GST INTRODUCTION

  • In any tax system, registration is the most fundamental and basic requirement for identification of taxpayers ensuring tax compliance in the economy.
  • Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail Input Tax Credit for the taxes on his inward supplies.
  • Without registration, a person can neither collect tax from his customers nor claim any Input tax credit of tax paid by him.

SOME KEY FEATURES OF GST

  • GST marks a significant shift in the tax landscape of many countries.
  • GST is a comprehensive indirect tax levied on the supply of goods and services across the country, replacing various indirect taxes like VAT (Value Added Tax), excise duty, service tax, etc.
  • Under GST, taxes are levied at each stage of the supply chain, allowing for the offsetting of taxes paid at the previous stage. This reduces the cascading effect of taxes and promotes efficiency in the tax system.

NEEDS OF GST REGISTRATION

  • He is legally recognized as supplier of goods or services.
  • He is 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/ recipient.
  • He can claim Input Tax Credit of taxes paid on his purchases / procurements and can utilize the same for payment of taxes due on supply of goods or services.
  • Seamless flow of Input Tax Credit from suppliers to recipients at the national level.

THRESHOLD LIMIT OF REGISTRATION

  • Under Goods And Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration.
  • For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offence under GST and heavy penalties will apply
  • GST registration usually takes between 2-6 working days. Team Clear can help you obtain GST registration faster in 3 easy steps.

WHO SHOULD OBTAIN THE GST REGISTRATION?

  • -Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
  • -Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be
  • -Casual taxable person / Non-Resident taxable person
  • -Agents of a supplier & Input service distributor
  • -Those paying tax under the reverse charge mechanism
  • -A person who supplies via an e-commerce aggregator
  • -Every e-commerce aggregator
  • -Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.

MINIMUM LIMIT FOR GST REGISTRATION

  • The minimum threshold limit for GST (Goods and Services Tax) registration in India depends on the type of business and its location.
  • For businesses operating in most states, the threshold limit for GST registration is an annual turnover of Rs. 40 lakhs (for the supply of goods) and Rs. 20 lakhs (for the supply of services).

However, for businesses operating in special category states such as Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim, the threshold limit for GST registration is an annual turnover of Rs. 20 lakhs (for the supply of goods) and Rs. 10 lakhs (for the supply of services).

However, the northeastern and hilly states were given a choice, allowing businesses to select between a GST ceiling of Rs. 20 lakhs or Rs. 40 lakhs as the annual turnover threshold for GST exemption in case of providers of goods.

Note- Businesses may voluntarily register for GST even if their turnover is below the threshold limit. This can help them take advantage of certain benefits and simplify their tax compliance.

DOCS REQUIRED FOR GST REGISTRTAION

  • PAN of the Applicant
  • Aadhar Card of the Applicant
  • Email ID and Contact Number of the Applicant
  • Name, Address, Contact Number and Email ID of Authorised Representative for filling GST Registration Application
  • Proof of business registration like Certificate of Incorporation
  • Identity and Address proof of Promoters/Director with Photographs
  • Address proof of the place of business-not older than 2 months
  • Bank Account statement/Cancelled cheque
  • Digital Signatures
  • Letter of Authorization/Board Resolution for Authorized Signatory

PENALTY FOR NOT OBTAINING GST REGISTRATION

An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.

The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes.

ONLINE GST REGISTRATION IN INDIA

GST Registration process is online based and must be carried out on the government website gst.gov.in. Every dealer whose annual turnover exceeds Rs.20 lakh (Rs.40 lakh or Rs.10 lakh, as may vary depending upon state and kind of supplies) has to register for GST.

STEPS FOR GST REGISTRATION ONLINE

To do GST registration online, you need to follow below steps:

PART A

- Go to GST Portal and click on ‘registration’ under the ‘services’ tab and click on ‘New Registration’.

-Select ‘taxpayer’ from the drop-down menu.

-Now, Fill up form GST REG-01=Part- A of the application form for your new registration and enter details such as the legal name of your business, state, email address, mobile number and PAN card.

-Verify your information by entering the one-time password sent to your mobile number and email id, click on ‘Proceed’ and you will receive a Temporary Reference Number (TRN) on your mobile and email when you complete the process and move to Part B.

PART B

-Login with your TRN and enter the CAPTCHA CODE, complete the OTP verification with OTP sent to your email id and registered mobile number, you will then be redirected to the GST registration page.

-Then, submit details of upto 10 promoters or partners of your business. In the case of a proprietorship firm, you will have to submit the details of the proprietor. You will have to provide personal details, designation, DIN (director identification number), PAN and aadhar

-Next, submit the details of the person you have authorized to file GST returns.

-Add the principal place of business, enter the address, official contact details and nature of possession of premises.

-Add details of any additional places of business, details of goods and services to be supplied and the company’s bank account details.

-Upload the required documents based on the type of business that you are registering.

Now, click on ‘Save and Continue’, once you submit the application, you will need to sign it digitally or through EVC option i.e. Aadhar OTP verification.

-Click on ‘submit’ to save your details.

-After submission, you will receive an Application Reference Number (ARN) on your mobile and email to confirm your submission.

-Track the status of your application using your ARN, go to ‘’https://www.gst.gov.in/’’ and click on the ‘services’ tab, then click on ‘Registration’ and then choose ‘Track Application Status, enter your Application Reference Number (ARN) in the required field and provide your captcha code- then click on search button and the status of your GST registration application will be displayed.

-Once, approved, you will get your GSTIN (GST Identification Number).

HOW TO DOWNLOAD THE GST REGISTRATION CERTIFICATE

To download the GST registration certificate, follow these steps:

  • Login to GST Portal using your credentials.
  • Go to the ‘Services’ tab and select ‘’User Services’’.
  • Click on ‘’View/Download Certificate’’.
  • Choose the ‘’GST Registration Certificate’’.
  • Enter the required details, such as GSTIN or ARN.
  • Click on ‘’Download’’ button.
  • The certificate will be downloaded in PDF Format.

INTRODUCTION OF GST RETURNS

A GST return is a document containing details of all income/sales and/or expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to file with the tax administrative authorities. This is used by tax authorities to calculate net tax liability

Under GST, a registered dealer has to file GST returns that broadly include:

  • Purchases
  • Sales
  • Output GST (On sales)
  • Input tax credit (GST paid on purchases)

WHO SHOULD FILE GST RETURNS?

Under the GST regime, regular businesses having more than Rs.5 crore as annual aggregate turnover (and taxpayers who have not opted for the Quarterly Return Filling & Monthly Payments of Taxes Scheme) have to file two monthly returns and one annual return. This amounts to 25 returns each year.

Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under the QRMP scheme. The number of GSTR filings for QRMP filers is 9 each year, which include 4 GSTR-1 and GSTR-3B returns each and an annual return. Note that QRMP filers have to pay tax on a monthly basis even though they are filing returns quarterly

There are also separate statements/returns required to be filed in special cases such as composition dealers where the number of GSTR filings is 5 each year (4 statementcum-challans in CMP-08 and 1 annual return GSTR-4).

HOW MANY RETURNS ARE THERE UNDER GST?

There are a total of 13 returns under the Goods and Services Tax (GST) regime. These returns serve to capture different aspects of a taxpayer’s financial transactions and obligations within the GST framework. However, it’s important to note that not all of these returns apply to every taxpayer. The applicability of these returns depends on the type of taxpayer and the nature of their GST registration.

Here is an overview of the 13 GST returns:

  • GSTR-1: This return is for reporting outward supplies or sales.
  • GSTR-3B: A summary return that includes details of both outward and inward supplies, along with the payment of taxes.
  • GSTR-4: Designed for taxpayers under the Composition Scheme, it provides a summary of their turnover and tax liability
  • GSTR-5: Filed by non-resident foreign taxpayers engaged in taxable activities in India.
  • GSTR-5A: Filed by online information and database access or retrieval (OIDAR) service providers.
  • GSTR-6: For Input Service Distributors to report the distribution of input tax credit (ITC) among their units.
  • GSTR-7: For taxpayers required to deduct Tax Deducted at Source (TDS) under GST
  • GSTR-8: Filed by e-commerce operators to report supplies made through their platform.
  • GSTR-9: An annual return that provides a consolidated summary of all monthly/quarterly returns filed during the financial year.
  • GSTR-10: A final return filed when a taxpayer’s GST registration is cancelled or surrendered.
  • GSTR-11: Filed by persons having Unique Identity Number (UIN) to claim a refund of taxes paid on their purchases.
  • CMP-08: A quarterly return for taxpayers under the Composition Scheme to report their tax liability.
  • ITC-04: Filed by taxpayers who are manufacturers to report the details of goods sent to a job worker and received back.

In addition to these GST returns, there are also statements of input tax credit available to taxpayers, namely:

  • GSTR-2A (dynamic): Provides a dynamic view of inward supplies as reported by the suppliers.
  • GSTR-2B (static): Offers a static view of inward supplies based on the supplier’s return.

For small taxpayers registered under the Quarterly Return Monthly Payment (QRMP) scheme, there is an Invoice Furnishing Facility (IFF) available. It allows them to report their Business-tobusiness (B2B) sales for the first two months of the quarter. These taxpayers must still make monthly tax payments using Form PMT-06.

DOES GST HAVE TO BE PAID MONTHLY?

GST is to be paid monthly by regular taxpayers, even those who have opted for quarterly filing of returns, i.e. the QRMP scheme(Quarterly Return Filling & Monthly Payments of Taxes Scheme Under GST).

However, for small taxpayers, there is an option to choose the composition scheme under GST, if their annual aggregate turnover is up to Rs.1.5 crore for manufacturers/dealers and Rs.50 lakh for pure service providers. They can file a quarterly statement-cum-challan and pay taxes quarterly.

LATE FILING OF GST RETURNS

Late filing of GST returns can have serious consequences, including financial penalties and interest charges. It is essential for businesses to adhere to the prescribed due dates to avoid these adverse effects. Here are some key points to understand about late filing of GST returns:

✓ Cascading Effect of Late Filing

Late filing of GST returns can have a cascading effect. You cannot file the return for the current period if the return for the previous month or quarter has not been filed. This can result in a backlog of pending returns, making it difficult to comply with GST regulations.

✓ Mandatory Return Filing

Under the Goods and Services Tax (GST) regime, return filing is mandatory, even if there are no transactions to report. This means that all registered taxpayers must file GST returns regularly, as specified by the government.

✓ Late Fee Charges

The late fee for late filing of GST returns is specified under the Central Goods and Services Tax (CGST) Act and the State Goods and Services Tax (SGST) Act. As per these acts, the late fee is Rs. 100 per day per Act, which means it’s Rs. 200/day (Rs. 100 under CGST and Rs. 100 under SGST). However, there is a maximum limit of Rs. 5,000 per Act. This means that if you delay filing a return for an extended period, the late fee can accumulate up to the maximum limit.

✓ Interest on Outstanding Tax

If you have outstanding tax liabilities, interest is charged at a rate of 18% per annum. Interest is calculated by the taxpayer on the amount of outstanding tax to be paid. It is calculated from the day after the due date until the actual date of payment.

FREQUENTLY ASKED QUESTIONS (FAQ’S)

Is there any threshold limit for mandatory GST Registration?

Businesses that sell goods and have a turnover of more than Rs.40 lakh (or Rs.20 lakh in the northeastern and hill states) must register as regular taxable persons. The threshold in the case of service providers is Rs.20 lakh (Rs.10 lakh for northeastern and hill states).

Who can get registered for the Composition Scheme under GST?

The Composition scheme can be opted for by the small taxpayers who want to low tax rates under GST and lesser compliance. A business with an aggregate turnover below Rs 1.5 crore and Rs.75 lakh for North-eastern states and Himachal Pradesh, can be applied for composition scheme under GST.

What is the deadline for registering under GST?

A business that is required to register for GST must apply for registration within 30 days after satisfying the criteria. Prior to starting a company, casual taxpayers and non-resident taxpayers must register for GST.

Is there any validity of GST Registration?

There is no expiration date for a GST registration. Hence, it remains valid until surrendered, suspended, or cancelled.

Can I do have GST registrations using the same PAN card?

No, it is only valid for one registration. However, you may add multiple businesses during the GST registration process.

What happens after obtaining the GST registration?

the taxpayer will get a GST registration certificate in Form GST REG-06 and gets a valid GST Identification Number. One will be eligible to avail input tax credit and must start filing GST returns monthly or quarterly, as applicable.

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