The Goods and Services Tax has changed the taxation landscape of India after its implementation in 2017. Businesses have had to make changes in their operations as well as infrastructure to incorporate the change. GST business registration has become mandatory for eligible enterprises which are issued a GST Identification Number (GSTIN) after successful submission of the application. This unique alpha-numeric code is required to be quoted by the organization in its bills, invoices, returns, and other important documents. We are presenting a stepwise guide for entrepreneurs looking for information about GST registration for new business ventures. Startup owners can use these steps to register their new business on the GST portal.
1.Find Out Whether You Are Eligible For GST Registration
The first step is to assess whether your business is eligible for GST registration or not. The new law states that any business with an annual turnover exceeding Rs 20 lakhs must mandatorily get the process done. The threshold turnover limit is Rs 10 lakhs for entities located in North-eastern and hilly states. The following entities are also required to get the registration:
i. Taxpaying entities registered under a pre-GST tax law like VAT, excise, service tax etc.
ii. Casual taxable persons
iii. Non-Resident taxable persons
iv. Agents of a supplier
v. Input Service Distributors
vi. E-commerce aggregators as well as people supplying through such aggregators
vii. Entities paying taxes under the reverse charge mechanism
viii. Anyone involved in the inter-state supply of goods
ix. When a commercial organization is transferred to another party, it will be the responsibility of the transferee to get GST registration for the service provider.
2.Collect The Documents Required For The Purpose
Entrepreneurs must make sure that they possess all the necessary documents before moving ahead with the online procedure. Following is the list of documents that are required to complete the process of GST registration for service tax immediately:
i. Permanent Account Number (PAN) of the applicant.
ii. Proof of business incorporation
iii. Proof of the place of business
iv. Digital Signature Certificate (DSC)
vi. Identity and address proof of directors or promoters
vii. Bank Account Details
viii. Valid Indian mobile number and email ID
ix. Constitution of the taxpayer
3.Conduct The Registration Process Through The Government Portal
The government has created a portal for disseminating information about the new indirect tax regime. This portal can be used for registering eligible taxpayers. They can use the following steps to complete the process:
Step 1: The process is divided into two parts- A & B. Visit https://www.gst.gov.in/ and click on the “Register Now” link to start Part A. Select “New Registration” on the next page and provide details like PAN, mobile number, and email ID. Applicants must choose “taxpayer” in the drop-down menu and enter the location details of the company. They have to provide the legal name of the business. It must be ensured that the name is the same as mentioned in the PAN.
Step 2: A Temporary Reference Number (TRN) will be issued on successful submission of the form. Users must go back to the “Register Now” link and this time choose the TRN option. They will be sent to a page displaying the application status as “Draft”.
Step 3: Users must click on the edit icon against the status to start Part B of the GST business registration process. All the requested details must be provided and then the verification page must be accessed.
Step 4: in order to submit the application companies and LLPs must use the DSC while other users can take help of an e-sign or EVC. An Application Reference Number(ARN) will be sent to the registered email after successful submission.
Step 5: ARN must be used to track the application status on the portal.
4.Know about GST Composition Scheme
Taxpaying entities with turnover less than Rs 1 crore can take advantage of the GST Composition scheme. This plan allows businesses to pay a fixed percentage of their turnover as the tax. Dealers using the composition scheme also need to file a lesser number of returns as compared to other GST taxpayers. Casual taxable persons, non-resident taxable persons, and e-commerce operators apart from ice cream, pan masala, or tobacco manufacturers cannot avail this scheme. Merchants involved in the intra-state supply of goods or service to restaurants or people who do not supply non-taxable goods can register for this plan.
5.Learn About The Fees And Penalties Associated With The Process
The government does not charge any fees for the registration process. Businesses using the services of tax consultants for the purpose will need to pay the advisors for their service. Eligible taxpayers who do not register under the new law will have to pay a penalty of 10% of the total amount due. In case, it is established that the business had wilfully refrained from doing the registration, the penalty will be 100% of the total amount.
6.Assess Whether Multiple GST Registrations Are Needed
Enterprises involved in running operations in various states have to conduct separate registration in each state. The law also dictates that in case, a company is functional in multiple business verticals, then it has to acquire the GST registration for each vertical. Even if all the operations of the different business domains are located in the same state, the entity will have to apply for separate GST incorporation for each vertical in the jurisdiction.
Entrepreneurs can use this guide to assess whether their organization is eligible for GST business registration. The above-mentioned steps can be used by them to conduct the process themselves, or else they can engage GST consultants in India to get proper assistance on the issue.