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GST for Individual

GST or Goods & Services Tax has been quite a revolution for the Indian economy, right from its inception. If you generate income in an individual capacity, you are also treated as a taxable person in the GST regime. Remain GST compliant & avail the benefits it brings along.

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What is GST?

GST or Goods & Services Tax is a destination-based tax, charged on the supply of goods and services. It is levied at every stage or change of hand an item moves through, along its supply chain. It has replaced and absorbed many indirect taxes such as the service tax, central sales tax, Value Added Tax (VAT), excise duty, and so on. The Indian Parliament passed the Goods & Services Act to introduce GST as a comprehensive indirect tax across the country. This Act came into effect from 1st July 2017.

The process of registration of an entity in the GST regime is known as GST registration. There are 3 components of GST. These are as follows-

Now that you have got an overview of GST, we will discuss GST registration for the individual people. As per the GST Act, any individual who carries out a business activity anywhere in India, needs to have GST individual registration. This means, if you are engaged in any economic activity in an individual capacity that generates income, you are treated as a taxable person in the GST regime. For example, if you operate as a tax consultant and offer services in an individual capacity, you need to have GST for individual consultants.

  • SGST (State GST)- It is levied by the State Government on an intra-state sale.
  • CGST (Central GST)- It is levied by the Central Government on an intra-state sale.
  • IGST (Integrated GST)- It is levied by the Central Government on an inter-state sale.

What are the benefits of GST?

Registration under the GST regime can bring the below-mentioned benefits to the Government and the individuals/businesses-

  • GST is calculated only on the value-added at each stage of the supply chain. Therefore, it has removed the cascading effect of taxes and eliminated the ‘tax on tax’. This has reduced the cost of production considerably.
  • GST has increased the revenue generation prospects for the Government
  • GST helps a business to consolidate its warehousing facilities and to improve the efficiency of its logistics operations, at reduced costs.
  • The GST regime has been able to regulate the unorganized business sector.
  • Because of the simplified return filing system in the GST regime, MSMEs are less dependent now on tax professionals as compared to the previous tax regime.
  • Small business owners can utilize the composition scheme provided by the GST regime to lower taxes. Thereby, they can reduce their taxation and compliance burden significantly.
  • GST registration makes a business legally authorized to collect tax from its purchasers or recipients and to pass on the credit against the taxes paid to them.

Major points to consider while registering for GST for individuals

Please note the following points while applying for GST for individual person-

Aggregate turnover criteria

Initially, the GST Act mandated that any individual or business with aggregated turnover of over Rs 20 lakhs must have GST registration. This threshold was kept at Rs 10 lakhs for the special category states. However, w.e.f. 1st April 2019 onwards, this limit was increased to Rs 40 Lakhs for the sale of goods. No changes were made to the limits for service providers. The states were given options to either opt for new limits or to continue with the previous ones. Thus, while applying for GST for individual consultants, take note of the aggregate turnover criteria.

Even if you do not qualify based on the above-mentioned aggregate turnover criteria, you should mandatorily have GST registration if you fall into any of the following groups-

Casual taxable person

If you do not have a fixed place to do business but occasionally supply services/ goods, you will fall into this category. For example, if you decide to sell fireworks temporarily during Diwali, you will be a casual taxable person. In this case, you need to have GST for individuals, irrespective of your aggregate income.

Non-resident taxable person

If you occasionally supply services/ goods to recipients with no fixed business place/ residence in India, you will fall into this category. In this case, you need to have individual GST registration, irrespective of your aggregate income.

Agents, brokers, dealers

You will fall into this category if you make a taxable supply of services/goods on behalf of another person/business.

Steps involved in GST registration

With Vakilsearch, you can do your GST registration online with a few simple steps. Our dedicated GST representatives will be in constant touch with you right from the word go and will help you obtain the GST individual registration in a smooth and hassle-free manner.

  • Step 1: Our representative will collect from you all the documents required for GST application (refer to the next section to know more about the documents required).
  • Step 2: Then, we will prepare your draft application. The completed draft will be visible to you for any correction you desire.
  • Step 3: We will file the application on your behalf. After the application is submitted, an Application Reference Number (ARN) will be generated, confirming successful submission. It will be shared with you on your registered mobile number and email ID. With this ARN, you can check the status of your gst registration applications on the Vakilsearch online portal.
  • Step 4: Post the submission, we would be doing the necessary coordination with the authority for expediting your application. We would also resolve related queries, if any, from the GST department- while you need to just relax and sit back!
  • Step 5: You will receive your permanent GST number within 7 working days of applying for GST registration, subject to successful document verification by the authorities. This number (called the GSTIN or GST Identification Number) will appear henceforth on all the invoices submitted or received by you.

We will send your GST certificate to you on your email ID. This certificate will have your 15 digit GSTIN.

More on GSTIN and GST State Code:

The first 2 digits of a GSTIN signify the GST State Code of the state in which you have done the GST registration. Every state in India has been given a GST State Code, which is a fixed two-digit number. This Code helps the destination state to know where a business entity or taxpayer is from.

For example, if your GSTIN is 21BBEPM0192C1Z8, the first 2 digits (21) denote the GST State Code for the state of Odisha. Thus, this GSTIN specifies that the business is located in Odisha. It also allows the Odisha State Government to assess whether to charge IGST, SGST or CGST on a particular invoice. If the State Code for both the buyer and the supplier is different, IGST will be charged. If these two State codes are the same, SGST and CGST will be charged.

You will receive your permanent GST number within 7 working days of applying, subject to the submission of proper documents. This number (called the GSTIN or GST Identification Number) will appear on all the invoices submitted or received by you.

Documents required for GST registration for individuals

The following documents should accompany your application -

  • PAN card of the applicant
  • Bank details (First page of bank passbook, a cancelled cheque of the bank account showing the name of the account holder, bank statement)
  • Proof of address (any one from rent/lease agreement, electricity bill, owner NOC and so on)

Why Vakilsearch

Vakilsearch is India’s largest professional platform of lawyers, chartered accountants, and company secretaries-with years of experience behind. We execute legal work for over 1000 companies and LLPs every month, by leveraging our tech capabilities, and the expertise of our team of legal professionals.

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We make your interaction with the government as smooth as possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

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With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.

Access To Experts

We provide access to reliable professionals and coordinate with them to fulfil all your legal requirements. You can also track the progress on our online platform, at all times.

Realistic Expectations

By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.

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