GST Registration

About Goods & Services Tax

GST or Goods and Service Tax, is an indirect tax imposed on the supply of goods and services used India. It is a multistage, destination oriented tax imposed on every value addition, replacing indirect taxes, including VAT, excise duty, service taxes etc.

The genesis of the introduction of GST in the country laid down in the historic Budget Speech of 28th February 2006, wherein the then Finance Minister laid down 1st April, 2010 as the date for the introduction of GST in India. The major objective behind the implementation of GST is to make uniform tax in India. GST is basically based on Canadian model, which is now a part of most of the countries in India’s has to be registered by the taxpayers in India, as all the earlier taxes are replaced with GST.

What is GST Registration?

The process by which a taxpayer gets registered under Goods and Service Tax (GST) is GST registration. Once the registration process has been completed, the Goods and Service Tax Identification Number (GSTIN) is provided. The 15-digit GSTIN is provided by the Central Government and against this number all filings and payments are done to Government.

Threshold limit for GST registration

The one who supplies goods for one place to another with the annual turnover of rupees 40 lacks and for services annual turnover of rupees 20 lacks requires GST registration. For special state (North-Eastern States)  it will be 20 lacks and 10 lacks.

Types of GST Registration

A business owner should know the type of GST Registration, he/she should have.  The different types of GST Registrations are:

Normal Taxpayer – Most of the businesses in India fall under this category. Normal businesses fall under this category. This type of GST Registrations doesn’t have any expiry.

Casual Taxable Person – The businesses who wish to set up a seasonal business or temporary business are fall in this category. One must deposit an advance amount based on the expected tax liability of the proposed business during the time the business is operational. This type of GST registration is valid for 3 months and can be extended.

Composition Taxpayer – One can opt for simplified GST Composition Scheme under this category. One will have to deposit a flat under this category. The Input tax credit cannot be obtained under this category. GST Registration under this category is not applicable for interstate supply.

Non-Resident Taxable Person – Any person living outside India, but supply goods to individuals who stay in India, opt for this type of GST Registration. Similar to the Casual Taxable Person type, you must pay a deposit equal to the expected GST liability during the time the GST registration is active. The duration for this type of GST registration is usually 3 months, but it can be extended or renewed.

Who Needs to Register for GST in India?

A taxable person under GST is a person who carries on any business at any place in India and who is registered or required to be registered under the GST Act. Any person who engages in economy activity including trade and commerce is treated as a taxable person.

Person here includes individual, HUF, company, firm, LLP, an AOP/BOI, any corporation or Government Company, body corporate incorporated under laws of a foreign country, corporate society, trust, an artificial juridical person.

Below mentioned are the types of taxable people who have to do GST registration:

  • The one person who makes an inter-state taxable supply.
  • The business holder who supplies goods or services from one state to another comes under inter-state supply and they have to register GST registration.
  • Casual taxpayer
  • The business holder who occasionally supplies goods and services and does have a specific business has to apply for GST for in India.
  • The one who pays tax under reverse charge

For goods and services the liability for payment of tax rests with the supplier. However in   some cases the liability to pay tax (GST) would rest with the recipient of the goods and services instead of the supplier are known as Reverse charge.

Non- resident taxable person

A Non –resident taxable person is any person who occasionally supplies goods or services to recipients in India, but has no fixed place of business or resident in India. All non-resident taxable persons are mandatorily required to obtain GST registration, irrespective of aggregate turnover criteria.

Input Service provider and E-commerce operator

Input service provider means a supplier of goods or services which receives tax invoice for the receipt of input service and issues a prescribed for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the services to a supplier of taxable goods or services. All input service providers are mandatorily required to obtained GST registration, irrespective of turnover.                                                                                                                                                                                 Electronic commerce is the supply of goods or services, including digital product over a digital or electronic network. All E-commerce operators are required GST registration.

Advantages of GST Registration

The following are some advantages of GST registration.

GST eliminates the cascading effect of tax:   GST is a comprehensive indirect tax that was designed to bring indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax.

Higher threshold for registration:   Earlier, in the VAT structure, structure, any business with a turnover more than 5 lacks is liable to pay VAT. It can differ state-wise.

Under GST regime, however this threshold has been increased rupees 20 lacks, which exempts many small traders and service providers.

Composition scheme for small business:    Under GST registration, small business can benefit as it gives an option to lower taxes by utilizing the Composition scheme. This move has brought down the tax and compliance burden on much small business.

Simple and easy online procedure: The entire process of GST registration is made online, and it is super simple. This has been beneficial for start-ups especially, as they do not have to run from pillar to post to get different registration such as VAT, excise, and service tax.

The number of compliances is lesser: Earlier, there was VAT and service tax, each of which had its own returns and compliances. Under GST, there is just one, unified return to be field. Therefore the   number of returns to be come down.

Defined treatment for E-commerce operators: Earlier to the GST regime, supplying goods through the e-commerce sector was not defined. It had variable VAT laws. All these differential treatments and confusing compliances have been removed under GST registration.

Improve efficiency of logistic: Earlier the logistics industry in India had to maintain multiple warehouses across state to avoid the current CST and state entry taxes on inter-state movement. These warehouses were forced to operate below their capacity. Under,  GST registrations , these restrictions on inter-state movement of goods have been lessened.

Unorganized sector is regulated under GST: In the pre-GST era, it was often seen that certain industries  in India like construction and textile were largely unregulated and unorganized. Under GST registration, there is provision for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.

Documents required for GST Registration in India

  • PAN of the Company/Firm/LLP/Proprietor
  • Incorporation Certificate of the Company/LLP/or Partnership Deed.
  • PAN and Aadhar of all directors/proprietor/partner
  • Photograph of all directors/proprietor/partner
  • Mobile No and E-mail of all directors/partners/proprietor
  • Professional Tax/any other state registration if available
  • Business Activity Details.

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