What is GST?
The Goods and Services Tax is an indirect tax. It aims to simplify the present tax structure in India. GST subsumes most of the taxes which include Central indirect taxes like Service Tax, Additional Customs Duty, Special Additional Customs Duty, Central Excise Duty, Cess and Surcharge, and Countervailing Duty, and Sate indirect taxes such as Sales Tax, Value Added Tax (VAT), Tax on Inter-state Sale, Local Tax, Entertainment Tax, Purchase Tax, Mandi Tax/Other State-Specific Local Levies, Luxury Tax, Taxes on Lottery and Betting, and Octroi/Entry Tax.
GST is a solitary tax on the supply of goods and services, right from the producer to the buyer. Credits of input duties paid at every stage are accessible in the consequent phase of value addition, which basically makes GST a duty just on value addition at every stage. The end consumer subsequently bears just the GST charged by the last merchant in the production network, with set-off advantages at all the past stages.
Who are liable to register under GST?
Any provider who carries on any business in India and whose total turnover surpasses the threshold limit (total turnover of Rs 9 lakh for North-East India and Rs 19 lakh for the rest of India) in a financial year is subject to get himself enlisted in the State where he is carrying on his business. As per Section 2(6) of the Model GST Law, total or aggregate turnover means the total value of taxable, non-taxable, exempted exported goods and supplies of the same PAN and it will be computed on an all India basis. Be that as it may, certain classifications of people according to the Schedule III of the Model GST Law are liable to be enrolled independent of this limit.
According to Paragraph 5 in Schedule III of the Model GST Law, the following people shall be registered compulsorily disregarding the total turnover of their respective businesses:
a) people who make Inter-State taxable supplies;
b) persons who are casually taxable;
c) persons who are liable to pay taxes under reverse charge;
d) taxable persons not residing in India;
e) persons requiring to deduct tax under the purview of section 37;
f) persons who supply goods and/or services on behalf of other registered taxable persons,
they may be an agent or any other person;
g) input service distributor;
h) persons who supply goods and/or any services other than branded services through an e-commerce operator;
i) every E-commerce operator;
j) an aggregator supplying services under his trade name; and
k) such other person or class of persons as may be from time to time notified by the Central Government or any State Government on the recommendations of the Council (like persons required to deduct tax, input service distributor and notified persons).
It should also be noted that as per Section 19 (2) of the Model GST Law, separate registrations may be obtained for different business verticals (in one State) of the same person and Section 19 (3) allows one who is not required to be compulsorily registered to get voluntarily registered as well. A person who is liable to get himself registered under the GST regime should do so within 30 days of him becoming liable.
Documents required for GST registration
For registering under the GST regime, the PAN Card of the person/body seeking registration is a mandatory document. Apart from this, the following documents are required –
Constitution of Business
- Partnership Deed in case of Partnership Firm;
- Registration Certificate in case of other businesses like Society, Trust etc. which are not captured in PAN
Details of Principal Place of Business
- In case of Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy
- In case of Rented or Leased premises – a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy
- In case of premises obtained from others, other than by way of Lease or Rent – a copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy
- Customer ID or account ID of the owner of the property in the record of electricity providing company, wherever available should be sought for address verification.
Details of Bank Account(s)
- Opening page of the Bank Passbook held in the name of the Proprietor / Business Concern – containing the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details
Details of Authorised Signatory
- For each Authorised Signatory: Letter of Authorisation or copy of Resolution of the Managing Committee or Board of Directors to that effect
- Proprietary Concern – Proprietor
- Partnership Firm / LLP – Managing/ Authorized Partners (personal details of all partners is to be submitted but photos of only ten partners including that of Managing Partner is to be submitted)
- HUF – Karta
- Company – Managing Director or the Authorised Person
- Trust – Managing Trustee
- Association of Person or Body of Individual –Members of Managing Committee (personal details of all members is to be submitted but photos of only ten members including that of Chairman is to be submitted)
- Local Body – CEO or his equivalent
- Statutory Body – CEO or his equivalent
- Others – Person in Charge
Process of Registration
The procedure of GST registration is an online process. The portal (http://gstindiaonline.com/) is maintained by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India.
- The applicant needs to submit his PAN and contact details like mobile number and email address in Part A of Form GST REG–01 on the portal or through the Facilitation Centre or Tax Return Preparer (FCs and TRPs facilitate dealers without a proper IT infrastructure) as per the notification of board or commissioner.
- After the PAN is verified on the Portal, contact details’ verification is done by entering the OTP sent to the mobile number and the email address provided by the applicant. Once the verification is successful, the applicant will receive an Application Reference Number on the registered mobile number and E-mail address. An electronic acknowledgement of the first step of the registration will then be issued to the applicant in FORM GST REG-02.
- After that, the Part- B portion of Form GST REG-01 is to be filled by the application specifying the application reference number. The form is then submitted along with required documents.
- In case additional information is required for the Registration process, Form GST REG-03 will be issued on the portal to which the applicant has to fill out Form GST REG-04 with the required information within 7 working days after he receives Form GST REG-03.
- If all required information is provided through Form GST REG-01 or Form GST REG-04, the registration certificate in Form GST REG –06 for the principal place of business and for every additional place of business is issued to the applicant. If the person has multiple business verticals within a state he has to file a separate application in Form GST REG-01 for registering each of those business verticals. If the details submitted are found unsatisfactory, the application for registration shall be rejected using Form GST REG-05.
Once a business is registered under the GST regime, it will be hugely benefitted. Some of the important advantages of this Registration are as follows:
- Businesses will be legally perceived as provider of products or administrations.
- Proper bookkeeping of expenses paid on the input goods or services which can be used for payment of GST due on supply of products or services or both by the business.
- Legally approved to gather charge from his buyers and pass the tax credit on to the buyers or beneficiaries.
Thus, it is very important to get registered under the GST regime. As discussed above the procedure is simple and hassle free and its benefits are many.