prpri GST Registration – An Indispensable need of today’s businesses GST Registration – An Indispensable need of today’s businesses

Overview

The Businesses are booming with the introduction of GST as it eliminated the complicated existing indirect tax structure in the country on sale of goods or of providing services and due to this complicated tax structure the businesses were incurring huge cost on meeting their compliance and maintenance of records. The Government through its administering Body – GST Council, is giving various reliefs to the small businesses of our country to work in a free environment and providing ample opportunities to the larger businesses to handle and managing the compliances of requirements of GST law.

GST registration not only helps you in getting your business recognized as a legal registrant but also opens a number of opportunities for your business.

GST Registration of a business with the tax authorities implies obtaining a unique, 15-digit Goods and Service Tax Identification Number (GSTIN) from the GST authorities so that all the operations of and the data relating to the business can be collected and correlated.

In current GST mechanism, the businesses are getting registered voluntarily due to its various features as listed here and to avail the benefits of Input Tax Credit and other schemes of Government, as notified from time to time. Further, the law provides that the business whose turnover exceeds ₹ 40 lakhs* and doing certain transactions as specified in law is required to get itself compulsorily registered with GST Authorities.

Further, if you are planning to sell on e-commerce platforms, then it is mandatory to get your business registered under GST. Now-a-days, if your documents are in order then it will take approximately 7 to 15 days for getting GSTIN after application.

Benefits to GST registered business

1. Become more Competitive GST Registration will give you a competitive advantage over your rivalry unregistered businesses, as you’ll be able to save your purchase cost by availing input of tax paid on purchases.

2. Expansion of business Online – As per GST Law, a person cannot sell products or services on e-Commerce platform without GSTIN. So, if you want to expand your reach to every individual through an e-Commerce platform like Flipkart, Amazon or through your own website, you would be in need for GSTIN.

3. It can avail Input Tax Credit – Only Registered GST business can avail input of GST tax paid on their purchases and thus save the cost.

4. It can supply in any part of India without any restrictions – In GST Law, Inter-state movement of goods is restricted without having GSTIN. So, for trading in another states or through e-commerce operator, your business would need GSTIN

Features of GST

1. It eliminated the cascading effects of tax.

GST is a comprehensive indirect tax that was designed to bring the indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax (i.e. Tax on Tax) that was evident earlier.

2. It is consumption based tax.

GST is consumption based tax i.e. tax is payable in the State where goods or services or both are finally consumed. The State from which goods are supplied will not get any tax as goods are consumed in another State.

In case of inter-state supplies, IGST will be payable. Input Tax Credit of IGST paid in one state will be available to receiver of goods or services in another State.

3. Input Tax Credit

Allowability of input tax credit for payment of output tax is one of the key features of GST. This will avoid cascading effect of taxes.

4. Composition Scheme for small businesses

Small Businesses do not have sufficient knowledge and expertise to comply with the requirements relating to GST Compliances. Hence, for them, a simplified composition scheme has been provided under GST Law.

The scheme is available to those whose aggregate turnover of supply of goods in a financial year does not exceed ₹ 1.5 Crore (₹ 75 Lakhs for Special Category States).

Documents for GSTIN/ GST Registration:

Sole Proprietorship

1. PAN Card

2. Aadhar Card

3. Passport Size Photo

4. SB Account front page/ Cancelled Cheque Leaf

5. Rental Agreement of the business place (If rented/leased)

6. Property Tax receipt of the business place(if Rent/Lease Agreement expires)

7. Utility Bill of the business place

Company

1. Director’s PAN CARD- All Directors

2. Director’s Aadhar Card

3. Soft copy of Photograph

4. Board Resolution for Authorizing any Director

5. PAN Card of Company

6. List of Sale & Purchase Items

7. Cancelled Cheque in the name of Company (if available)

8. Certificate of Incorporation

9. Rent Agreement (if rented) or Ownership Documents (if Owned) or Consent Letter ( if Consented)

10. Address Proof of Shop/Branch/Godown/Store: Anyone of the following (Should not be older than 2 months)

    • Electricity bill
    • Water tax
    • Municipal Tax/House Tax Bill

11. Digital Signature Certificate (DSC) of at least one director

 Partnership Firm/LLP

1. Partners’s PAN CARD- All Partners

2. Partners’s Aadhar Card

3. Soft copy of Photograph

4. Resolution for Authorizing any Partner

5. PAN Card of the Firm

6. List of Sale & Purchase Items

7. Cancelled Cheque (if available)

8. Partnership Deed/COI of LLP

9. Rent Agreement (if rented) or Ownership Documents (if Owned) or Consent Letter ( if Consented)

10. Address Proof of Shop/Branch/Godown/Store: Anyone of the following (Should not be older than 2 months)

    • Electricity bill
    • Water tax
    • Municipal Tax/House Tax Bill

11. Digital Signature Certificate (DSC) of at least one partner in case of LLP

Note: Aadhar Authentication of authorized signatory is mandatory in every case, for which an OTP on mobile number registered on UIDAI is required. So, keep in mind it before applying, as without it the application will go through the process of physical verification which is time taking and become a hectic task for getting registration.

FAQs on GST Registration

Q.1 What is advantage of taking registration in GST?

Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

  • Legally recognized as supplier of goods or services.
  • Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
  • Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
  • Getting eligible to avail various other benefits and privileges rendered under the GST laws.

Q.2 Can a person without GST registration claim ITC and collect tax?

No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.

Q.3 Will all traders necessarily have to register under GST?

A trader dealing only in exempted goods or where turnover is below Rs.40 Lakhs in the financial year (but not engaged in inter-State supplies) is not required to register under GST.

Q.4 If a person is operating in different states, with the same PAN number, whether he can operate with a single Registration?

 No. Every person who is liable to take a Registration will have to get registered separately for each of the States where he has a business operation and is liable to pay GST in terms of Sub-section (1) of Section 22 of the CGST/SGST Act.

Q.5 Is there any scheme for payment of taxes under GST for small traders?

Yes. Composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 1.5 Crore  (Rs. 75 lakhs for special category States). The basic objective is to bring simplicity and reduce cost of compliance for the small taxpayers. The scheme is optional and is mainly for small traders, manufacturers and restaurants.

Q.6 Will the compliance process under GST be complicated for traders under GST? What measures have been put in place to ease burden of compliance on small traders?

 No. The compliance process will be automated and easy for small traders.

1. Small traders with a turnover below Rs.40 Lakhs need not register under GST

2. The returns and payment of tax process under GST is completely online. There will be minimal interface or no interface with the tax authorities.

Q.7 Whether Cancellation of Registration Certificate is permissible?

Yes. Any Registration granted under GST may be cancelled by the Proper Officer or by the applicant on its own. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration and intimate the taxable person.

Q.8 How will the goods and services be classified under GST regime?

HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime.

Services will be classified as per the Services Accounting Code (SAC)

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Disclaimer:-  The above information is purely and solely for informative purposes. This in no way should be construed to be any professional advice, as these are merely general information and our interpretations of the laws and the Act. Viewers are requested to consult us before taking any action based on our interpretations. Circulation of any information in our name without our permission is not allowed.

Author Bio

Qualification: CS
Company: Malkit Singh & Associates
Location: New Delhi, Delhi, India
Member Since: 14 Mar 2021 | Total Posts: 5
Practicing Company Secretary & a member of Institute of Company Secretaries of India. He has also obtained degree in Bachelor of Commerce (B.CoM) and also Registered as a GST Practitioner. View Full Profile

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