GST Registration

What is Goods and Service Tax (GST)?

The Goods and Services Tax is a unified, indirect tax levied on the supply of goods and services in India. Introduced in July 2017, GST replaced a host of indirect taxes such as VAT, service tax, and excise duty. GST (Goods and Services Tax) operates on a system of input tax credit (ITC), which ensures that tax is only paid on the value added at each step in the supply chain. Thus, the tax burden is distributed fairly across the supply chain, ensuring that the consumer doesn’t face tax on tax, unlike the previous cascading tax system where taxes were levied on top of other taxes at each stage of production and distribution.

What are the types of GST in India?

The GST (Goods and Service tax) is divided into four main categories, each of them serves a specific purpose in taxation structure.

CGST (Central Goods and Services Tax)

CGST is applicable on the intra-state supply of goods and services, i.e, it is levied when the supply occurs within the boundaries of the same state. This tax is imposed and collected by the Central Government.

SGST ( State Goods and Services Tax)

SGST applies to transactions within a single state. The revenue collected from SGST goes to the respective state government. When a product is sold within the state, both CGST and SGST are charged.

UTGST(Union Territory Goods and Services Tax)

This is a special category of GST for Union Territories (UTs) of India that do not have their own legislative assembly. It is levied on the intra-territorial supply of goods and services in Union Territories in conjunction with CGST.

Who needs to register GST?

GST registration is mandatory for compliance and enables businesses to collect, remit taxes, claim input tax credits, and participate fully in the formal economy. In India, GST registration is crucial for certain businesses and individuals based on specific criteria.

Businesses dealing with Goods:

Businesses with turnover of ₹40 lakh (₹20 lakh for special category states) for most states.

Service Providers:

Business dealing with services and annual turnover of ₹20 lakh (₹10 lakh for special category states) for most states.

Inter-State Suppliers:

Businesses supplying goods or services from one state to another, regardless of their turnover.

E-commerce Operators:

E-commerce platforms which facilitate sales of goods or services, irrespective of their turnover.

Casual Taxable Persons:

Individuals who occasionally supply goods or services in a taxable territory where they do not have a fixed place of business.

Non-Resident Taxable Persons:

Non-resident individuals or entities supplying goods or services in India.

Input Service Distributors:

Businesses that distribute credit of CGST, SGST, or UTGST to their branches.

What are the documents required for GST registration?

The documentation requirements for GST registration depends upon business structure. Here is a detailed list of documents required for:

Proprietorship/Individuals

1. PAN Card of the proprietor.
2. Aadhaar Card or any valid photo ID (e.g., passport, voter ID, driver’s license) of the proprietor.
3. Business Address Proof (Any utility bill in the name of the proprietor, Rent agreement).
4. Bank Account Statement.

Hindu Undivided Family (HUF)

1. PAN Card of the head of the HUF.
2. Aadhaar Card or any valid photo ID.
3. HUF Deed (if available).
4. Address Proof of the HUF (can be utility bill or property document).
5. Bank Account Statement in the name of the HUF.

Limited Liability Partnership (LLP) / Partnership Firm

1. PAN Card of the LLP.
2. Certificate of Incorporation or LLP agreement.
3. Address Proof of the registered office (Utility bill or rent agreement).
4. Identity and Address Proof of all partners (Aadhaar, voter ID, passport, etc.).
5. Partnership Deed (certified copy).
6. Bank Account Statement or Canceled Cheque in the name of the partnership firm.

Company

1. PAN Card of the company.
2. Certificate of Incorporation.
3. Memorandum of Association (MoA) and Articles of Association (AoA).
4. Address Proof of the registered office(Utility bill or rent agreement).
5. Identity and Address Proof of all directors (Aadhaar, voter ID, passport, etc.).
6. Digital Signature of the authorized signatory.
7. Bank Account Statement or Canceled Cheque in the name of the company.

All documents should be kept up to date and accurate to avoid delays in the registration process.

What is a GST registration certificate?

Once a business entity is registered for GST an official document is issued by the Goods and Services Tax (GST) authorities. The certificate serves as proof of GST registration and includes important details about the taxpayer's business.

Importance of the GST Certificate

Proof of Registration: It acts as legal proof that the business is registered under GST. This certificate is also a crucial document if a business wishes to avail financial aid, apply for loans, or participate in government tenders.

Mandatory for Compliance: The GST certificate must be displayed at the principal place of business and additional places of business.

Participation in the Formal Economy: It allows businesses to collect GST from customers, claim input tax credits, and comply with GST return filing obligations.

What is the GST Identification Number (GSTIN)?

GSTIN stands for Goods and Services Tax Identification Number. It is a unique 15-digit alphanumeric number assigned to every registered taxpayer under the Goods and Services Tax (GST) system in India. GSTIN is a crucial element of the GST framework in India, enabling efficient tax administration, compliance, and tracking of transactions.

Important forms for GST registration procedure:

Form GST REG-01: This is the application form for GST registration.

Form GST REG-04: For amendment of registration details.

Form GST REG-06: For the issuance of a GST registration certificate.

Form GST REG-07: For cancellation of registration.

What if a business fails to register for GST?

In case if a business that is required to register under GST fails to do so, the penalty imposed is 100% of the tax due or Rs 10,000, whichever is higher. This means that if a business is operating without a valid GST registration, it will be liable to pay the full tax amount due along with a penalty that could be quite significant.

If a business delays registration beyond the time they are required to register, they will still be liable for the tax that should have been collected from the time they crossed the GST threshold. In addition to this, they will have to pay Interest at 18% per annum on the tax amount due and Applicable late fees or penalties.

How Can JKStartup360 Help You Avoid Penalties?

To avoid penalties and stay compliant, it's essential to get your GST registration done accurately and on time. All you need to do is contact our expert team, submit your documents, and provide some basic information about your business. We'll handle the rest, ensuring a smooth and stress-free GST registration process for you. Our specialists will guide you through each step, ensuring timely and accurate filing. With JKStartup360 by your side, you can focus on growing your business while we take care of the compliance hassle.