Step-by-Step Guide to GST Registration: Everything You Need to Know

Jan 24, 2023 | Blog, Uncategorized | 0 comments

What is GST Registration:

As per chapter 1 of GST Flyer (In Introduction para), in any tax system registration is the most fundamental requirement for the identification of taxpayers ensuring tax compliance in the economy. Only after obtaining GST Registration, Taxpayer can collect the taxes on behalf of the government and avail of Input tax credit for the taxes on his inward supplies. Simply we can say that without registration a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him.

Nature of Registration:

  • Registration under GST is PAN-based and State Specific i.e., one registration per one State/UT.
  • Business entities having more than one place of business in a State may obtain separate registration for each such place.
  • GSTIN is a 15 Digit unique number allocated to a registered person.

Who should obtain the GST registration:

(A) As per Sec 22 of the CGST Act, the Following are the Persons liable to Register Under the GST

Who is Liable? Provision
Person making a taxable supply of Goods/Services/Both and Having Place of Business in states other than Special category states Whose Aggregate Turnover(ATO) is exceeding 20 Lakhs in a Financial Year
Person making a taxable supply of Goods/Services/Both and Having Place of Business in Special category states Whose Aggregate Turnover(ATO) is exceeding 10 Lakhs in a Financial Year
Person who is already registered under existing law (i.e., Pre-GST) As per Sec 22(2) of CGST Act, Liable to register on the Appointment date
Situations of transfer of business on account of succession, etc. Transferee liable to be registered from the date of the succession of business
Situations of amalgamation/ demerger by an order of High Court etc. Transferee is liable to be registered from the date on which Registrar of Companies issues incorporation certificate giving effect to order of High Court etc.

Note:

  1. As per Sec 2(6) of the CGST Act, Aggregate Turnover Includes Taxable supplies, Exempt supplies, Exports, and Interstate supplies (Other than Inward supplies liable to Reverse charge).
  2. Aggregate Turnover will be computed as per PAN Basis
  3. As per Chapter 1 of GST Flyer Special category states include: Assam, Arunachal Pradesh, Himachal Pradesh, Uttarakhand, Manipur, Mizoram, Sikkim, Meghalaya, Nagaland or Tripura
  4. A person, who is exclusively engaged in Intra state Supply of Goods, Shall be liable to registration only if ATO exceeds 40 Lakhs.
  5. The above Provision is applicable for persons having business in the following states: Jammu and Kashmir, Assam, Himachal Pradesh, and All other non-special categories States

(B) As per Sec 24 of the CGST Act, the following persons are liable for Compulsory Registration

  • Persons making any inter-State taxable supply
  • Casual taxable person(CTP) making taxable supply (Except CTP making an interstate taxable supply of handicraft goods up to 20 lacs/ 10 lacs)
  • A person who is required to pay tax under RCM as per GST laws
  • Ecommerce operators who are notified as liable for tax payment under section 9(5)
  • Persons who are required to deduct tax (TDS) as per GST laws
  • Non-resident taxable persons who is making taxable supplies
  • A person who makes taxable supplies on behalf of some other person (i.e. as an Agent of some Principal)
  • Person supplying, other than supplies notified under section 9(5) through an e-commerce operator
  • All E-Commerce operators that are mandated to collect tax at source (TCS).
  • Every person supplying online information and database access or retrieval services (OIDAR) from a place outside India to an Unregistered person in India.
  • Input Service Distributor (ISD), whether or not separately registered under this GST Act
  • Person/ class of persons as notified by the Central/ State Government

All about the GST registration process:

As per Sec 25 of the CGST act, the following is the procedure for registration under GST

Person liable for registration [Section 25(1)] Every person liable for registration u/s 22 or 24 Shall apply for registration in every such State/ UT in which so liable in Thirty (30) days from the date on becoming liable to registration under GST
CTP & NRTP First Proviso to Sec 25(1) Shall Apply for registration at least 5 days before commencement of business
SEZ Second Proviso to Sec 25(1) SEZ developer shall have to apply for a separate registration, distinct from his place of business located outside the SEZ Even if in the same State or UT
SINGLE REGISTRATION [Section 25(2)] A person seeking registration under this Act shall be granted a single registration in a State or Union territory. Provided that, a person having multiple places of business in a State or UT may be granted a separate registration for each such place of business.
VOLUNTARY REGISTRATION [Section 25(3)] Persons who are not liable to register under this act can also apply for registration under GST on a voluntary basis.
SUO MOTO REGISTRATION [Section 25(8)] If the person who is liable to be registered under this Act, fails to obtain registration, Then the proper officer may, without prejudice to this Act or under any other law in force, proceed to register a such person under CGST Act
SPECIAL CATEGORY[Section 25(9)] A Unique Identity Number will be granted to the following persons for claiming of refund of taxes: (i) Specialized agency of the United Nations Organization or Multilateral Financial Institution and Organization notified under the United Nations, Consulate or Embassy of foreign countries; (ii) Any other person as may be notified by the Commissioner.
DISCRETION OF PROPER OFFICER [Section 25(10)] The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed.
ISSUE OF CERTIFICATION [Section 25(11)] A certificate of registration shall be issued in such form and with effect from such date as prescribed under Rule 10 of CGST Rules, 2017
DEEMED REGISTRATION [Section 25(12)] If, in case an application is filed for registration and no deficiency has been communicated to the applicant within the relevant period, Then the registration or a Unique Identity Number shall be deemed to have been granted

Note:

Explanation —Every person who makes a supply from the territorial waters of India (TWI) shall obtain registration in the coastal                State or Union territory where the nearest point of the appropriate baseline is located.

Documents Required for GST Registration:

Documents Required for GST Registration

As per GST Portal (https://www.gst.gov.in/docadvisor/), the Following is the Common documents required for all the Persons

  • PAN
  • Aadhar
  • Business registration proof or incorporation certificate
  • ID cards and address proofs of promoters or directors with passport-size photographs
  • Supporting address proof of the place of business of a registered person
  • Bank account statements
  • Letter of authorisation for authorised signatory

GST Registration Fees:

There is no fee prescribed under the GST law for obtaining GST registration on the GST portal.

Penalty for not obtaining GST registration:

As per Sec 122(1)(xi) of the CGST Act, A person who fails to obtain GST registration shall pay Penalty [100% of the tax due or Rs. 10,000 ]– whichever is higher.

FAQ:

  • Is GST registration mandatory?

As discussed in Sec 24 of the CGST Act above, all persons required to register under GST compulsorily and Whose Turnover exceeds a threshold limit.

  • Can I apply for multiple GST registrations simultaneously?

As discussed in Sec 25 of the CGST Act above, the answer is “YES”.

  • Is it possible for me to obtain multiple GST registrations within a single state?

As discussed in Sec 25 of the CGST Act above, the answer is “YES”.

  • Who is eligible to apply for the composition scheme under GST?

A taxable person who is engaged in trading activity and whose aggregate turnover is below Rs 1.5 crore can opt for the Composition scheme subject to some condition as specified the section 9 of the CGST Act.

  • What is the turnover considered for determining the GST registration threshold limit?

As per Sec 2(6) of the CGST Act, Aggregate Turnover Includes Taxable supplies, Exempt supplies, Exports, and Interstate supplies (Other than Inward supplies liable to Reverse charge).

The aggregate turnover will be calculated on a pan-India basis for entities with the same PAN.

  • What are the benefits of registering under GST?

As per chapter 1 of GST Flyer:

By obtaining a GST Registration, taxpayers will be is legally recognized as a supplier of goods or services.

He will be authorized to collect tax and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

He can claim the Input tax credit.

  • What is a GST identification number or GSTIN?

A GST identification number (GSTIN) is a unique 15-digit number assigned to a business or individual by the Indian government for the purpose of GST compliance. The GSTIN is used to identify a registered taxpayer under the GST system. It is a combination of the taxpayer’s PAN number, a state code, and a two-digit number. It is mandatory for all registered taxpayers to mention GSTIN on all invoices and GST returns filed.

  • What is the maximum time period for registering under GST?

Any person must get a GST registration within 30 days from the date when they become liable to obtain GST registration of the Application is complete in all aspects.

  • What if the GST registration application gets rejected?

If the applicant fails to provide any reply, is not satisfied with the reply or the applicant fails to submit a reply within the time mentioned, the processing officer can cancel the application. On rejection of a GST registration application, the GST Officer would issue the notice to the taxpayer. According to GST rules, the authorized officer must provide written explanations for any rejected applications. If the taxpayer corrects the errors in the previous application, they can reapply for GST registration. If the applicant is unclear about the reasons for rejection, they can seek assistance from the nearest GST Seva Kendra.

  • Is the PAN card required for registering under GST?

Yes, Except in the case of the non-resident taxable person

  • What happens after obtaining the GST registration?

After obtaining the GST registration successfully, the taxpayer will get a GST registration certificate and gets a valid GST Identification Number. one is able to claim the input tax credit, issue GST-compliant invoices and file GST returns on a monthly or quarterly basis depending on the requirements.

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