How to Apply GST Registration

GST Registration

1.Step-by-step procedure to complete GST Registration

2.Types of GST Registration

3.Who should complete the GST Registration?

4.Documents required to complete GST Registration

5.Penalty in case individuals or businesses do not complete GST Registration

According to GST rules, it is mandatory for a business that has a turnover of above Rs.40 lakh to register as a normal taxable entity. This is referred to as the GST registration process. The turnover is Rs.10 lakh for businesses that are present in hill states and North-Eastern states. The registration process can be completed within 6 working days.

About GST Registration

GST registration can be done easily at the online GST portal. Business owners can fill a form on the GST portal and submit the necessary documents for registration. It is mandatory for certain businesses to complete the GST registration process. It is a criminal offense if these businesses carry out operations without registering for GST and heavy penalties are levied for non-registration.

Types of GST

As per the newly implemented tax system, there are 3 different types of GST:

Integrated Goods and Services Tax or IGST
State Goods and Services Tax or SGST
Central Goods and Services Tax or CGST

Additionally, the government has fixed different taxation rates under each, which will be applicable to the payment of tax for goods and/or services rendered.

Integrated Goods and Services Tax or IGST

The Integrated Goods and Services Tax or IGST is a tax under the GST regime that is applied on the interstate (between 2 states) supply of goods and/or services as well as on imports and exports. The IGST is governed by the IGST Act. Under IGST, the body responsible for collecting the taxes is the Central Government. After the collection of taxes, it is further divided among the respective states by the Central Government. For instance, if a trader from West Bengal has sold goods to a customer in Karnataka worth Rs.5,000, then IGST will be applicable as the transaction is an interstate transaction. If the rate of GST charged on the goods is 18%, the trader will charge Rs.5,900 for the goods. The IGST collected is Rs.900, which will be going to the Central Government.

State Goods and Services Tax or SGST

The State Goods and Services Tax or SGST is a tax under the GST regime which is applicable on intrastate (within the same state) transactions. In case of intrastate supply of goods and/or services, both State GST and Central GST are levied. However, the State GST or SGST is levied by the state on the goods and/or services that are purchased or sold within the state. It is governed by the SGST Act. The revenue earned through SGST is solely claimed by the respective state government. For instance, if a trader from West Bengal has sold goods to a customer in West Bengal worth Rs.5,000, then the GST applicable on the transaction will be partly CGST and partly SGST. If the rate of GST charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST. The total amount to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned from GST under the head of SGST, i.e. Rs.450, will go to the West Bengal state government in the form of SGST.

Central Goods and Services Tax or CGST

Just like State GST, the Central Goods and Services Tax of CGST is a tax under the GST regime which is applicable on intrastate (within the same state) transactions. The CGST is governed by the CGST Act. The revenue earned from CGST is collected by the Central Government. As mentioned in the above instance, if a trader from West Bengal has sold goods to a customer in West Bengal worth Rs.5,000, then the GST applicable on the transaction will be partly CGST and partly SGST. If the rate of GST charged is 18%, it will be divided equally in the form of 9% CGST and 9% SGST. The total amount to be charged by the trader, in this case, will be Rs.5,900. Out of the revenue earned from GST under the head of CGST, i.e. Rs.450, will go to the Central Government in the form of CGST.

List of State taxes:

•Value Added Tax (VAT) or Sales Tax

•Octroi

•Entertainment Tax

•Tax on Lottery or Betting or Gambling

•Purchase Tax

•Luxury Tax

List of Central taxes:

•Service Tax

•Additional Excise Duty
•Central Excise Duty and so on

What is the step-by-step procedure to complete GST Registration?

The step-by-step procedure that individuals must follow to complete GST Registration is mentioned below:

First, individuals must visit the GST portal (https://www.gst.gov.in/).
Next, the individual must click on the ‘Register Now’ link which can be found under the ‘Taxpayers’ tab.
Next, the individual must select ‘New Registration’.
On the same page, the individual must fill the below-mentioned details:
•Under the ‘I am a’ drop-down menu, select ‘Taxpayer’

•Select the respective state and district from the drop-down menu.

•Enter the name of the business.

•Enter the PAN of the business.

•Enter the email ID and mobile number in the respective boxes. The entered email ID and mobile number must be active as OTPs will be sent to them

•Enter the image that is shown on the screen in the respective box and click on ‘Proceed’.

On the next page, enter the OTP that was sent to the email ID and mobile number in the respective boxes.
Once the details have been entered, click on ‘Proceed’.
Individuals will be shown the Temporary Reference Number (TRN) on the screen. It is vital that they make a note of the TRN.
Next, individuals must visit the GST portal again and click on ‘Register’ which is present under the ‘Taxpayers’ menu.
Next, select ‘Temporary Reference Number (TRN)’.
Next, individuals must enter the TRN and the captcha details
Once the details have been entered, click on ‘Proceed'
Individuals will receive an OTP on their email ID and registered mobile number. Enter the OTP on the next page and click on ‘Proceed’
The status of your application will be available on the next page. On the right side, there will be an Edit icon, click on it.
There will be 10 sections on the next page. All the relevant details must be filled, and the necessary documents must be submitted. The list of documents that must be uploaded are mentioned below:

•Address proof where the business is located.

•Bank details such as account number, bank name, bank branch, and IFSC code.

•Authorization form

•The constitution of the taxpayer.

Once all the above-mentioned details have been entered, individuals must visit the ‘Verification’ page. Once individuals check the declaration, they must submit the application by using one of the below mentioned methods:

•By using an Electronic Verification Code (EVC). The code will be sent to the registered mobile number of the applicant.

•By using the e-Sign method. An OTP will be sent to the mobile number that has been linked with the Aadhaar card.

•In case companies are registering, the application must be submitted by using the Digital Signature Certificate (DSC).

Once the above step is completed, a success message will be shown on the screen. The Application Reference Number (ARN) will be sent to the registered mobile number and email ID.Individuals can check the status of the ARN on the GST portal.

Types of GST Registration

Under the GST Act, GST Registration can be of various types. It is vital that the taxpayer is aware of the different types of GST Registration and selects the appropriate one. The different types of GST Registration are mentioned below:

Normal Taxpayer: Most of the businesses in India fall under this category. The applicant need not provide any deposit in order to become a normal taxpayer. There is also no expiry date for taxpayers who fall under this category.

Composition Taxpayer: Taxpayers who wish to obtain the GST Composition Scheme can opt for this type of GST Registration. A flat GST rates must be deposited by taxpayers who opt for GST Registration under this category. Input tax credit cannot be obtained by taxpayers who come under this category.

Non-Resident Taxable Person: In case individuals live outside India, but supply goods to individuals who stay in India, must opt for this type of GST Registration. Similar to the Casual Taxable Person type of GST Registration, taxpayers must pay a deposit that is equal to the expected GST liability during the time the GST registration is active. The duration for this type of GST registration is usually 3 months, but it can be extended or renewed at the type of expiry.

· Non-Resident Online Service Provider

· Special Economic Zone Developer

· GST TDS Deductor – Government Entities

· UN Embassy/ Body/ other notified individuals

· Special Economic Zone Unit

· GST TDS Collector – E-commerce Companies

Who should complete the GST Registration?

GST Registration must be completed by the below-mentioned individuals and businesses:

· Individuals who have registered under the tax services before the GST law came

· into effect.

· Non-Resident Taxable Person and Casual Taxable Person

· Individuals who pay tax under the reverse charge mechanism

· All e-commerce aggregators are required to register for GST

· Businesses who have a turnover that exceeds Rs.40 lakh. In the case of

Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states,

the turnover of the business should exceed Rs.10 lakh.

· Input service distributors and agents of a supplier

· Individuals who supply goods through an e-commerce aggregator.

· Individuals who are providing database access and online information from outside India to people who live in India other than those who are registered taxable personS must complete GST Registration.

What are the documents that are required to complete the GST Registration?

The below-mentioned documents are required to complete the GST Registration:

· Permanent Account Number (PAN) of the applicant

· Aadhaar card of the applicant

· The bank account statement of the applicant, as well as a cancelled cheque, must be submitted

· The address proof where the business is located must be given

· The Incorporation Certificate or the business registration proof must be submitted

· The Digital Signature must be given

· The Director’s or Promoter’s address proof and identity proof must be submitted along with their photographs.

· The Authorised Signatory must receive the Letter of Authorisation or Board Resolution.

What is the penalty in case individuals or businesses do not complete GST Registration?

In case the offender does not pay tax or makes a payment that is lesser than the amount that must be paid (due to genuine errors), the penalty that is levied is 10% of the tax amount that is due. However, the minimum penalty that must be paid is Rs.10,000.

In case the offender does not complete the GST Registration on purpose and tries to evade tax, the penalty that is levied is 100% of the tax amount that is due.