GST, or Goods and Services Tax, is a consumption tax levied on the sale of goods and services in India. It was introduced on 1 July, 2017, by the central government under a new Act called the Goods and Service Tax Act (GST Act). GST registration is the process by which a business signs up for GST.
We will try to understand GST with a simple example from everyday life. Have you ever wondered why your restaurant bill is much higher than the menu price of the mouth-watering delicacies you just had at your favorite hangout? That is because GST @18% is added to your food bill. This blog post will simplify the basics of GST registration for you.
Understanding GST registration
Before delving into GST registration, it’s essential to address fundamental questions like the definition of GST and identifying who needs GST registration. So, let’s begin by getting the basics right.
What is GST?
GST, or Goods and Services Tax, is a consumption tax levied on the sale of goods and services. It was implemented to replace several indirect taxes previously in place, like VAT, excise, import, and export duties. Put simply, it is a single tax that consumers pay when they buy goods or services, and what businesses collect and remit to the government for the services they provide.
Who needs GST registration?
GST registration is a mandatory requirement for businesses with an annual turnover of Rs. 40 lakh and above. The limit for regular states was increased from Rs. 20 lakhs to Rs. 40 lakhs in October 2023.
However, the minimum turnover requirement for GST in India is different for certain special category states. For Jammu and Kashmir, Uttarakhand, Himachal Pradesh, and the northeast, the GST registration limit for annual turnover was raised from Rs. 10 lakh to Rs. 20 lakh.
Here’s an overview of aggregate turnover thresholds for different categories
|Type of Supply
|Special Category States
|Goods & Services
|Rs. 40 lakhs
|Rs. 20 lakhs
Steps for GST registration
The process of registering for GST online involves a two-part procedure. Before diving into the details, follow these initial steps:
- Go to the GST portal
- At the top of the GST home page click on “Services” and select “Registration.” In the drop-down option, select “New Registration.”
- For new registration, fill this page by selecting “taxpayer” from the drop-down menu.
- Input other details like your state and district, the legal name of the business, PAN card details, phone number, and email address.
Note: Ensure you have the business PAN.
- Verify the information given above by generating an OTP in the registered mobile number.
- You will receive a 15-digit Temporary Reference Number (TRN) on your email and mobile. Make a note of the TRN.
Note: Once you generate the TRN, you need to complete filling in the part-B details within the next 15 days.
Part B of GST registration form
- Go to the GST portal. After choosing ‘New Registration’ tab, select Temporary Reference Number (TRN).
- Input the TRN and the captcha code and click on “Proceed.”
- You will receive an OTP on the registered mobile number. Enter the OTP and click on “Proceed.”
- Once you input the OTP, it will redirect you to the registration dashboard.
- Here, fill in additional business details, including the legal business name, business structure, and other relevant information.
- Upload the necessary documents to support your registration (necessary documents are mentioned below).
- Double-check all the fields and documents that you provide to ensure accuracy.
- Once all details are filled in and documents uploaded, submit the Part B of the GST registration application.
- If successful, you will receive an acknowledgment with the Application Reference Number (ARN) for future reference.
- You can track the status of your application on the GST portal.
Documents required for GST registration
|Documents required for GST registration
|Sole proprietor / Individual
|PAN card of the ownerAadhaar card of the owner Photograph of the owner (in JPEG format, maximum size – 100 KB) Bank account detailsAddress proof
|Partnership firm/ LLP
|PAN card of the ownerAadhaar card of the owner Photograph of the owner (in JPEG format, maximum size – 100 KB) Bank account details address proof
|Hindu Undivided Family (HUF)
|PAN card of all partners
Copy of partnership deed Photograph of all partners and authorized signatories (in JPEG format, maximum size – 100 KB) Address proof of partners (Passport, driving license, Voters identity card, Aadhaar card etc.) Aadhaar card of authorized 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
|Company (Public/ Private/ Indian/ foreign)
|PAN card of HUF PAN card and Aadhaar card of Karta Photograph of the owner (in JPEG format, maximum size – 100 KB) Bank account details address proof of principal place of business
Note: The documents required may vary based on the type and nature of the business. You can verify the link and check for documents required for your specified business.
Importance of address proof
One of the mandatory requirements in the GST registration process is ‘Address proof.’ Individuals can provide their passport, driver’s license, voter’s identity card, or Aadhaar card as address proof.
Businesses can use documents such as a property tax receipt, a copy of the municipal khata, a copy of the electricity bill, an ownership deed, and a no-objection certificate (NOC) from the landlord as valid address proof.
Significance of address proof
- Address proof helps determine the jurisdiction under which the taxpayer falls.
- Helps in seamless communication with tax authorities.
- The process also verifies the existence and legitimacy of the business entity.
- Helps prevent fraudulent registrations or misuse of the GST system.
Display of GSTIN
Displaying the Goods and Services Tax Identification Number (GSTIN) at the business premises is essential. A GST registration certificate testifies that a business in India is registered under GST. After successful registration, the GST registration certificate (in GST REG-06) can be downloaded from the portal. It is important to note that non-compliance to display GSTIN can lead to penalties and legal consequences. Besides, displaying GSTIN has several benefits. Let’s look at some of them:
- Displaying GSTIN enhances transparency, affirming the credibility of the business.
- GSTIN authenticates the legal identity of the business and assures that the business is a registered and legitimate entity.
- For businesses, displaying GSTIN is essential to claim Input Tax Credit (ITC) on purchases.
Recent updates and amendments
Staying informed about the latest updates in the GST registration process is crucial for businesses. Let’s look at the latest updates:
- From 1 January, 2022, Aadhaar authentication of registration is compulsory to file for a GST refund claim and to apply for revocation of canceled GST registration under CGST Rule 23 in REG-21.
- Eligible persons for Aadhaar authentication are the following. Proprietor (proprietorship firm), partner (partnership firm), Karta (HUF), Managing Director or Full-Time Director (Company), Member of the Managing Committee (AOP/BOI/Society), and Trustee (Trust). Besides, the authorized signatory of the registered person is also eligible.
- If the individual has not been allotted an Aadhaar number, e-KYC would be required for Aadhaar authentication.
- The Search ARN Functionality for Registration, post-TRN Login, has been improved for taxpayers, providing an enhanced user experience.
- However, the following category of persons have been exempted from seeking Aadhaar authentication. Individuals who are not citizens of India, a central government or state government department, a local authority, PSUs, statutory bodies, indivduals who have been allotted Unique Identification Number.
GST registration is important for businesses operating in India. It offers several benefits and ensures that businesses are compliant with tax regulations. Among other things, GST registration serves as a legal acknowledgment of a business’s presence in the GST system, fostering transparency and credibility.
We hope this article helped readers understand the GST registration process. While we have covered the latest changes in the GST registration process, stay informed about any updates or changes. Also, ensure timely filing of returns and compliance with GST laws.
Q. Is GST registration free?
Ans. Taxpayers should note that there is no fee for GST registration. You need not pay anything for registration under GST. However, defaulting on tax payments or making short payments will incur a GST penalty.
Q. Who is eligible for GST registration?
Ans. GST registration is a mandatory requirement for businesses with an annual turnover of Rs. 40 lakh and above in regular states. For special category states such as Jammu and Kashmir, Uttarakhand, Himachal Pradesh, and the northeast, the GST registration limit for annual turnover is Rs. 20 lakh.
Q. What happens if businesses don’t complete GST registration?
Ans. In case businesses do not complete the registration process, 10% of the amount that is due or Rs. 10,000 will be levied. In the case of tax evasion, 100% of the amount that is due will be levied as a penalty.
Q. Can I apply for GST number online?
Ans. GST registration is mandatory for all e-commerce sellers. Citizens can apply for new GST by registering online without visiting a government office.