GST REGISTRATION

What is GST?
GST (Goods and Services Tax) is a single tax that replaces various old taxes like VAT, Service Tax, and others. It applies all over India starting from July 1, 2017.

When do you need to register for GST?
You need to get GST registration if:

  • Your annual sales are more than INR 40 lakh (INR 20 lakh for special states).
  • You sell goods or services across state lines.
  • You sell through e-commerce platforms.

What are the GST tax rates?
GST rates range from 0% to 28%, depending on what you’re selling.

What is Input Tax Credit?
If your business is registered under GST, you can claim credit for the GST you paid on purchases when you file your GST returns.

Filing Returns and Paying Tax
As a GST-registered business, you must:

  • File three monthly or quarterly returns.
  • File one annual return.
  • Pay taxes every month.

What is the Composition Scheme?
If your annual turnover is less than INR 1.5 crore, you can opt for this scheme. It allows you to pay a lower tax rate (1% to 5%) and file returns every three months instead of monthly.

When Do You Need to Register for GST in India?

  1. Turnover Criteria
    • General Rule: If your annual sales are over INR 40 lakh, you must register for GST.
    • For Services: If your annual service income is over INR 20 lakh, you need GST registration.
  2. Temporary Events
    • If you’re selling at events or exhibitions without a permanent business location, you need temporary GST registration before starting. This registration is valid for 90 days.
  3. NRIs
    • If you’re a Non-Resident Indian and want to start a business in India, you need GST registration before beginning operations. This registration is also valid for 90 days.

 

  1. Agents and Input Service Distributors
    • If you’re an input service distributor wanting to carry forward input tax credits, you need GST registration.
  2. Reverse Charge
    • If your business needs to pay tax under the reverse charge mechanism, you must be registered for GST.
  3. E-Commerce Platforms
    • E-commerce platforms (like Amazon or Flipkart) that host multiple vendors need to be registered for GST.
  4. Inter-State Sales
    • If you sell goods or services across state borders, you need GST registration. This involves Integrated Goods and Services Tax (IGST).
  5. Exporting
    • Businesses involved in exporting goods must be registered under GST, even though exports are zero-rated.

Why is GST Registration Important for Your Business?

1.      Stay Competitive

  • Being GST registered makes you stand out from competitors who aren’t, showing that your business is officially recognized.

2.      Sell Online

  • To sell products or services on e-commerce platforms like Amazon or Flipkart, you need GST registration.

3.      Save on Costs

  • GST registration allows you to claim credits for the GST you paid on your purchases, which helps reduce costs.

4.      Trade Across India

  • You need GST registration to sell goods or services to other states without restrictions.

5.      Bid on Government Tenders

  • Many government contracts require you to have a GSTIN. Without it, you might miss out on these opportunities.

 

6.      Open a Business Bank Account

  • To open a current bank account for your business, especially if you’re a sole proprietor, you’ll need GST registration as proof.

 

7.      Work with Big Companies

  • Large companies often prefer dealing with businesses that have valid GST registration.

What is a GST Identification Number?

 

A GST Number, or GSTIN, is a 15-digit code given by the government when you complete GST registration. It’s used to identify your business for tax purposes.

How is a GST Number (GSTIN) Structured?

  1. First 2 Digits: Show your state code.
  2. Next 10 Digits: Represent your PAN number.
  3. Next 1 Digit: Indicates the sequence of GST registrations in your state.
  4. Last 2 Digits: Are random.

What is the GST Simple Tax Scheme?

The GST Composition Scheme is a simple tax option for small businesses. It helps reduce paperwork and makes paying taxes easier. Small businesses with an annual turnover of up to ₹1.5 crore can choose this scheme. Instead of filing monthly GST returns, they pay a lower, fixed percentage of their sales as tax.

Different Types of GST Registration

Types of GST Registration: Composition vs. Regular

  • Compliance:
    • Composition Scheme: Easier rules for small businesses.
    • Regular Scheme: Regular rules apply.
  • Tax Rate:
    • Composition Scheme: Pay a lower, fixed rate of 1-5% on sales.
    • Regular Scheme: Tax rates range from 0-28% depending on what you sell.
  • Input Tax Credit:
    • Composition Scheme: You can’t claim credits for GST paid on purchases.
    • Regular Scheme: You can claim credits for GST paid on purchases.
  • GST Return Filing:
    • Composition Scheme: File returns every three months (quarterly).
    • Regular Scheme: File returns every month.
  • Tax Invoice:
    • Composition Scheme: Cannot issue tax invoices to customers.
    • Regular Scheme: Can issue tax invoices to customers.

Benefits of GST Registration

 

1)      Proves Your Business is Legitimate

  • Shows your business is officially recognized and allowed to operate.

2)       Boosts Your Business’s Credibility

  • Makes your business look more trustworthy to customers, suppliers, and banks.

3)      Saves on Taxes

  • Lets you claim credits for GST paid on your business purchases, lowering your tax costs.

4)       Simplifies Compliance

  • Reduces the hassle of dealing with multiple registrations and cuts compliance costs.

5)      Expands Your Market

  • Allows you to sell goods and services anywhere in India without restrictions.

6)       Gives You a Competitive Edge

  • Lowers your tax costs, helping you offer better prices than competitors.

7)       Makes Tax Filing Easier

  • Simplifies the tax process, making it easier to manage your business.

8)       Offers Legal Protection

  • Helps you take legal action if customers or suppliers don’t pay or comply with agreements.

 

 

 

What Happens if You Don't Register for GST?

If you don’t get GST registration on time, you could face:

  1. A Penalty:
    • You’ll have to pay either ₹10,000 or 10% of the tax due, whichever is higher.
    • You’ll also need to pay the GST on your sales, plus interest, even if you haven’t collected it from customers.
  2. Other Consequences:
    • Goods and vehicles might be seized or held.
    • You won’t be able to claim or transfer input tax credits.

How to Register for GST:

  1. Submit Your Details:
    • Provide your business information on our website.
  2. Choose a Package:
    • Pick a service package and pay online using various payment options.
  3. Order Processing:
    • Your application will be assigned to a professional.
  4. Document Review:
    • The professional will check your documents and file your GST application.
  5. Follow-Up:
    • The professional will keep in touch with the government to process your application.
  6. Receive GSTIN:
    • Once registered, you’ll get your GST certificate and guides on GST and invoicing software.

How to Check Your GST Registration Application Status

  1. Go to the GST Portal:
  2. Find the Right Section:
    • Click on the “Services” tab and select “Registration.”
  3. Track Your Application:
    • Click on “Track Application Status.”
  4. Enter ARN:
    • Type in your ARN (Application Reference Number) from your GST application.
  5. Verify with Captcha:
    • Enter the captcha code shown on the screen.
  6. Check Status:
    • Click “Search” to see your application status.
  7. Status Information:
    • Your application status might show as:
      • Submitted
      • Pending for verification
      • Pending for clarification
      • Rejected
      • Approved
  8. Rejection Details:
    • If rejected, the reason will be provided.
  9. Clarification Needed:
    • If the status is “Pending for clarification,” provide the needed information and resubmit.
  10. Receive Certificate:
  • Once approved, you will get your GST registration certificate.

How to Download Your GST Registration Certificate

  1. Visit the GST Portal:
  2. Navigate to Services:
    • Click on “Services” and select “Registration.”
  3. Download the Certificate:
    • Click on “Download Certificate.”
  4. Enter ARN:
    • Input your ARN (Application Reference Number).
  5. Complete Captcha:
    • Enter the captcha code shown.
  6. Download the File:
    • Click “Download” to get your GST registration certificate.
  7. Receive PDF:
    • The certificate will download as a PDF.

Documents Needed for GST Registration

  1. PAN Card:
    • Required for the business or applicant, as GSTIN is linked to PAN.
  2. Identity and Address Proof of Owners:
    • Provide documents like PAN, passport, driving license, Aadhaar card, or voter ID for all business owners.
  3. Proof of Business Address:
    • Submit documents like a rental agreement or sale deed, plus copies of an electricity bill, latest property tax receipt, or municipal khata.
  4. Bank Account Proof:
    • Provide a scanned copy of the first page of your bank passbook showing transactions and your business address.