The Goods and Services Tax (GST) has become the backbone of India’s tax system since its implementation in 2017. GST replaced multiple taxes like central excise duty, service tax, and value-added tax. As per the GST Act, all businesses eligible for GST registration must file for it. GST registration is essential for eCommerce sellers and businesses whose turnover exceeds Rs.40 lakh. It is mandatory and failure to comply results in hefty penalties. In this blog post, we will discuss the benefits of GST registration, the process involved, documents required, and the penalty for non-registration.
Explanation of GST Registration
GST registration is a fundamental requirement for those individuals and entities supplying goods or services in India. If the aggregate value of supplying goods exceeds Rs. 40 lakh, the registration becomes mandatory. For special category states, this limit is Rs. 20 lakhs p.a. The Ministry of Finance has simplified the registration process to ease the tax filing process. Any service provider with an annual aggregate turnover above Rs. 20 lakhs, exclusive supply of goods with an aggregate turnover exceeding Rs.40 lakhs, or interstate service providers with an annual turnover exceeding Rs.20 lakhs is required to obtain a GST registration. The process of registration can be carried out via the GST portal, where the applicant can get the GST ARN immediately after submitting the application. The applicant can check the application status and post queries if necessary. Within 7 days of ARN generation, the taxpayer will receive a GST registration certificate and GSTIN. In summary, GST registration is fundamental for taxpayers operating a business in India and simplifies the tax filing process.
Importance of GST Registration
It is vital for any taxable individual or business to register under GST as it offers a unique identity and credibility, making it easier to build trust with consumers and suppliers. Moreover, GST registration offers benefits such as the option of input tax credit and compliance with tax regulations, which creates a positive impression on both suppliers and consumers. Registering under GST also guarantees that you avoid paying penalties. The consequences for not registering under GST can be severe such as hefty fines up to 100% of the tax amount evaded. One should be registered under GST if their business turnover exceeds Rs. 40 lakhs or above(Rs. 10 lakhs for northeastern states) and if they supply goods or services within the country, export/import, sell digital products, or deal with selling goods online. Registering under GST is a simple process that can be done through the GST portal and requires essential documents for initiating the process. Therefore, GST registration is crucial for any taxable individual or business, and it is essential to register as soon as possible.
II. Who should obtain GST Registration?
Individuals registered under Pre-GST law
Individual registered under Pre-GST law are required to obtain a GST registration as well. These individuals include those who were registered under previous tax laws such as excise, VAT, or service tax. The GST Act has mandated that if a business was registered under the old tax laws, they must register for GST as well. This is to ensure that there is continuity in the registration process and to minimize any confusion or discrepancies caused by the change in tax laws. Registration under the GST Act is mandatory for any taxable person carrying out any business in India with an annual turnover over the prescribed threshold limit. These individuals are required to obtain a unique registration number known as the Goods and Services Tax Identification Number (GSTIN). This 15-digit number is provided by the government to taxpayers who have successfully attained GST registration. Failure to obtain a GST registration may result in penalties and consequences that can adversely affect the business. Therefore, it is important for individuals and businesses registered under Pre-GST law to obtain a GST registration as well.
Businesses with turnover above the threshold limit
Businesses with a turnover above the threshold limit are mandated to obtain a GST registration. Previously, the limit was set at Rs.20 lakhs, but it has now been increased to Rs.40 lakhs for most states. However, special category states and northeastern states still have a threshold limit of Rs.10 lakhs. The increase in the threshold limit was proposed by MSME to ease compliance under the GST regime. If the business carries on its activities without registering under GST, it will be considered an offense and heavy penalties will be imposed. Moreover, registered businesses can claim Input Tax Credit (ITC) and be eligible for various benefits under the GST framework. The turnover for the ongoing financial year is considered for applicability of the new threshold limits, and every supplier whose turnover exceeds the limit must obtain a GST registration. In addition, businesses that are required to deduct TDS or TCS under GST, and those making sales on behalf of someone else as an agent or principal must also register for GST.
Agents of a supplier & Input service distributor
Agents of a supplier and Input service distributors play a crucial role in the GST registration process in India. An agent in GST is someone who supplies goods or services on behalf of the supplier. The agent is appointed by the supplier and is responsible for complying with all the provisions of the GST Act, including registering for GST. An Input service distributor (ISD) is a taxpayer who distributes the input tax credit (ITC) to other units or branches of the same organization, having different GSTINs under the same PAN. The ISD plays an essential role in ensuring that input credit is properly distributed to all units, reducing the tax liability of the organization.
Both agents and ISDs are required to register under GST if their turnover exceeds the threshold limit. They are also required to maintain proper records and submit regular returns to authorities. Obtaining GST registration through Meerad services can help simplify the process and ensure compliance with all the relevant rules and regulations. With the extension on the due date to file GSTR-6 for April and May 2021, the registration process has become even more accessible. Be sure to obtain GST registration, appoint an agent where necessary, and consider using an ISD to manage your organization’s input credit effectively.
E-commerce aggregators have become an integral part of the digital commerce landscape. They are responsible for bringing buyers and sellers on the same platform, providing a seamless shopping experience, and facilitating transactions. With the implementation of GST in India, e-commerce aggregators have been entrusted with the responsibility of collecting and depositing tax at the rate of 1% on each transaction under Section 52 of the CGST Act. This is to ensure that every dealer/trader selling goods or services online pays their share of taxes.
Therefore, all e-commerce companies must obtain GST registration mandatorily and submit an application for registration through the GST portal or from a facilitation center notified by the Commissioner. After the proper officer verifies the details and issues a certificate of registration in form, the e-commerce operator can collect TCS and pay the taxes in compliance with the GST law.
It is worth noting that the GST registration rules and forms for e-commerce operators, online sellers, e-retailers, and dealers vary from the normal or regular registration where the Tax Collection at Source (TCS) provisions apply. However, Meerad services make the process of obtaining GST registration for e-commerce aggregators simple and hassle-free. By partnering with Meerad, e-commerce aggregators can ensure compliance with the latest GST regulations while focusing on their core business operations.
Person supplying online information and database access
Online Information Database Access and Retrieval (OIDAR) Services are a category of services that are provided through the internet and received by the recipient online. It includes services like e-books, movies, software, and other intangibles provided via the internet. The supply is mediated through the internet, and it is impossible without information technology. Using the internet to facilitate communication or service does not mean that the service is OIDAR. OIDAR services differ from normal services when they are provided from non-taxable territory as compliance verification becomes difficult. The place of supply is crucial in determining the taxability of a particular service. When the supplier is located outside India, the recipient of the service is liable for paying GST as well as other compliances. The government has planned to come up with a simplified scheme of registration for such service providers located outside India. This scheme requires the supplier of OIDAR services located outside India to pay IGST (Integrated tax) on such supply of services.
III. GST Registration Process
11 steps involved
Registering for GST in India is a relatively simple process that can be completed online. Here are the 11 steps involved:
1. Visit the government website gst.gov.in and click on the “Registration” tab. Then select “New Registration” and fill out Part A with your business and contact details.
2. Upon submitting Part A, you will receive a Temporary Reference Number (TRN) via email and/or SMS. Note down this number as it will be required in Part B.
3. Using your TRN, submit Part B of the application along with the required documents.
4. The proper officer will examine your application and documents within three days. If everything is in order, your registration will be approved.
5. If there is a deficiency in your application or more information is needed, the officer may issue a notice (FORM GST REG-03) requesting clarification or additional documents.
6. If you receive a notice, respond with the required information within seven working days using FORM GST REG-04.
7. If there is no response or the proper officer is not satisfied with the clarification provided, your application may be rejected (FORM GST REG-05).
8. If your application is approved, you will receive a certificate of registration via email, which includes your Goods and Services Tax Identification Number (GSTIN).
9. Your GSTIN is a 15-digit alphanumeric number that includes your State code, PAN/TAN, and entity code.
10. Once registered, you must file regular GST returns and maintain accurate records.
11. Keep an eye out for updates as GST rules and requirements may change over time.
Overall, the process can take around 7-10 working days from application to approval. With Meerad services, the process can be even quicker and more efficient. Don’t delay in obtaining your GST registration—it’s an essential step for individuals and businesses alike.
Obtaining a GST registration number or GST identification number is mandatory for any entity making taxable intra-state or inter-state supply of goods and services.
The documents required for GST registration depend upon the business’s constitution or the type of GST registration they wish to obtain. For instance, a sole proprietor, partnership firm, or a company may need different sets of documents for registration.
Common documents that are required for any form of GST registration include the PAN card of the applicant or authorized signatories, an Aadhar card, phone number, and email address of the primary authorized signatory, and proof of place of business.
Additionally, passport-sized photos of all owners, partners, and authorized signatories are necessary, along with a copy of cancelled cheque or extract of passbook/bank statement for bank account details.
The specific documents required depend on the nature of the activities being carried out by the entity and vary based on the type of GST registration. This articledelivers a definitive guide on documents required for GST registration to help simplify the process, making it easier for businesses to get their GST registration done smoothly.
Fees and Penalty
F and penalty are integral parts of the GST registration process in India. To begin with, the fees for obtaining a GST registration certificate are minimal at INR 100, making it an affordable option for all individuals and businesses.
However, late filing of returns can attract a penalty of INR 100 per day, with the maximum amount being INR 5,000. If any of the offenses listed under the GST Act are committed, a penalty will also have to be paid.
The penalty is based on the tax amount due and can range from 10% to the entire amount. Failure to register under GST can also result in a penalty of INR 10,000 or 10% of the tax due, whichever is higher. Additional penalties are levied for non-display of GST number or failure to register an additional place of business.
CAs and tax professionals must be aware of these penalties to avoid any inadvertent mistakes that can lead to severe consequences. At Meerad, we encourage individuals and businesses to obtain GST registration through our affordable and hassle-free services.
V. Penalty for not obtaining GST Registration
Not registering or late registering under GST can lead to heavy consequences for individuals and businesses. According to the GST Act, every supplier must get registered under the GST Act when the aggregate turnover of goods or services exceeds INR 20 Lakh in a financial year. Failure to do so can result in penalties, including a penalty of INR 10,000 or 10% of the tax due, whichever is higher. Late registration can also attract a penalty of INR 10000/- or the total amount of tax evaded by the taxable person/supplier. Confiscation of goods and vehicles, inability to claim input tax credit, and inability to transfer input tax credit are some of the other consequences of not registering for GST on time. Additionally, offenders may face penalties for offences such as not issuing invoices or submitting false information, that can result in monetary fines or even imprisonment. It is imperative for individuals and businesses to abide by the GST regulations to avoid any penalties or consequences. Using automation tools like GST software, businesses can achieve compliance and avoid penalties in a hassle-free manner.
Under the GST Act, persons/suppliers who fail or delay in obtaining GST registration are liable to pay penalties. The penalty for non-registration under GST can be INR 10,000 or 10% of the tax due, whichever is higher. Similarly, the penalty for late application registration under the GST Act will also depend on the tax amount evaded, which could be the higher of INR 10,000 or the total tax amount. Furnishing false information during registration or providing false documents to the tax officials can also attract a fine of INR 10,000. Failure to furnish monthly returns for outward and inward supplies and yearly returns can cost between INR 100 and INR 5,000 per day per Act. Offenders who issue incorrect or fraudulent invoices, misappropriate another taxpayer’s ID number, or transport taxable goods without appropriate documents or registration can be fined INR 10,000 or more depending on the tax amount evaded. When participating in activities that involve tampering or obstruction, offenders can face 6 months of imprisonment plus a fine of an undisclosed amount. Overall, avoiding GST registration or non-compliance with GST laws can prove costly to individuals and businesses alike.
VII. Recap of GST Registration in India
In summary, GST registration is mandatory for businesses and individuals whose turnover exceeds the prescribed threshold limit. It is a tedious 11 step process that involves submitting relevant documents and business details. Failure to register under GST can result in heavy penalties. Meerad offers end-to-end GST registration services to assist in obtaining registration faster. The process involves registration on the GST portal where an applicant will need to submit their PAN, mobile number, and email address. The PAN is verified, and after receiving an application reference number, the applicant fills in Part B of Form GST REG-01. If additional information is required, Form GST REG-03 is issued, and the applicant must respond within seven days. GST registration usually takes between 2-6 working days. Meerad experts guide on the applicability and compliances under GST for businesses. Proof of business registration, identity and address proof of promoters/director, and address proof of the place of business are some of the documents required for GST registration. Meerad can also help businesses in getting certified for the Goods & Services Tax Law.
Encouragement to obtain GST Registration through Meerad services
If you are looking to obtain GST registration for your business in India, look no further than Meread services. Our team of experts can guide you through the 11-step process, ensuring that you have all the necessary documents and comply with all legal requirements. We can also save you time and effort by handling the application process on your behalf. With our help, you can obtain GST registration in just 2-6 working days, compared to the average time of up to 30 days for those applying on their own. Additionally, failing to obtain GST registration can result in heavy penalties under GST law, so it’s important to get it right the first time. Our services are completely online, so you don’t even need to visit an office. Trust Meerad to make the process of obtaining GST registration for your business as easy and stress-free as possible.
VIII. Documents required for GST Registration in India
1. PAN Card of the applicant
2. Aadhaar Card
3. Proof of business registration or incorporation certificate
4. Bank account details including cancelled cheque or bank statement
5. Business address proof
6. Digital Signature Certificate (DSC)
7. Letter of Authorization/ Board Resolution for Authorized Signatory
8. Details of Authorized Signatory including PAN Card, Aadhaar Card, and photograph
IX. Advantages of GST Registration in India
1. One of the biggest advantages of GST registration is that it provides the ability to claim input tax credit on purchases. This means you may be able to save money on GST paid on business purchases.
2. GST registration helps businesses to improve transparency and accountability in their transactions by maintaining proper records of sales and purchases.
3. Businesses with GST registration receive legal recognition, which can build trust in their customers and vendors.
X. Disadvantages of GST Registration in India
1. GST registration can increase the cost of compliance as businesses need to maintain proper records and regularly file returns.
2. The process of registering for GST can be complex and time-consuming, especially for small businesses.
3. Businesses that fail to comply with the GST regulations can be penalized severely.
XI. Process of getting GST Registration in India
The process of getting GST registration in India can be completed online through the GST portal. The following are the steps for GST registration:
1. Visit the GST portal and click on the “New Registration” option.
2. Enter your details and verify your mobile number and email address.
3. Upload the required documents and complete the form.
4. A GST officer will review the application and approve or reject it within a few working days.
XII. Types of GST Registration in India
There are four types of GST registration in India:
1. Regular GST registration
2. Composition Scheme GST registration
3. Non-Resident taxable person GST registration
4. GST registration for e-commerce operators
XIII. Frequently Asked Questions about GST Registration in India
1. Who is required to register for GST in India?
Any business with an annual turnover of more than Rs. 40 lakhs is required to register for GST in India. The threshold limit is lower for businesses in some states.
2. Can I register for GST without a GSTIN?
No, you need to have a GST Identification Number (GSTIN) to file GST returns and claim input tax credit.
3. How long does it take to get a GST registration in India?
The process of getting GST registration in India takes around 7 to 10 working days.
4. Can I get GST registration for multiple states using a single PAN Card?
Yes, a person with a single PAN Card can apply for GST registration in multiple states.
5. What is the penalty for not registering for GST in India?
Businesses that fail to register for GST can be penalized up to 10% of the tax amount or a minimum of Rs. 10,000.