The objective of the introduction of GST in India was to eliminate various indirect taxes and establish a unified taxation system. Additionally, GST facilitates streamlined tax collection and improved process efficiency.
GST registration is mandatory for businesses with turnover above Rs. Rs. 40 lakh* for sale of goods (Rs. 20 lakh for North Eastern and Hilly States for sale of goods). The limit for service providers will remain unchanged. If the total turnover of service providers is Rs. If it is more than that then they will have to register. 20 lakh (for regular category states) and Rs. 10 lakh (for special category states).
Furthermore, specific businesses must mandatorily obtain GST registration. Failure to do so is an offense under the GST Act, which can result in a substantial penalty. The process of GST registration takes place online, and GST is applied at each stage of the supply chain to ensure utilization of all available tax benefits.
Every product goes through several stages, including procurement of raw materials, manufacturing, wholesaling, retailing and selling to final consumers for consumption. In short, GST is levied at all three stages. To summarize, all goods and services go through several stages, including: (a) procurement and production of raw materials, (b) wholesale and retail distribution, and (c) final sale to consumers for use. GST registration is mandatory in the following example
1.When the aggregate turnover threshold is exceeded.
2.Certain businesses necessitate Compulsory Registration.
3.Voluntary Registration
GST is integrated into the final price of goods/services before purchase, eliminating earlier indirect taxes imposed by the Central and State Governments in India.
The subsequent individuals/entities are obligated to obtain registration under GST:
- Any business unit whose total turnover in a financial year exceeds Rs 40 lakh (Rs 20 lakh for special category states under GST).Note: This provision is not applicable if the entity is exclusively engaged in supply of goods/services exempted under GST.
- All entities registered under prior taxation laws (such as excise duty, VAT, service tax, etc.) are obliged to register under the Goods and Services Tax.
- Any entity or supplier involved in interstate supply of goods casual taxable person.
- Taxpayers are working under the reverse charge mechanism.
- Input Service Distributors and their representatives.
- E-commerce operator or aggregator*
- Non-resident taxable person.
- Agents acting on behalf of suppliers.
- Persons who supply through e-commerce aggregators.
- Entities providing online information, database retrieval or retrieval services from a place outside India to a person in India, other than a registered taxable person.In other words, any person or company involved in handling foods from farm to plate must obtain a food license.
To facilitate the administration of GST, a framework was developed to empower both the Central and State Governments to levy and collect the tax through their respective legislations. The GST categories are mentioned as follows:
CGST is a tax levied by the Central Government on the supply of goods and services within a state. This applies when both the seller and the buyer are located in the same state, constituting an inter-state supply. In such cases, the seller is required to collect both CGST and SGST. The CGST collected is retained by the Central Government, while the SGST collected is remitted to the State Government.
State goods and services tax is a tax imposed by the state government on the supply of goods and services within a state.
IGST operates under the IGST Act, wherein the seller collects IGST from the buyer. The revenue collected as IGST is divided between the central and state governments.
UTGST is applicable when goods and services are used within the Union Territories (UTs) of India, and the corresponding revenue is collected by the concerned Union Territory government.
- Registration Number
- Legal Name and Constitution of business
- Trade Name
- Period of validity
- Period of validity
- Date of Liability
- Signature of the applicant
The general public and inflation rates were taken into consideration in the design of GST levels. To ensure simplicity and accessibility, GST was organized into a four-tier structure.
These four categories are mentioned below:
Zero Rates
Zero-rated taxation refers to the absence of taxes applied on goods and/or services.
Lower Rate
The lower tax rate includes a 5% tax rate, which is imposed on the consumer price index (CPI) basket and mass consumption goods.
Standard Rate
The standard rate includes tax rates of 12% and 18%.
Higher Rates
Higher rates of taxation include the 28% tax rate under the GST rules.
The standard rate includes tax rates of 12% and 18%. • High RatesHigh rate taxation includes the 28% tax rate under the GST rules. (Section-8) What documents are required for GST registration? The documents required for online GST registration vary depending on the nature of the business. The list of documents required for GST registration (categorized according to type of business) is given below:
The validity of any GST registration certificate depends on the type of taxpayer obtaining the certification. It is fully valid when the certificate is issued to a regular taxpayer. In such cases, it becomes invalid only if it is canceled by the GST authority or surrendered by the taxpayer himself.
However, in the case of certificates issued for a casual taxpayer or a Non-Resident Indian (NRI) taxpayer, the validity is limited to a period of 90 days from the date of registration and the period specified in the registration application, whichever is earlier. Further, the validity period can also be extended under the provisions of Section 27(1) of the GST Act by the appropriate authorities.
Please use the steps below to integrate GST registration legally and securely and reap benefits in the form of better quality sales and satisfied customers. Our Utkarsh experts will be available to assist you with guidance related to GST registration and its compliance for the smooth functioning of your business in India. Utkarsh professionals will assist you in seamless planning at minimal cost, ensuring successful completion of the process.
It is advisable that an attorney with “taxation experience” should be appointed to understand the requirement in detail and overcome the many potential pitfalls within GST registration. Initial information from your side will be mandatory to start the process. Once all information is provided and payment is received, the lawyer will begin working on your request.
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Our customers can track the progress on our platform at all times. If you have any questions about the GST registration process, our experienced representatives are just a phone call away. Utkarsh will ensure that your communication with professionals is engaging and seamless.
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GST has consolidated various indirect taxes, uniting the Indian market.
The introduction of GST has eliminated the cascading effect of multiple VATs and taxes, leading to decreased costs for products and services
Small businesses benefit from GST Registration by sidestepping protracted taxation procedures. Service providers with turnovers under 20 lakhs and goods providers with turnovers under 40 lakhs are exempt from GST payments.
GST's implementation aims to reduce corruption and unrecorded sales, also alleviating the burden of diverse indirect tax compliance for small enterprises.
GST Registration fosters uniformity in taxation protocols and facilitates centralized registration. Businesses can conveniently file tax returns quarterly through online means.
GST's inception significantly curbs tax evasion.
In the former VAT system, businesses with turnovers above Rs 5 lakh were liable for VAT in India. Meanwhile, service tax was waived for providers with turnovers under Rs 10 lakh. Under GST, this threshold has risen to Rs 20 lakh, benefiting numerous small traders and service providers
GST offers a Composition scheme enabling small businesses with turnovers of Rs 20 to 75 lakh to reduce taxes. This initiative lightens the tax and compliance burden for many small enterprises.
The entire GST process, spanning registration to return filing, occurs online and is remarkably user-friendly. This proves advantageous for startups, sparing them the effort of navigating various registrations like VAT, excise, and service tax.
Previously, separate returns and compliances existed for VAT and service tax. In contrast, GST necessitates a single, unified return.
Pre-GST, industries like construction and textiles operated with limited regulation. GST introduces provisions for online compliance and payments, linking input credit availability to supplier acceptance. This enhances accountability and regulation within these sectors.
The initial stage of GST Registration involves filling out an online application. The taxpayer (applicant) should visit the GST portal, www.gst.gov.in, and create a username and password.
Click the link on the GST portal labeled 'New User Login.' Accept the displayed declaration form and proceed with the GST registration process.
Select 'New Registration' and log in to initiate the GST registration procedure.
Provide the requested details on the GST portal: Choose 'Taxpayer' from the drop-down menu. Select the appropriate state and district. Enter business details (Name and PAN card). Provide an active email ID and mobile number (for receiving OTPs). Enter the Captcha and click 'Proceed.'
Enter the OTP sent to the provided email ID and mobile number.
Click 'Proceed' after entering the OTP
Upon successful verification, a Temporary Reference Number (TRN) will be displayed. Keep this TRN for future steps
Return to the GST portal, click 'Register' under 'Taxpayers' menu, and select 'Temporary Reference Number (TRN).'
Return to the GST portal, click 'Register' under 'Taxpayers' menu, and select 'Temporary Reference Number (TRN).'
Click 'Proceed' after entering the required information.
An OTP will be sent to the registered email ID and mobile number. Enter this OTP and proceed.
Check the application status on the subsequent page. Click the 'Edit' icon for further adjustments.
Navigate through various sections on the next page, filling in relevant details along with necessary documents.
Before submitting the application, verify the declaration on the 'Verification' page. Choose one of the following methods for submission: Electronic Verification Code (EVC) e-Sign method Digital Signature Certificate (DSC) for company applicants
Upon completion, a successful message will appear on the screen, and the Application Reference Number (ARN) will be sent to the registered mobile number and email ID.
Monitor the status of the ARN on the GST portal.
GSTIN, known as Goods and Service Tax Identification Number, consists of 15 digits. This number is generated by the government when an individual or a company has successfully applied for GST Registration.
Yes, Digital Signature Certificate (DSC) is required if you are a Public Limited Company, Private Limited Company, Limited Liability Partnership (LLP), or One Person Company (OPC).
Yes, anyone can voluntarily get GST Registration even if the annual turnover does not exceed the threshold limit of 40 lakhs or 20 lakhs in the case of the northeast.
Any business is required to get more than one GST Registration number if: 1: The business entity is supplying goods & services from multiple States; then, it is mandatorily required by the business to get GST Registration in different States. 2: Further, any business entity can get multiple GST Registration number even if they are operating from a single State under several verticals to avoid accounting complications between various businesses.
Composition Scheme under GST is a secure scheme made to decrease the compliance burden for the small taxpayers. Small taxpayers can pay GST at fixed rates and can get rid of tedious GST formalities under this Composition Scheme under GST. The annual turnover of any business, if, is less than ₹1.5 Crore, can choose for a composition scheme under application for GST Registration.
Composition scheme under GST Registration in India does not apply to: Supplier of non-taxable goods Manufacturers of Notified Goods Service providers E-commerce sellers Inter-state sellers
Advantages related to Composition Scheme under GST Less tax liability; Not require maintaining detailed records; Need to file a single quarterly return. Four returns in a year; Limited compliances; A small amount of tax on turnover can be paid (1% for traders & 5% for restaurant); Can provide an auxiliary service up to 5 lakhs Rupees annually under the composition scheme.
Cannot avail input tax credit of any purchases made; Cannot charge any composition tax on an invoice from the customer as usual practice in case of a normal GST scheme. Cannot issue tax invoice;
ARN is known as the Application Reference Number. After the successful submission of the application of GST Registration, the ARN number is generated. The ARN number is generated after uploading of the necessary documents.
HSN is known as the Harmonized System of Nomenclature. This is an internationally accepted product coding system to maintain uniformity in the classification of goods.
