GST Registration

Understanding GSTIN (Goods and Services Tax Identification Number)

The GSTIN is a unique 15-digit number issued for each taxpayer who registers under the GST system in India. This is crucial for all transactions done with respect to GST, such as the filing of returns and tax invoices.

Structure of GSTIN:

• The first two digits are the state code.
• The next ten digits represent the applicant’s PAN (Permanent Account Number).
• The thirteenth digit signifies the number of registrations within a state for a given PAN.
• The last two characters include a checksum digit for verification.

Who Needs GST Registration?

GST registration is mandatory for:

• Businesses with an annual turnover exceeding Suppliers of Goods ₹40 lacs and suppliers of service ₹20 lakhs (₹10 lakhs for special category states).
• E-commerce operators and online sellers (Compulsory)
• Individuals making inter-state taxable supply of goods and services(Compulsory).

Voluntary registration also exists for businesses willing to take the benefit of GST

Types of GST

1. Central Goods and Services Tax (CGST): Impose by the central government on the sales of the products and services within a state.
2. State Goods and Services Tax (SGST): Impose by the state government on the sales of products and services within the same state.
3. Union Territory Goods and Services Tax (UTGST): Applicable for intra-Union Territory supplies, where SGST is replaced by Union Territories like Delhi, Chandigarh, etc.
4. Integrated Goods and Services Tax (IGST): This tax is levied on inter-state and international supplies of goods and services. IGST revenue is shared between the central and state governments.

Step-by-Step GST Registration Process

1. Visit the GST Portal: Open the GST registration page at GST Portal.
2. Select “New Registration”: Click on the option to apply for GST online.
3. Provide General Information: Provide business name, PAN, and Email, etc.
4. Validate Information: validate by OTP sent to a registered mobile number and registered Email ID.
5. Upload documents: Required GST registration documents have to be uploaded.
6. GSTIN: GST No will be generated on final approval.

Documents required at GST Registration

• PAN Card of the Business and Applicant
• Aadhar Card of the authorized signature end.
• Business Address Proof (rent agreement, utility bill, etc.).
• Bank Account Statement and a canceled cheque.
• Incorporation Certificate or proof of business registration.
• Digital Signature for online verification.
• ID proof, address proof, and a photograph of the authorized signatory.
• Authorization Letter or Board Resolution for the signatory.

GST Registration Fees

• Government Fees: GST registration is free of cost on the official GST portal.
• Professional Fees: You may incur professional fees if you are consulting experts such as JSR Taxes Mentor or other similar services.

Frequently Asked Questions (FAQs)

1. Who needs to register for GST?

Businesses with an annual turnover exceeding ₹40 lakhs (₹20 lakhs for special category states) are required to register for GST. This limit is ₹10 lakhs for service providers in special category states.

2. Can a person voluntarily register for GST?

Yes, individuals and businesses that do not meet the turnover threshold can voluntarily register for GST. Voluntary registration grants access to Input Tax Credit (ITC) and enables participation in interstate trade.

3. How long does GST registration take?

Typically, GST registration is completed within 7 to 15 working days if all documents are in order. If no deficiencies are noted, it is considered approved after the prescribed period.

4. Is GST registration state-specific?

Yes, GST registration is state-specific. If a business operates in multiple states, it must obtain separate registrations for each state.

5. What is the penalty for not registering under GST?

Failure to register when required may result in a penalty of 10% of the tax due, subject to a minimum of ₹10,000. In cases of deliberate tax evasion, the penalty can go up to 100% of the tax due.

6. What is the composition scheme?

• Eligibility: Businesses with a turnover of up to ₹1.5 crore (₹75 lakh for specific northeastern states and Himachal Pradesh) can avail the scheme. Some categories, including service providers, can also benefit from the scheme with specified conditions, such as ₹50 lakh turnover under the special composition scheme for services
•  Tax Rates:
  • Manufacturing and trading: 1% of turnover
  • Food shops (not selling alcoholic beverages): 5% of turnover.
  • Other service providers: 6% of turnover (special scheme for service providers).
• Benefits of Compliance: Simplification and ease of GST return filing with quarterly return (CMP-08) instead of No detailed account keeping or long-invoiced bills.

7. What happens if the GST registration is canceled?

Cancellation can occur voluntarily, by tax authorities, or due to non-compliance. Once canceled, the business must stop charging GST. They can reapply if the cancellation is lifted or after addressing the reason for cancellation