What is GST Registration?
Under Goods and Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offence under GST and heavy penalties will apply.
Who should obtain the GST registration?
- Business Entities: Any enterprise with an aggregate annual turnover exceeding Rs. 40 lakhs. For special category states under GST, the threshold is Rs. 20 lakhs.
- Service Providers: Those with an aggregate annual turnover surpassing Rs. 20 lakhs. For special category states, this limit is Rs. 10 lakhs.
- Exemptions: It's important to note that entities dealing exclusively in GST-exempted goods or services are not bound by these thresholds.
- Previously Registered Entities: Entities that were registered under older tax frameworks (like Excise, VAT, Service Tax, etc.) need to migrate and register under the GST regime.
- Inter-State Suppliers: Any entity or individual involved in the supply of goods across state boundaries.
- Casual Taxable Entities: Those who undertake taxable supply occasionally.
- Entities under Reverse Charge Mechanism: Businesses obligated to pay tax under the reverse charge.
- Input Service Distributors & Agents: Distributors of input services, including their representatives.
- E-Commerce Platforms: Operators or aggregators of e-commerce platforms
- Non-Resident Taxable Entities: Individuals or entities that are non-resident but engage in taxable supply within India.
- Supplier's Agents: Representatives who supply on behalf of a principal supplier.
- E-Commerce Suppliers: Individuals or entities that offer goods or services through an e-commerce aggregator.
- Online Service Providers: Entities delivering online information, database access, or retrieval services from outside India to an individual in India, excluding those already registered under GST.
Documents Required for GST Registration
- PAN of the Applicant
- Aadhaar card of the Applicant
- Proof of business registration or Incorporation certificate
- Identity and Address proof of Promoters/Director with Photographs
- Address proof of the place of business
- Bank Account statement/Cancelled cheque
- Digital Signature
- Letter of Authorization/Board Resolution for Authorized Signatory
- Copy of partnership deed For LLP Firm
- Certificate of incorporation for Company
- Memorandum of Association / Articles of Association
- Board resolution appointing authorized signatory / Any other proof of appointment of authorized signatory (in JPEG format / PDF format, maximum size – 100 KB)
GST Registration Fees
Fees for GST Registration with Finbizz is Rs1, 999 only
Penalty for not obtaining GST registration
An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10, 000.
The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes
Advantages of GST Registration for Businesses
- Legal Compliance: Ensures that businesses remain compliant with tax regulations, thus avoiding any potential penalties.
- Input Tax Credit: Businesses can claim credits for the GST they've paid on purchases, which can then be set off against the GST charged on sales, leading to a reduction in tax liability.
- Inter-State Trade Ease: Encourages businesses to transact across state boundaries without facing tax-related challenges.
- Elimination of Cascading Effect: By removing the effect of tax being levied on an already taxed amount, the overall cost of products or services is reduced.
- Competitive Edge: Being GST compliant can instill trust in potential customers, opening up more business opportunities.
- Access to Larger Markets: Major corporations often prefer collaborating with GST-registered vendors.
- Optimized Cash Flow: Efficient management and lower tax liability can enhance the cash flow within a business.
- Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record can boost a business's credit profile.
- Legal Safeguard: A GST registration protects businesses and ensures their rights are upheld.
- Simplified Compliance: The GST process is streamlined, enabling businesses to file returns and make payments online easily.
- Transparent Operations: Ensures businesses maintain accurate records, promoting a sense of trustworthiness and professionalism.
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