GST Registration Process: A Step by Step Guide for New Businesses

#AD

Goods and Services Tax is a tax that is levied indirectly, having a broad base and being multi-tier in character and destination based in design. It replaced numerous indirect taxes in India like the service tax, VAT, and excise duty. It became operative from July 1, 2017. The aim behind introducing GST was to establish one nation, one tax, abolition of the cascading effect of taxation, and forming an integrated national market. It is tax leviable on the supply of goods and services, which is divided into the following categories: CGST, i.e., Central GST; SGST, i.e., State GST, which is leviable for interstate supplies; and IGST, i.e., Integrated GST, which is leviable for interstate supplies.

A company is bound to refund registration under GST if the company registration crosses the threshold limit. All e-commerce players and inter-state suppliers also have to get registered for GST, regardless of their turnover. GST registration allows business entities to legally collect tax from customers as well as claim input tax credits on their procurements. In other words, once registered, the business receives a unique 15-digit GST Identification Number (GSTIN). On time GST registration not only guarantees tax compliance but also builds trust among clients about the integrity of business procedures. Therefore, GST and the registration process are most important in guaranteeing transparency, improving business facilitation, and allowing economic integration along with the other potential investments.

Applicability and Eligibility Criteria for GST Registration

The GST framework in India requires businesses to obtain specific GST registrations for each state in which they conduct business or make taxable supplies. This requirement emerges from the dual nature of GST, which interacts with both the central and state governments whereby tax obligations are determined on the “place of supply” basis.

For example, if a business holds establishments in Delhi and Maharashtra, it must obtain separate GST registrations in both states, despite the PAN being the same, generating two separate GST Identification Numbers (GSTIN) specific to the states.

In other instances, if the business carries on activities in different sectors within a state, more than one registration may be needed. This led to compliance requirements, enabling location wise tracking of tax obligations as well as interstate and intrastate transaction transparency. The bottom line is that GST registration should follow the geographical extent of the operations of the business.

GST Registration is obligatory for individuals and enterprises engaged in the supply of goods or services within India. Factors influencing the requirement for GST registration include the type of business and geographical location, including revenue. The requirements are outlined as follows:

1. Compulsory Registration under GST:

The following kinds of persons who have to get themselves registered under GST, regardless of their threshold limits:

1. Persons who are engaged in interstate supply of goods and services.

2. E-commerce platforms, such as Amazon and Flipkart, along with their sellers.

3. Casual taxable persons, which refer to businesses carrying on occasional supplies in more than one state.

4. Non-resident taxable persons.

5. Businesses that are liable for reverse charge tax.

6. Agents providing goods or services on behalf of another taxable person.

7. Input Service Distributors (ISDs).

8. Any person or body deducting TDS under GST.

2. Turnover Based Requirement for Registration:

Businesses require GST registration if the annual turnover of the business meets or exceeds any of the following thresholds:

• 40 lakhs for goods suppliers (Rs. 20 lakhs for special category states*).
• 20 lakhs for service providers (Rs. 10 lakhs for special category states*).

*(Special category states: Manipur, Mizoram, Nagaland, and other northeastern states.)

1. Voluntary Registration:

Such businesses might even voluntarily decide to register above such threshold limits with a view to avail of input tax credits and improve their market position.

Documentation Required for New GST Registration

Filing Form GST REG-01 through the GST system uploads particular documentation of individuals or business under a specified business structure. Providing available documents will help in smoother registration and speed up approval from GST authorities.

1. Evidence of Business Identity and Constitution:

• A sole proprietor must submit a PAN card of the proprietor.
• A partnership firm has to furnish a PAN card along with a partnership deed.
• A PAN card, Certificate of Incorporation, Memorandum of Association, and Articles of Association are required for LLPs or Companies.

2. Identity and Address Verification of Partners, Promotees, and Directors:

• PAN Card
• Aadhaar Card
• Address proof: passport, voter’s ID, or driving license.
• JPEG photo in passport size.

3. Place of Business:

• Ownership: Copy of property tax receipt/utilities bill/municipal khata.
• Rented/leased: Lease agreement, documents from property owner, and latest (not older than 2 months) utility bill.
• Shared properties require NOCs from the owner along with utility bills.

4. Bank Account:

• The first page of the bank passbook or a voided check.
• A bank statement which would cover account number, account holder name, IFSC code, and branch.

5. Authorisation and Signatures:

• For Corporations/LLPs: A signature or letter of authorisation must be given for said signatory by a board resolution.
• For other organisations: Letter of authorisation, consent form, or signature of a managing partner is required for others.

6. Digital Signature Certificate (DSC):

• For Companies and LLPs, they should get a Digital Signature Certificate for signing this application electronically.

GST Registration Procedure for New Businesses

The GST registration occurs entirely online and is done on the official GST portal http://www.gst.gov.in. The process is explained in a sequential and detailed manner below:

Step 1: To access the GST Portal go to www.gst.gov.in. Choose “Services” > “Registration” > “New Registration”.

Step 2: Part A of GST REG-01 should be filled out. Select “New Registration”. Enter the details listed below:

• Legal name of the business (as per PAN).
• PAN of the business or applicant.
• Email address and mobile number should be verified through an OTP.
• Select State, UT, and District.
• Indicate taxpayer type (regular, casual, etc.).
• Complete the CAPTCHA and submit the form.

You shall receive a Temporary Reference Number (TRN) in the email-ID and SMS.

Step 3: Using the TRN, fill up GST REG-01 Part B. Login using the TRN. Enter OTP received on mobile or email. Open complete application form.

Step 4: Fill in the Comprehensive GST Application.

This procedure requires filling out the following:

1. Details of the business: the legal name, trade name, business structure, and PAN number.

2. Information about promoters/partners: Names of sole proprietor, partners, and directors.

3. An authorized signatory should be appointed for filing returns and representing the business.

4. Address and contact details for the documented principal place of business.

5. Address and documents of additional places of business being supplied.

6. List out goods and services offered along with HSN/SAC codes.

7. Enter bank details: account number, account type, IFSC code, and upload valid proof (like a cheque copy or passbook page).

8. State-specific information like professional tax, and state excise license if applicable.

9. Upload the documents required according to the business type and ownership structure.

Step 5: Verification and Submission

• Verification of applications will require a Digital Signature Certificate (DSC) for companies and limited liability partnerships.
• Proprietors and individuals may use an E-Signature (Aadhaar OTP).
• In the case of verification through the EVC, an EVC can be acquired through mobile OTP.

Step 6: Generation of ARN

The success of the application will generate an Application Reference Number (ARN) for the submission. The ARN can track the application status.

Step 7: Verification by GST Officer

Revenue officers would be reviewing the application and attached documents. Usually, applications might be accepted within seven working days if all conditions are met. In any case where extra information or documents are required, the officer shall issue a notice in Form GST REG-03. You have to submit additional details in Form GST REG-04 within seven days after the receipt of the notice.

Step 8: Allocation of GSTIN and Certificate

After acceptance, a 15-digit GST Identification Number (GSTIN) will be allotted. The GST Registration Certificate (Form GST REG-06) can be downloaded from the portal.

This wraps up the registration procedure allowing a taxpayer to collect GST, file returns, and claim input tax credit as per law.

Why Is GST Registration Necessary?

1. Companies that generate a considerable amount of revenue or are engaged in interstate commerce must comply with the laws of the land.

2. Tax collection: GST can be levied on customers by the business.

3. Input Tax Credit: Businesses, under the program, may reclaim taxes paid on purchase.

4. Fostering trust with consumers and suppliers enhances the reputation of the business.

5. E-commerce eligibility: Required for selling through platforms like Amazon and Flipkart.

6. Government contracts often require the inclusion of a valid GSTIN while applying.

7. Avoids penalties: Compliance helps prevent fines and litigation.

8. National operations: Important in interstate trade and branch expansion.

9. Invoice validity: Only registered persons can issue GST compliant invoices.

10. Works towards developing business owing to a uniform tax system.

Conclusion

Any business intending to operate legally and in good efficiency within the tax framework of the country must undergo GST registration. It not only ensures compliance with the law, but also brings lots of benefits, such as authority to collect GST, claim input tax credits, and carry out operations from one state to another. It is entirely online and fast, thus giving an ease of use to all entrepreneurs and businesses, big and small. For one to obtain their GSTIN, the business practice has to be acquainted with eligibility tests, must put up their documents, and follow the detailed stepwise description of the application process available on the GST portal. It is important that businesses should understand requirements on a continuous basis and keep their records in an appropriate manner post registration to avoid penalties and make tax management hassle free. In the end, GST registration is not only compliance but also provides credibility, transparency, and growth opportunities for businesses within the integrated tax system of India.