Are you looking for Goods and Service Tax Registration? People imagine it is a complicated and rough process but you know what! It’s not at all like that, just go through this article and you will find it very easy.
The Goods and Service Tax Act, which was approved in the Parliament on March 29, 2017, came into effect on July 1, 2017. India has adopted a double GST model, where both central and state government imposes a tax on goods and services. There are three types of GST implemented in the country:
CGST: It is imposed by the central government of India.
SGST: It is imposed by the state government.
IGST: It is imposed by the central and state government together, but composed by the central government.
Tax will be charged at each and every point of sale, State tax and Central tax will apply in case of intra-state sales, while incorporated GST will be levied for inter-state sales. Goods imported will come under IGST as they will be regarded as inter-state supply.
What is GST?
It is one of the major tax reforms in India and it is improving the ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. Under the new regime, all entities involved in selling or buying goods or providing services or both are necessary to register for goods and service tax.
Entities without tax registration would not be permitted to collect tax from a customer or claim an input tax credit of GST paid. Further, it is compulsory once an entity crosses the minimum verge turnover of starts a new business that is expected to cross the approved turnover.
As per the committee, entities in special category states with a yearly turnover of Rs.10 lakhs and above would be necessary to register under goods and service tax. All other entities in the rest of India would be necessary to register for goods and service tax if annual turnover exceeds Rs.20 lakhs.
There are also different other criteria, that could make an entity liable for obtaining GST registration – irrespective of annual sales turnover. Entities required to register for goods and service tax as per regulations should file for application within 30 days from the date on which the entity became liable for registration under goods and service tax.
GST Registration Process
Here is a Step-by-Step Process to Complete Online Registration
- Log on to www.gst.gov.in.
- Tick on the ‘Services’ tab on the menu at the top of the page.
- You will have three options, viz. ‘Registration’, ‘Payments, and ‘User Services’.
- Click on ‘Registration’ and select ‘New Registration’.
- You will be redirected to a new page in which you will have to choose whether you are a taxpayer or a GST practitioner before entering a few details such as the legal name of the company, the state and district in which the entity is located, Permanent Account Number, email address and mobile number and this is basically Part-A of the form.
- The particulars you have entered will have to be confirmed by the portal, so you will receive an email for confirmation or a one-time password.
- Based on the type of business you are running, it will be necessary to upload a few documents as requested.
- Part B of the form will then have to be filled in with a few details after which you will receive the Application Reference Number through SMS or email.
- Your request will then be verified by a GST officer and it could either be approved or you will be requested to provide some more details or documents until the authorities have all the obligatory information to approve your application.
Separate registration has to be done for each state if a seller has branches in many states. Companies with more than 1 vertical can register separately for each of them, as goods and service tax has just been introduced, it might take us a while to get used to it and understand it.
At present, all assessees have been asked to register for GST, and no process is in place for people who do not want to register for it. They can select to stop their registration after registering though.
Most of the services and products that are subject to the new tax rule have been categorized under four tax slabs – 5%, 12%, 18%, and 28%. Goods and service tax rates will not apply to some goods and services, like milk, curd, fresh fruits, etc.
The rates for important food items have been kept very low and the reason to do this is that food items make up about 50% of the consumer basket and contribute relatively much to ensuring that widespread price rises are kept in check. Luxury goods and negative items are taxed at a higher rate so as to maintain income impartiality for central and state governments.
Some of the goods and services subject to 5% GST are:
- Rail and economy class air tickets
- Small restaurants
Some of the goods and services subject to 12% GST are:
- Cell phones
Some of the goods and services subject to 18% GST are:
- Biscuits (All categories)
- Pastries and cakes
- Ice cream
- Instant food mixes
Some of the goods and services subject to 28% GST are:
- Gambling and race club betting
- 5-star hotels
- Small cars
- Consumer durables such as AC, Fridge,
- Luxury and Sin items
The following Documents are necessary for GST Registration
- Permanent Account Number (PAN) of the candidate
- Aadhaar card of the applicant
- Proof of address of the business place
- Statement of bank account
- Utility Bill (Electricity, gas, or bill
Penalty for not registering
Any offender who is not paying tax or making short payments (legitimate errors) has to pay a fine of 10% of the tax amount due subject to the least amount of Rs.10,000. The penalty will at 100% of the tax amount due when the offender has intentionally evaded paying dues.
The average time taken to obtain a goods and service tax Certificate is about 1 – 2 working days, subject to government processing time and customer document submission.
Before you go, make sure to check out our latest article about ISO certification and necessary documentation.