GST Registration

GST Registration in India

The Goods and Services Tax (GST) in India is structured around three primary components:

• Central Goods and Services Tax (CGST): This tax is levied by the Central Government on the supply of goods and services within a particular state. CGST applies to transactions carried out entirely within the boundaries of one state.
• State Goods and Services Tax (SGST): SGST is charged by the State Government on the supply of goods and services within its jurisdiction. Similar to CGST, SGST is also limited to transactions happening within a specific state.
• Integrated Goods and Services Tax (IGST): This tax is imposed by the Central Government on the supply of goods and services that occur between different states or between a state and a Union Territory. IGST is relevant for transactions where goods or services cross state or Union Territory boundaries.

Who is required to register for GST?

GST registration is essential for the following persons:

• Business Entities: Any enterprise with an aggregate annual turnover exceeding Rs. 40 lakhs. For special category states under GST, the threshold is Rs. 20 lakhs.
• Service Providers: Those with an aggregate annual turnover surpassing Rs. 20 lakhs. For special category states, this limit is Rs. 10 lakhs.
• Exemptions: It's important to note that entities dealing exclusively in GST-exempted goods or services are not bound by these thresholds.
• Previously Registered Entities: Entities that were registered under older tax frameworks (like Excise, VAT, Service Tax, etc.) need to migrate and register under the GST regime.
• Inter-State Suppliers: Any entity or individual involved in the supply of goods across state boundaries.
• Casual Taxable Entities: Those who undertake taxable supply occasionally.
• Entities under Reverse Charge Mechanism: Businesses obligated to pay tax under the reverse charge.
• Input Service Distributors & Agents: Distributors of input services, including their representatives.
• E-Commerce Platforms: Operators or aggregators of e-commerce platforms.
• Non-Resident Taxable Entities: Individuals or entities that are non-resident but engage in taxable supply within India.
• Supplier's Agents: Representatives who supply on behalf of a principal supplier.
• E-Commerce Suppliers: Individuals or entities that offer goods or services through an e-commerce aggregator.
• Online Service Providers: Entities delivering online information, database access, or retrieval services from outside India to an individual in India, excluding those already registered under GST.

GST Registration Turnover Limit

GST registration can be obtained voluntarily by any person or entity, irrespective of turnover. GST registration becomes mandatory if a person or entity sells goods or services beyond a certain turnover.

Service Providers: Any person or entity who provides service of more than Rs.20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers has been fixed at Rs.10 lakhs.

Goods Suppliers: As per notification No.10/2019 any person who is engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs in a year is required to obtain GST registration. To be eligible for the Rs.40 lakhs turnover limit, the supplier must satisfy the following conditions:

• Should not be providing any services.
• The supplier should not be engaged in making intra-state supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.
• Should not be involved in the supply of ice cream, pan masala or tobacco.

If the above conditions are not met, the supplier of goods would be required to obtain GST registration when the turnover crosses Rs.20 lakhs and Rs.10 lakhs in special category states.

Special Category States: Under GST, the following are listed as special category states - Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

Aggregate Turnover: Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover.

Advantages of GST Registration for Businesses

Registering for GST offers a range of benefits to businesses:

• Legal Compliance: Ensures that businesses remain compliant with tax regulations, thus avoiding any potential penalties.
• Input Tax Credit: Businesses can claim credits for the GST they've paid on purchases, which can then be set off against the GST charged on sales, leading to a reduction in tax liability.
• Inter-State Trade Ease: Encourages businesses to transact across state boundaries without facing tax-related challenges.
• Elimination of Cascading Effect: By removing the effect of tax being levied on an already taxed amount, the overall cost of products or services is reduced.
• Competitive Edge: Being GST compliant can instil trust in potential customers, opening up more business opportunities.
• Access to Larger Markets: Major corporations often prefer collaborating with GST-registered vendors.
• Optimized Cash Flow: Efficient management and lower tax liability can enhance the cash flow within a business.
• Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record can boost a business's credit profile.
• Legal Safeguard: A GST registration protects businesses and ensures their rights are upheld.
• Simplified Compliance: The GST process is streamlined, enabling businesses to file returns and make payments online easily.
• Transparent Operations: Ensures businesses maintain accurate records, promoting a sense of trustworthiness and professionalism.

GST Certificate

The GST Certificate stands as an authoritative document provided by the Indian government to entities that are registered under the Goods and Services Tax (GST) framework. This certificate confirms a business's legitimate Registration under GST and prominently displays key details such as the GST identification number, the business name, and official address.

Possessing an authentic GST Certificate is pivotal for enterprises because:

• Tax Collection Authority: It empowers businesses to impose and gather GST from their clientele.
• Tax Credit Claims: With this certificate, businesses can rightfully claim credits on the GST they've disbursed on their procurements and operational costs.
• Loan Applications: When seeking financial aid or loans, businesses might be asked to present their GST certificates to validate their authenticity.
• Government Tenders: To be eligible and participate in official government tenders, the GST Certificate must often be produced as evidence of tax compliance.
• Market Reputation: The certificate enhances a business's stature in the market, reflecting its commitment to national tax regulations.

GSTIN

GSTIN, which stands for Goods and Services Tax Identification Number, is a distinctive 15-digit alphanumeric code allocated to every taxpayer who is registered under the GST framework in India. This number acts as the primary identifier for both businesses and individuals in the context of GST-related transactions and compliance.

Voluntary GST Registration for Businesses

Businesses generating a turnover of less than Rs.20 lakhs can do the GST registration voluntarily. By doing so, they can benefit from advantages such as availing input tax credits, unrestricted inter-state sales, eligibility to list on e-commerce sites, and establishing a competitive stance against businesses that aren't GST-registered.

GST Registration Documents Requirements

Sole proprietor / Individual

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

LLP and Partnership Firms

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

HUF

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

Company (Public and Private) (Indian and foreign)

• PAN card of the Company
• Certificate of incorporation given by Ministry of Corporate Affairs
• Memorandum of Association / Articles of Association
• PAN card and Aadhar card of authorized signatory. The authorised signatory must be an Indian, even in case of foreign companies/branch registration
• PAN card and address proof of all directors of the Company
• Photograph of all directors and authorised signatory (in JPEG format, maximum size 100 KB)
• Board resolution appointing authorised signatory / Any other proof of appointment of authorised signatory
• Bank account details
• Address proof of principal place of business

GST Return

What is GST Return?

A GST Return is a detailed statement that captures all the financial transactions of a person registered under GST, reflecting revenues and expenditures. It is a mandatory submission for every holder of GSTIN to the tax authorities, allowing them to determine the net tax liability with precision.

The GST return filing encompasses several critical elements:

• Purchases: It records in detail the purchases the taxpayer has made.
• Sales: It provides a comprehensive log of the taxpayer's sales activities.
• Output GST (On Sales): It notes the GST charged on the taxpayer's sales.
• Input Tax Credit (GST Paid on Purchases): It lists the GST paid on purchases, which is eligible to be deducted from the GST owed on sales.

Who Should File GST Returns?

GST returns must be filed by any business or individual registered under the GST regime. This obligation applies to entities whose annual aggregate turnover surpasses the specified threshold, which is set by the tax authorities and may differ for various classifications of taxpayers, such as standard taxpayers and those opting for the composition scheme.

How Many Returns are there under GST?

Within the Goods and Services Tax (GST) system, 13 returns cater to different facets of a taxpayer's financial dealings. Below is a snapshot of the 13 GST returns:

• GSTR-1: Filed for disclosing details of outward supplies, essentially the sales.
• GSTR-3B: A summarised return that outlines both sales and purchases, inclusive of tax payments.
• GSTR-4: Applicable to those under the Composition Scheme, summarizing turnover and corresponding tax.
• GSTR-5: For non-resident taxpayers conducting taxable transactions in India.
• GSTR-5A: For providers of online information and database access or retrieval services.
• GSTR-6: Used by Input Service Distributors for detailing input tax credit distribution.
• GSTR-7: For entities required to deduct TDS under GST.
• GSTR-8: To be filed by e-commerce operators reporting transactions on their platform.
• GSTR-9: An annual comprehensive return summarizing all periodical filings over the fiscal year.
• GSTR-10: The final return upon cancellation or surrender of GST registration.
• GSTR-11: For those with a Unique Identity Number, claiming refunds on their purchases.
• CMP-08: A quarterly statement for Composition Scheme taxpayers detailing tax liability.
• ITC-04: For manufacturers to declare details about goods dispatched to and received from a job worker.

Additionally, there are return-related statements for input tax credits:

• GSTR-2A (dynamic): Offers a real-time perspective of inward supplies as suppliers report.
• GSTR-2B (static): Provides a fixed snapshot of inward supplies based on the suppliers' filings.

Due dates for various types of GST returns

Penalty for Late Filing GST Returns

If you submit GST returns late, you could face penalties and interest charges. Businesses should submit on time to avoid these costs. Here's what you need to know about late GST returns:

• Filing Returns is Required: Every registered taxpayer has to file GST returns regularly, even if there's no business activity.
• Delays Lead to More Delays: If you miss a filing deadline, you can't file for the next period until you've filed for the previous one.
• Penalties for Late Filing: If you file GSTR-1 late, for example, you'll get a penalty that shows up when you file GSTR-3B.
• Interest on Late Tax Payments: If you owe taxes and pay late, you'll be charged 18% interest per year on the amount you owe, starting from the day after the due date until you pay.
• Late Filing Fees: The law sets the late filing fee at Rs. 100 per day for each CGST and SGST, with a maximum of Rs. 5,000.
• Annual Return Late Fees: For yearly returns like GSTR-9 and GSTR-9C, the late fee is capped at 0.25% of your turnover in your state or UT unless the government provides relief or changes the fees.

GST LUT Filing

Understanding LUT in GST

LUT full form is Letter of Undertaking holds significant relevance within the context of the Goods and Services Tax (GST) framework. This document serves as a powerful tool for exporters, allowing them to engage in the export of goods or services without the obligation of immediate tax payment.

GST LUT Form for Exporters

For all registered taxpayers engaged in the export of goods or services, it is mandatory to provide a Letter of Undertaking (LUT) using the Form GST RFD-11 form on the GST portal. This obligation is essential to facilitate exports without paying Integrated Goods and Services Tax (IGST).

Eligibility Criteria for LUT registration

The Letter of Undertaking (LUT) is open for utilization by any registered taxpayer engaged in exporting goods and services. However, individuals facing prosecution for tax evasion exceeding Rs. 250 lakh or more are ineligible to benefit from this option.

• Intent to Supply: The applicant should intend to supply goods or services within India, to foreign countries, or to Special Economic Zones (SEZs).
• GST Registration: The entity seeking to avail the benefits of an LUT should be registered under the GST framework.
• Tax-Free Supply: The desire to supply goods without the imposition of integrated tax is an essential requirement for LUT application.

Documents required for GST LUT registration

• LUT Cover Letter: A request letter signed by an authorized person.
• Eligibility: Ensure you meet eligibility criteria (no serious tax evasion cases).
• Copy of GST Registration: Proof of your GST registration.
• PAN Card of Entity: Identification using PAN card.
• KYC of Authorized Person: ID and address proof of authorized person.
• GST RFD 11 Form: Application form for LUT.
• Copy of IEC Code: If involved in exports.
• Canceled Cheque: From your associated bank account.
• Authorized Letter: Granting power to the authorized signatory.

GST E-Way Bill

What is an e-Way bill?

An E-way bill, short for electronic way bill, is essential for the movement of goods in both inter-state and intra-state transportation under the GST regime. It is an electronic document generated on the e-way bill portal (ewaybillgst.gov.in), which serves as proof of the movement of goods.

According to GST regulations, any person registered under GST who initiates the transportation of goods with a consignment value exceeding Rs. 50,000 must provide details of these goods in an E-way bill before the goods begin their journey. The requirement for an e-way bill is mandated under Section 68 of the CGST Act and further detailed in Rule 138 of the CGST Rules, 2017.

Key Components of eWay Bill

The e-way bill, crucial for the movement of goods in India, consists of Part A and Part B. Part A involves gathering vital information about the consignment (GSTIN of the recipient, pin code of the delivery location, invoice or challan number, value of the consignment, HSN code, reason for transportation, and transport document number). Part B captures the transportation specifics — the vehicle number for road transport or other conveyance details via rail, air, or ship.

Validity of eWay Bill

There is a specific validity period for an e-way bill, which is determined based on the distance the goods are transported. The e-way bill is valid for one day for every 100 kilometers or part thereof for regular vehicles. In the case of Over Dimensional Cargo (ODC) vehicles, the validity is one day for every 20 kilometers or part thereof. This validity period expires at midnight on the last day.

What are the penalties associated with the e-way bill?

The individual responsible is penalized if a consignment is transported without an e-way bill. This penalty is either Rs. 10,000 or an amount equal to the tax evaded on the consignment, whichever is higher.