As per the GST rules, it is mandatory for a business/supplier that has a turnover of above Rs.40 lakhs (Rs 10 lakhs for special category states present in hill states and North-Eastern states) to register as a normal taxable entity. In India, the GST Registration Process is completely online. No manual intervention or physical paper submissions is required. The online process is as simple as it may sound. The online GST registration process is usually completed within 4-6 working days and the supplier is allotted a 15-digit GSTIN (GST identification number) and a certificate of registration by the GST department.
If the organizations fulfilling the eligibility criteria carry on business without registering under GST, it will be an offense under GST and heavy penalties will apply.
Types of GST Registration
Various types of GST Registrations are described under the GST Act. We must be aware of the different types of GST Registration before selecting the suitable one.
- Normal Taxpayer: Most of the businesses in India fall under this category. No deposits are necessary from businesses/individuals filing GST in this category. There is also no expiry date for taxpayers who fall under this category.
- Casual Taxable Individual: Individuals who wish to set up an occasional/seasonal shop can opt for this category. You must deposit an advance amount that is equal to the expected GST liability during the time the seasonal shop/business is operational. The duration of the GST Registration under this category is 3 months and it can be extended or renewed.
- Composition Taxpayer: Apply for this if you wish to obtain the GST Composition Scheme. In this case, businesses need to deposit a fixed yearly payment irrespective of their actual earnings. ITC cannot be obtained under this category.
Companies that have a yearly turnover of up to Rs. 1 Crore are eligible for such a registration process.
- Non-Resident Taxable Individual: People who reside outside India, but supply goods to individuals who stay in India, can opt for this type of GST Registration. Similar to the Casual Taxable Individual type, you must pay a deposit equal to the expected GST liability during the time the GST registration is active. The normal tenure is usually 3 months, but it can be extended or renewed by the taxpayer.
Advantages of GST Registration
➢ Lesser compliance
Under the previous tax regime, businesses had to file multiple returns accorded with different indirect taxes – VAT, excise, and service tax. As GST is a unified and singular tax regime, the number of filings has come down, making it less hassling for entities to file a return.
➢ An input tax credit can be claimed or transferred.
A registered person can claim the Input tax credit on the purchase of goods & services & can utilize the same for payment of taxes due on the supply of goods or services.
➢ Interstate Supply
Registered persons can make Interstate sales without any restrictions.
➢ Recognition as a supplier of Goods & Services
The Taxpayer will be legally recognized as a supplier of goods or services. He would be legally authorized to collect tax from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/ recipients.
Documents required for GST registration online.
➢ PAN of the Applicant
➢ Aadhaar card
➢ Proof of business registration or Incorporation certificate
➢ Identity and Address proof of Promoters/Director with Photographs
➢ Address proof of the place of business
➢ Bank Account statement/Cancelled cheque
➢ Digital Signature
➢ Letter of Authorization/Board Resolution for Authorized Signatory
Penalties for Not Registering Under GST
If a GST eligible individual/business carries on business without paying taxes, it will be an offense under GST and penalties will be applied.
If the error of payment is genuine, i.e. unintentional, the individual or business in question has to pay 10% of the total tax. However, this is only applicable if the total tax burden is higher than Rs. 1 Lakh.
If the error of payment is intentional, the culpable entity needs to pay the entire due amount as a penalty.
There are several circumstances that prompt cancellation or surrendering of GST registration of the businesses that have already registered their businesses/ventures under GST. These circumstances are as follows –
➢ If the turnover is below the minimum limit
In case a business’s turnover has fallen below the minimum threshold applicable in its respective state post GST registration, that company can apply for deregistration.
Nevertheless, entities that supply goods to other states are required to be registered under GST irrespective of their annual turnover.
➢ Discontinuation of business
If a business entity discontinues its operations, it needs to apply for a cancellation of its GST registration.
➢ Business status change
If the business undergoes a transfer in the ownership status, then it can apply for cancellation of GST registration.
➢ Change in business type
A business needs to surrender its GSTIN registration if it has undergone any constitutional alteration and apply new for registration as per the current constitution.
(For eg. if a business has changed its constitution from a Partnership firm to a Private Limited Company, it needs to cancel its registration as a Partnership firm and register new under GST as a Private Limited Company.)
➢ Can I have more than one GST registration on a single PAN?
It is possible in the case of multiple business verticals within the same state. A person having different categories of business may obtain multiple registrations with the same PAN within a single state. Further, these will be treated as separate taxable persons for all purposes of GST.
➢ Can I have multiple GSTINs in a state or union territory?
Yes, a person can have multiple registrations in a state/union if he is having Multiple Business Verticals in a state/union.
➢ Do I need only a single GSTIN for all my business branches in different states?
GSTIN is State Specific therefore you have to take separate state-wise registration for branches in different states.
➢ Do I need to renew my GST Registration?
If you’ve registered under normal taxpayer then, it is valid for a lifetime. GST registration for normal taxpayers never expires therefore there is no need to renew it.