GST Registration

What is GSTIN?

GSTIN stands for Goods and Services Tax Identification Number. It is a unique 15-digit number assigned to every taxpayer registered under the GST regime in India. The GSTIN is used to identify taxpayers and to track their transactions. The GSTIN is structured as follows:

• The first two digits represent the state code.
• The next ten digits are the PAN card number of the taxpayer.
• The thirteenth digit is an entity code used to distinguish between different types oftaxpayers.
• The fourteenth digit is a fixed alphabet ‘Z’.
• The fifteenth digit is a check digit, which is used to verify the accuracy of the GSTIN.

What is GST Registration?

GST registration refers to the procedure of acquiring a unique identification number for businesses obligated to pay Goods and Services Tax (GST). In accordance with GST regulations, companies with an annual turnover exceeding Rs. 40 lakh (or Rs. 20 lakh for select special category states) are required to register as regular taxable entities. However, this threshold may vary based on the nature and location of the business. Failure to register for GST once the turnover threshold is surpassed can lead to legal repercussions and penalties. GST registration plays a vital role in promoting compliance and transparency within the taxation framework.

What is a GST Certificate?

A GST certificate is an official document issued by the Government of India to a taxpayer or entity upon successful registration under the GST system. This certificate serves as tangible proof of registration and grants the taxpayer the authority to collect Goods and Services Tax (GST) from customers on behalf of the government. The GST certificate contains the following information:

• GST Identification Number (GSTIN)
• Name of the taxpayer
• Address of the taxpayer
• Date of registration
• Type of registration (regular, composite, or non-resident)
• Business category
• Signature of the authorised officer

Who should register for GST?

Businesses engaged in the supply of goods and whose turnover surpasses INR 40 lakh within a financial year are obligated to register as regular taxable entities. Nevertheless, if your business operates in the northeastern states, Jammu & Kashmir, Himachal Pradesh, and Uttarakhand, the turnover thresholds differ. For goods suppliers in these regions, the threshold is reduced to INR 20 lakh, while for service providers, it stands at INR 10 lakh.

Also, here is the list of certain businesses for which registration under GST is mandatory, irrespective of their turnover:

• Casual taxable person / Input Service Distributor (ISD)
• Non-resident taxable person
• Inter-state supplier of goods and services
• Supplier of goods through an e-commerce portal
• Any service provider Liable to pay tax under the reverse charge mechanism
• TDS/TCS deductor
• Online data access or retrieval service provider

Components of GST

The components of Goods and Services Tax (GST) in India are:

1. Central Goods and Services Tax (CGST)

This is levied by the central government on all intra-state and inter-state supplies of goods and services. The CGST rate is the same for all states and union territories.

2. State Goods and Services Tax (SGST)

This is levied by the state government on all intra-state supplies of goods and services. The SGST rate varies from state to state.

3. Integrated Goods and Services Tax (IGST)

This is levied by the central government on all inter-state supplies of goods and services. The IGST rate is the sum of the CGST and SGST rates.

4. Union Territory Goods and Services Tax (UTGST)

This is levied by the central government on all supplies of goods and services made within a union territory. The UTGST rate is the same as the SGST rate.

What are the documents required for GST registration?

List of documents that you will need for registering your business under GST:

Private Limited Company

• Certificate of Incorporation
• PAN card of Company
• Articles of Association, AOA
• Memorandum of Association, MOA
• Authorisation letter/board resolution for authorised signatory
• Identity and address proof of directorswith a photograph
• Digital Signature
• Director’s Proof (Any 2 from the below)

LLP

• PAN Card of LLP
• LLP Agreement
• Partners’ names and address proofwith a photograph
• Authorisation letter/board resolution for authorised signatory
• Director’s Proof (Any 2 from the below)

Individual/Proprietorship

• PAN Card
• Address proof of proprietor
• Copy of the Aadhaar card
• Identity and address proof of promoters/directors with a photograph

Director’s Proof (Any 2 to be shown as proof of address of a director)

• Telephone or Electricity Bill
• Driving License
• Bank Account Statement
• Ration Card
• Passport
• Voter Identity Card
• Aadhar Card

How to Apply for GST Number Online

To apply for a GST number online, you can follow these steps:

• Go to the GST portal and create an account.
• Once you have created an account, login and click on the ‘New Registration’ tab.
• Select the appropriate category of registration for your business.
• Fill in the required details in the application form.
• Upload the required documents.
• Submit the application form.

Important facts about GST registration

• Any business that has a turnover of over 20 lakh INR is required to register for GST.
• If you are a supplier of goods to more than one state, you are required to register for GST in all the states you supply goods.
• There is no registration fee for GST.
• Failing to file for GST will result in a fine of 10,00 INR or 10% of the due amount.

What is GST Registration Turnover Limit?

GST registration involves obtaining a unique identification number for individuals or entities engaged in the supply of goods or services in India. While GST registration is optional for any individual or entity, regardless of turnover, it becomes obligatory once turnover exceeds specific thresholds, which vary based on the category of the state and the type of supply. The turnover threshold for GST registration is determined by the aggregate turnover of an individual or entity within a financial year. Aggregate turnover encompasses the total value of all taxable supplies, exempt supplies, exports, and inter-state supplies by an entity with the same PAN, excluding GST taxes. For service providers, the aggregate turnover also incorporates the value of inward supplies subject to tax under the reverse charge mechanism. India’s states and union territories are categorized into two groups under GST: normal category states and special category states. Special category states include those with special status under Article 370 or Article 371 of the Indian Constitution, as well as those located in the North-Eastern or Himalayan regions of the country.

The special category states under GST rules are:

1. Arunachal Pradesh
2. Assam
3. Jammu and Kashmir
4. Ladakh
5. Manipur
6. Meghalaya
7. Mizoram
8. Nagaland
9. Sikkim
10. Tripura
11. Uttarakhand
12. Himachal Pradesh

The turnover limits for GST registration differ for normal and special category states. The following table summarises the turnover limits for different types of supplies and states:

Type of Supply	Normal Category	States Special Category States
Goods	Rs 40 lakhs	Rs 20 lakhs
Services	Rs 20 lakhs	Rs 10 lakhs
Both Goods and Services	Rs 20 lakhs	Rs 10 lakhs

The aggregate turnover is calculated by adding the value of all supplies made by a person or entity in a financial year, excluding the following:

• Value of inward supplies on which tax is payable under reverse charge mechanism
• Value of supplies on which tax is collected at source under section 52
• Value of exempt supplies
• Value of non-GST supplies
• Taxes under GST

The formula for calculating aggregate turnover is:

Aggregate Turnover = (Value of all outward supplies + Value of all inward supplies liable to reverse charge) – (Value of inward supplies + value of supplies taxable under reverse charge + Value of exempt supplies + Value of non-GST supplies + Taxes under GST) It is important to calculate the aggregate turnover based on PAN, even for businesses with multiple locations. This is because GST registration is required for each state or union territory from where a person or entity makes a supply if the aggregate turnover exceeds the threshold limit. Therefore, a person or entity may have to obtain multiple GST registrations for different states or union territories, depending on the turnover in each state or union territory.

How to Check GST Registration Status?

After Applying for GST Registration you will have an Application Reference Number (ARN). A GST registration application is processed after 15 days of submission, but it can check the GST registration status online on the GST portal.

Who is exempt from GST registration?

There are some categories of persons who are exempt from GST tax rate slabs and registration, either by law or by notification.

• Persons engaged in exempt or nil-rated supplies: No GST registration is needed for persons who only supply tax-free goods or services. For instance, fresh fruits and vegetables sellers are exempt from GST.
• Agriculturists: An agriculturist is a person who cultivates land personally to produce agricultural produce. Such a person is exempt from GST registration due to the size of the supply of produce out of land cultivation. This is because agricultural activities are considered as neither a supply of goods nor a supply of services under the GST law.

However, if an agriculturist engages in any other taxable activity, such as processing, packaging or trading of agricultural produce, then he or she will be liable to register under GST.

• Persons below the threshold exemption limit: The GST law provides a threshold exemption limit for businesses based on their annual turnover. The turnover is the aggregate value of all taxable supplies made by a person in a financial year. The threshold exemption limit is Rs. 20 lakhs for most states and Rs. 10 lakhs for special category states, such as the northeastern and hilly states.

If a person’s turnover does not exceed the threshold exemption limit, then he or she is not required to register under GST. However, some persons are not eligible for this exemption and have to register under GST regardless of their turnover. These include persons who supply goods or services across state borders, persons who occasionally undertake taxable transactions, and persons who are not residents of India but make taxable supplies in India.

The features of GST registration

GST registration has some key features that are important to understand before applying. These features are:

• PAN-Based and State-Specific Registration:

GST registration is linked to the applicant’s Permanent Account Number (PAN) and is applicable solely to the state or union territory in which the business operates. Consequently, if a business entity has multiple branches spanning various states or union territories, it must procure separate GST registrations for each state or union territory while utilizing the same PAN.

• Registration for Each State or Union Territory:

When a business operates in multiple states or union territories, it is mandated to register separately in each location where it maintains a business establishment, irrespective of its turnover. This requirement is crucial to ensure that Goods and Services Tax (GST) is collected and distributed accurately among the states or union territories in accordance with the place of supply rules.

• Separate Registration for SEZ Units:

A business entity that operates within a Special Economic Zone (SEZ) or acts as an SEZ developer must acquire a distinct GST registration for each SEZ unit or the SEZ area, depending on the circumstances. This requirement arises because SEZ units or areas are considered as distinct territories for GST purposes and are entitled to specific exemptions and concessions.

• Display of Registration Certificates:

A registered person is required to display his GST registration certificate prominently at his principal place of business and every additional place of business. The registration certificate contains the GSTIN, the registered person’s name, the address of the place of business, and the date of validity of the registration.

• Single GSTIN for Each State: A registered person is allotted a single GSTIN for each state or union territory where he is registered. It uniquely identifies the registered person, the state or union territory and the PAN of the registered person. The GSTIN can be verified online through the GST portal or a GSTIN verification app.
• Non-Tax-Specific Registration: GST registration is not specific to any particular tax, such as Central GST, State GST, Integrated GST or Cess. A registered person is liable to pay all the applicable taxes under the GST regime, depending on the nature and location of the supply. A registered person can also claim input credit for the taxes paid on the purchases, subject to certain conditions and restrictions.

Advantages of GST registration

• Legal recognition of a business
• Uniform accounting of taxes
• Businesses will be eligible to avail of several benefits under the GST regime
• Legal authorisation of collecting tax from sales made

Penalty for not registering under GST

Failing to register under GST can attract severe penalties and consequences. Some penalties involved are:

• A penalty of Rs. 10,000 or 10% of the tax due, whichever is higher, for not registering despite being liable to do so.
• A penalty of Rs. 10,000 or the tax amount, whichever is higher, for collecting GST but not depositing it to the government within three months.

Types of GST registration

• Normal taxpayers

Most businesses in India fall under this category. Businesses whose turnover exceeds Rs 40 lakh in a financial year are required to register as normal taxable people. However, the threshold limit is Rs 10 lakh if you have a business in the northeastern states, J&K, Himachal Pradesh and Uttarakhand.

• Casual taxable individual

Occasional or seasonal businesses need to register their businesses under GST for this category. Businesses need to make a deposit equal to the GST liability from the occasional operations. The tenure for registration is 3 months. However, businesses can apply for renewal and extensions.

• Non-resident taxable individual

Individuals who reside outside India but occasionally supply goods or services as agents, principals or in other capacities to Indian residents are liable to file for registration under this category.

The business owner must pay a deposit equal to the expected GST liability during the GST active tenure. The normal tenure is 3 months. However, individuals can extend or renew the registration if required.

• Composition registration

Businesses with an annual turnover of up to Rs 1 crore are eligible for registration under the Composition Scheme. Under this scheme, businesses have to pay a fixed amount of GST irrespective of their actual turnover.

Benefits of GST registration for businesses who opt for GST registration voluntarily?

Businesses that have registered for GST can enjoy several benefits, such as: Working capital reduction for composition dealers: Composition dealers are small businesses with a turnover of Rs.20 to 75 lakh who can pay a lower tax rate under GST. By registering for GST, they can reduce their working capital requirement by claiming input tax credit. Decreased tax liability: GST registration allows businesses to collect GST from their customers and avail input tax credits. This reduces their tax liability and avoids double taxation. It also simplifies the compliance process, as businesses only need to file one consolidated return instead of multiple returns for different taxes. Advantage of engaging in interstate business without restrictions: GST registration enables businesses to engage in interstate trade without any restrictions or barriers. They can sell their goods and services across the country without paying additional taxes or obtaining any permits. This expands their market reach and customer base. Competitive advantage: Businesses not liable to register for GST can also opt for voluntary GST registration to gain a competitive edge in the market. By registering for GST, they can enhance their credibility and legitimacy among their customers and suppliers.