GST Registration

Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover.

For those taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.

The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.

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.

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.

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.

Below, we have given the GST registration documents to use it as a checklist.

Sole proprietor / IndividualPAN card of the ownerAadhar card of the ownerPhotograph of the owner (in JPEG format, maximum size  100 KB)Bank account details*Address proof**
LLP and Partnership FirmsPAN card of all partners (including managing partner and authorized signatory)Copy of partnership deedPhotograph 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 signatoryProof of appointment of authorized signatoryIn the case of LLP, registration certificate / Board resolution of LLPBank account details*Address proof of principal place of business
HUFPAN card of HUFPAN card and Aadhar card of KartaPhotograph of the owner (in JPEG format, maximum size 100 KB)Bank account detailsAddress proof of principal place of business
Company (Public and Private) (Indian and foreign)PAN card of the CompanyCertificate of incorporation given by Ministry of Corporate AffairsMemorandum of Association / Articles of AssociationPAN card and Aadhar card of authorized signatory. The authorised signatory must be an Indian, even in case of foreign companies/branch registrationPAN card and address proof of all directors of the CompanyPhotograph 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 (in JPEG format / PDF format, maximum size 100 KB)Bank account detailsAddress proof of principal place of business