GST Registration for VAT, Service Tax Holders

Last Updated at: Sep 07, 2020
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In her budget speech for the FY 2020-21, the honourable Finance Minister has announced the introduction of a simplified GST return format with effect from 1st April. It will help SMEs and VAT & Service Tax holders, among others to transit smoothly through the taxation system

GST Registration
Over 1.03 crore businesses have registered under the Goods and Services Tax (GST) regime and the implementation of the biggest indirect tax reform has been smooth so far.

 

High Commissioner of India to Bangladesh has called upon the business leaders of India and Bangladesh to come forward with innovative ideas in response to the emerging economic scenario in the midst of Corona pandemic in the world.

 

All indirect taxpayers must be overjoyed at the arrival of GST because they will not have to pay multiple taxes to various authorities anymore. Now, they will have to register for GST by getting a GSTIN and then they can handle the entire system with relative ease as compared to the previous system.

All indirect taxpayers must be overjoyed at the arrival of GST because they will not have to pay multiple taxes to various authorities anymore. Now, they will have to register for GST by getting a GSTIN and then they can handle the entire system with relative ease as compared to the previous system.

The rolling in of GST or the Goods and Service Tax has been one of the most important announcements of this year. With GST, traders and businesses can do away with copious amount of registrations, and be registered to this tax scheme alone. With the implementation of GST looming (April 1, 2017 for all, and beginning November 29, 2016 for existing taxpayers), it is time to understand the procedure for registering into this new system.

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What is GST Registration?

All business carrying out a taxable supply of the goods or the services under the GST regime and whose turnover exceeds the threshold limit of Rs. 20 lakh/ 10 Lakh as applicable is required to register as a normal taxable person. This process is of registration is referred to as GST registration.

Make Your Business GST Ready

Why is the GST Registration Important?

The GST registration is important because it will enable the taxpayer to avail the various benefits that are available under the GST regime. One such benefit is to avail the seamless input tax credit. Multiple taxes have been clubbed under the GST and hence the cascading of taxes that was prevailing earlier is no longer applicable.

The timely registration will help you to avoid any kind of interface with the tax authorities.

What is a Threshold Limit?

In order to provide a relaxation to small suppliers it has been provided that every supplier will be liable to be registered under this act in the State form where they make a taxable supply of goods or services if the aggregate turnover in a financial year exceeds ₹ 9 lacs. However, this limit is ₹ 4 lacs for people conducting business in the NE states including Sikkim.

Here, the aggregate turnover means the aggregate value of all the taxable and the non-taxable supplies, exempt supplies and the exports of goods and/or services of a person having the same PAN, to be computed on an all India basis and excludes the taxes, if any, charged under CGST Act, SGST Act and IGST act, as the case may be. But the aggregate turnover doesn’t include value of supplies on which the tax is levied on the reverse charge basis and the value of the inward supplies.

What is a Casual Registration?

A person who sporadically supplies the goods and/or services in a territory where the GST is applicable but doesn’t have a fixed place of business. Such an individual shall be treated as a casual taxable person as per the GST.

Example: A person who has a place of business in Pune supplies taxable consulting services in Bangalore where he has no place of business would be treated as a casual taxable person in Bangalore.

What are penalties for not registering under the GST?

An offender not paying the tax or making a short payment has to pay a penalty of 10% of tax amount due subject to a minimum of Rs.10, 000. The penalty will be as high as 100% of the tax amount the offender has evaded i.e., in case of a deliberate fraud.

However, for other genuine mistakes, the penalty is 10% of the total tax due.

GST Enrollment for Taxpayers

Taxpayers, who have already registered for taxes within their state or with the central government, are eligible to enroll for GST. With the state of Goa announcing the last date for GST switchover for existing tax payers, it is time to ensure we have everything in hand before a similar announcement in other states too.

The taxpayers who are eligible for GST registration are those who have already registered with:
1. Luxury tax
2. Entertainment tax
3. Sales Tax or VAT
4. Service tax
5. Central Excise

By enrolling with GST, the date given for the online GST registration will get automatically updated in the new integrated tax system.

Steps for enrollment of existing taxpayers under the GST:
The procedure for enrolling into the GST is as follows:

GST Registration

The registration of GST is totally online, through the authorized GST portal. The government has emphasized that the whole enrollment will happen through a paperless system wherein taxpayers visit the GST portal to enroll themselves for GST.

GST registrations are mandatory for all taxpayers with a supply turnover of over Rs. 20 lakh per annum.

Provisional ID

The concerned State authorities provide a ‘Provisional ID and password’ for all existing taxpayers. This Provisional ID is given by the state authorities (concerned for collecting taxes).

The Goa government, with the last date specified for GST registration as November 29, had given out the IDs and password between November 9 to 11, in their concerned government offices.

The Provisional ID is usually in the below-mentioned format:

State Code –> PAN of the Taxpayer –> Entry number of the PAN holder in the State –> ‘Z’ as default –> Unique Number

Documents required for GST registration:

The following are the mandatory documents required for GST registration in any state across the country:
1. Provisional ID and password (collected from state authorities)
2. Email address – where communications will be sent
3. Mobile number- SMS intimations will be sent
4. Bank details – Account number, IFSC code and so on
5. Constitution of business – Documented proof, such as partnership agreement, registration certificate and so on, all in soft copy. The file should not exceed 1MB limit to upload on GST site)
6. Appointment of authorized signatory (in PDF or JPEG, 1MB file size)
7. Photographs of promotors/partners or karta (JPEG, with file size not more than 100KB)
8. Copy of the opening page of bank passbook in PDF or JPEG, with file size not exceeding 1MB)

Ensure that the bank details (passbook page scanned) contains your account number, branch, IFSC code, and a few transaction details. The banks will provide the same.

GST Registration Form

Now, with all the documentation in hand, enter the portal with the provisional ID and password provided.

The page will open up to ‘GST registration form’. Fill in all the details, and upload the scanned (soft copy) documents already collected, and wherever relevant.

After submission, an acknowledgement form will be generated as a proof. This acknowledgement is very crucial for further communications. Save it on your PC or take a hard copy and keep it with you for future references.

The enrollment process itself is simple, and if you have all proof of documentation, the whole procedure will take a few minutes to complete.

Here are a few pointers to further expand your knowledge on the GST registration.
1. Provisional ID and password are mandatory. Please collect it from State authorities whenever the announcement for the same comes across.
2. A primary authorized signatory of a business, such as a proprietor, an authorized partner or any person who is authorized to sign on behalf of the business, is responsible for answering any queries and will register for GST on the portal.

Since you are already a registered Tax payer, certain details such as the PAN of the business, Legal name of the business, The reason for liability to obtain registration, your email id and mobile number, will already be present in the GST system. These details cannot be changed, since they have been migrated from the existing tax systems to GST. Fill in those which are blank, and upload the necessary documents to complete the procedure.

FAQs

Q. What are the benefits of registering a business under GST?

Registration under the Goods and Service Tax (GST) regime will give the following advantages to the business:

  • It will be legally recognized as supplier of goods or services.
  • Proper accounting of the taxes paid on the input goods or services which can be used for the payment of GST due on supply of the goods or services or both by the business.
  • It will be legally authorized to collect the tax from his purchasers and pass on the credit of the taxes paid on goods or services supplied to the purchasers or the recipients.

Q. What is the registration process for the GST in India?

The GST registration process is done online through a portal maintained by the Central Government of India. The Government appoints GSPs (GST Suvidha Providers) to help the businesses with the registration process.

Based on the information provided by the GSTN, the registration process looks like this:

  • The applicant is required to submit his PAN details, mobile number and the email address in Part A of the Form GST REG–01 on the GSTN portal or through the Facilitation centre (notified by the board or commissioner).
  • The PAN details are verified on the GST Portal. The mobile number and the E-mail address are also verified with a one-time password (OTP). Once the verification is complete, the applicant receives an application reference number on the registered mobile number and also via E-mail. An acknowledgement will be issued to the applicant in FORM GST REG-02 electronically.
  • The applicant is required to fill Part- B of the Form GST REG-01 and specify the application reference number. The form can then be submitted after attaching the required documents.
  • If some additional information is required, Form GST REG-03 will be issued. The applicant is required to respond in Form GST REG-04 with the required information within 7 working days from the date of the receipt of Form GST REG-03.
  • If all the required information has been provided via Form GST REG-01 or Form GST REG-04, the registration certificate in Form GST REG –06 for the principal the place of business and also for every additional place of business will be issued to the applicant. In case where the applicant has multiple business verticals within a state he can file separate application for the registration in Form GST REG-01 for each of the business verticals. In case the details submitted are not satisfactory, the registration application is then rejected using Form GST REG-05.The applicant who is needed to deduct the TDS or collect TCS shall submit an application in Form GST REG – 07 for the registration. In case he is no longer liable to deduct or collect the tax at the source then the officer may cancel and communicate the cancel of the registration.

Q. Can an individual without the GST registration claim ITC and collect tax?

No, without the GST registration an individual can neither collect the GST from his customers nor can he claim any input tax credit of GST paid by him.

Q. What will be the effective date of the registration?

Where application for the registration has been submitted within thirty days from date on which the individual becomes liable to the registration, the effective date of the registration will be the date of his liability for the registration.

Where an application for the registration has been submitted by the applicant after thirty days from date of his becoming liable to the registration, the effective date of the registration will be the date of grant of the registration.

In case of a suomoto registration, i.e. taking the registration voluntarily while being within the threshold of exemption limit for paying the tax, the effective date of registration will be the date of order of registration.

Q. Who is liable for Registration under the Model GST Law?

Suppliers who carry out business in India and whose aggregate turnover exceeds the threshold limit in a year is liable to get registered. However, there are certain categories of people mentioned in the Schedule III of MGL are liable to be registered irrespective of this threshold.

An agriculturist will not be considered as a taxable person and will not be liable for registration. (As per section 9 (1))

Q. What is an aggregate turnover?

As per section 2 (6) of the MGL, an  aggregate turnover includes the aggregate value of:
(i) all the taxable and non-taxable supplies,
(ii) exempt supplies, and
(iii)  the exports of goods and/or service of a person having the same PAN.

The above will be computed on all India basis and it excludes taxes charged under the CGST Act, SGST Act and the IGST Act.
The aggregate turnover doesn’t include the value of supplies on which the tax is levied on the reverse charge basis, and the value of inward supplies.

Q.  When is a registration compulsory?

As per paragraph 5 in Schedule III of MGL, following categories of persons shall be required to be registered compulsorily regardless of the threshold limit:
a) individuals making any an inter-State taxable supply;
b) a casual taxable persons;
c) individual who are required to pay  the tax under  the reverse charge;
d) a non-resident taxable persons;
e) individual who are required to deduct the  tax under section 37;
f) individual who supply goods and/or services on behalf of the other registered taxable people
whether as an agent or otherwise;
g) an input service distributor;
h) individuals  who supply goods and/or services other than the  branded services, through an electronic commerce operator;
i) every electronic commerce operator;
j) an aggregator who supplies the  services under his brand name or his trade name; and
k) such other person or the  class of persons as may be notified by the Central Government or a  the State Government on recommendations of the Council.

Q. Can a person having multiple business verticals in a state obtain different registrations?

Yes, according to the Sub-Section (2) of Section 19, an individual having multiple business verticals in a State may obtain a separate registration for each of his business vertical, subject to such conditions as may be prescribed.

Q. Is there a provision for an individual to get himself voluntarily registered even though he may not be liable to pay the GST?

Yes, according to the Sub-section (3) of Section 19, an individual even though not liable to be registered under Schedule III, may get himself registered voluntarily and all provisions of this Act shall apply to such him.

Q. Are PAN details mandatory for obtaining a Registration?

Yes, every individual has to have a Permanent Account Number (PAN) issued under the Income Tax Act, 1961 (43 of 1961) in order to be eligible for the grant of registration under the Section 19 of the Model GST Law.
However as per section 19 (4A) of MGL,  PAN is not mandatory for a non-resident taxable person who can be ranted registration on the basis of any other document as may be prescribed.

Q. Is there a system to facilitate smaller dealers or dealers having no IT infrastructure?

In order to cater to the needs of the  taxpayers who are not IT savvy, following facilities are made available:-
Tax Return Preparer (TRP):
A taxable person can prepare his registration application /returns himself or  he can approach the TRP for assistance. The TRP prepares the said registration document / return in the prescribed format on basis of the information provided to him the taxable person. The legal responsibility of the accuracy of information contained in the forms prepared by the TRP rests with the taxable person only and the TRP will not be liable for any errors or an incorrect information.

Facilitation Centre (FC):
He will be responsible for the digitization and / or uploading of the forms and the documents including the summary sheet duly signed by the Authorized Signatory and then given to the taxable person. After uploading the data on a common portal using the ID and Password of FC, a print-out of the acknowledgement is taken and signed by the FC and handed over to the taxable person for his records. The FC scans and uploads the summary sheet duly signed by the Authorized Signatory.

 Q. Can the application for Registration be rejected?

Yes, according to the sub-section 7 of MGL, the officer can reject an application for registration after verification. However, it is also provided in the sub-section 8 of Section 19, the application shall be not rejected for registration or the Unique Identity Number without giving a prior notice to show cause and without giving the person an opportunity of being heard.

Q. Is the Registration permanent?

Yes, the registration Certificate once granted is permanent unless it is surrendered, cancelled, suspended or revoked.

Q. Is it required for the UN bodies to get registration under MGL?

All UN bodies Embassy or Consulate of foreign countries and any other class of persons are required to obtain a unique identification number (UIN) from GST portal. The structure of the said ID is uniform across the States in conformity with the GSTIN structure and the same will be common for the Centre and all the States. This UIN will be required for claiming the refund of taxes paid by them and /or for any other purpose as may be prescribed in the GST Rules.

Q.  What is the responsibility of a taxable person supplying to UN bodies?

A taxable supplier supplying to these organizations is required to mention the UIN on the invoices and to treat such supplies as the supplies to another registered person (B2B) and the invoices of the same shall be uploaded by the supplier.

Q. Are Government organization required to get registration?

A unique identification number (ID) is given by the respective state tax authorities through the GST portal to the Government authorities / PSUs not making outward supplies of  the GST goods (therefore not liable to obtain  the GST registration) but are making inter-state purchases.

Q. Who is considered a Non-resident Taxable Person?

A taxable person who resides outside India and comes to India to intermittently undertake transaction in the country but has no fixed place of business in India is considered a non-resident taxable person in terms of Section 2 (69) of the MGL.

Q. What is the validity period of the Registration certificate issued to a Casual Taxable Person and non-Resident Taxable person?

The certificate of registration issued to a “casual 34 taxable person” or a “non-resident taxable person “is valid for a period of ninety days from the effective date of registration. However, the proper officer, at the request of the taxable person, may extend the validity of the aforementioned period of ninety days by a further period not exceeding ninety days.

Q. Is there a requirement for an Advance tax to be paid by a Casual Taxable Person and Non-resident Taxable Person at the time of obtaining the registration under this Special Category?

Yes, while a normal taxable person doesn’t have to make any deposit to obtain the registration, a casual taxable person or a non-resident taxable person may, at the time of submission of an application for the registration under sub-section (1) of section 19, make an advance deposit of the tax in an amount equivalent to the estimated tax liability of such a person for period for which the registration is required. If the registration is to be extended beyond the initial period of ninety days, then an advance additional amount of the tax equivalent to the estimated tax liability is to be deposited for the period for which the extension beyond ninety days is being sought 

Q. Are amendments to the Registration Certificate permissible?

Yes, according to the Section 20, the proper officer may on the basis of information furnished either by the registrant or as established by him, approve or reject the amendments in the registration particulars in the manner may be prescribed. The permission of the proper officer for making amendments is required for only certain core fields of information, whereas for all the other fields, the registrant can himself carry out the amendments.

Q. Is the cancellation of the Registration Certificate permissible?

Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned in the Section 21 of the MGL. The proper officer may, either on his own or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such a person, cancel the registration, in the manner as may be prescribed.

Q. Is the cancellation of Registration under CGST Act means cancellation under SGST Act also?

Yes, the cancellation of registration under one Act (say CGST Act) will be deemed to be a cancellation of registration under the other Act (i.e. SGST Act). (Section 21 (6)) as well.

Q.  What is the time limit for the decision on the online application?

If the information and the uploaded documents are in order, then the State and the Central authorities approve the application and communicate the approval to the portal within three working days. The portal then automatically generates the Registration Certificate.

Q.  What is the time given to the applicant to respond in case there is a query raised by the tax authority on the online application?

If during the verification process, one of the tax authorities raises a query or notices some error, the same is communicated to the applicant and to the other tax authority through the GST Common Portal within three working days. The applicant can reply to the query / rectify the error / answer the query within a period informed by the concerned tax authorities (Normally it is seven days).

On receipt of the additional document or clarification, the relevant tax authority will respond within seven working days.

Q.  What is the process of refusal of the registration?

In case the registration is refused, the applicant is informed about the reasons for such refusal through a speaking order. The applicant will have the right to appeal against the decision of the Authority. As per sub-section (10) of section 19 of MGL, any rejection of the application for registration by one authority (i.e. under the CGST Act / SGST Act) will be considered to be a rejection of application for registration by the other tax authority (i.e. under the SGST Act / CGST Act) as well.

Q.  Is there any communication related to the application disposal?

The applicant is informed of the fact of grant or rejection of his registration application through a SMS and an e-mail by the GST common portal. Jurisdictional details are intimated to the applicant at this stage.

Q. Can the proper Officer Cancel the Registration on his own?

Yes, in certain circumstances that are specified under the section 21(2) of MGL, the proper officer can cancel the registration. Such circumstances could  include not filing  the return for a continuous period of six months (for a normal taxable 36 person) or three months (for compounding taxpayer), and not commencing business within six months from  date of the  registration. However, before cancellation of the registration, the proper officer has to follow the principles of natural justice. (Section 21 (4))

Q. What happens when the registration is obtained by means of fraud or suppression of facts?

In such cases, the registration can be cancelled with the retrospective effect by the proper officer. Section 21(3).

Q. If a taxpayer has different business verticals in one state, will he have to obtain a separate registration for each such vertical in the state?

No, but the taxpayer has the option to register such separate business verticals individually in terms of Section 19(2) of MGL.

Q.  Who is an ISD?

ISD stands for the Input Service Distributor and has been defined under the Section 2 (56) of MGL. It is essentially an office meant to receive the tax invoices towards the receipt of input services and further distribute the credits to the supplier units proportionately.

Q. Do all assesses /dealers who are already registered under the existing central excise/service tax/vat laws have to get fresh registration?

No, the GSTN will migrate all such assesses /dealers to the GSTN network and will issue the GSTIN number and the password. They will be asked to submit all the requisite documents and information needed for registration in a prescribed period of time. Failure to do so shall result in cancellation of the GSTIN number. The service tax assesses having a centralized registration will have to apply again in the respective states wherever they may have their businesses.

Q. Is there a facility for digital signature in the GSTN registration?

A taxpayers will have the option to sign the submitted application using a valid digital signatures (if applicant is required to obtain the DSC under any other prevalent law then he may have to submit his registration application using the same). For all those who do not have a Digital signature, an alternative mechanisms will be provided in the GST Rules on Registration.

Q. Will the ISD be required to be separately registered other than the existing taxpayer registration?

Yes, the ISD registration is for one office of the taxpayer which will be different from the normal registration.

Q.  Can a taxpayer have multiple ISDs?

Yes, different offices of a taxpayer can apply for an ISD registration.

Q. What can be the liabilities (as far as the registration is concerned) on transfer of a business?

The transferee or the successor will be liable to be registered with effect from such transfer or succession and they will have to obtain a fresh registration with effect from such a date. (Schedule III of MGL).

Q. Can the registration certificate be downloaded from the GSTN portal?

In case the registration is granted, the applicant can download the Registration Certificate from the GST common portal.

The new indirect tax collection system has made the lives of all business owners across the country simpler and easier than ever before. Now, they do not have to apply for various tax registrations such as Luxury Tax, Service Tax, Sales Tax, Central Excise duty and Value Added Tax among others.

The new indirect tax collection system has made the lives of all businessowners across the country simpler and easier than ever before. Now, they do not have to apply for various tax registrations such as Luxury Tax, Service Tax, Sales Tax, Central Excise duty and Value Added Tax among others.

To know more about GST Registration: Click here

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.