Certain firms must obtain a GST Registration in accordance with the laws related to it. A value-added tax known as the Goods and Services Tax, or GST, is imposed on practically all products and services offered for domestic consumption. The enterprises that sell the goods and render the services are responsible for paying the taxes, which ultimately fall on the customers. Under the GST system, companies are required to pay taxes to the government on behalf of the taxes they charge their clients for a variety of goods and services. Therefore, to pay those taxes and enjoy the benefits attached, businesses need to obtain GST Registration. In this article, we will go through how to Obtain GST Registration in India in detail.
What is GST?
GST which stands for Goods and Services Tax was implemented in India with the goal of eliminating various indirect taxes like exercise duty tax, service tax, purchase tax, etc. It established a single taxation structure for the whole of India. GST will be applied to both products and services, as part of a dual system of GST that separates the duties of the federal and state governments. The GST Council will be chaired by the Union Finance Minister and would include representatives from various state finance departments. GST also facilitates the collection and improves the efficiency of the process. Before GST central and state government has different kinds of taxes but now for the whole of India, there is just one tax which is GST.
Modes of GST
Who Needs to Obtain GST Registration in India?
The following people or organizations must be Registered for GST-
- Individuals who are listed as Pre-GST registered users (i.e., Excise, Service Tax, VAT, etc.).
- Businesses with annual sales of 40, 20, and 10 lakhs rupees, respectively, in the case of goods (refer to note for turnover limits).
- Businesses with annual revenues of Rs. 20/10 Lakhs for services, respectively.
- Non-Resident taxable person or casual taxpayer.
- Agents of a provider, distributors of input services, and taxpayers using the reverse charge mechanism.
- A supplier using an e-commerce aggregator.
- Every online store’s aggregator.
- Any person, excluding registered taxable people, who offer online information and database access or retrieval services (OIDAR Services) from outside India to a person in India.
Documents Required for GST Registration
The following documents are necessary for GST Registration-
- PAN Card
- Address proof of proprietor
- PAN Card
- Partner’s names and address proof
- LLP Agreement
- Certificate of Incorporation or Evidence of Business Registration
- Business’s PAN
- Association Bylaws (AOA)
- Articles of Association (MOA)
- Board Resolution for Letter of Authorization or Authorized Signatory
- Address and identification documentation for company directors
- Aadhaar card
- Voter identity card
- Ration card
- Telephone/ electricity bill
- Driving license
- Bank account statement
Constituents of the GST-
Advantages of GST Registration
The advantages of registering under GST include the following-
- Become qualified to receive the Input Tax Credit (ITC)
- There are no limitations on making supplies for other states.
- Limited adherence
- Fewer tax obligations
- Increased working capital
- For further information on the composition scheme
- Utilize an input tax credit (ITC)
- Make supplies for interstate travel without limitations
- Register with online storefronts
- Possess an edge over competing unregistered enterprises
- It is acceptable to legitimately collect taxes from customers and transfer tax advantages to suppliers.
- Your company achieves complete tax compliance
- When you buy raw materials for your business, you must pay input tax credits that you can use to boost profits.
- Additionally, while creating a current account or business account, the GST certificate can be utilized as one of the documents.
- Additionally, if you have GSTN, you can quickly apply for different state and federal government tenders.
- Additionally, you can grow your company through a variety of channels, including the online market, imports and exports, etc.
- GST numbers are used to launch payment gateways and mobile wallets.
Composition Scheme Registration-
The government has introduced the Composition Scheme for small taxpayers to make the difficult processes of complying with numerous tax compliances easier. It is a plan that enables qualified taxpayers to pay a portion or percentage of their annual income in taxes. Additionally, under this program, small stores, restaurants, and trading firms can register for GST. The following additional benefits will result from this and the taxpayers/businesses won’t have to worry about directly collecting taxes from their clients:
- File Instead of several monthly returns, there is only one quarterly return.
- Paying less in taxes provides you a competitive advantage.
- Under GST regulations, keeping the Books of Accounts and Records is simple.
Eligibility Requirements for the GST Composition Scheme Registration
- The organization must be an authorized taxpayer.
- Additionally, the company’s annual turnover should be less than Rs 1 crore.
- Dealers, restaurants that don’t serve alcohol, and product manufacturers can choose to participate in this program.
Registration as a Temporary Taxpayer
A casual taxpayer is someone who sporadically provides taxable products or services. For instance, before providing or offering any goods or services, and Event Management Company with several events in different states must register as a Casual Taxable Person for the relevant taxable state.
Penalties and Offenses
Any individual who is registered for GST is subject to penalties if any of the following circumstances occur-
- For failing to hold GST Registration: The greater of 100 percent of the outstanding tax debt or Rs. 10,000.
- If a GST invoice is not provided, the greater of 100% of the outstanding tax or Rs. 10,000 would be charged.
- Incorrectly producing or generating an invoice an Rs. 25,000 fine.
- Not submitting a GST return returns daily 200 rupees (including both GGST& SGST)
- Selecting the composition scheme while not being eligible: 100 percent of the amount of taxes owed, up to a maximum of Rs. 10,000.
GST Registration is mandatory for businesses having a minimum turnover of Rs. 10 lakhs in the northeastern states of India and Rs. 40 Lakhs in other states. Additionally, any business that has registered for GST is required to submit GST Returns that include all required legal information as well as specifics on the earnings they made the previous year. From this point forward, everyone is subject to punishment for defaulting or failing to comply. Consult an expert for obtaining GST Registration in India. You also reach an expert at Bizadvisors.io for help.
Read our article:How to Apply for Online GST Registration Certificate in India?