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GST Registration in India - Step by Step Process?

Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. In this article, we delve upon the issue of GST registration, Registration Certificate and different schemes under GST. Read on to find out how you can be a registered taxpayer under GST and the benefit it brings to you.
Written by:
Published on
27-Jan-20

GST

Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. GST is a comprehensive indirect tax that has replaced various indirect taxes that existed earlier and serves as one indirect tax for the entire country. It works on a destination-based and a multi-stage tax model wherein tax is charged on each value addition.

Table of content:

  1. GST Act(s) in brief
  2. Components of GST
  3. Benefits of GST
  4. GST registration in India
  5. Who should compulsorily register?
  6. Persons exempted from registration
  7. Documents required for GST Registration
  8. What is the GST Registration Cost?
  9. What are the penalties for non-registration of GST?
  10. Registration as a Casual Taxable Person
  11. Composition Scheme under GST
  12. Who can opt?
  13. Which business are not eligible?
  14. How to apply?
  15. GST Registration Process
  16. GST Registration Certificate
  17. Validity
  18. Constituents of GST registration Certificate
  19. FAQ's

GST Act(s) in brief

GST is not a result of any single legislation but a number of Central, as well as State legislation, laid down the foundation of GST in India. The Parliament of India has enacted IGST (Integrated Goods and Service Tax) Act and CGST (Central Goods and Service Tax) Act, and States as well as Union Territories (with legislature) have enacted their respective SGST (State Goods and Service Tax) Act which forms the entire GST structure. The primary objective to enact GST was to eliminate the cascading effect created by the previous indirect tax regime.

Components of GST

India is a federal country and the Constitution confers power from both the Centre as well as the State to levy and collect taxes[1]. Also, to implement GST in India, a model had to be sketched out that involved both the Centre and States in the process and administration. Accordingly, a Dual Model was employed that distributed its administration to both Centre and States to levy the tax concurrently. Thus, the model incorporates two components, first, levied by the Central Government and the second, levied by the State Government. And further depending on the place and nature of supply, following are the taxes charged under GST:

1) Central Goods and Service Tax (CGST), 

2) State Goods and Service Tax (SGST), 

3) Union Territory Goods and Service Tax (UTGST); and 

4) Integrated Goods and Service Tax (IGST).

 

Benefits of GST

  • GST reforms the indirect taxation structure and represents the country as a common national market.
  • GST increases the competitive quotient of Indian goods, commodities, and services in the global as well as the domestic markets.
  • GST increases the exemption limit for small traders or service providers.
  • GST provides benefits to small businesses through its Composition Scheme.
  • The introduction of GST has reduced tax compliances as the number of tax returns filed under GST is lower than the previous indirect tax regime.
  • GST offers a simple procedure of registration and filing returns as all the process has been made online.

GST registration in India

The current GST regime requires every business (subject to certain turnover) that supplies goods or services to be registered under the GST. The business having a turnover of more than Rs. 40 lakh are required to register as a normal taxable person, however, the turnover threshold for the north-eastern states has been kept as Rs. 10 lakh. 

The GST registration can be easily done through the Online GST Portal.

Under the GST regime, it is mandatory for certain businesses to register under GST. Carrying out business without registering is a criminal offence and can lead to heavy penalties. 

Who should compulsorily register?

As per the Central Goods and Service Tax Act, 2017 the below-mentioned categories[2] of persons are required to be compulsorily registered under GST irrespective of their turnover or threshold limit:

  1. Persons making any inter-State taxable supply;
  2. A casual taxable person who is making taxable supply;
  3. Persons who are required to pay tax under reverse charge;
  4. The non-resident taxable person making taxable supply;
  5. People who make a taxable supply for other taxable people as an agent or otherwise.
  6. Input service distributor
  7. Persons who supply goods and/or services, other than branded services, through electronic commerce operator
  8. Every electronic commerce operator
  9. An aggregator who supplies services under his brand name or his trade name
  10. Any other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the GST Council.

Persons exempted from registration

The Central Goods and Services Act, 2017 provides exemptions to a certain category of persons[3]. The following are exempted from registering under GST:

  1. Persons who are exclusively engaged in providing business of supplying goods or services or both which are not liable to tax or are exempt from tax under the current GST regime.
  2. An agriculturist is also exempted from registration, however, the exemption is to the extent of supply of produce of cultivation.
  3. Persons who have been exempted by the Central Government on the recommendations made by the GST Council.

Documents required for GST Registration

The following documents are required for GST registration[4]

  • Pan card of the applicant (Promoter / Partner / Proprietor) as well as business.
  • Aadhaar card of Promoter / Partner / Proprietor
  • Proof of Place of Business (Electricity Bill or rent-lease agreement, latest property tax receipt, etc.)
  • Partnership deed or the incorporation certificate.
  • Bank account statement of individual, firm or the company.

The documents required may vary, depending upon the nature of a taxable person, the exact requirements can be checked with the GST Docadvisor page in the GST Portal. 

What is the GST Registration Cost?

The Government of India has not prescribed any fee for registration under GST and therefore, the registration is free of cost. However, if you opt for any professional service for registration, then you’ll have to pay such a professional fee. The professional fee charged is variable and may depend upon who you are approaching and the level of expertise. The Professional fee may range anywhere between Rs. 1000 to Rs. 5000. 

What are the penalties for non-registration of GST?

The Central Goods and Services Act, 2017 provides for a direct penalty in case a taxable person fails to register. It provides that if the taxable person fails to register under GST, he/she shall be liable to pay a fine of Rs. 10,000 or an amount equivalent to the tax evaded, whichever is more.

Registration as a Casual Taxable Person

Section 2(20) of the Central Goods and Services Tax Act, 2017 provides that “Casual Taxable Person means a person who occasionally undertakes transactions involving the supply of goods or services or both in the course or furtherance of his business. Such a person may act as a principal, an agent or a person in any other capacity in a State or UT, where he has no fixed place of business”. Casual Taxable Person falls in the category of taxpayers who are required to compulsorily register under GST irrespective of their turnover threshold prescribed under the GST regime. 

  • Casual Taxable Person is required to avail of temporary registration at least five days before the commencement of business in India under GST by following the same procedure as followed by a regular taxpayer. 
  • The registration is valid for only 90 days. 
  • The period of validity may be extended by making an application before the appropriate authority. 
  • Additionally, the Casual Taxable Person is obligated to pay advance tax. Such an advance tax is equal to his approximate tax liability for a period for which such a person has availed registration under GST.

Composition Scheme under GST

The introduction of the GST has paved a way for a new regime of business compliance. In India, big organizations have the resources and expertise to facilitate the compliance procedure, however, small and medium-sized organizations have to face difficulty in complying with these procedures. Thus, a composition scheme has been introduced to lower the burden on small businesses, wherein a registered taxpayer has to pay tax at a minimum rate based on their turnover.  

Who can opt?

Under the current GST regime taxpayers whose annual turnover is less than 1.5 crore or 75 lakhs, for some specified States, are eligible for registration under the composition scheme. If at any given time the turnover exceeds the above-mentioned threshold, the person becomes ineligible and has to register under the regular scheme. Also, registration under this scheme is voluntary which means it is not mandatory for the taxable person having a turnover less than the abovementioned threshold to register under the composition scheme. 

Which business are not eligible?

  • A business engaged in the supply of services (excluding restaurants) is not eligible to register under the composition scheme. Therefore, taxable persons who are engaged in the supply of goods can take advantage of the composition scheme.
  • A business engaged in inter-state supply of goods.
  • A business making a supply of goods through e-commerce operators. 
  • A casual taxable person or a non-resident taxable person cannot avail of the benefits of a composition scheme. 
  • Supplier of tobacco, pan masala, and ice cream.

How to apply?

A taxpayer can opt for composition scheme by filing GST CMP-02 with the government. The application can be made by logging into the GST Portal. The taxpayer wanting to opt for composition scheme must give an intimation at the beginning of every Financial Year.

GST Registration Process

GST registration can be completed online through the GST Portal and can be a bit tedious. Here are the steps one can follow to complete the registration:

STEP 1: Visit the GST Portal. The GST homepage will be displayed.

STEP 2: Click Services > Registration > New Registration tabs.

From herein the application process can be divided into two parts Part ‘A’ and Part ‘B’.

Part ‘A’

STEP 3: You will be redirected to a new page. Select the ‘New Registration’ option.

STEP 4: Fill in all the empty columns and click ‘Proceed’. 

 STEP 5: An OTP Verification Page will be displayed. Enter the OTP sent to your phone number and email respectively. Kindly note that the OTP sent to your phone and email address are different. Click ‘Proceed’.

STEP 6: A system generated Temporary Reference Number (TRN) will appear on the screen. You will receive these details on your email as well as your phone no.

Part ‘B’      

STEP 7: Click on the ‘Proceed’ button or you can also click Services > Registration > New Registration option and select the Temporary Reference Number (TRN) radio button to log in using the TRN.

STEP 8: Enter the TRN and the CAPTCHA and click ‘Proceed’

STEP 9: On the OTP verification page. Enter the OTP and click ‘Proceed’.

STEP10: At the dashboard ‘My Saved Application’ page will be displayed. Under the Action, click the ‘edit’ icon.

STEP 11:  This part will consist of 10 sections. Fill in the necessary details in all the columns and submit the required documents.

STEP 12: Head to the verification page. Check the declaration box and submit the application via any of the following means – DSC, E-sign, and EVC.

STEP 13: You will get a success message and an Application Reference Number (ARN) on your registered email id and mobile number. You can track the status of your application using this ARN on the GST portal.

GST Registration Certificate

All the registered taxpayers with GST Portal are issued a GST Registration Certificate in Form GST Reg-06. If you are a registered taxpayer, the registration certificate can be downloaded from the GST Portal. 

How to download?

STEP 1: Visit the GST Portal at https://gst.gov.in.

STEP 2: Click on the login button at the top right corner. Fill in the log in credentials, correct the CAPTCHA and click on the log in button.  

STEP 3: As soon as you log in, a dashboard shall appear. Click on Services followed by User services.

STEP 4: A drop-down menu shall appear after clicking on User Services. Click on the View/Download Certificates.

STEP 5: A table highlighting different forms shall appear. Click download appearing in the GST REG-06 row.

STEP 6: The registration certificate will be downloaded and the format shall be as follows: 

Validity

The GST registration certificate issued to a regular taxpayer does not have an expiry date and is valid throughout unless it is surrendered by the taxpayer or is suspended, revoked or cancelled by the Goods and Service Tax Authority.

However, wherein the registered taxpayer is a casual taxpayer or a Non-resident Indian, the validity of the GST Registration certificate is limited to a period of 90 days from the date of registration or for the period specified in the registration application, whichever is earlier[5]. After such a period, validity can be extended by making an application before the appropriate authority.

Constituents of GST registration Certificate

The GST registration certificate comprises of the following:

  • Registration Number: A 15 digit registration number is given to the registered taxpayers, also known as GSTIN. The first two digits of GSTIN is the state code, the following 10 digits is the PAN (Permanent Account Number), the 13th digit is the Entity Number of the same state PAN Holder, and the letter “Z" by default at the 14th place, Checksum digit will be at 15th place.
  • Legal Name: The first row of the GST registration certificate will have the legal name of the business holder.
  • Trade Name: If the business has any trade name the same shall appear in the second row.
  • Constitution of business: The subsequent row specifies the type of business i.e. whether the business is a partnership, sole proprietorship, company etc. 
  • Date of liability: The date on which the business becomes liable to registration under GST, this effective date of registration is known as the date of his liability.
  • Period of Validity: Generally, the GST registration certificate is valid throughout. However, in case the registration is made only for a certain period. The validity of the registration certificate is provided in this section. 
  • Types of registration: This row in the GST registration certificate shows the type of business/taxpayer which has sought the registration.
  • Signature: In this section, the Digital Signature (DS) will be displayed.
  • Details of Approving Authority: In the last section of the GST registration certificate, the details of the Approving officer will be mentioned. The details will include the Name, Designation, Jurisdiction Office, and Date of issue of the certificate.

Every registered taxpayer must have this certificate in the business premise available all the time. Also, the person should start issuing GST compliant sales invoices.

Frequently Asked Questions:

How are exports and imports treated under GST?

According to the Integrated Goods and Service Tax Act, 2017 (IGST Act), the exports of goods or services or both are considered as ‘Zero-rated supplies’. The registered taxpayer exporting such goods or services or both are allowed to claim a refund of the GST paid. 

On the other hand, as per IGST Act import of goods or services or both are deemed as inter-state supplies and IGST is levied on such supplies.  

What is meant by Input Tax Credit under GST?

Businesses can reduce their tax liability by claiming the credit to the extent of GST paid on the purchases. Therefore, it serves as a mechanism to reduce your tax liability under GST.

How will Inter-State Transactions Be Taxed?

Integrated Goods and Services Tax (IGST) is applicable in case of inter-state supply of goods or services. Therefore, the inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST.

What is GSTIN?

GSTIN or Goods and Services Tax Identification Number is a state-wise PAN-based unique 15 digit number allotted to every registered taxpayer under GST. GSTIN has replaced previously existing Tax Identification Number (TIN) which was allotted to businesses by respective state tax authorities for registering under VAT.

What is GSTN?

The Goods and Service Tax Network (or GSTN) is an organization that manages the entire IT system of the GST portal. This portal is used by the Government of India to track every financial transaction, and provide taxpayers with all services – from registration to filing taxes and maintaining all tax details related to GST.

What is GST Return?

GST return is a document that consists of the detail of all the sales and purchases made along with tax collected or paid by a registered taxpayer. GST return filing in the regular courses is generally done either on a quarterly or an annual basis. Taxpayers registered as Input Service Distributor, under the composition scheme, or liable to collect or deduct tax will fall under separate return filing. Authorities calculate tax liability on the basis of return filed by a registered taxpayer.

Which organizations exempt from GST Registration?

The Central Goods and Services Act, 2017 provides exemptions to a certain category of persons. The following are exempted from registering under GST:

  • Persons who are exclusively engaged in providing business of supplying goods or services or both which are not liable to tax or are exempt from tax under the current GST regime.
  • An agriculturist is also exempted from registration, however, the exemption is to the extent of supply of produce of cultivation.
  • Persons who have been exempted by the Central Government on the recommendations made by the GST Council.Do I need PAN to apply for GST registration?

Yes, PAN is mandatory for GST registration. Also, PAN forms part of GSTIN issued by the GST authority after the GST registration. 

What provisions are applicable for a non-resident taxable person?

Sections 2(77) of the CGST Act defines ‘non-resident taxable person’ (NRTP) as “non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India”. NRTPs are required to estimate the taxes and pay the same to the Government in advance. Also, NRTPs are entitled to registration only for a period of 90 days which is further extendable by a period not exceeding another 90 days.

I am a vendor selling through an e-commerce portal. Do I need GST registration? 

Yes, GST registration is compulsory for a vendor selling through an e-commerce portal. The same is made compulsory under the CGST Act.  

 

[1]: The Constitution of India 1950, art. 246.

[2]: The Central Goods and Service Tax Act 2017, sec. 24.

[3]: The Central Goods and Service Tax Act 2017, sec. 23.

[4]: Docadvisor, GST Portal, https://www.gst.gov.in/docadvisor/.

[5]: The Central Goods and Services Tax Act 2017, sec. 27.