The Goods and Services Tax (GST) became controversial from the time it was introduced in 2017. While there is a lot of confusion that surrounds this concept, it is known to have dissolved the cascading tax effect that was put in place earlier.
Today businesses are expected to complete the online GST registration for themselves. Before delving into the subject of the GST registration process, it is vital to understand the criteria that determine if a business should register for a GST number.
Should you complete the GST Online Registration?
You will be required to complete the GST registration process:
- If you are an individual who had registered under the tax services before the GST was implemented
- If you are a Non-Resident taxable person or a Casual taxable person
- If you are an individual who pays tax under the reverse charge mechanism
- If you are an e-commerce aggregator
- If your business turnover exceeds Rs.20 Lakh. In places like Uttarakhand, Himachal Pradesh, and Jammu & Kashmir, among others, the minimum turnover is Rs.10 Lakh
- If you are an Input service distributor or an agent of a supplier
- If you are an individual who supplies goods through an e-commerce aggregator.
Online GST Registration in India
GST registration can be done without hassle on the online GST portal. You need to fill a form on the GST portal and submit the documents that are required for registration.
Certain businesses must complete the GST registration process. If these businesses function without registering for GST, it is considered a criminal offense.
Documents you need for Online GST Registration
The following documents are required for the GST registration process:
- Your Permanent Account Number (PAN)
- Your Aadhaar card
- Your bank account statement and a canceled cheque
- Address proof showing the location of the business
- The proof of your business’ registration
- Your digital signature
- Your address and identity verification, along with photographs if you are the director
Types of GST Registration
Online GST Registration can be of various kinds. You must be aware of the different types of GST Registration and select the correct one.
These are the different types of GST registration:
Generally, the GST registration is mandatory if the turnover of a business exceeds Rs.40 lakh for goods (Rs.20 lakh for particular states) or Rs.20 lakh for services (Rs.10 lakh for select states) during the financial year.
However, in some instances, registration is required even if the turnover is less than the mentioned threshold.
A business that is not subject to compulsory registration can apply for registration voluntarily.
You can apply for voluntary registration under GST for the following reasons:
1. To Claim ITC on purchases
If you are registered under GST, you are allowed to claim the Input tax credit of the GST you have paid on your purchases.
2. Registered dealer status
If you are registered under GST, you will receive a certificate of registration that will constitute proof of the legal status of the business.
3. Competitive Edge
Larger organizations and MNCs prefer to associate themselves with the GST registered dealers. A GST registered dealer has the edge over the rest in this regard.
4. Inter-state transactions
If you plan on selling goods or services outside your state in the future, you can apply for a voluntary GST registration.
5. E-Commerce Sales
If you are planning to sell goods or services on an e-commerce platform, apply for voluntary GST registration to avoid the burden of compulsory GST registration in the future.
4. Unutilized ITC of earlier taxes
A dealer who may have unutilized input tax credit under service tax or VAT can carry this credit forward.
Registration under Composition Scheme
A taxpayer whose turnover does not exceed Rs 1 Crore can opt for the Composition Scheme. The turnover threshold has been reduced to Rs 75 Lakh in Himachal Pradesh and North-Eastern states.
You cannot apply for this scheme if:
- You are a manufacturer of ice cream, pan masala, or tobacco
- You are a person who makes inter-state supplies
- You are a casual taxable person or a non-resident taxable person
- You are a business which supplies goods with the help of an e-commerce operator
You do not need online GST registration if:
- Your business turnover during the financial year does not cross Rs.40 Lakh for goods (Rs.20 lakh for select states) or Rs.20 lakh for services (Rs.10 lakh for select states).
- Your business does not fall under the provisions of compulsory registration.
- If you are a seller of goods or services that are exempt from GST
- You are an Agriculturist who supplies crops
Steps for Online GST Registration
Head to the GST portal and click on ‘Register Now’ under ‘Taxpayers (Normal).’
This is part A of the GST registration process. Select ‘New Registration‘ and select ‘Taxpayer’ in the drop-down menu that comes under ‘I am a.’ Then select your state and district.
Submit the name of your business and its PAN along with your mobile number and email address. You will receive OTPs on them. Then click on Proceed.
Enter the OTP you have received and click on ‘Continue.’
You will now receive a Temporary Reference Number (TRN), which will also be sent to your registered phone number and email address. Be sure to note your TRN.
Go back to the GST portal and click on ‘Register now.’
Select TRN, enter your TRN, and the captcha code, and then click on ‘Proceed.’ You will receive an OTP on your mobile. Enter the OTP and click on ‘Proceed.’
The status of your application will be shown as a draft. Click on the Edit Icon.
Now you will get into part B of the GST registration process. Fill in the required details and submit your documents. You will need the following:
- Your photographs
- Constitution of the taxpayer
- Proof of location of the business
- Your bank account details
- Your authorization form
Go to the verification page, tick the declaration, and submit your application in one of the following ways:
- Via Digital Signature Certificate (DSC). This is mandatory for companies.
- Via e-Sign. An OTP will be sent to the number you have registered.
- Through Electronic Verification Code.
You will get a message that says the verification was successful. Your Application Reference Number (ARN) will be sent to your registered email address and mobile number.
While the concept of GST has always known to be a tad confusing this article should bring you some clarity and streamline the process of online GST registration for you.