GST ACT
The Central Goods and Services Tax Act of 2017, implemented to streamline taxation and curb tax evasion, establishes the framework for the Goods and Services Tax (GST) levied on intra-state and inter-state supplies of goods and services in India.
What is GST Registration?
GST registration is the process through which businesses liable to pay Goods and Services Tax (GST) obtain a unique identification number. According to the Central Goods and Services Tax Act of 2017, businesses with an annual turnover exceeding ₹40 lakh (or ₹20 lakh in certain special category states) are required to register as regular taxable entities. This process results in the issuance of a GSTIN (Goods and Services Tax Identification Number), a 15-digit unique number that serves as the taxpayer’s identity under the GST framework. The GSTIN facilitates the tracking and sharing of all transaction-related data with the relevant authorities.
GST, or Goods and Services Tax, is an indirect, multi-stage, destination-based tax system that replaced VAT and other indirect taxes in India. Any business liable for service tax, excise duty, VAT, or central excise must register for GST under the GST Act of 2017. For eCommerce sellers, online GST registration is mandatory. The process can be conveniently completed online via the GST portal. Once the GST application is submitted, an Application Reference Number (ARN) is immediately generated, allowing applicants to track their registration status.
benefits of gst registration in India
Registration under GST is an important step towards a unified tax system in India. It offers many advantages to registered businesses. A taxpayer who registers under the GST Act of 2017 will receive the following benefits, along with simplified compliance for GST Filling and other related processes.
Legal Recognition
By registering for GST, a firm gains legal recognition as a supplier of goods or services, confirming its status as an authorized business entity.
Input Tax Credit (ITC)
Registered businesses can reduce their overall tax liability by claiming Input Tax Credit (ITC), allowing them to deduct the GST paid on purchases from the GST collected on sales.
Simplified Process
The GST system has simplified compliance by streamlining tax filing and payment processes. With a unified online platform, businesses can manage their tax obligations more efficiently and save time.
Composition Scheme
The Composition Scheme under the GST Registration offers all small businesses the option to pay tax at a lower, fixed rate. This simplifies compliance and reduces their tax burden, helping them manage their finances more easily.
Higher Threshold for GST Registration
With a higher registration threshold limit for GST registration in India, only businesses with an annual turnover exceeding ₹40 lakh are required to register for GST. This exempts many small companies from mandatory registration, simplifying their operational processes.
Eliminates the Cascading Effect of Taxes
GST removes the cascading effect of taxes by enabling input tax credit throughout the supply chain. This allows businesses to claim credit for the taxes paid on purchases, ultimately lowering the tax burden on end consumers.
GST Compliance Rating
The GST compliance rating is a score assigned by the government to businesses based on factors like timely filing of monthly and annual returns, accurate reporting of input credits used, and taxes paid. This rating reflects a company’s compliance with tax regulations, providing transparency to customers and other businesses. Companies with high compliance ratings benefit from faster processing of Input Tax Credit (ITC) and refund requests, as GST authorities prioritize claims from these businesses, ensuring quicker disbursement of credits and funds.
Documents Required for GST Registration
The following documents are necessary for the new registration process.
- Applicant's PAN
- Aadhaar card
- Evidence of business registration or Incorporation certificate.
- Identity and address proof of promoters/directors, along with photographs.
- Proof of business location address (property paper or house tax receipt and Owner ID).
- Electricity bill or utility bill for the office address with rent agreement (if rented).
- Letter of authorization or board resolution for the authorized signatory.
GST Registration Eligibility Criteria and Threshold Limits for GST Registration
Before registering for GST, GST registration eligibility must be verified. Individuals who were registered under pre-GST laws are also required to opt for GST registration.
- It is mandatory for businesses with an annual turnover of ₹40 lakhs in normal category states and ₹20 lakhs in special category states to register for GST.
- If a company's annual turnover exceeds ₹40 lakhs, it must register as a regular taxable entity under GST law.
The GST Council is responsible for recommending GST rates, tax exemptions, and other tax-related policies. Below is a complete outline of the eligibility criteria.
| Aggregate Turnover | Registration Required | Applicability |
|---|---|---|
| Earlier Limits for Sale of Goods/Providing Services | ||
| Exceeds ₹20 lakh | Yes – For Normal Category States | Upto 31 March 2019 |
| Exceeds ₹10 lakh | Yes – For Special Category States | Upto 31 March 2019 |
| New Limits for Sale of Goods | ||
| Exceeds ₹40 lakh | Yes – For Normal Category States | From 1 April 2019 |
| Exceeds ₹20 lakh | Yes – For Special Category States | From 1 April 2019 |
| New Limits for Providing Services | ||
| Exceeds ₹40 lakh | Yes – For Normal Category States | Upto 31 March 2019 |
| Exceeds ₹20 lakh | Yes – For Special Category States | Upto 31 March 2019 |
| For Service Providers | ||
| Exceeds ₹20 lakh | Yes – For Normal Category States | From 1 April 2019 |
| Exceeds ₹20 lakh | Yes – For Normal Category States | From 1 April 2019 |
Turnover limit for gst registration
Businesses with an annual turnover exceeding ₹40 lakhs (for goods) and ₹20 lakhs (for services) are required to register for GST and comply with tax obligations on their taxable goods and services. While it is not mandatory for businesses with annual revenue below ₹40 lakhs to register, they have the option to do so. Voluntary registration allows these businesses to benefit from input tax credits. It’s important to note that states categorised as special have distinct minimum thresholds: ₹10 lakhs for services and ₹20 lakhs for goods. Below is a comprehensive outline of these requirements.
| Normal Category States/UT Opting for ₹40 lakh Limit | Normal Category States Opting for Status Quo | Special Category States/UT Opting for ₹40 lakh Limit | Special Category States/UT Opting for ₹20 lakh Limit |
|---|---|---|---|
| Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh | Telangana | Jammu and Kashmir, Ladakh and Assam | Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand |
Step-by-Step Guide For GST Registration Process In India
Here are 4 steps to complete your GST registration process
Step 1
Get in touch with our experts
Step 2
Provide Business Information
Step 3
Filing for GST Registration
Step 4
Get your GSTIN
1. Get in touch with our experts
Book a slot with our GST experts in India and resolve it all your queries.
2. Provide Business Information
To initiate the registration process, provide the necessary documents and fill in essential business details, including the business name, SEZ unit (if applicable), principal place of business, additional places, mobile number, email address, state, and PAN card details.
3. Filing for GST Registration
Our team will apply for GST on your behalf by submitting the registration application online. You’ll then receive an OTP to complete the verification.
4. Get your GSTIN
Our team will provide you with the Application Reference Number (ARN), also known as the temporary reference number, once your verification is successful. You can use this number to track the status of your application. After completing the registration process, the GST registration certificate will be available on the official GST website.
All documents must be submitted within the specified timeframe and in accordance with government guidelines to avoid any delays. The GST certificate will be issued directly by the Central Government. Legalxcode will initiate and guide you through the entire process, including assistance with GST registration certificate download PDF for your records.
Types of GST Registration
Here are few types of GST registered in India:
- Central Goods and Services Tax (CGST) applies to the supply of goods and services within a single state
- State Goods and Services Tax (SGST) is applicable to the sale of goods or services within the confines of a state
- Integrated Goods and Services Tax (IGST) is imposed on transactions involving goods and services across state boundaries
- Union Territory Goods and Services Tax (UTGST) is levied on the supply of goods and services in Union Territories such as Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is charged in conjunction with CGST.
Importance of GSTIN
A GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit code that identifies registered taxpayers, including dealers, suppliers, and businesses across India under the GST regime. This identification system enhances transparency within the GST framework, facilitates the collection of GST-related data from vendors, and helps prevent tax evasion. Having a GST number offers numerous benefits for small enterprises. It provides access to various government assistance and relief programs, enables the claiming of input tax credits on purchases, and enhances credibility with both suppliers and consumers. The GSTIN is essential for activities such as securing loans, claiming refunds, simplifying verification processes, making corrections, and understanding one's GST identification number.
Identify your unique GSTIN number
A GSTIN (Goods and Services Tax Identification Number) is a unique 15-digit alphanumeric code assigned to businesses registered under the GST guidelines in India. Below is an example of a GSTIN:
- Let's break down the Indian GST structure in India:
- First two digits (State Code): 22 - Represents the state code where the business is registered
- Next ten digits (PAN): ABCDE1234F - PAN (Permanent Account Number) of the business
- Next one digit (Entity Code): 1 - Represents the entity code for the PAN holder
- Next one digit (Blank): Z - Currently kept blank for future use
- Last one digit (Check Code): 5 - A check code for verification purposes
GST Registration Fees
While there are no prescribed GST registration fees for obtaining GST registration online through the GST registration portal independently, you can save some money by handling it yourself. However, having an expert by your side can significantly simplify the process, minimize the risk of rejection, and ensure a quick and hassle-free registration experience. Additionally, professional assistance can also guide you in related services such as GST cancellation, amendments, and post-registration compliance, helping your business stay fully compliant with GST laws.
GST Registration FAQs
Can I register for GST voluntarily if my turnover is below the threshold?
Yes, you can voluntarily register under GST even if your turnover is below the threshold. It might be beneficial for availing input tax credits and participating in interstate transactions, improving your business credibility
What are the penalties for not registering for GST on time?
Penalties for not registering for GST on time include late fees and interest charges. It is crucial to adhere to the GST registration time limit to avoid financial implications and ensure compliance with tax regulations.
What is the difference between the effective date of GST registration and the date of GST registration?
The effective date of GST registration is when you become liable to pay GST, while the date of registration is when you are officially registered. Understanding this difference is important for determining when your GST obligations commence and for ensuring clarity on GST registration applicability.
Is issuing a tax invoice and tax collection mandatory for voluntary GST registration?
Yes, issuing a tax invoice and tax collection is mandatory for voluntary GST registration. Even if your turnover is below the threshold, compliance with invoicing and collection requirements is necessary to meet legal obligations and maintain transparency in your transactions.
Can I avail input tax credit against a 5% GST liability for goods sold by my LLP?
No, input tax credit cannot be availed against a 5% GST liability for goods sold by your LLP. Input tax credit is typically applicable for higher tax rates, and the limited 5% tax rate may not provide eligibility for claiming input tax credit in this scenario.
What should a business do about GST when not registered and dealing with GST-charging entities?
If not registered for GST and dealing with GST-charging entities, consider registering to avail input tax credits. Without registration, businesses might bear the entire tax burden, impacting profitability.
How to resolve error code SB001 in GST export through ICEGATE?
Resolve GST export error code SB001 on ICEGATE by verifying data accuracy, ensuring proper document submission, and seeking assistance from ICEGATE or GST support for technical guidance.
How to deal with negative amount errors in GSTR3B due to credit notes?
To address negative amount errors in GSTR3B due to credit notes, rectify the values, report corrections in subsequent returns, and maintain accurate documentation to reconcile discrepancies.
How to handle GST compliance if my GSTIN was cancelled and I didn’t file the final return?
If your GSTIN was cancelled without filing the final return, you should rectify the issue by filing the pending return immediately. Failure to do so can lead to penalties and compliance issues. It is also advisable to verify GSTIN number details regularly to ensure accuracy and compliance with GST rules.
What is the GST Annual Return?
The GST Annual Return is a summary of a taxpayer's financial activities for a fiscal year, including details of sales, purchases, and taxes paid. It provides a comprehensive overview of the taxpayer's GST transactions.
What is the HSN Code?
The HSN Code, or Harmonised System of Nomenclature, is a standardised coding system for classifying goods internationally. It simplifies the identification of products for tax and regulatory purposes, aiding in smooth trade.
What is the full form of SAC Code?
The full form of SAC Code is ‘Service Accounting Code.’ It is a system of classification for services under GST, helping in uniform taxation and simplifying compliance for service providers.
Can a salaried person apply for GST?
Yes, a salaried person can apply for GST registration if involved in business activities beyond their employment. Registering is mandatory if the aggregate turnover exceeds the prescribed threshold.
Who should sign up for GST Registration?
Businesses must register for GST if they exceed the annual turnover limit, sell online (e.g., via Amazon/Flipkart), operate as a proprietorship, offer goods or services across states or internationally.
What is an E-way Bill?
An E-way Bill is a document required for the movement of goods worth over a specified value between different states. It ensures tax compliance and facilitates the smooth transportation of goods by providing details about the consignment.
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