GST and GST Registration
GST stands for Goods & Services Tax. It is a destination and comprehensive indirect tax levied on the supply of services and goods. It has replaced many indirect taxes such as the service tax, Value Added Tax (VAT), central sales tax, excise duty, additional customs duty and so on. The Government passed the Goods & Services Act which came into effect from 1st July 2017. This day is celebrated as ‘GST Day’ every year.
Initially, the GST Act stated that businesses exceeding an annual turnover of Rs 20 lakhs needed to register themselves as a taxable entity. But, as decided in the 32nd GST Council Meeting in January 2019, states were given options to either opt for new limits or to continue with the previous ones. Bihar opted to raise this limit to Rs 40 lakhs for sale of goods and this new limit came into effect from 1st April 2019 onwards. However, there was no change in the threshold limits for service providers doing GST Registration in Bihar.
It can be done easily on the online portal of GST Registration. The Government has not described any GST Registration fees in Bihar. But, you may need to bear a professional fee if you hire the services of a consultant or CA for GST registration.
For certain businesses, it is a criminal offense to operate without doing GST Registration in Bihar.
What are the benefits of GST registration?
Registration under the GST regime can bring the below-mentioned benefits to the Government and the businesses-
- GST has removed the cascading effect of taxes and eliminated the ‘tax on tax’. This has reduced the cost of production considerably for businesses.
- The GST regime has been able to regulate the unorganized business sector. A GST registration makes a business legally recognized as a supplier of services or goods
- GST Registration in Bihar increases the revenue generation prospects for the Government
- GST helps a business to consolidate its warehousing facilities and to improve the efficiency of logistics, at reduced costs.
- 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.
- GST has been a boon to the MSMEs. 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 businesses can utilize the composition scheme provided by the GST regime to lower taxes. Thereby, they can reduce their taxation and compliance burden significantly.
Who should register for GST? (Checklist)
The following entities should mandatorily do GST registration in Bihar
- Individuals/businesses registered under tax services of the previous regime (VAT, Excise, Service Tax, etc.) before GST came into effect
- Persons/businesses making the inter-state supply of goods & services
- Non-Resident taxable person/Casual taxable person
- All e-commerce aggregators
- A person/business that supplies through an e-commerce aggregator
- A person/business that supplies online information, database access and/or retrieval services from outside the country to a person/business in India (other than a registered taxable entity)
- Agents of a supplier & Input service distributor
- Any other person/business as notified by the Central/State Govt. , as and when recommended by the GST Council
How to do Online GST registration in Bihar
The process of GST registration is very simple, and if you have complete documents with you, the process will be hassle-free. Register with Vakilsearch in 3 simple steps –
- We help you get a secure GST identification number
- We make it easy for you to get your GST from the comfort of your own home
- We will file your returns and complete all other compliances as and when required
You can also register for the GST in the following way
- Visit the online GST registration portal
- Click “Services”>“Registration” > “New Registration”
- On the next page, submit the following details-
- Select your type as “Taxpayer” from the ‘I am a’ drop-down menu
- Select ‘Bihar’ in the ‘State/UT’ drop-down menu
- Select the appropriate district in the ‘District’ drop-down menu
- Enter the name of your business, as mentioned in your PAN
- Enter your PAN number
- Enter your E-mail ID and valid mobile number in the space provided. OTPs will be sent to them. Remember that the OTPs will be valid only for 10 minutes.
- Click “Proceed”
- On the resultant page, enter the OTPs received in appropriate boxes and click “Proceed”
- A system-generated Temporary Reference Number (TRN) will appear on your screen. Note this number for future reference.
- Now, visit the GST site homepage again and log in using the TRN and Captcha code.
- The ‘My Saved Application’ page will be displayed on your screen. Click the ‘Edit’ icon
- The resultant page will show your Registration Application Form with different tabs
- You will see 10 sections on top of the page. Enter all the required details in each of these sections.
- Fill the details of the ‘principal place of businesses and ‘commodity details’. Click ‘Save & continue’
- Select appropriate HSN code
- Fill in your Bank account details
- Upload scanned copies of the relevant documents ( refer to the next section to know more about the documents required)
- Next, visit the “verification” page and check the declaration box.
- Submit your application by any of the following methods-
- By e-Sign methods- With an OTP received on the mobile number linked to your Aadhaar card
- By EVC- With an Electronic Verification Code received on your registered mobile number
- If you are registering as a company, you must apply with a Digital Signature Certificate (DSC).
- After the application is submitted, a message confirming successful submission will appear on the screen.
- An Application Reference Number (ARN) will be sent to your Email ID and the registered mobile number. With this ARN, you can check the status of your GST registration online in the Bihar application on the GST portal.
You will receive your permanent GST number within 7 working days after GST Registration online in Bihar, 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.
To know where a business entity or taxpayer is from, every state in India has been given a State Code, which is a fixed two-digit number. These codes are small so that there is less chance of mistakes in filing GST Returns and in processing GST invoices. The first 2 digits of a GSTIN signify the GST State Code. The Bihar state code for GST needs to be present in any GST invoice for businesses operating in Bihar.
The Bihar GST Code is 10, as per the GST State Code List. For example, in GSTIN 10AAEPM0122C1Z8, the first 2 digits (10) denote the Bihar GST code. The Bihar State Code for GST specifies that the business is located in Bihar.
The Bihar GST state code can be obtained from the GSTIN of the buyer, mentioned in the “Place of Supply” section of a GST invoice. The Bihar GST state code helps the Government to assess whether to charge IGST, SGST or CGST on a taxpayer or a business entity. 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.
What are the documents required for GST registration in Bihar?
Please keep the following documents ready to complete the GST registration process-
- PAN card of the applicant
- Identity and address proof for each of the directors/promoters with photographs
- Proof of business address (anyone from rent/lease agreement, electricity bill, owner NOC and so on)
- Proof of constitution of business (anyone from partnership deed, Memorandum of Association (MOA), certificate of incorporation, registration certificate, Articles of Association (AOA), Society by-laws and so on)
- Authorization details (anyone from letter of authorization, copy of the resolution passed by the managing committee/BoD specifying the authorized signatory
- Bank details ( First page of bank passbook, a canceled cheque of the bank account showing the name of the account holder, bank statement)
Frequently Asked Questions
When a person occasionally supplies goods/services in an area in India where GST is applicable, but he does not have a fixed place of business in India, he will be treated as a non-resident taxable person under GST. Section 24 of the GST Act mentions special provisions relating to the Non-Resident Taxable persons. They may get temporary registration for 90 days, which can be extended further for another 90 days if needed. They will be asked to make GST deposits in advance, depending on their estimated tax liability.
No, you are not allowed to collect any GST from your customers if you are not registered with the GST regime. Also, you can’t claim any ITC (Income Tax Credit) against GST paid by your customers.
An input service distributor is an office of the supplier of services or goods who receives tax invoices upon receipt of input services. He also issues tax invoices while distributing the credit of SGST, CGST or IGST paid on those services. He must be a supplier of services or goods having the same PAN as that of the particular office mentioned above.
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