How important is GST registration for Business: A Step-by-Step Guide for Businesses

The introduction of the Goods and Services Tax (GST) in 2017 led to a major paradigm shift in India’s taxation system. This replaced the web of indirect taxes and brought forward a unified tax system intended to streamline taxation across the nation. To ensure legal compliance, financial management and business success, businesses must have knowledge regarding GST and its registration process.

What is GST Registration?

Through GST registration, businesses can get themselves listed under the GST regime. Once registered, the business is given a unique Goods and Services Tax Identification Number (GSTIN). This unique number is used for all GST purposes such as filing returns, paying taxes or claiming input tax credits.

Who Needs to Register for GST?

Businesses that surpass certain yearly turnover thresholds are mandated to register under GST. At present these thresholds are:

• ₹40 lakhs for most businesses

• ₹20 lakhs for businesses in special category states (e.g., North Eastern states, Jammu & Kashmir, Himachal Pradesh, Uttarakhand)

However, you might need to register your LLP Company, private limited company, and public company even if your turnover falls below this threshold if you:

• Business that conduct interstate supply of goods or services

• Are casual taxable person (i.e., occasionally supply goods or services)

• Are non-resident taxable person (i.e., supply goods or services but do not have a fixed place of business in India)

• Are required to pay tax under reverse charge (where the recipient of goods or services is liable to pay GST)

• Are e-commerce operators or supplier

• Are Input Service Distributor (ISD)

What is the Online Process of GST Registration?

• Visit the GST portal: Proceed to the official GST portal (https://www.gst.gov.in/).

• Click on 'Services' > 'Registration' > 'New Registration': By doing this you will be redirected towards the registration page.

• Fill Part A: Fill in simple details of your business here, such as PAN, name of the business, email and phone numbers.

• Get Temporary Reference Number (TRN): After completing Part A, you will receive an SMS and email with a unique TRN.

• Fill in Part B: Use your TRN to move on to Part B of the application where you provide additional information about your business like the nature of your business, constitution, bank account number etc. Also, mention authorized signatory details.

• Submit Application: Lastly, upload the required documents and submit the application form.

• Verification: Your GST officer will verify your application and documents. As long as everything is correct, you’ll get your GSTIN within a few days.

What are the Documents Required for GST Registration?

The mandatory documents for GST registration may not be the same for all types of businesses such as LLP, public, and private limited company, but they include:

• PAN Card: The Permanent Account Number (PAN).

• Proof Business Registration: Partnership deed, certificate of incorporation or such registration certificates can be submitted

• Proof Place Business: Rental agreement, electricity bill or property tax receipt can be submitted

• Bank Account Details: Cancelled cheque or bank statement having IFSC code

• Photographs: Passport-sized photographs of an authorised signatory.

• Aadhaar Card: For individual applicants

All documents should be scanned and uploaded in the appropriate format on the GST portal.

Why is GST Registration Necessary?

GST registration is more than just a legal obligation, it can offer many benefits including:

• Avoid penalties: Companies must have a GST registration from a legal standpoint. Failure to do so attracts penalties or other legal issues.

• Input Tax Credit (ITC): Registered businesses have the right to claim ITC, which implies that they can deduct the GST they paid for purchases from the GST they collected on sales.

• Business Credibility: A GSTIN enhances business credibility and is typically a requirement to take part in governmental bids or tenders.

• Wider Market Access: Registering for GST opens up a wider market as many firms like dealing with suppliers who are registered.

• Ease of Doing Business: The process of tax compliance becomes easier through the registration of GST since it replaces several indirect taxes with one.

Trademark Registration is Also Very Important

Though directly connected with GST, Trademark Registration is another significant process that every company should consider. A trademark guards your company’s identity such as your company’s name, logo and or even taglines. It discourages people from associating your brand with any other products without permission and saves your business.

Conclusion

GST registration is one of the important parts of the Indian tax structure. GST is not mandatory for all businesses, but it is a decision that makes them more credible, expands market reach, and helps in simplifying tax procedures. With knowledge about the registration process and the benefits of engaging in it, businesses can easily meet the requirements and help in the growth of the Indian economy. If you need expert help with GST registration, contact PSR compliance for dedicated support.

FAQs

1. Is it possible to operate a private limited company without GST registration?

If your turnover crosses the threshold limit it becomes unlawful to carry out any business without GST registration. It can cause penalties and legal implications.

2. What will happen if I have not registered for GST as required?

Late registration attracts penalties and interest on the tax due. You can register for GST within 30 days of liability.

3. Can I cancel my GST registration if I no longer need it?

Yes, you can apply for cancellation of your GST registration if you satisfy certain conditions. You can do this process online through the GST portal.

4. Can I cancel my GST Registration?

Yes, it is possible to apply for cancellation of the GST registration provided several conditions are met. The process can also be done online using the GST portal.

5. How free is GST registration?

Normally, there are no charges for registering for GST. However, as a penalty for late registration, a fee of ₹10,000 may be charged.

Explore Other Services Offered by PSR Compliance:

Read More: What Is RNI Registration -Newspaper/Magazine Registration What is RNI?

Read More: FSSAI Central License Apply Online - Fresh/Renewal

Read More: 12A and 80G Registration -Process and Procedure

Read More: CDSCO License Online Registration

Read More: Step By Step Guide to ITR Filing and Income Tax Return Online

Read More: 5 Steps to Obtain BIS Registration for Your Products

Read More: Step-by-Step Process for NGO Registration in India 2024