For every business owner whose yearly turnover is more than Rs.20 lakh (Rs.10 lakh for North Eastern (NE) and hill states), Goods and Service Tax (GST) registration is mandatory. In India, it is one Indirect Tax that has replaced various other Indirect Taxes. It acts as one indirect tax for the whole country.
The bill was passed by the Parliament on 29 March 2017, and the Act came into effect from 1 July 2017. In India, as per the GST Law, tax is charged at every value addition and is comprehensive, multi-stage, and destination based. Tax is charged at each point of sale under the GST regime. Integrated GST is collected for inter-state sales, and Central GST and State GST are levied for intra-state sales.
In case eligible organisations do not register for GST, it is an offense and they face huge penalties.
Who requires mandatory GST registration?
- Casual Taxable person
- For businesses that have branches in different states
- For non-resident taxable individuals
- Inter-state suppliers
- For agents of an input service distributor and supplier
- For individuals who were registered under the laws before GST
- Businesses whose yearly turnover is more than Rs.20 lakh (Rs.10 lakh for NE and hilly states)
- E-commerce operators who supply goods or service
- For individuals for whom Input Tax Credit is a must
Penalties for not registering under GST
- If the individual does not pay tax or makes a payment lesser than the amount that must be paid due to genuine reasons, he/she will have to pay 10% of the tax amount due. The minimum penalty that must be paid is Rs.10,000.
- If the individual on purpose does not register for GST, he/she will have to pay 100% of the tax amount due.
- If an individual is eligible for GST and does not register, it is a crime under Section 122.
Documents needed for GST registration
Below is a list of documents that are required for GST registration:
- Permanent Account Number (PAN) card
- Business address proof
- Documents showing that the business is registered
- Letter of Authorisation
- Aadhaar Card
- Digital signature
- Account statement from bank and cancelled cheque
- Identity (with photograph) and address proof of Director/Promoters
Online GST registration procedure
The registration for GST is usually completed within 2 to 6 working days. The following steps will need to be followed for online GST registration
- You must visit the official GST portal which is https://www.gst.gov.in/.
- Once on the portal, ‘Register Now’ under the ‘Taxpayers (Normal/TDS/TCS)’ tab must be clicked. It will lead you to https://reg.gst.gov.in/registration/.
- Once here, choose ‘New Registration’.
- Under ‘I am’ select ‘Tax Payer’.
- The next step would be to enter your state, district, name of business as mentioned on PAN, permanent account number, email address, mobile number, and captcha.
- The email ID and mobile number entered by you must be active as different OTPs will be sent to them.
- Click on ‘Proceed’ once all details have been entered.
- The next page will request you for the OTPs that have been sent to your email address and mobile number. Once you have entered the details, click on ‘Continue’.
- You will be able to see the Temporary Reference Number (TRN). Make a note of the TRN. You will also receive the TRN on the email ID and mobile number.
- You will again need to visit the official GST portal and click on ‘Register Now’ which can be found under ‘Taxpayers (Normal/TDS/TCS)’.
- Choose ‘Temporary Reference Number (TRN)’. Type in the TRN that you have noted in the box provided. Fill in the captcha as well. Click on ‘Proceed’ once details have been entered.
- You will receive a new OTP on your email ID and mobile number. Click on ‘Proceed’ once you have entered the OTP.
- On the dashboard, your application status can be seen under ‘Draft’. Click on the ‘Edit’ icon.
- There will be 10 sections on the next page. All necessary details and documents that need to be uploaded must be completed.
Few documents that are required are:
- Constitution of the taxpayer
- Authorisation form
- Documents that show place of business
- Bank account details
- Go to the ‘Verification Page’ once you have uploaded all documents.
- Check the declaration box. Submission of the application can be done by e-sign, DSC, or EVC.
- You will see a ‘success message’ once the submission process is done. An Application Reference Number (ARN) will be sent to your email address and mobile number.
Benefits of GST
Few of the main GST benefits are mentioned below:
- It is a simple process that can be completed online.
- Due to the introduction of GST, the cascading effect that was present earlier does not exist. The main aim is to have all indirect taxation under one banner.
- For e-commerce operators, the process has become very simple. It was very difficult for them to deliver goods before due to the presence of various VAT laws.
- Textile and construction sectors which were not organised or regulated before, have been controlled due to the introduction of GST.
Therefore, if you are eligible for GST, it is mandatory to register. Failing to register can lead to huge penalties being levied. To Understand more clearly about Online GST registration process feel free to visit here. Therefore, you’ll find an easy and quick process as individuals will not have to visit various departments for registrations as well.