GST Registration

What is GST Registration

Under the GST regime, businesses with a turnover of over Rs. 40 lakhs* (Rs. 10 lakhs for NE and hill states) are required to register as a regular taxable entity. This registration process is known as GST registration. In certain cases, GST registration is mandatory for businesses. If an organization conducts business without registering for GST, it will be considered a violation of GST laws, and significant penalties will be imposed. The CBIC has notified the increase in the threshold turnover from Rs. 20 lakhs to Rs. 40 lakhs.

Who should Register for GST?

  1. Those who were registered under the previous tax laws (Excise, VAT, Service Tax, etc.).
  2. Businesses with an annual turnover exceeding the threshold limit of Rs. 40 lakhs* (Rs. 10 lakhs for certain states).
  3. Casual taxable persons or non-resident taxable persons.
  4. Agents of suppliers and input service distributors.
  5. Those who pay tax under the reverse charge mechanism.
  6. Individuals who supply goods or services through an e-commerce aggregator.
  7. All e-commerce aggregators.
  8. Persons who supply online information and database access or retrieval services from a place outside India to a person in India, except for registered taxable persons.

Rietway Consultants GST Registration Package

The Services which are included in our package are as Follows:
✅ Consultation for GST Requirement
✅ Preparation of Documents
✅Application Filing
✅GST Certificate and Login Credentials

Documents Required for GST Registration

  1. PAN of the applicant
  2. Aadhaar card
  3. Proof of business registration or incorporation certificate
  4. Identity and address proof of promoters/directors with photographs
  5. Address proof of the place of business
  6. Bank account statement or cancelled cheque
  7. Digital signature (in case of a company)

GST Registration Procedure

1. Documentation: The documents required depends on the applicant type, the first step is to arrange the documents required for GST Registration.
2. Application At GSTIN: The applicant is registered on GST Portal for submission of the application, for this purpose OTP is sent on the phone and email.
3. ARN Generation: ARN is generated after submission of application on the GST Portal with all information and required documents.
4. GST Registration: After generation of ARN, the certificate of GST registration is issued by the GSTIN and GST Number is allotted in approx a week time.

What are the components of GST?

The GST will consist of three tax components, namely, CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax). These taxes will be levied by both the central and state governments on all entities for transactions that occur within a state. For inter-state transactions, the centre will levy the IGST (Integrated Goods and Services Tax).

What is the input tax credit?

Input tax credit allows businesses to reduce the tax that they have already paid on their purchases and pay the remaining amount at the time of tax payment.

When a registered seller sells a product, the buyer pays taxes on the purchase. Similarly, when the buyer sells the product, they collect tax on the sale. Input tax credit allows businesses to adjust the taxes paid during the purchase of goods and services with the amount of tax collected during the sale of goods and services (output tax), and pay the balance amount of tax, i.e. tax on sale minus tax on purchase.

Penalty for not registering under GST

A penalty of 10% of the tax amount due (with a minimum of Rs.10,000) is applicable to an individual who fails to pay tax or makes short payments due to genuine errors. If an individual deliberately evades paying taxes, the penalty will increase to 100% of the tax amount due.

FAQ on GST Registration

Q1 What is GSTIN?
All businesses that successfully register under GST are assigned a unique Goods and Services Tax Identification Number also know as GSTIN.

Q2 When should a business apply for multiple GST registrations?
If a business operates from more than one state, then a separate GST registration is required for each state. For instance, If a sweet vendor sells in Karnataka and Tamil Nadu, he has to apply for separate GST registration in Karnataka and TN respectively.
A business with multiple business verticals in a state may obtain a separate registration for each business vertical.

Q3 What is Composition scheme and when should a business opt for it?
Small businesses having an annual turnover less than Rs. 1.5 crore** ( Rs. 75 Lakhs for NE States) can opt for Composition scheme.
**CBIC has notified the increased in the threshold turnover for opting into the Composition Scheme from Rs 1 crore to Rs 1.5 crores.

Composition dealers will pay nominal tax rates based on the type of business: o Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers).

o They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.

o Businesses that have opted for Composition Scheme cannot claim any Input Tax Credit.

Composition scheme is not applicable to :
o Service providers
o Inter-state sellers
o E-commerce sellers
o Supplier of non-taxable goods
o Manufacturer of Notified Goods

Q4 Who can Register for Composition scheme under GST?
This scheme is a lucrative option for all SMEs who want lower compliance and lower rates of taxes under GST.
A GST taxpayer whose turnover is below Rs 1.5 crore** can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the present limit is Rs 75 lakh.
Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.
**CBIC has notified the increased in the threshold turnover for opting into the Composition Scheme from Rs 1 crore to Rs 1.5 crores.
Obtain GST registration and file CMP-02 to opt-in for the scheme.

Q5 What are the benefits of registering under GST?
A. For normal registered businesses:
Take input tax credit
Make interstate sales without restrictions

B. For Composition dealers:
Limited compliance
Less tax liability
High working capital

C. For businesses that voluntarily opt-in for GST registration (Below Rs. 40 lakhs*)
Take input tax credit
Make interstate sales without restrictions
Register on e-commerce websites
Have a competitive advantage compared to other businesses

*CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs.