Every company/individual who supplies goods and services has to register under Goods and Service Tax (GST) under the current GST regime. So, if your annual business turnover exceeding Rs.20 lakh (in all Indian states, other than north-eastern countries), you need to register with Goods and Service Tax Network (GSTN).
You will receive a unique Goods and Service Tax Identification Number (GSTIN) once you have registered under the GST regime. The 15-digit number is issued by the Central Government a state-wise to you once your registration is complete. There are several advantages of GST registration, including the fact that as a supplier, you will get a legal identity. You can collect GST from recipients of goods and services by availing the input tax credit.
Additional Read: GST Registration Procedure
1. Who Should Register for GST?
- Under the Pre-GST law, individuals can register (Service Tax, VAT, Excise,etc.)
- Businesses whose turnover is above the limit of Rs. 40 Lakhs* (For J&K, Himachal Pradesh, North-Eastern States, and Uttarakhand Rs 10 Lakhs)
- Nonresident taxable person/ casual taxable individual/Composition Taxpayer
- Input service distributor and Agents of a supplier
- Under the reverse charge mechanism those who are paying taxes
- Every e-commerce aggregator and an individual who supplies it.
- A person is residing outside India, providing an online database and information to a person in living India, other than a taxable person who is registered.
- A person who is making the inter-state supply within the threshold limit
2. Uncommon Situations when GST Registration is Required
- In a financial year, suppliers who supply the taxable goods or services and have a turnover of Rupees 9 Lakhs or above.
- In a financial year Suppliers who provide the taxable goods or services and have a turnover of Rupees 4 Lakhs or above ( Included Sikkim and NE states)
- Businesses relocated to the other city or that have transferred.
3. Documents required for GST Registration
Below listed are the documents you require under GST while registering.
- Applicants PAN CARD
- Incorporation Certificate or Partnership deed
- Promoters or partners Voter ID's, PAN cards, or Aadhaar cards
- Address proof of the business in the form of rent, electricity bill, or for an SEZ, or lease agreement or an issued document by the government
- Digital Signature
- A Company, firm, or an individual Bank account statement and canceled cheque.
4. GST registration time limit
A Person who liable under this act can take the registration within 30 days after the registration date. The effective date of GST registration shall be the date on which he became liable for GST registration.
5. Penalty for not registering under GST
An offender has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000 for not paying tax or making small payments (genuine errors).
The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes.
6. Benefits of registering under GST?
- A supplier can be recognized legally for supplying goods or services.
- Input goods or services, proper accounting of taxes paid can be utilized for payment of GST due to the supply or both by the businesses.
- The supplier is legally authorized to collect tax from the purchasers. The credit of the taxes paid can be passed on the supply of goods or services to the recipient or purchaser.
- Eligible in availing various other benefits and privileges under the GST law
7. Key facts about GST registration
- Businesses with an annual aggregate of over Rs.20 lakhs is required to register for GST.
- Eleven individual states require you to register if you have half the turnover, which is Rs.10 lakh. These particular states are Assam, Arunachal Pradesh, J&K, Meghalaya, Manipur, Nagaland, Mizoram, Tripura, Sikkim, Uttarakhand, Himachal Pradesh.
- If you are a supplier and supplying goods and services in one or more states, you will need to register in all the states you supply.
- In the case of multiple branches in multiple states, you can register one particular chapter as primary and the remaining as additional.
- Zero fees are applicable to register for GST
- Failing to register for GST can result in a penalty of a minimum of Rs.10,000 or 10% of the amount due. In the case of intentional tax evasion, the penalty can be 100% of the owed taxes.