GST Registration

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GST Compliance! GST is a tax registration mandatory for all businesses in India meeting ANY of these conditions:

GST is a multi-stage tax system which is comprehensive in nature and applied on the sale of goods and services. The main aim of this taxation system is to curb the cascading effect of other Indirect taxes and it is applicable throughout India.

 

What is GST & how it works?

GST stands for Goods and Services Tax. It is an Indirect tax which introduced to replacing a host of other Indirect taxes such as value added tax, service tax, purchase tax, excise duty, and so on. GST levied on the supply of certain goods and services in India. It is one tax that is applicable all over India.

Given below is how will GST works:

  • Manufacturer: The manufacturer will have to pay GST on the raw material that is purchased and the value that has been added to make the product.
  • Service Provider: Here, the service provider will have to pay GST on the amount that is paid for the product and the value that has been added to it. However, the tax that has been paid by the manufacturer can be reduced from the overall GST that must be paid.
  • Retailer: The retailer will need to pay GST on the product that has been purchased from the distributor as well as the margin that has been added. However, the tax that has been paid by the retailer can be reduced from the overall GST that must be paid.
  • Consumer: GST must be paid on the product that has been purchased.

History Of GST

On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing the new tax regime commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a committee to draft the GST law. In 2004, a task force concluded that the new tax structure should put in place to enhance the tax regime at the time.

In 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing Committee started discussions about GST, and tabled its report on GST a year later. In 2014, the new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and passed the bill in Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.

GST went live in 2016, and the amended model GST law passed in both the house. The President of India also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime implemented on 1st July 2017.

Types of GST

Authority which is benefitted

Priority of Tax Credit use

Who is it collected by?

Transactions which are applicable (Goods and Services)

CGST

Central Government

CGST IGST

Central Government

Within a single state, i.e. intrastate

SGST

State Government

SGST IGST

State Government

Within a single state, i.e. intrastate

IGST

Central Government and State Government

IGST CGST SGST

Central Government

Between two different states or a state and a Union Territory, i.e. interstate

UTGST/UGST

Union Territory (UT) Government

UTGST IGST

Union Territory (UT) Government

Within a single Union Territory (UT)

 

According to GST rules, it is mandatory for a business that has a turnover of above Rs.40 lakh to register as a normal taxable entity. This is referred to as the GST registration process. The turnover is Rs.10 lakh for businesses that are present in hill states and North-Eastern states. The GST registration process can be completed within 6 working days.

Who is eligible to register under GST?

GST Registration must be completed by the following individuals and businesses:

  1. Individuals who have registered under the tax services before the GST law came into effect.
  2. Non-Resident Taxable Person and Casual Taxable Person
  3. Individuals who pay tax under the reverse charge mechanism
  4. All e-commerce aggregators
  5. Businesses that have a turnover that exceeds Rs.40 lakh. In the case of Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states, the turnover of the business should exceed Rs.10 lakh.
  6. Input service distributors and agents of a supplier
  7. Individuals who supply goods through an e-commerce aggregator.
  8. Individuals providing database access and online information from outside India to people who live in India other than those who are registered taxable persons.

Step 1 – Go to GST portal. Click on Services. Then, click on the ‘Registration’ tab and thereafter, select ‘New Registration’.

Step 2 – Enter the following details in Part A –

  • Select New Registration radio button
  • In the drop-down under ‘I am a’ – select Taxpayer
  • Select State and District from the drop down
  • Enter the Name of Business and PAN of the business
  • Key in the Email Address and Mobile Number. The registered email id and mobile number will receive the OTPs.
  • Click on Proceed

Step 3 – Enter the two OTPs received on the email and mobile. Click on Continue. If you have not received the OTP click on Resend OTP.

Step 4 – You will receive the 15-digit Temporary Reference Number (TRN) now. This will also be sent to your email and mobile. Note down the TRN. You need to complete filling the part-B details within the next 15 days.

Step 5 – Once again go to the GST portal. Select the ‘New Registration’ tab.

Step 6 – Select Temporary Reference Number (TRN). Enter the TRN and the captcha code and click on Proceed.

Step 7 – You will receive an OTP on the registered mobile and email. Enter the OTP and click on Proceed

Step 8 –You will see that the status of the application is shown as drafts. Click on Edit Icon.

Step 9 – Part B has 10 sections. Fill in all the details and submit appropriate documents. The Aadhaar authentication section was added and the bank account section was made non-mandatory in 2020.

Here is the list of documents you need to keep handy while applying for GST registration-

  • Photographs
  • Constitution of the taxpayer
  • Proof for the place of business
  • Bank account details*
  • Verification and aadhaar authentication, if chosen

* Bank account details are non-mandatory at the time of GST registration since 27th December 2018.

Step 10 – Under the Business Details section, enter the trade name, business constitution and district.

Note: Trade name is completely different from the legal name of the business. 

Next up, enter the date of commencement of business and date from which liability arises. Also, select ‘Yes/No’ for type of registration as a casual taxable person and if ‘Yes’ is chosen, then generate the challan by entering the details for advance tax payment as per the GST law for casual taxable persons.

Further, under the ‘Reason to obtain registration, select the reason as ‘Input service distributor’ if that is the case, at this stage. Alternatively, many other options are available to choose from.

Based on the selection made, enter details in the fields that appear. For example, if you select ‘SEZ unit’, then enter the name of the SEZ, designation of approving authority, approval order number, etc. and upload the supporting documents.

In the Indicate Existing Registrations section, choose the type of existing registration such as Central Sales Tax, Excise or Service Tax, registration number and date of registration. Thereafter, click the ‘Add’ button.

Step 11 – Under the Promoters/Partners tab, you may enter the details of up to 10 Promoters or Partners. 

Personal details such as name, address, mobile number, date of birth, email address and gender and identity details such as Designation / Status and Director Identification Number if the taxpayer is a company, whether or not an Indian citizen, PAN and Aadhaar numbers must all be entered. 

Fill in the residential address and upload a photograph of the stakeholder. You are allowed to upload PDF or JPEG files with maximum file size for upload of 1 MB.

If the promoter is also the primary authorised signatory, then make the necessary selection. Click on the ‘SAVE & CONTINUE’ button to proceed.

Step 12 – Enter details of the Authorised signatory similar to the details entered for promoters/partners, in step 10.

Step 13 – Enter Principal Place of Business details. 

The taxpayer’s principal place of business is the primary location within the state where he or she conducts business. The principal place of business is usually the address where the company’s books of accounts and documents are stored, as well as where the company’s president or top management is based.

Report the address, district, sector/circle/ward/charge/unit, commissionerate code, division code and range code. Also, enter the official contact number of taxpayer and nature of possession of premises as rented or owned or shared, etc. 

Next up, upload supporting documents, including consent letter or NOC for business on premises rented out and upload the proof of SEZ Unit/SEZ Developer approval for the premises, if applicable. Also, checkmark the Nature of business activities in the premises and add any additional places of businesses. Click on the ‘SAVE & CONTINUE’ button.

Step 14 – Submit details of goods and services in the next tab along with the HSN codes or SAC for up to a maximum of 5 goods and 5 services on the top of your list.

Step 15 – Next, enter the Bank details of the taxpayer for up to 10 bank accounts. Submission of bank accounts details has been made optional from 27th December 2018. If you do not report these details at the time of GST registration, then after GSTIN is granted, you will get a prompt upon logging in for the first time on the GST portal to file a non-core amendment application to submit the bank details.

Also, upload supporting documents together with the details.

Step 16 – Under the State Specific Information tab, enter the professional tax employee code number, PT registration certificate number and State Excise License number with the name holding the license. Click on ‘SAVE & CONTINUE’.

Step 17 – Next, choose whether or not you are willing to do Aadhaar authentication.

Step 18 – Once all the details are filled in go to the Verification page. Tick on the declaration and submit the application using any of the following ways:

  • Companies and LLPs must submit application using DSC
  • Using e-Sign – OTP will be sent to Aadhaar registered number
  • Using EVC – OTP will be sent to the registered mobile

Step 19 – A message is displayed on successful application and Application Reference Number(ARN) is sent to registered email and mobile.

As per the 43rd GST Council meeting’s outcome, maximum late fee is reduced to the following amounts based on type of return and turnover slab, notified via the CGST notifications 19/2021, 20/2021 dated 1st June 2021 for GSTR-3B and GSTR-1. 

  • In case of nil GSTR-1 and GSTR-3B filing, the maximum late fee charged shall be capped at Rs.500 per return (i.e Rs. 250 each for CGST & SGST).
  • In GSTR-1 and GSTR-3B other than nil filing, maximum late fee is fixed based on annual turnover slab, as follows:
    • If the annual turnover in the previous financial year is upto Rs.1.5 crore then the late fee of maximum Rs 2,000 per return can only be charged (i.e Rs.1000 each for CGST and SGST).
    • If the turnover ranges between Rs.1.5 crore and Rs.5 crore then the maximum late fee of Rs.5,000 per return can only be charged  (i.e Rs. 2500 each for CGST and SGST).
    • If the turnover is more than Rs.5 crore then late fee of maximum Rs.10,000 (i.e Rs. 5000 per CGST and SGST) can be charged.

Additionally, the late fee has been rationalised for delayed filing of GSTR-4 from FY 2021-22, via the CGST notification 21/2021 dated 1st June 2021. The maximum late fee will be restricted to Rs.500 per return for nil filing and Rs. 2000 for other than nil filing.

According to CGST notification 22/2021 dated 1st June 2021, the late fee chargeable for GSTR-7 i.e TDS filing under GST shall be of maximum Rs. 2,000 while late fee per day charged is reduced from Rs.200 to Rs.50 per day of delay, per act, per return

 

How can I claim deductions for tax saving?

You should file an income tax return to claim tax deductions for tax savings such as ELSS, PPF, NSC investments and for payments such as housing loan repayments, insurance premium and donations.

 

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