What is GST?
- The Goods & Services Tax (GST) is an indirect tax on Goods and Services, which came into effect from 1st July 2017.
- It is a destination-based tax.
- GST has replaced the previous indirect taxes except for a few state taxes.
- GST is divided into five tax rates which are 0%, 5%, 12%, 18% and 28%. There are two special tax rates, which are 0.25% and 3% on rough precious/ semi-precious stones and gold, respectively. Petroleum products, alcoholic drinks, and electricity don’t come under GST. The state government taxes them as per the previous tax systems.
- For the businesses, with the turnover of more than Rs 40 Lakhs are compulsory to get registered under GST as average taxable person.
Are you thinking that what are the benefits of GST registration for startups/proprietorship/partnership firm or company, then we need to discuss the benefits of GST registration?
What are the benefits of GST registration?
There are lots of benefits of getting registered under GST, but we will discuss the significant benefits which are beneficial for your business.
- Legal recognition as a supplier of goods and services
- For normal taxpayers, to make interstate supply without any restrictions
- Maintenance of taxes paid on the input goods or services which can be used for payment of GST on the supply of goods or services
- Legally authorised to collect the taxes while making sales or providing services
- Legally authorised to claim the taxes paid on the goods or services while purchasing any goods or services
- Easy to get registered on e-commerce websites.
How to apply for GST registration?
There must be so many questions in your head regarding how to apply for new GST registration, documents required for GST registration, GST registration fees, so all the questions are answered below. You have to apply for GST registration online. You can visit www.gst.gov.in website for GST registration. Now, we will discuss a few crucial points about GST registration.
- Any taxpayer can apply for GST registration once the documents are available and verified to obtain the GST registration
- There’s a time limit to obtain the GST registration which is of 15 days
- In case the department is not satisfied with the documents you submitted while applying for the registration, then there are chances of getting the application rejected or receiving SCN (Show Cause Notice).
- Getting applications rejected or receiving SCN can increase the time limit.
- Once the application gets approved, then the taxpayer will receive GST Certificate and GST login credentials.
- GST number and other details will be mentioned in the GST certificate.
- There is no government fee for getting registered under GST
- In some cases, the taxpayers have to pay the charges for digitally signing the application for GST registration.
Also read: How to change GST registration details of a business?
What are the documents required for GST registration?
- PAN of the Applicant
- Aadhaar card
- Incorporation certificate or proof of business registration
- Photographs and Address proof of Promoters/Director
- Address proof of the place of business
- Board Resolution/Letter of authorisation for Authorised Signatory
- Bank account statement/cancelled cheque
- Digital Signature
Every GST registration gets registered under the PAN number so that the original document will be PAN of the applicant. If the officials of the GST department are not satisfied with the papers provided while applying, then the department can reject your application, so it is essential to have the correct documents.
How to get GST registration for a sole proprietorship?
If you are an individual running your business, then you can also get registered under GST with the help of your PAN number. Any individual can apply for GST registration for a proprietorship firm with the valid documents required for GST registration. It is the simplest form of business. Documents required for GST registration of the proprietorship firm will be the same as mentioned above.
Can an entity have more than one GST?
It is mandatory to obtain a different registration number for a business in different states under the same PAN, but you have to use the same GST number for all the branches in the same state. For example – If you want GST registration in Delhi and have two different branches, then the GST number for both the branches will be the same.
If a business has operations in different states, with the same PAN number, whether they can operate with a single Registration?
No. Every individual or business that is liable to take a registration will have to get separate GST registration for each of the States where operations of the business are taking place and are liable to pay GST. For example – If you have a GST registration in Delhi and you are want to start a business in Mumbai, then you have to apply for new GST registration in Mumbai.
Is GST registration compulsory?
- For the businesses, with the turnover more than Rs, 40 Lakhs are compulsory to get registered under GST irrespective of the fact that they want GST registration for partnership firm or GST registration.
- For certain businesses, GST registration is mandatory. If those businesses carry on without GST registration, then they have to pay hefty penalties.
What is the Composition Scheme?
Any taxpayer can get registered in GST. They can get registered as composition, or regular taxpayer depends on some factors.
- If small taxpayers do not want to be part of GST formalities, then they get to opt for a composition scheme in which they have to pay GST at a fixed rate of turnover.
- This scheme can opt by any taxpayer whose turnover is less than Rs. 1.5 crore. The limit is of Rs 75 lakhs for North-Eastern states and Himachal Pradesh.
- Turnover will be calculated by summing up the turnover of all the businesses registered under the same PAN.
Also read: Composition Scheme under GST
Who can register for the Composition scheme under GST?
If you want to opt for a composition scheme, then you have to follow the conditions given below.
- The taxpayer can’t claim the input tax credit
- The dealer cannot deal with interstate supply and GST exempted goods.
- If any transaction is taking place under the Reverse Charge Mechanism, then the taxpayer has to pay tax at the actual rate.
- If taxpayers are running more than one business registered under the same PAN, then he has opted for composition for all of them or none of them.
Can GST be surrendered?
- If the business is not doing well and the taxpayer wants to close it, then he can apply for cancellation of Registration.
- The taxpayer needs to be sure that there’s no pendency in GST compliances. Before applying to cancellation, the taxpayer needs to file all the pending returns correctly.
- After applying to the cancellation, the taxpayer can receive the SCN from the department if there’s a further need for any document.
- Order for cancellation of Registration will receive once the application gets approved from the department.
Also read: Is it necessary to register a company to get a GSTIN number?
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