount is assessed. It is crucial to understand that, while there are no GST registration fees, the penalty for noncompliance can be severe.

Intentional Tax Evasion: If an individual or business knowingly fails to pay the required taxes, the penalty is 100% of the evaded tax amount.

Documents Required For GST Registration

Electricity Bill

Telephone Bill

Property Tax Receipt

Lease / Rent Agreement

Passport Size Photo

Partnership Deed

Incorporation Certificate

PAN Card

Aadhaar Card

Consent Letter