In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration. For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.
GST is the biggest tax reform in India, tremendously improving ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. By abolishing and subsuming multiple taxes into a single system, tax complexities would be reduced while tax base is increased substantially.
GST registration certificate is provided to persons registered under the GST Act. Entities in India having an annual turnover of more than Rs.20 lakhs in case of service providers and Rs.40 lakhs in case of goods suppliers are required to obtain GST registration. In addition to the aggregate turnover criteria, various other criteria’s could also make a business liable for GST registration (GST Turnover Limit). You can check GST registration eligibility here. In this article, we look at the GST registration certificate in detail.
Step 1:Go to GST portal. Click on Register Now under Taxpayers (Normal)
Step 2: Enter the following details in Part A –
Step 3: Enter the OTP received on the email and mobile. Click on Continue. If you have not received the OTP click on Resend OTP.
Step 4: You will receive the Temporary Reference Number (TRN) now. This will also be sent to your email and mobile. Note down the TRN
Step 5: Once again go to GST portal. Click on Register Now
Step 6: Select Temporary Reference Number (TRN). Enter the TRN and the captcha code and click on Proceed.
Step 7: You will receive an OTP on the registered mobile and email. Enter the OTP and click on Proceed
Step 8: You will see that the status of the application is shown as drafts. Click on Edit Icon.
Step 9: Part B has 10 sections. Fill in all the details and submit appropriate documents.
Here is the list of documents you need to keep handy while applying for GST registration-
Step 10: Once all the details are filled in go to the Verification page. Tick on the declaration and submit the application using any of the following ways
Step 11: A success message is displayed and Application Reference Number(ARN) is sent to registered email and mobile.
The Central Government has decided to provide two threshold limit for GST registration for suppliers of goods, Rs.20 lakhs and Rs.40 lakhs. However, each of the individual State Governments must decide on the threshold limit within a week as the State’s revenue is also tied to GST. This decision will now lead to various States having different GST threshold limits overtime.
Service providers will continue to be required to register for GST once they cross a turnover of Rs.20 lakhs and in case of Special Category States at Rs 10 lakhs.
Aggregate turnover is an important term that determines GST registration requirement. Turnover, in common parlance, means value of a business over a period of time. Aggregate turnover in GST can be described as the taxable value of supplies of goods and services, exempt supplies of goods and services, export of goods and services and inter-state supplies. Hence, aggregate turnover for GST includes supplies of goods or services, supplies exempt from GST and exports.
The basic pre-requisite for registration in GST is the aggregate turnover. The laws of GST states that any turnover up to 20 lakhs is completely exempted from GST, 10 lakhs for special category states except the state of “Jammu and Kashmir”, which is fully exempted from registration, while anything above these values are subject to registration. The aggregate turnover is calculated by taking together the value in respect of the activities carried by all the entities of the concerned person on a pan- India basis.
Eleven states are conferred with the status of special category, as prescribed by the Government. These are:
Aggregate turnover can be calculated as follows:
Value of all (taxable supplies+Exempt supplies+Exports+Inter-state supplies) – (Taxes+Value of inward supplies+Value of supplies taxable under reverse charge + Value of non-taxable supplies) of a person having the same PAN(Permanent Account Number) across all his business entities in India.
Composition Scheme is a simple scheme and an alternative method of levying a tax under GST. Small businesses registered under the GST composition scheme can pay GST at a fixed rate of turnover every quarter and file quarterly GST returns. Composition levy would be generally meant for small taxpayers those who are supplying goods and services or both to the end consumer with low turnover. This composition scheme has been designed with the aim to make compliance more accessible and cost-effective for the taxpayers. In this article, we look at the composition levy scheme in detail.
Any existing taxpayer whose annual turnover did not cross Rs 1.5 crore threshold or Rs.75 lakhs in the preceding financial year.
In the case of states under special category, except Jammu & Kashmir and Uttarakhand, the limit of annual turnover is increased from Rs. 50 lakhs to Rs. 75 lakhs. While the turnover threshold for Jammu & Kashmir and Uttarakhand will be Rs. 1 crore must register under the GST composition scheme.
The below following conditions must be satisfied to avail this composition levy scheme.
A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability.
Under GST, a registered dealer has to file GST returns that include:
To file GST returns, GST compliant sales and purchase invoices are required. You can generate GST compliant invoices for free on ClearTax BillBook.
In the GST regime, any regular business has to file two monthly returns and one annual return. This amounts to 26 returns in a year.
The beauty of the system is that one has to manually enter details of one monthly return – GSTR-1. The other return GSTR 3B will get auto-populated by deriving information from GSTR-1 filed by you and your vendors.
There are separate returns required to be filed by special cases such as composition dealers.
1. GST eliminates the cascading effect of tax GST is a comprehensive indirect tax that was designed to bring the indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax that was evident earlier.
2. Simple and easy online procedure The entire process of GST (from registration to filing returns) is made online, and it is super simple. This has been beneficial for start-ups especially, as they do not have to run from pillar to post to get different registrations such as VAT, excise, and service tax.
3. Unorganized sector is regulated under GST In the pre-GST era, it was often seen that certain industries in India like construction and textile were largely unregulated and unorganized. Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries. Let us now look at disadvantages of GST. Please note that businesses need to overcome these disadvantages to run the business smoothly.
4. Registration and Filing Returns Under GST Made Simple as Everything is Done Online Be it GST registration or return filing, a registered business owner can do everything online. This is certainly opposed to the earlier indirect tax regime, where a business owner had to get himself registered separately for various indirect taxes.
5. Regulated Unorganized Businesses One of the motivations to implement GST was to get on board the unorganized sector and eventually increase the tax base. According to Economic Survey 2017 – 2018, post the implementation of GST, there has been a 50% increase in the number of indirect tax payers. Furthermore, there has been an increase in the number of voluntary registrations, especially small enterprises that sell goods to large enterprises. These small entreprises want to come under the ambit of GST and claim input tax credit benefit.
IEC is a code required by business who are involved in imports and exports in India.
Under these circumstances importer exporter code is not required:
No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.
Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be the date on which he became liable for registration. Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration. In case of a person taking registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.
A person should take a Registration, within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as is prescribed under the Registration Rules. A Casual Taxable person and a non-resident taxable person should however apply for registration at least 5 days prior to commencement of business.
No. Every person who is liable to take a Registration will have to get registered separately for each of the States where he has a business operation and is liable to pay GST in terms of Sub-section (1) of Section 22 of the CGST/SGST Act.
Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.