Goods and Service Tax or GST, in short, is a tax imposed on the sale of all goods and services in India. It is a form of indirect tax that replaces all the previous indirect taxes applicable to the manufacturing and sale of different goods and services. It is a multi-stage and destination-based tax. The Indian government introduced GST on 1st July 2017, this new form of tax obsoletes all other previous indirect taxes like service tax, excise duty, customs duty, VAT, surcharges, Octroi.
It is mandatory to have Registration under GST for all the businesses and companies that are running in India and are eligible to pay GST (goods and service tax), or they should take New GST Registration. After coming into existence on July 1st, 2017, GST became the new form of indirect tax and included all the previous indirect taxes.
GST has been imposed in all stages, starting from manufacturing to the final consumption of the product. The regulatory body, GST Council of India, decides all the tax rates, rules, and regulations for goods and services taxes.
The online GST registration process is fairly simple, and an individual does not require to go and submit any documents manually.
Benefits of New GST Registration:
Simplicity:
GST is an all-in-one tax; it cuts down all the indirect tax you were paying earlier. So registration under GST will allow paying only one tax, that is GST, and the online registration process has become very user-friendly.
It's simple form completion, and submission with no additional compliance and processing makes the registration process easy.
Reduction in Tax:
GST is an indirect tax, and its concept is "one nation one tax". Online GST registration replaces all the previous individual taxes (VAT, service tax, customs duty, etc.) and decreases the tax burden on small scale industries and businesses. The GST registration is also easy, and the GST Registration Fees are minimal.
Claim the input tax credit:
GST certificate holders like sellers, dealers, and traders can claim input tax credit which is already paid on purchases.
Benefits for e-commerce business:
GST registration is mandatory for e-commerce business, without registering under GST, one cannot open an e-commerce website. Goods and service tax has provided many advantages for an r-commerce business like Nykaa, Snap Deals, Myntra, Club factory, etc.
Improving economy:
Whenever the price drops consumption of that product increases, the same thing happens with tax. When tax rates decrease, it improves the consumption rate of that product in the market. GST's core concept is just this; it compiles all the previous indirect taxes and makes it one, which reduces tax burden and ultimately reduces the price of the product. Low product cost results in a consumption level rise which then leads to a rise in productivity and improves the economy in the long run.
Who can apply for the GST registration process?
For businesses and companies, who buy and sell goods and services and have a turnover higher than Rs. 20 lakhs for annual supply of services and Rs. 40 lakhs for the annual supply of goods, GST Registration is necessary.
- Individuals who are still under Excise, VAT, Service Tax i.e. under pre-GST law, have to apply for New GST registration.
- If the turnover is more than Rs. 40 lakhs (Rs. 20 lakhs for states special category) annually for goods providers, then they have to tale GST registration.
- For a service provider if the sales turnover exceeds the limit of Rs. 20 lakhs per annum (Rs. 10 lakhs for states special category), it is mandatory to take online GST registration.
- Agents of suppliers or IDS (Input Service Distributor) will get benefits of Input Tax Credit by taking goods and service tax registration.
- All e-commerce portals, sellers (like Amazon, Snap deal) and aggregators need GST certificate to open their business. Persons who supply online data and database access from outside India to a person in India need GST registration to run their business.
- If you are a goods and service supplier in multiple states, i.e. you are doing inter-state supply, then GST registration is a must.
Documents required for GST registration online
For proprietorship
- PAN number of applicant
- Aadhar card
- Proof of address
- Statement of the bank account or canceled cheque
- Description of business
- Passport size photograph of the applicant
For private Limited
- PAN number of the company
- Aadhar card of all the directors
- Incorporation certificate or proof of business
- Bank account details
- Residential proof of business or company
- MOA and AOA
- Digital signature
- Letter of Authorization
- ID and address proof of promoters and directors
- Photographs of promoters and directors
For LLP/ Partnership
- PAN card of partnership
- Aadhar card of all partners
- Bank account details
- Address prod
- LLP certificate or partnership deed
The documents, as mentioned above, are required to collect before GST registration.
Guideline for online GST registration process
1.The whole GST registration process is online and through online portals supported by the Central Government of India. Throughout this registration process, some fields will require professional help. So it is best to consult an expert before taking your GST registration.
2. After preparing all the documents required for GST registration head over to the GSTN online portal, in part A of form goods and service tax REG-01 the applicant needs to submit PAN, mobile number, and email address.
3. Upon verification of the PAN, mobile number and email address the GST portal will generate a one-time password, and an application reference number (ARN) will be sent to the registered mobile number and via email. After this verification process, Form goods and service tax REG-02 will be generated electronically.
4. Now the applicant needs to fill all the necessary information in part B of form goods and service tax REG-01 and specify the application reference number (ARN). Submit this part of the form with all the relevant documents to proceed onto the next part.
5. In case any additional information is required Form Goods and service Tax REG-03 will be issued, and the applicant has to respond in Form Goods and Service Tax REG-04 within 7 days from the issue of Form GST REG-03.
6. After doing all the steps correctly and providing information through Form Goods and Service Tax REG-01 or REG -04 a registration certificate GST REG-06 will be issued. In it, the applicant will get the GSTIN number for the principal place of business and every additional place of business.
7. In case the provided information turned out to be wrong or not satisfactory then your GST registration application will get rejected using Form Goods and Service Tax REG-05.
Mode of GST Registration
There are four kinds of GST registration, and you have to choose the category for which you are eligible.
CGST
The tax imposed on the intrastate supply of goods and services by the Central government of India is called Central Goods and Service Tax (CGST). Intra-state supply of services and goods happens when the supplier and buyer are in the same state.
SGST
The tax imposed on the intra-state supply of goods and services is known as the State Goods and Service Tax (SGST). Here the tax revenue goes to the state government.
IGST
This tax is levied on the inter-state supplies of goods and services. When the supplier of goods and services and the supply are in different states, then IGST is applicable. The tax revenue generated through IGST is shared between State and Central.
UTGST/ UGST
When the exchange of goods and services happens in any union territory, the tax which is applied is UGST which is collected by the central government.
Method to track your GST registration application
You can track your GST registration and check its status online. Follow these simple steps to track your GST registration.
1. First, you need to log on to the GSTN portal i.e. https://services.gst.gov.in
2. After successfully logging into your account, click on the “service” option.
3. You will now get a “registration” result.
4. On that page, choose "track application status".
5. You now have to enter your ARN number in the search feed and click search.
6. You will now be able to see the application status and the same information will be sent to your mail for easy accessibility.
The penalty related to GST registration
- If an eligible person is not registering under GST, then that person has to pay a penalty of 10% of the tax amount or a penalty of minimum Rs. 10,000, which is greater. So online GST registration is mandatory for businesses.
- Deliberately avoiding the tax will attract a fine of 100% of the tax amount.
- Doing the invoicing wrong can lead to a penalty of rs. 25000. You have to fill in GST tax returns for NIL return to avoid any penalty.