The word GST full form stands for Goods and Services Tax. It has almost been a year since its inception, the initial days of jittery have reduced to a major extent and it has been welcomed by most of the business concerns across the country. Now let's understand more about GST meaning, the GST Law, its features, GST registration procedure.
What is GST Registration?
Under the GST regime, those business firms whose annual turnover is more than Rs 20 lakh (in case of North Indian states and hill states the turnover should be more than Rs 10 lakhs) should register themselves under the GST as a normal taxable person and this is known as the GST Registration.
GST Registration Eligibility - Who all should register under this?
• A casual taxable person or a non-resident taxable person
• A business whose turnover is more than Rs 20 lakh per annum (Rs 10 lakhs for Uttarakhand, North Eastern States, Himachal Pradesh, Jammu & Kashmir)
• Supplier's agent & input service distributor
• All the e-commerce aggregator
• Individuals who supply using e-commerce aggregator
• Individuals who pay tax under the reverse charge mechanism
• Those who have registered under the pre-GST Law (VAT, Service Tax, excise and so on)
• Individuals who supply online information and provide database access or retrieve services from abroad to an individual in India, other than a registered taxable person.
Benefits of Registering Under GST Law
In case of a Normal Registered Businesses:
- No restrictions for interstate sales
- Get input tax credit
In case of Composition Dealers:
- Tax liability will reduce
- Limited compliance
- High working capital
In case of Business houses who voluntarily opt-in for registering under GST (turnover below Rs 20 lakh per annum)
- No restrictions for interstate sales
- Get input tax credit
- Get competitive advantage compared to other business
- Get access to register on e-commerce websites
GST Registration Documents
The following are the documents that need to be uploaded for GST registration.
- PAN Card.
- Proof of constitution of business.
- Address proof of the place of business.
- Canceled Cheques/ bank account statement.
- Signature of Authorized Signatory.
- Aadhaar Card
- Identity Card and address proof of promoters/ directors along with their photographs
- Digital signature
- Letter of authorization/ Board resolution for authorized signatory
Note: All documents need to be scanned and uploaded in pdf format of file size not more than 1 Mb.
GST Registration Online
GST registration is done online in the Government GST portal. It may be done directly by the beneficiaries or through a Facilitation Centre notified by the government. Either way, the methodology is the same.
GST Registration Process
GST Registration involves accessing the website https://www.gst.gov.in/ and then selecting Services tab> Registration>New Registration. The window that opens is the Part A of the Registration Form. In this form select new registration and enter details like PAN number, mobile number, e-mail ID etc. After completing all fields click proceed. The portal carries out verification of the PAN details from the government IT web portal and then generates an OTP both through the mobile and also on the e-mail ID. On entering the OTP, the system generates a Temporary Reference Number (TRN). This number serves as a reference till the registration certificate is issued. It is valid for fifteen days by when Part B details need to be completed.
To fill up Part B access the new registration form as done earlier and select the Temporary Registration number button and enter the TRN in the assigned space. Once again, a mobile authentication will be carried out and a window displaying the application status will open. This window displays the expiry date after which the application will be purged. The status column displays 'Draft' which will change to 'Pending for validation' when Part B is completed.
On clicking the edit icon under the action column, the registration application form is displayed. This form has ten tabs all of which are required to be ticked to complete the form. The salient aspects of each of the forms associated with the ten tabs are explained below.
- This window is completed in two stages. The first stage includes registration of casual taxable person and reason for registration.
- Casual taxable persons are those who are doing business in places other than their registered office location.
- The Reason for registration in most cases is 'Voluntary Basis'. The other items on the menu are self-explanatory.
- Input service distributors are companies with head office in one state and branch offices in others. Billing of maintenance etc is done in the head office but services are rendered in other states. This warrant is required for sharing of tax revenues amongst the states and hence such a provision.
- On completion of this stage, the second stage opens which captures the specifics of the business.
- This stage also caters for Composition Tax Payers. These are business wherein the turnover is less than Rs 1.5 crores and they opt to pay a fixed amount of GST.
Individuals Concerned with Business
- The next three windows are concerned with individuals responsible for the business. The details of the promoters and authorized signatory are entered in respective pages.
- Aadhaar data is required to be furnished and photographs need to be uploaded.
- The next page is for authorized representative which in this case could be a registered GST practitioner or other entities authorized to interact with the GST portal on behalf of the business.
Place of Business
- The next two pages are for the principal place of business and additional place of business.
- Proof of principal place is required to be uploaded. Even an electricity bill can also be used as an address proof.
Goods and Services
- This pertains to the goods and services supplied by the business.
- The code number of goods under the Harmonised System of Nomenclature (HSN Code) should be mentioned. Look up facility is available if the codes are not known.
- Up to five services may be specified for service providers.
- Bank account details like account number and IFSC code needs to be entered.
- Multiple Bank accounts may be used.
- Proof-like passbook or account statement needs to be uploaded.
- Verification is the final stage of filling up the registration application.
- Aadhar verification using Mobile OTP is carried out.
- Personnel identification may be carried out using the digital signature or mobile authentication.
- Once the verification is completed, acknowledgment is sent to both the mobile number as well as the e-mail referring to the TRN. GST registration will be confirmed within three working days unless there are observations which need to be resolved.
What is GST Online Registration Fees?
How to check GST Registration Status via online?
Once an individual or a business firm apply for GST registration, an Application Reference Number (ARN) will be generated. It is important to note down the ARN for further reference. Generally, it takes 15 days to process a GST registration application form, but one can check for the GST registration status through online on the GST web port by following the below-mentioned steps:
Step 1: Visit the GST web page
Step 2: Go to Services > Registration > click on the 'Track Application Status'
Step 3: Now enter the ARN which was generated at the time of submitting the GST application form and enter the captcha code to proceed further and now click on 'Search'
Step 4: The ARN will generate one of the following below mentioned statuses:
- Provisional - It means that the application has not been filed yet but the provisional identity has been already issued.
- Pending for Verification - This means that the application has been successfully submitted but the verification is yet to be done.
- Validation against Error - This means that the PAN filled in the application form does not match with the details provided by the Income Tax Department. In this case, the form has to be resubmitted.
- Migrated - This means that the application for migration to GST has been done successfully.
- Canceled - This means that the registration has been canceled.
GST Registration Forms
There are up to 30 GST registration forms concerned with various aspects of registration. All are in digital formats and communication is through the portal.
- GST-REG-01 is the application form described in this article.
- GST-REG-02 is the acknowledgment that generates TRN.
- GST-REG-03 and GST-REG-04 are for observations and settlement thereof.
- GST-REG-05 is for rejection and
- GST-REG-06 is the registration certificate that bears the GST number.
Other forms pertain to specific instances of Business like tax deductor/collector at the source, non-resident tax person etc. Several forms are notices for observations and violation of registration provisions. Replies to these are also required in specified forms. Few of these are used at the time of registration.
What is the penalty for not registering under the GST?
An individual is liable to pay a fine of 10% of the tax amount due subject to a minimum of Rs 10,000.
In case if an individual has deliberately evaded payment of tax then he will be penalized at 100% of the tax amount due.
What is aggregate turnover as per GST Law?
As per the GST Law under section 2(6) of the CGST/SGST Act, an Aggregate turnover includes the aggregate value of
- all exempt supplies
- all taxable supplies
- export of goods/services
- all inter-state supply of a person having the same PAN.
All the above mentioned will be calculated across the country and it excludes taxes charged under the CGST Act, SGST Act, UTGST Act, and the IGST Act.
The term aggregate turnover includes all supplies made by the taxable person, either on his own account or on behalf of all his principals.
The term Aggregate turnover does not include the value of supplies on which tax will be levied on reverse charge basis and value of inward supplies.
What is GSTIN?
GSTIN stands for the GST Identification number, which is assigned to every dealer who registers under the GST law.
GSTIN is a 15 digit number. The following is the break-up of the GSTIN:
• The first two digits of GSTIN represents the state code, which is a unique one and this is taken from the Indian Census of 2011.
• The following 10-digits will be the Permanent Account Number of the taxpayer.
• The thirteen-digit is assigned based on the number of registration within a state.
• The fourteenth will be the letter 'Z' by default.
• The last one will be for check code, it can either be an alphabet or a number.
What is ISD and its significance under GST Law?
ISD stands for Input Service Distributor. The ISD is required to obtain compulsory registration under GST in a union territory or a state from where the distributor makes a taxable supply of goods or services or both. There is no need to obtain registration in a particular state of a union territory wherein the distributor is distributing the credit.
Who is a Casual Taxable Person under GST?
A person who supplies goods or services which are taxable in nature in a taxable territory wherein he does not have a fixed place of business is known as a Casual Taxable Person under the GST law. He/she can act as a principal or an agent or in any other capacity to supply goods or services for the progress of the business.
In case of New Registration Application is it mandatory to add a Bank Account?
Yes, it is mandatory to maintain atleast one bank account and information pertaining to the account should be submitted at the time of submitting new registration application.
What is the Registration Process for Casual Taxable Person?
The following is the registration process in case of a Casual Taxable Person:
Step 1: An individual has to first apply for registration by declaring the mobile number, PAN and e-mail ID in Part A of the Form GST REG-01.
Step 2: Now Validate and verify the mobile Number, PAN and e-mail ID through One Time Password (OTP).
Step 3: Post successful verification, a temporary reference number will be generated and using the same advance tax deposit needs to be made. One can get an acknowledgement for the deposited amount, through electronic mode in the form of Form GST REG - 02.
Step 4: Now using the generated reference number, the applicant can fill in and submit the PART B of Form GST REG - 01 via electronic mode.
Step 5: Moving on a Registration Certificate will be issued through electronic mode and after which the tax deposit will appear in electronic cash ledger.
Step 6: After procuring the receipt of Registration Certificate, CTP can make taxable supplies.
Step 7: Last procedure is Validity of Certificate, which is period specified in the application or 90 days from the effective date of registration whichever is earlier.
Should an individual register separately in each of the State and Union Territory under GST Law?
One time registration is sufficient for an individual under GST Law and the same is valid throughout India. One need not have to register separately under different states and union territories. If the individual has a professional address in a different state then, he is free to apply for another registration in that particular state.
What is TRN?
TRN stands for Temporary Reference Number. TRN is a unique 15 digit reference number which allows an individual or a firm to access the new registration application under the GST portal in the pre-login mode and it allows one to login without validating any login credentials.
TRN gets generated after successful submission of all the fields of the PART A that is the first page of the new registration application form and on validating the mobile number along with the e-mail ID correctly by entering the respective OTPs.
Is Permanent Account Number (PAN) Card mandatory to secure GST registration?
Yes, PAN is mandatory for securing GST registration under the new GST law. In case of Proprietorship, the PAN number of the proprietor can be used to secure GST number. If GST is required for a company or a trust, then in such cases, PAN must be first obtained to enter information for GST registration application.
How can an individual download the GST Registration Certificate?
Once the GST registration gets approved, the applicant can download the copy of the GST Registration Certificate from the GST common portal.
For GST registration purpose who can be the primary authorized signatory?
As per the GST rule, the Primary Authorized Signatory is an individual who will be primarily responsible to perform action on the GST system portal. All the communication from the GST department relating to the tax payer will be sent directly to the primary authorized signatory. So it is better for the promoter of the enterprise or firm or business to be the primary authorized signatory.
Which documents were used for the Inter-state supply of goods till the introduction of e-way bills?
The triplicate copy of invoices used for the supply of goods and the duplicate copy of invoice meant for the supply of services were used for the inter-state supply of goods under GST law prior to the introduction of the e-way bill.
Is it possible for an individual to claim ITC and collect tax without GST registration?
No, it is not possible for an individual to claim any input tax credit of GST paid by him/her nor can collect GST from his/her customer without GST registration.
What is the time limit for Registration under Model GST Law?
An individual should take registration within a period of 30 days from the date on which he/she becomes liable for registration, subject to conditions as may be prescribed.
If an individual has more than one registration then is it compulsory to fill in the state-specific information?
It is better to fill in the details to ensure self-verification before finally submitting the application. Even though the system will permit an individual to move on to the next section, as this particular field is an optional one.
Liability for GST Registration in India
|Liability to Register||Liability for Tax Payment|
|India||INR 9 Lakhs||INR 10 Lakhs|
|North-East India||INR 19 Lakhs||INR 20 Lakhs|
What is Goods and Services Tax?
Goods and Service Tax is a taxation system that was adopted to bring uniformity in taxation throughout the country and thereby create a common free market within the Union of India. It amalgamated several existing taxes like excise, VAT (Value Added Tax), state levies, octroi etc and dispensed with them entirely from the taxation regimen. It was made into law by the Four Acts of the Parliament in 2016. It became effective from 01 July 2017 after most of the State assemblies passed corresponding acts to make it applicable in respective States.
Features of GST
- Uniformity in taxation - Goods and Services are taxed uniformly throughout the country under GST. Goods and Services are categorized into four tax rate categories i.e. 5%, 12%,18% and 28%. The application of such rates is uniform in the country.
- Simplification of Taxation - All commercial enterprises are required to be GST registered with few exceptions (business with less than Rs 20 Lakhs turnover are not required to register for GST). All such mandated entities are required to register and report business transactions within the ambit of GST directly online in the government GST portal. This dispenses paperwork, human intervention as also facilitates Tax data compilation both for the business as also the government.
- Reduction in taxes and cost of goods and services - GST will reduce taxes because it does away with cascading of taxes and only taxes value addition. GST provides for claiming tax credits wherein tax liability of upstream vendors paid by downstream vendors can be claimed as tax credits. The consequent benefit will eventually pass down as reduced cost of goods and services.
- Widening of the tax net and better compliance - Being on a digital platform it will be possible to link with track business transactions accounts with ease and ensure compliance. With increasing digitization of banking and digital money transactions, even small businesses will be incentivized to be GST compliant.
- e-Way Bill - GST also introduces e-way billing system which greatly facilitates transportation of goods. The consequent savings on account of more efficient logistics management is of enormous importance to businesses.
GST implementation in India, that too entirely on a digital platform is of enormous significance. The GST network has an uncanny resemblance to the IT network. Both the Aadhaar and KYC are linked to the digital banking network and are directly accessible by beneficiaries. The success of these networks will make India not only a single free market, but also one that is fully digitized. There is no other way a country of our size can be managed. The accountability and ease of implantation of the system will be the harbinger of other digital platforms to cater for services like Property Registration, Domestic Services management etc.
The GST Registration, despite its apparent complexity and the numerous pages and fields that need to be populated, is a fairly simple and efficient process. GST implementation has mushroomed an entire industry of GST consultants and software technologies to support GST compliance. The need to submit 37 reports every year has compelled businesses to rely on such tech-savvy chartered accountants either within their resources or outsourced to implement GST in their businesses and be on the safe side of the law. Tax credits are an added incentive for propriety in GST implementation.
After more than a year of rough riding GST has come to be widely accepted within the business fraternity. There were several teething troubles but both the government and the environment rose to the occasion to cope up with it.
For e.g. the reduction in the number of monthly reports was a positive government initiative. As such India has enough domestic technical talent to make the system work. Since knowledge and experience of GST implementation has already proliferated widely, GST registration is now a relatively simple task.