GST Registration in India

Last Updated at: Jan 13, 2021
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Nitin Gadkari, the Union Minister for MSMEs, has announced that MSMEs can avail the Interest Subvention Scheme even without the Udyog Aadhar Number (UAN). However, they must be having the GST registration number. He said this was an incentive to MSMEs for joining the GST regime. 

 

The idea behind the implementation of GST was quite simple. The Government wanted to promote ease of doing business by getting rid of multiple indirect taxes and bringing them under one comprehensive taxation system. Despite a few glitches, GST has been widely successful and business owners have appreciated its arrival.

As a seller or service provider, it is mandatory to register for the GST if your business has a turnover of above Rs.40 lakhs (if you sell physical good) or more than Rs.20 lakhs (if you supply services).

The introduction of the Goods & Services Tax (GST) will please most Indian businesses. It tremendously simplifies matters for any business that has to deal with VAT, CST, Octroi, Service Tax and even a few other taxes (pretty much all Indian businesses).

If you’re just looking around for related information on startups, government registrations, tax or legal documentation, check out the list of services we provide to make your interaction with government as smooth as is possible by doing all the legal documentation for you. We will also give you absolute clarity on the process to set realistic expectations.

The Goods and Services Tax is a new taxation system that will, under its umbrella, cover the whole lot of indirect taxes that were being levied by the government. GST will be imposed at the time of consumption, and the net tax will be calculated after accounting for all the taxes paid on input, just as in the case of VAT.

Make Your Business GST Ready

The idea behind GST is to bring all businesses, freelancers and consultants under a single tax system, whether they sell goods or services.

GST Activation Drive

GST enrollment

GST Rate

On November 4, the GST council finalised the GST rates. Yes, rather than a single rate, the council has decided to introduce four slab rates. The GST rate structure will, therefore, be divided into four slab rates (5%, 12%, 18% & 28%). Rates on Gold, 1% under the VAT regime, are yet to be decided, but will likely be on the low side. Alcohol, cigarettes and other ‘sinful’ items are likely to be those taxed at 28%.

Under the Indian taxation system, all the goods and services are categorized into 6 slabs. It is significant for all business people to know under which category their goods or services fall. The GST rate finder service is used to find the GST rates of all the goods and services. This service is also referred to as the HSN finder. By using the HSN finder, we can also find the HSN codes for goods and services.

 

Read Also: GST Registration For VAT & Service Tax Holders

GST Eligibility Criteria

Any business that “supplies” goods or services over a value of Rs. 25 lakh (Rs. 10 lakh in North Eastern states). Remember that the GST is levied on supply, not sales. Therefore, stock-taking, discounts and freebies also come under the GST net. Even those supplying non-taxable goods and existing dealers must also register for GST. However, all dealers already registered under VAT, Service Tax Registration, etc. will get provisional registration automatically. Also, business making sales to other states must register for GST, regardless of turnover.

The range of firms covered under GST include dealers, bloggers, and writers, earnings from Google AdWords through PayPal, import-export businesses, all kinds of startups and companies, whether they are LLPs, proprietorships, partnerships or private limited companies.

One can also apply voluntarily for GST registration to enjoy input tax credit (which would allow for adjustment of tax paid to suppliers).

For detailed information on eligibility for gst registration : click here

Documents Required for GST Registration

The list of documents required for registration of GST for various business are as follows:
Proprietorship
PAN Card of proprietor and address proof of the individual.

LLP

  1. PAN Card of LLP
  2. LLP Agreeement
  3. Partners’ names and address proof

Private Limited Company:

  1. Incorporation certificate
  2. PAN of Company
  3. Articles of Association
  4. Memorandum of Association
  5. Resolution signed by board members
  6. Identity and address proof of directors

Read more: Documents that are to be maintained by taxpayers.

GST Registration Process

The online registration of GST is simple and straightforward and is similar to what is done for service tax registration.
1. Go to the GST registration portal and fill in the details/particulars asked in the application
2. Upload the original scanned copies of all documents specified. The application needs to be printed and sent to the GST department for confirmation.
3. When you submit the application after filling in all the necessary details, an acknowledgment number will be generated, and the same will be communicated through SMS and email.
4. After verification of the documents, the application will be reviewed and accepted.
5. A GSTIN will be generated on acceptance of the application and a temporary password and Login ID will be sent. GSTIN is a unique 15-digit ID.
6. GSTIN will be one unique identification for your business.

Click here to know about GST Enrollment.

GST Enrollment in Maharashtra

GST Enrollment has begun for dealers already registered under VAT, Service Tax or Excise (etc.) in most states. The enrollment procedure begins with the provisional ID and password and we’re regularly asked where the password and ID are to be found. Well, it’s easy enough for you to do yourself, so let’s find out what you need to do. Do note that the provisional ID and password applies only to already registered dealers.

Click here to know more about GST enrollment in Maharashtra.

Understand your GSTIN

The 15-digit GSTIN or the unique identification number provided on GST registration carries some significant details on it.

1. The first two digit of the GSTIN are the STATE CODE
2. The next ten digits (3 to 12) is your PAN NUMBER
3. The 13th digit is the ENTITY CODE and will be assigned to the type legal entity you are registering under. Thus, if your application (with a particular kind of legal entity) is second in the state, the 13th digit would be ‘2’. It is again a state-based number.
4. The 14th digit is left BLANK at present, to be filled at a later stage, by the deciding authorities.
5. The 15th digit is a redundancy CHECK DIGIT used to provide Unique identification and for providing accuracy.

CGST & SGST

GST will have a central component (Central Goods and Services Tax or CGST) and a state component (State Goods and Services Tax or SGST). Therefore, centre and state will levy GST on all entities. Credits on CGST and SGST are to be kept apart completely. Input tax credit on CGST may only discharge CGST liability. The same goes for SGST.

Advantages of GST Registration

Businesses currently have to undergo VAT registration from the state’s sales tax department to start on their own. It gets more difficult to get a VAT for every state since each one has a different regulation regarding its VAT law.

This is where GST comes into the picture. Every process will become centralized and will speak of a uniformity beyond the domestic boundaries of a state. New businesses can say goodbye to multiple VAT registration since all they now need will be one registration under GST, which will be applicable across the country.

To more about the advantages of GST Registration: click here

How will Inter State Transactions Be Taxed?

Inter-state transactions will attract the Integrated Goods and Services Tax (IGST), to be levied by the centre. Of course, the seller will have to pay the amount after adjusting any IGST, CGST and SGST (in this order) credit available.

Exports under GST

No tax will apply on exports of goods or services. Input tax credit will remain and be made available to exporters as a refund.

Imports under GST

Goods and services imported into the country will simply be treated at inter-state supply. IGST will, therefore, be levied on imports. A complete set-off will be available on GST paid on imports.

If you have any doubts regarding GST then please visit our GST portal help portal and submit your requirement and our team will get back to you immediately.

If you are a business owner, you must bear in mind that GST has three crucial components. The central goods and services tax (CGST) must be paid to the Central Government, the state goods and services tax (SGST) to the respective state government and the inter-state tax (IGST) is paid to multiple states in case of imports and exports.

How can Vakilsearch help you with your GST registration?

  1. We address all your queries in regards to GST registration.
  2. Vakilsearch will help you get the entire process done in 7-10 days. (after submission of the documents)
  3. We will help you with the post-registration formalities and compliances.
A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.