GST Registration For Service Providers

On March, 2020 The Central Board of Indirect Taxes & Customs (CBIC) is planning to act tough with non-filers of returns. In a recent meeting cancellation of GST registration has been proposed for non-filer of returns for six or more than six return periods.

The Indian tax system is the most complicated one in the world with the Centre, the States, and the local bodies having powers to levy a variety of taxes to earn revenue. Various kinds of taxes are collected at different levels like the direct taxes which affect the common man directly like the income tax and wealth tax, indirect taxes which the common man pays for goods and services availed of like VAT and service tax, corporate tax, etc.

The new Goods and Services Tax (GST) is a unified tax structure that was implemented by the Government of India on 1 July 2017. It is one of the most historic tax reforms in Indian Taxation History. The Indian taxation system has come a long way from a closed, complicated one to an open, simple, and futuristic one.

GST Registration For Service Providers

India is a strong services-led economy with the sector generating a significant chunk of employment opportunities and contributing to the GDP. Service providers now have to grapple with a completely new set of facts. It is no news that the implementation of the GST (Goods and service tax) will pose some major advantages and a few disadvantages to the services industry.

GST is said to be a destination-based or consumption-based taxation. Also, as GST is a destination-based tax, it might be a challenge to determine the destination of certain services (at present, services are taxed at the place of rendering the service). This may lead to a difficulty in determining state GST, central GST, or inter-state GST on B2B and B2C transactions.

Interstate and Intrastate Service Providers

If a service provider has operations in only one state then it is an Intrastate Service Provider and GST is going to be excellent because, without too much of a compliance burden, it tends to get more input-tax credits. But, if a service provider is operating in more than one state it is called an Interstate Service Provider, and I believe the majority would have operations in multiple states; in that case, it would be hugely different under GST.

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.

GST Registration for Service Providers

Generally any business in India irrespective of whether they deal with goods or services or both, if they have a turnover above the threshold limit as prescribed under the new GST regime has to get registered under GST. But there are certain exceptions to this general rule, where certain businesses are required to register under GST irrespective of their turnover. If the organisation carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.

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Threshold for GST Registration For Service Providers

Any business whose turnover exceeds the threshold limit of ₹20 lakhs (₹10 lakhs for North Eastern and hill states) will have to register under GST.

Process of Registration

The procedure is extremely easy for service providers who need to register for GST:

• Step 1: Visit the GST portal
• Step 2: Click ‘New user login’ after choosing one of the two options when you first access the GST portal 
• Step 3: Enter your ID and password to log in 
• Step 4: You will be directed to a screen where you enter your email address and mobile number after logging in 
• Step 5: You will receive distinct OTPs on your email address and mobile number after inputting the same; make note of them 
• Step 6: Make the username and password you like 
• Step 7: Create security queries 

The Portal will authorise the GST Registration once all the previously stated procedures have been completed.

Financial Year to Reckon the Aggregate Turnover

If new threshold restrictions are applicable, aggregate turnover for the current fiscal year—in this case, FY 2019–2020—is taken into account. All suppliers whose total revenue for the current fiscal year surpasses the prescribed thresholds must register for GST. On the other hand, some individuals must comply under the GST:

• Interstate vendors
• Temporary Taxable Individuals
• Individuals subject to the reverse charge basis
• Taxable individuals who are not residents
• Individuals who must withhold TDS under the GST
• People who must deduct TCS under GST
• Distributors of Input Services
• selling something on someone else’s behalf, either as an agent or a principal.
• Each and every e-commerce company offers suppliers a platform to produce supplies through.
• suppliers who ship their goods through online retailers who must pay taxes at the source.
• Online service providers who offer services to an unregistered individual in India from outside of the country. 

Compulsory GST Registration For Service Providers

Every service provider who is registered under the Pre-GST laws (i.e., Excise, VAT, Service Tax etc.) needs to register under GST by default.

As per 23rd GST Council Meet on 10th November 2017

E-commerce sellers/aggregators need not register if total sales is less than Rs. 20 lakh – Notification No. 65/2017 – Central Tax dated 15.11.2017

As per the 22nd GST Council meeting of 6th October 2017

Service providers providing inter-state services are exempted from registration if their annual turnover is below 20 lakhs (10 lakhs for Special states. 20 lakhs for J&K)

Notification No. 7/2017 – Integrated Tax dated 14th September 2017

Job workers making the inter-state supply of services to a registered person are exempted from registration if their turnover is below 20 lakhs (10 lakhs for Special states)

Service Providers – Registration in Multiple States

There has been much confusion when it comes to registration in different states and when a service provider needs to look at a multi-state registration. To make things very clear, merely because you provide services in a particular state, you are not required to register in that state. That is not required at all. It is only when you have operations in a particular state, which is a place of business or office that you have to register in that state.

GST Registration –A Mixed Bag for Multiple State Services

In the past, even if you were operating in more than 10 states, you could have obtained just one registration, which is for the place where you are headquartered. Service provision is typically of a nature where in order to succeed in your business in a state, you will have to set up an office in that state. So if you are a Chennai-based company and if you are selling your solutions in Mumbai and Bangalore, at some stage in your evolutionary process you will set up your office in that city and have a person manning that office instead of you going there frequently.

When you have that kind of setup with more than one state of operation, you are required to obtain multiple registrations, you have to do the compliance of each of those registrations, the invoicing has to be organized according to that state and therefore the input tax credit also becomes state-centric. This is the reason that for multiple state service providers, it is a mixed bag.

DOCUMENTS REQUIRED FOR GST REGISTRATION

The following documents are required for GST apply online:

• Valid Permanent Account Number (PAN)
• Valid Indian Mobile Number
• Valid email address
• Place of business
• Valid Bank Account Number from India with IFSC
• At least one Proprietor/ Partner/ Director/ Trustee/ Karta/ Member with PAN
• An authorized signatory who is a resident of India with valid details including PAN

GST Invoice for Services

A Service Provider who has registered under GST can issue invoices and it can collect GST from its customers, in case if one has not registered under GST, they can issue a bill of supply without mentioning any GST.

GST has made doing business and trade very easy. The market size for every trader has grown. Now the whole country is his market. With regard to the service sector, GST has positive impacts like streamlining of taxes for inter-state service providers, clear distinction between goods and services, input credit facility and regularised GST return filing.

What is the difference between SGST and CGST?

Conclusion

We tried our best to provide you with information regarding your concern. In case of any help or suggestions leave us your comment below or contact our team.

Other Related Articles ;

1. Documents Required for GST Registration
2. GST Registration for Individuals
3. How to Register and Login to GST Online