Comprehensive Guide to GST Registration in India

The Goods and Services Tax (GST) is a comprehensive, indirect tax levied on the supply of goods and services in India. Implemented on July 1, 2017, GST replaced several other indirect taxes such as excise duty, VAT, and service tax. The introduction of GST has simplified the taxation process and created a uniform tax structure across the country.

In this comprehensive guide, we will discuss various aspects of GST registration, including the types of registrants, turnover limits, GSTIN, registration process, required documents, and the benefits of registering under GST.

1. Taxable Person under GST

A ‘taxable person‘ under the GST Act is an individual or entity that conducts business in India and is registered, or required to be registered, under the Act. Taxable persons can include:

• Individuals
• Hindu Undivided Families (HUFs)
• Companies
• Firms
• Limited Liability Partnerships (LLPs)
• Associations of Persons (AOPs) or Bodies of Individuals (BOIs)
• Government corporations, co-operative societies, and local authorities
• Trusts, artificial juridical persons, and foreign corporations or bodies corporate incorporated under foreign laws

1.1 GST Registration Turnover Limit

GST registration can be obtained voluntarily by any person or entity, regardless of turnover. However, it becomes mandatory if the person or entity crosses a certain turnover limit.

Service Providers: GST registration is mandatory for service providers with an aggregate turnover of more than Rs. 20 lakhs in a financial year. In special category states, the threshold is Rs. 10 lakhs.

Goods Suppliers: Any person engaged exclusively in the supply of goods and having an aggregate turnover exceeding Rs. 40 lakhs in a financial year must obtain GST registration. To be eligible for this limit, the supplier must meet specific conditions, such as not providing any services, not supplying goods within specified states, and not dealing in ice cream, pan masala, or tobacco. If these conditions are not met, the threshold for GST registration is Rs. 20 lakhs (or Rs. 10 lakhs in special category states).

Special Category States: The following states are considered special category states under GST: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

1.2 Aggregate Turnover Calculation

Aggregate turnover is the sum of taxable supplies, exempt supplies, exports, and inter-state supplies, minus taxes, value of inward supplies, value of supplies taxable under reverse charge, and value of non-taxable supplies. Aggregate turnover is calculated based on the PAN, so even if a person has multiple places of business, the turnover is combined.

2. Types of GST Registration

There are several types of GST registration, including regular, casual taxable persons, non-resident taxable persons, and eCommerce operators. Some registrants must obtain GST registration regardless of turnover limits.

2.1 Casual Taxable Persons

A casual taxable person is defined as someone who occasionally supplies goods or services in a state or union territory where they have no fixed place of business. This category includes temporary or seasonal businesses and those operating in fairs or exhibitions.

2.2 Non-resident Taxable Persons

Non-resident taxable persons (NRIs) are individuals, businesses, or not-for-profit entities that supply goods or servicesbut have no fixed place of business or residence in India. Foreign persons, businesses, or organizations supplying goods or services to India are considered non-resident taxable persons and must comply with all GST regulations in India.

2.3 E-Commerce Operators

E-commerce operators are individuals or entities that own, operate, or manage digital or electronic facilities or platforms for electronic commerce. Anyone selling products or services through the internet is considered an e-commerce operator and must obtain GST registration, irrespective of their business turnover.

3. GSTIN: Goods and Services Tax Identification Number

GSTIN or Goods and Services Tax Identification Number is a unique 15-digit number provided to entities registered under GST. The allocation of GSTIN is based on the applicant’s PAN and the state in which they operate. The first two digits represent the state code, and the following ten digits represent the applicant’s PAN.

4. GST Registration Process

4.1 Online GST Registration

The GST registration process is entirely online and can be completed through the GST Portal. To register, follow these steps:

1. Visit the GST Portal (gst.gov.in) and click on the “Register Now” link under the “Taxpayers” tab.
2. Select the appropriate option (New Registration, Temporary Reference Number, or GSTIN) and fill in the required details, including your PAN, mobile number, and email address.
3. Complete the OTP verification process for your mobile number and email address.
4. After verification, you will receive a Temporary Reference Number (TRN) on your registered mobile number and email. Use this TRN to log in to the GST Portal and complete the remaining registration process.
5. Fill in the application form with the necessary details and upload the required documents.
6. Submit the application, and you will receive an Application Reference Number (ARN) on your registered mobile number and email.
7. Track your application status using the ARN. Once approved, you will receive your GSTIN and GST registration certificate.

4.2 Registration through Service Providers

Alternatively, you can register for GST through various service providers such as IndiaFilings or ClearTax. These providers offer a hassle-free, end-to-end solution for GST registration, guiding you through the entire process and ensuring all documents are correctly submitted.

5. Downloading GST Registration Certificate

Entities with a valid GST registration are required to display their registration certificate prominently at their place of business. The GST certificate can be easily downloaded from the GST Portal by logging in to your account and navigating to User Services > View / Download Certificate.

6. Voluntary GST Registration

Any person or entity wishing to supply goods or services can obtain GST registration voluntarily, regardless of their business turnover. Voluntary registration can help businesses avail input tax credit and issue GST-compliant invoices to customers.

7. Penalty for Non-Compliance

Entities that cross the aggregate turnover threshold must obtain GST registration within 30 days of becoming liable. Failure to comply can result in a penalty of Rs. 10,000 and loss of input tax credit during the period of non-compliance.

8. Documents Required for GST Registration

The documents required for GST registration vary based on the type of registrant. Here’s a summary of the required documents for different entities:

8.1 Sole Proprietor / Individual

• PAN card of the owner
• Aadhar card of the owner
• Photograph of the owner (JPEG format, max size: 100 KB)
• Bank account details
• Address proof

8.2 LLP and Partnership Firms

• PAN card of all partners (including managing partner and authorized signatory)
• Copy of partnership deed
• Photograph of all partners and authorized signatories (JPEG format, max size: 100 KB)
• Address proof of partners (Passport, driving license, Voters identity card, Aadhar card, etc.)
• Aadhar card of the authorized signatory
• Proof of appointment of the authorized signatory
• Registration certificate / Board resolution of LLP (if applicable)
• Bank account details
• Address proof of the principal place of business

8.3 HUF

• PAN card of HUF
• PAN card and Aadhar card of Karta
• Photograph of the owner (JPEG format, max size: 100 KB)
• Bank account details
• Address proof of the principal place of business

8.4 Company (Public and Private) (Indian and Foreign)

• PAN card of the company
• Certificate of incorporation from the Ministry of Corporate Affairs
• Memorandum of Association / Articles of Association
• PAN card and Aadhar card of the authorized signatory (an Indian national, even for foreign companies/branch registration)
• PAN card and address proof of all directors
• Photograph of all directors and authorized signatory (JPEG format, max size: 100 KB)
• Board resolution appointing the authorized signatory / Any other proof of appointment (JPEG or PDF format, max size: 100 KB)
• Bank account details
• Address proof of the principal place of business

9. Benefits of GST Registration

GST registration offers several advantages to businesses:

9.1 Bank Loans

GST registration and return filing serve as proof of business activity and create a track record. Banks and NBFCs often rely on GST return data when considering loans, making GST registration essential for securing credit.

9.2 Supplier Onboarding

Reputed companies often require GST registration during the supplier onboarding process. Registering for GST can help your business secure contracts and expand its client base.

9.3 E-Commerce

To sell online through platforms like Amazon, Flipkart, Snapdeal, Zomato, and Swiggy, GST registration is mandatory. Having a GST registration enables you to tap into the growing e-commerce market.

9.4 Input Tax Credit

Entities with GST registration can collect GST from customers and offset their liability against GST paid on the purchase of goods and services. This process can result in tax savings and improved profit margins.

10. Conclusion

GST registration is an essential aspect of conducting business in India. Understanding the registration process, turnover limits, and documents required can help you navigate the GST landscape with ease. By registering for GST, you can not only ensure compliance but also take advantage of benefits such as input tax credit, access to e-commerce platforms, and easier access to credit.