The name Goods and Services Tax (GST) reflects that it is a taxation system that takes into account both the goods and the services. Through a dual mechanism of GST, the GST applies to both tangible goods as well as intangible services and maintains a balance of independent revenues for both the Central Government and the State Government.
With the advent of the GST regime on 1st July 2017, all value additions are subject to a comprehensive, multi-stage, and destination-based tax. Transparency in the indirect tax framework will be enhanced by the GST regime, which is expected to bring down inflation rates and cascading effects. Investments, e-commerce, and the “Make in India” approach will also rise.
GST is based on the concept of “One Nation One Tax” and has tax rates that start at 0% and reach 28% at the highest.
People still do not have a very good understanding of this tax mechanism, so they seek help from a Chartered Accountant in order to familiarize themselves with it.
Under the GST regime, it is mandatory for all business entities engaging in the purchase of goods or services or both to register themselves. Input tax credits cannot be claimed by entities that do not have GST registrations for their operations, which prevents them from collecting GST from consumers.
As a consequence, GST registration is mandatory for claiming ITCs and collecting GST from customers. GST is a destination-based tax applicable to all transactions involving the supply of goods or services.
Who should register for GST?
Companies that supply goods that turn over more than INR 40 lakh in a financial year are required to register as normal taxable persons. However, in the northern states, J&K, Himachal Pradesh, and Uttarakhand, the threshold limit is INR 10 lakh.
Service providers have a turnover limit of INR 20 lakh, and in special category states, INR 10 lakh.
There are also certain businesses for which GST registration is mandatory no matter what their turnover is:
- A distributor of input services (ISD) or a casual taxpayer
- Taxable non-resident
- Provider of goods and services across state lines
- An e-commerce portal that provides goods
- A service provider of any kind
- Under reverse charge, liable to pay tax
- Tax deductor/TCS deductor
- Provider of online data access and retrieval services
What are the documents required under GST?
The following documents are required if you wish to avail services for gst registration online. For now, let’s have a look at the documents.
An entity should obtain its PAN card before applying for GST registrations since GST Registration is linked to the PAN of the business.
IDENTITY PROOF ALONG WITH PHOTOGRAPHS:
The following documents can be admitted and submitted as Identity Proofs: Passports, Voter ID cards, PANs, Aadhar cards, Driving licenses; Address Proofs (passports, Aadhar cards, driving licenses, voters’ identity cards, ration cards). The following persons are required to submit the above-mentioned documents:-
The Managing Director, the Directors, and the Authorized Person of the Company
Family of Hindu Undivided – Karta
Ownership – Proprietorship
A local authority’s CEO or an equivalent
A statutory body – the CEO or an equivalent
Authorized Person, Managing Trustee, and Trustees
The details of all partners must be submitted, but only the photographs of 10 partners, including that of the managing partner, should be submitted;
Organizations or bodies of individuals -Members of the Managing Committee (personal information of every member must be submitted, but photographs of only 10 members, including the Chairman, must be submitted)
Others – persons responsible
There is no requirement for proprietorships to submit a proof of business registration since proprietorships and proprietorships are considered the same entity, so there is no need to submit a proof of business registration. You will also need to submit your business charter document. Your GST consultant will walk you through the registration process and let you know whether proof of business registration is required.
A GST Registration application requires that you provide address proof for all places of business. In case you have any doubts, you can get guidance from https://www.gst.gov.in/ as to which documents will be accepted as address proofs for your business. Here are the documents that can be used as address proofs:-
Copy of latest Property Tax Receipt or Municipal Khata or Electricity Bill if owned.
If the premises are rented or leased, please provide a copy of the current rental agreement with a copy of the Lessor’s latest tax receipt, municipal khata, or electricity bill in support of ownership. In case of unavailability of the rental agreement or lease deed, you can use an affidavit along with a supporting document in possession of the premises, like a copy of the electricity bill, etc.
In case the applicant’s premises or business is located in a special economic zone (SEZ) or he is an SEZ developer, then all the necessary documents must be uploaded.
In other cases, a copy of the consent letter from the owner of the premises should be submitted along with a copy of the electricity bill or Municipal Khata as proof that the consenter owns the premises.
Scanned copies of the following documents are acceptable as proof of bank account:-
A page of the Passbook that is relevant to the first page
A copy of the relevant page of the bank statement
A canceled check bearing the name of the proprietor or business entity, the bank account number, the IFSC code, the MICR code, and the branch location including the code.
Other Cases- Copy of consent letter of the owner of premises along with a supporting document of ownership of premises of the consenter like a copy of the electricity bill, Municipal Khata.
Frequently Asked Questions about GST Registration
What is the cost of GST registration?
When registering for GST, there is no charge.
How much turnover does GST require?
In North-Eastern and hilly states that fall under the special category, businesses with an aggregated turnover over Rs 20 lakh are mandated to register under GST.
Can GST be applied to certain incomes?
In order to qualify for registration under GST, the amount of 40 lakh INR (supply of goods in a normal state), 20 lakh INR (supply of goods in a specific state), or 10 lakh INR (supply in a specific state) and above must be supplied.
Does GST registration apply to everyone?
Those supplying goods or services that are not taxable or wholly exempt from tax are not required to register for GST.
GST is a mandatory tax?
As soon as your turnover exceeds the specified threshold, you are required to register for GST.
- A Complete Online Application Guide
- Gst Registration – How To Register?
- The 3 most common GST errors