Goods & Service Tax Registration
Easy to Incorporate
GST registration is essential for businesses in India. Taxhint Advisors can assist you in obtaining your GST registration seamlessly.
GST Registration
Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover.
For those taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.
The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.
Key Components of GST Registration
The Goods and Services Tax (GST) in India is structured around three primary components:
1: Central Goods and Services Tax (CGST):
The central government levies the CGST tax on purchases made inside a single state. It is one of the three parts of the Goods and Services Tax (GST), together with the Union Territory Goods and Services Tax (UTGST) and State Goods and Services Tax (SGST). For intrastate transactions, the combined rates of CGST, SGST, and UTGST apply, however for interstate transactions, the integrated goods and services tax (IGST) is applicable.
Purpose of CGST:
- The purpose of the CGST is to combine multiple central taxes into a single tax in order to establish a unified tax structure.
- It guarantees a smooth tax experience for both consumers and businesses while streamlining the tax system.
- The central government receives revenue from the CGST, which it uses for development initiatives and central services.
2: State Goods and Services Tax (SGST):
State governments levy the Goods and Services Tax (SGST) on the supply of goods and services within their borders. In intrastate transactions, where both the CGST and SGST are applicable, it functions in conjunction with the Central Goods and Services Tax (CGST).
Purpose of SGST:
- The purpose of the SGST is to bring in money for state governments so they may fund public services and local development.
- By combining multiple state taxes into one, it streamlines the tax structure.
3: Integrated Goods and Services Tax (IGST):
The central government imposes the Goods and Services Tax (IGST) on the exchange of goods and services between states or between a state and a Union Territory. It is intended to handle the tax ramifications of cross-state transactions and guarantee a seamless transfer of tax credits across states.
Purpose of IGST:
- State-to-state taxes becomes less complicated because to the unified tax structure that the IGST offers for interstate transactions.
- makes ensuring input tax credits are used across state lines in a way that doesn't result in tax cascades.
Who is required to register for GST?
GST registration is essential for the following persons:
Business Entities:
Any company that generates more than Rs. 40 lakhs in revenue annually. The GST threshold for special category states is Rs. 20 lakhs.
Service Providers:
Those who make more than Rs. 20 lakhs in total revenue annually. This cap is Rs. 10 lakhs for states that fall under special category.
Exemptions:
It's crucial to remember that organisations that only trade in items or services subject to a GST exemption are not constrained by these caps.
Previously Registered Entities:
In order to register under the GST system, entities that were previously registered under outdated tax frameworks (such as excise, VAT, service tax, etc.) must migrate.
Online Service Providers:
Organisations that provide online data, database access, or retrieval services to an individual in India from outside the country; this category does not include those who are already GST registered.
Suppliers of electronic commerce:
People or organisations who sell products or services via an electronic commerce aggregator.
Inter-State Suppliers:
Any organisation or person engaged in the cross-border supply of goods.
Agents of the Supplier:
Those who provide services on a primary supplier's behalf.
Advantages of GST Registration
Legal Compliance:
Guarantees that companies continue to abide by tax laws, preventing any fines.
Input Tax Credit:
Companies can apply for credits to offset the GST they paid on sales against the GST they paid on purchases, lowering their tax obligation.
Inter-State Trade Facilitation:
Enables companies to do cross-border business without encountering tax-related obstacles.
Optimized Cash Flow:
A company's cash flow can be improved via effective management and a reduced tax burden.
Enhanced Credit Rating:
A company's credit profile can be improved by upholding a steady and favourable record of GST compliance.
Elimination of the Flowing Effect:
The total cost of goods or services is lowered by eliminating the impact of taxes being imposed on amounts that have already been subject to taxes.
Simplified Compliance:
Businesses can easily file returns and make payments online thanks to the streamlined GST process.
Competitive Advantage:
Gaining the trust of potential clients by adhering to GST regulations might lead to increased business prospects.
GST Registration Turnover Limit
Any person or company, regardless of turnover, may voluntarily seek GST registration. If a person or company sells more goods or services than a specific turnover, they are required to register for GST. GST application online makes the registration process quick and easy for businesses that need to do so.
Service Providers:
A GST registration is necessary for any individual or organisation providing services with an annual gross revenue of more than Rs. 20 lakhs. The GST turnover cap for service providers in states falling under special categories is set at Rs. 10 lakhs.
Goods Suppliers:
According to notification No. 10/2019, anybody involved in the exclusive supply of goods and with an annual gross turnover of more than Rs. 40 lakhs must register for GST. In order for the provider to qualify for the turnover limit of Rs. 40 lakhs, they need to meet the following requirements:
- Not supposed to be offering any services.
- Providing commodities within the same state—that is, supplying them within the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripur, and Uttarakhand—should not constitute the supplier's business.
- Should not be associated with the distribution of tobacco, pan masala, or ice cream.
When the turnover exceeds Rs. 20 lakhs and Rs. 10 lakhs, the provider of products will need to obtain GST registration if the aforementioned standards are not met.
Special Category States:
Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand are states that fall under the special category under the GST.
Total Turnover :
Total Turnover is equal to (Taxable supplies + Exempt supplies + Exports + Inter-State supplies)*(Taxes + Inward Supply Value + Reverse Charge Taxable Supply Value + Non-Taxable Supply Value).
The PAN is used to calculate aggregate turnover. Therefore, the total turnover needs to be calculated even if an individual has several locations of business; this must be added up.
GST Certificate
When an entity registers under the Goods and Services Tax (GST) framework, the Indian government issues them with an official document known as the GST Certificate. This certificate, which clearly shows important information including the business name, official address, and GST identification number, attests to a company's valid registration under the GST.
Having a valid GST Certificate is essential for businesses because:
What is GSTIN?
The Goods and Services Tax Identification Number, or GSTIN, is a unique 15-digit alphanumeric identifier that is assigned to each taxpayer who has registered under the Indian GST structure. When it comes to transactions and compliance pertaining to GST, this number serves as the primary means of identification for both people and organisations. Once the application is properly submitted using the GST Apply online portal, you will obtain your GSTIN.
GST Registration Documents Requirements
The documents required to be submitted for registration are:
1: Sole proprietor / Individual:
- PAN card of the owner
- Aadhar card of the owner
- Photograph of the owner
- Bank account details*
- Address proof**
2: LLP and Partnership Firms:
- PAN card of all partners (including managing partner and authorized signatory)
- Copy of partnership deed
- Photograph of all partners and authorised signatories
- Address proof of partners (Passport, driving license, Voters identity card, Aadhar card etc.)
- Aadhar card of authorised signatory
- Proof of appointment of authorized signatory
- In the case of LLP, registration certificate / Board resolution of LLP
- Bank account details*
- Address proof of principal place of business
3: HUF:
- PAN card of HUF
- PAN card and Aadhar card of Karta
- Photograph of the owner
- Bank account details
- Address proof of principal place of business
4: Company (Public and Private) (Indian and foreign):
- PAN card of the Company
- Certificate of incorporation given by Ministry of Corporate Affairs
- Memorandum of Association / Articles of Association
- PAN card and Aadhar card of authorized signatory
- PAN card and address proof of all directors of the Company
- Photograph of all directors and authorised signatory
- Board resolution appointing authorised signatory
- Bank account details
- Address proof of principal place of business