GST Registration

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What is GST?

GST is an indirect tax that has been formed to abolish several other indirect taxes in India, in order to create a single taxation regime for the ease of collection and to increase the efficiency of the process.

Today, new GST registration has become mandatory for any business with an annual turnover of Rs. 40 Lakh or more. In the North East and Hill states, registration is compulsory for businesses that are earning more than Rs.10 Lakh revenue in a year. 

The GSTIN registration process is a relatively simple process and takes between 2 and 6 working days to be completed

Types of GST

There are various types of GST that are applicable in India.

GST can be divided into 4 sections, based on the type of transaction it involves. Before a business can understand and determine its GST liability, assessing the following table is mandatory.

GST Types

Description

SGST [State Goods and Services Tax]

SGST is the tax payable on the sale of products and services within a particular state.

It replaces the previous taxes, including VAT (Value Added Tax), Entry Tax, Entertainment Tax, State Sales Tax, surcharges and cesses.

CGST [Central Goods and Services Tax]

Tax that is levied on the supply of intra-state products is called CGST. 

The Central Government charges CGST

CGST has replaced many taxes that were levied by the Centre, including Service Tax, CST, SAD, Central Excise/Customs Duty etc.

UTGST [Union Territory Goods and Services Tax]

Taxes that are applicable on the sale of products and services in the Union Territories such as Daman and Diu, Andaman and Nicobar, Chandigarh, Dadra etc.

IGST [Integrated Goods and Services Tax]

Sale of inter-state products and services also leads to taxation. 

Basically, when a business transfers services and products from one state to another it needs to pay IGST.

Who Should Register for GST?

Business owners satisfying any of the clauses mentioned below are liable to register for GST as per the Goods and Services Act-

  • Individuals and businesses that were registered under the pre-GST laws must register under GST.
  • Businesses that exceed a yearly turnover of Rs. 40 Lakh (Rs. 10 Lakh for businesses in the North-Eastern/hilly areas) are also eligible for GST registration.
  • Any individual that is supplying products through an e-commerce platform.
  • E-commerce aggregators are also liable to pay GST.
  • Non-residents & casual taxable persons.
  • Individuals that are paying taxes under a reverse charge mechanism are eligible for new GST registration as well. In such cases, the receiver has to pay taxes, instead of the supplier of the goods and services.

All eligible businesses or individuals should read several clauses regarding eligibility and documentation for GST to ensure a hassle-free registration process.

Types of GST Registration

GST Registration is divided into various types. Undergoing the registration procedure is a difficult process without recognising the different forms. To acquire a better idea of the types refer to the table below.

Who is Eligible?

Type of Registration

Average taxpayer

No deposit is necessary from individuals or businesses filing GST in  this category. Most businesses in India come under this classification

Casual Taxable Individual

Individuals that have set up an occasional or seasonal business need to register for their GST under this category.

They need to make a deposit equal to the amount of  GST liability of the occasional business.

The tenure for registration is 3 months, but the business can apply for extensions & renewal.

Non-Resident Taxable Individual

An individual that is residing outside India but occasionally supplies goods/services as an agent, principal or in othe form to Indian residents are also liable to file for registration in this category. 

The business owner has to pay a deposit equal to the GST liability that is expected during that particular GST active tenure.

The tenure for registration is 3 months, but the business can apply for extensions & renewal.

Composition Registration

The Composition registration process further reduces the hassle involved in GST registration. A business needs to deposit a fixed annual payment irrespective of the actual earnings.

Only companies that have an annual turnover not more than Rs. 1 Crore are eligible for this registration process.

Documents Necessary for new GST registration online

Applicants must provide documents without fail to complete the process of GST registration successfully. 

However, the documents required differ based on whether it is a an individual or business applying for the registration.

To get an idea about the documents necessary you can refer to the table below. 

Section

Documents Required

Sole Proprietors and individuals

  • Individual’s Or owner’s PAN card
  • Address proof
  • Photograph of owner
  • Bank account information
  • Individual’s or owner’s Aadhaar card

Hindu Undivided Families

  • Address proof of the business
  • Bank detail
  • Owner’s photograph
  • HUF’s PAN card
  • Family patriarch’s PAN Card

LLPs and Partnerships

  • Partners’ address proof
  • Partners’ PAN card
  • Bank details
  • Deed declaring partnership
  • Proof of registration for the LLP
  • Partners’ photograph
  • Principal address proof for the business
  • The authorised signatory’s Aadhaar card
  • Proof of appointment of the signatory authority

Companies

  • PAN card of the company
  • PAN card of all directors of the company
  • Primary address proof of the company 
  • Bank account details of the company 
  • Proof of the signatory’s appointment
  • Signatory’s Aadhaar card
  • PAN card of the signatory
  • Articles of Association & Memorandums
  • Incorporation certificate from the MCA [Ministry of Corporate Affairs]
  • Address proof of all the directors 


Upon providing  all the required documents, a 15-digit GSTIN is created that is unique to every registered business that is operating in the country. There are no charges that need to be paid as registration expenses for this process.

Fines for Not Registering Under GST

If a GST-eligible business or individual is not paying taxes, either fully or partially, they have to pay penalty charges for the same.

If there is an error of payment that is genuine i.e. unintentional, the business or individual, in that case, has to pay 10% of the total tax. 

This is only relevant and applicable when the total tax burden is greater than Rs. 1 Lakh.

In case the error of payment is intentional, that particular entity has to pay the entire amount due as a penalty.

What are the Advantages of GST Registration?

Business entities can enjoy numerous benefits if they are registered under GST. 

  • Abolition of cascading effect

    The Introduction of GST has eliminated the cascading effect in indirect taxation that existed previously, causing double taxation at every step. This measure has also lowered the tax liability for business entities.

  • Convenient application procedure
    The procedure of application for GST registration is online as well as the filing of GST can be done conveniently through the GSTN portal thus making it very efficient and saving time.
  • Lesser Compliance
    In the previous tax regime, a business had to file various returns applicable with different indirect taxes, For example – VAT, Excise Duty & Service Tax. As GST is a unified & singular tax system, the number of filings required has come down this making it a  hassle-free process for entities to file their returns. 
  • The benefit of the Composition Scheme
    SMEs with an annual turnover not more than Rs. 1 Crore have lower tax rates and less stringent compliance terms if they are properly registered under the GST Composition Scheme.
  • Less stringent terms on logistics
    The terms for logistics under GST are relatively less strict as compared to the previous tax regime
  • Regulation of the Unorganised Sector
    Registration under GST consists of several provisions such as compliances, payment of taxes, the benefit of input credit that ensures transparency in the system of tax collection.

Such benefits reduce the hassle of filing taxes and also ensure an efficient indirect tax collection regime.

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