GST Registration: All You Need to Know

Every taxable person coming under the net of indirect taxes needs to register under GST. There are several types of GST Registration. The registration process remains more or less similar. But, different persons need to fulfill a different eligibility criterion.

In this post, we discuss the GST registration process in detail. You can find answers to all your questions about it.

Who needs to register under GST?

All businesses having an annual turnover of more than Rs. 20 Lakhs need to register under GST. This threshold limit for GST registration is Rs. 10 Lakh for special category States.

11 Special Category States- GST registration

Is it Compulsory to register under GST even if my turnover is below the above limit?

For the following persons, it is compulsory to register under GST even if the turnover is below the above limit.

Compulsory Registration

Other than this, any other person or class of persons may be notified by the Central Government. Such persons need to get a compulsory GST Registration.

What documents do I need to provide?

Have a look at this handy checklist to know what documents you will need for registering under GST.

Documents for GST Registration

How to apply for GST Registration?

A person applying for registration needs to follow the below steps.

GST Registration Process

All these steps are explained in detail below.

Step 1: Filling up Form GST REG 01

This is the first step in registering as a taxpayer under GST. The applicant needs to provide information in two parts.

Part A

Before applying for registration, the taxpayer needs to provide the following information.

  • Mobile number (validated through an OTP)
  • PAN (verified through CBDT database)
  • E-mail address (verified through an OTP)

After successful verification, the applicant will receive a reference code.

Part B

Using the above reference number, the applicant needs to fill part B of the form with the requisite documents. The form needs to be duly signed or verified through electronic verification.

Step 2: Acknowledgment in Form GST REG 02

This is an electronic acknowledgment. It’s issued to the applicant after successfully submitting the application for GST Registration.

Step 3: Verification of Information

The application for GST registration will be forwarded to an officer who will then examine the application. If everything is in order, the officer will approve the application within 3 working days.

Step 4: Approval/Rejection of application

In case of any deficiency in the application, the applicant will receive a notice in From GST REG 03. The applicant will then need to remove the above deficiency in Form GST REG 04 within 7 working days.

Subject to the removal of these deficiencies, the application will be processed and approved.

Further, failure of the proper officer to take any action within

  • 3 working days of receiving the application
  • 7 working days of receiving clarification/information or documents sought

The application will be deemed to be registered.

Step 5: Issue of Registration Certificate

The final step is the issuance of registration certificate in Form GST REG 06.

Do I need to pay a fee for GST Registration?

No. There is no government for registering under GST.

So, if you register under GST yourself by logging on to the GST common portal, you don’t need to pay any fee. However, if you avail the services of a GST Suvidha Provider, you may need to pay a professional fee for GST Registration.

After GST registration, you will receive a GSTIN.

What is GSTIN?

GSTIN stands for GST Identification Number. After GST Registration, every taxable person receives a GSTIN. It identifies and distinguishes him from other taxpayers.

It is a 15 digit number providing a unique identity to every taxpayer registered under GST.

The first 2 digits represent the State Code of the state where the taxable person is applying for registration.

Next 10 digits are the PAN number of the taxpayer.

The next digit is assigned on the basis of registration number within a particular state.

The second last letter is Z by default.

Last digit is a random check code which can be a number as well as an alphabet.

What if I do not register under GST?

If it is compulsory for you to get GST registration and you fail to do so, you will be subject to a penalty of

  • Rs. 10,000, or
  • Amount of tax involved

Whichever is higher.

Is there any benefit of GST Registration apart from avoiding penalties?

Registering under GST gives you the following benefits.

  • Legal recognition as supplier
  • Authority to collect taxes from customers
  • Authority to pass on Input Tax Credit (ITC)
  • Ability to claim ITC and utilize it to pay outstanding taxes
  • Seamless flow of ITC from suppliers to recipients

Can I apply for a single registration for all my businesses?

You need to apply for separate GST registration for separate business verticals. A business vertical is a unit or department of a business which is subject to different risks and returns than the rest of business. Nature of the following factors is taken into account while determining the difference.

  • Products and Services
  • Process of production
  • Customers
  • Channels of distribution
  • Regulatory environment

So, if you have multiple business verticals within a state or within the country, you need to obtain separate GST Registration for all of them.

What is Composition Scheme under GST? Can I opt for it?

Composition scheme is an optional scheme under GST. In this scheme, tax is chargeable at a fixed percentage of the annual turnover. Taxpayers opting for this scheme cannot avail the benefit of Input Tax Credit. They also cannot collect tax from their customers.

Businesses with an annual turnover less than Rs. 75 Lakhs (50 Lakhs for North-Eastern states) can opt for this scheme if they are dealing in the following.

  • Goods
  • Restaurant business

Service providers cannot opt for GST composition.

The rate of tax is 2 % for manufacturers, 5 % for suppliers, and 1 % for suppliers of other goods.

The GST composition scheme targets small businesses as the turnover limit is less than Rs. 75 Lakh per year.

If you have not yet applied for GST Registration, do it soon to avoid penalties and to avail the benefits it has to offer.

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