Goods and Services Tax (GST) is a unique unified tax law. GST is believed to be one of the most-awaited tax laws which is helping India grow into a common national market. This tax law has reformed how business is done and how goods and services are taxed in India.
Since GST is one single tax levied on goods and services, the credits of input taxes that are paid at each stage are available in the following stage of value addition. This makes GST a tax only on value addition at every stage. As a result of this, the final consumer has to only bear the tax charged at the last stage of the supply chain.
GST Registration- An Overview
The GST was launched on 1st of July, 2017. It is a comprehensive, multi-staged and destination-based tax. Under this tax framework, every product has to go through multiple stages of supply such as- purchase of raw materials, manufacture, selling to wholesaler, sale to retailer and the final sale to the consumer. GST, ever since its implementation has had remarkable impact on several sectors. We can consider GST impact on real estate, Agriculture, GDP, Telecommunication sectors, Logistics and many other sectors where GST has had positive effects on.
There are four tax rates under the GST. The items that are classified as basic necessities are not taxed. They come under the exempt list. Household commodities and life-saving drugs are taxed at 5%. Items such as processed food or computers are taxed at 12%. Hair products, capital goods and industrial services and intermediaries are taxed at a rate of 18%. And luxury goods are taxed at 28%.
Who Needs to Register for GST?
- Anyone who supplies goods and/or services of value more than 20 Lakh per annum
- Anyone supplying goods and/or services from one state to another
- E-commerce operators
- Anyone who supplies goods and/or services through e-commerce operators
- Any casual taxable person
- Person who collects or deducts tax (TDS/TCS)
- Any agent who supplies goods on behalf of another person
- Aggregator who supplies goods under his/her own brand name
- Anyone paying tax under reverse charge mechanism
- Anyone registered under the pre-GST law
Types of GST Registration
There are four major types of GST Registration. They are as follows-
1. Normal Taxpayer- Most of the taxpayers running business in India fall under this category.
- Composition Taxpayer- Taxpayers who are enrolled under the GST Composition Scheme can register for GST. They can pay a flat GST rate. However, a person enrolled under this category cannot claim an Input Tax Credit.
- Casual Taxable Person- Any person who proposes to set up a stall or seasonal shop falls under this category of GST registration. This registration is normally provided for 3 months but it can also be renewed or extended.
- Non-Resident Taxable Person- A person who is supplying goods or services in India but is located outside India can register under this category. This registration is also normally provided for 3 months but can be renewed or extended as per requirement.
Important Documents for GST Registration
The necessary documents for GST registration are-
1. PAN Card of the applicant or business owner
- Valid Indian e-mail address and contact number
- Proof of place of business
- Bank account number from India
- Latest Property Tax Receipt
- Municipal Khata copy
- Electricity Bill
- Valid rent/lease agreement/consent letter
- Proof of address (Voter ID Card, Aadhar Card, Driving License, Ration Card, etc.)
- PAN Card of LLP, LLP Agreement
How to Register for GST?
The online procedure of GST registration can be done through the online GST Portal. After submitting the application registration, a GST Application Reference Number (ARN) is provided. This GST ARN allows you to check your application status. The taxpayer receives GSTIN and a GST registration certificate 7 days after generating the GST ARN.
Below is a walkthrough for GST registration for beginners. The steps are-
Step 1 – The very first step of GST registration is to create a username and password at the GST Common Portal (www.gst.gov.in). Then, click on Services > Registration > New Registration.
Step 2 – The new GST registration page will be displayed on the screen. The next step is to select the New Registration option. Someone who has tried to register before but has left halfway without completing the process, the TRN number option will help continue the registration procedure from where it was left.
A drop down list will appear where one can select the type of taxpayer from the options. The next option is to select the state and district.
For business owners, they need to enter the legal name of business as it is mentioned in the PAN database. There will be an automated check to ensure that the name entered matches the name in the PAN Card.
Other fields need to be filled such as the PAN Card number, email address, mobile number and once all the details are filled, a captcha code will appear. After entering the captcha code, the applicant has click on Proceed.
Step 3 – After submitting all the information, the OTP verification page will be displayed. Two separate OTPs will be sent to the email and mobile number that has been provided by the applicant in the previous step. The applicant has to enter both the OTPs sent in email and mobile number in the respective fields.
Step 4 – The step after OTP verification is to generate a TRN (Temporary Reference Number). This TRN can be used to complete and submit the application for GST registration. The applicant has to once again go to the GST Portal and click on “Register Now”.
Step 5 – Two options will be shown- New Registration and Temporary Reference Number. As the applicant will already have the TRN number, they would need to select the second option, enter the captcha code and click on Proceed.
Another OTP will be sent to both email and phone number. The applicant has to enter the OTP and click on Proceed.
Step 6 – The status of application will now be shown as drafts. Applicant has to select the Edit icon. There are 10 sections in Part B. The applicant will need to fill in the details and submit proper documents such as photographs, constitution of taxpayer, proof for place of business, bank account details and authorisation form.
Step 7 – Once all the above mentioned details are filled up, the proprietor has to go to the Verification page, tick on the declaration and then submit the application using either DSC, e-signature or EVC.
Step 8 – A success message will be shown on the screen and an ARN (Application Reference Number) will be sent to the registered email ID and phone number.
GST form is a complex field. The GST portal, however, has a user-friendly interface but it is recommended that someone who is a fresh applicant must seek help from a professional before submitting the application and completing other required formalities to avoid mistakes.