The Goods and Services Tax is a single, unified tax system that is applicable throughout India. Registration in GST is compulsory for businesses that exceed certain threshold limits. But what exactly does “Registration” in GST mean?
Keep reading to learn the meaning of “Registration” under GST, reasons to obtain Registration, and the Registration procedure.
- What is Registration in GST means?
- Reasons to Obtain Registration in GST
- What is the Procedure for GST Registration?
- Concept of Deemed Approval in GST Registration
- Documents Required for GST Registration
- Cancellation of Registration in GST
- Download Registration Under GST Notes
- FAQs About GST Registration
- Winding up the Registration Concept
What is Registration in GST means?
Registration in GST means obtaining a unique GSTIN (Goods and Services Tax Identification Number). The GSTIN is a unique 15-digit number assigned to a business for the purpose of GST.
You can understand it with the help of the Aadhaar number. Your Aadhaar number is your very own unique number that identifies you as an Indian citizen. Similarly, the GSTIN is a unique number for the “identification” of businesses.
A GSTIN is mandatory for businesses that exceed the threshold limit for registration. The current threshold limit is Rs. 40 lakhs for most states (except for Special Category States, where the threshold limit is Rs. 20 lakhs).
Reasons to Obtain Registration in GST
There are several reasons why businesses may want to obtain registration in the GST even if they do not exceed the threshold limit for registration.
Some of the key reasons to obtain Registration for GST purposes are:
- To claim Input Tax Credit: One of the main advantages of GST is that it allows businesses to claim input tax credit on the GST paid on their purchases/inputs. Check what is Input Tax Credit to understand it better.
- To file GST returns: All businesses that are registered under GST are required to file GST returns on a monthly or quarterly basis, depending on their turnover. A GSTIN is mandatory for this purpose.
- To participate in tenders and government contracts: Many government agencies and private companies require businesses to be registered under GST in order to participate in tenders and contracts.
What is the Procedure for GST Registration?
Now, as you know what Registration under GST means; what about the Registration procedure? Is it that simple to get a GSTIN? What are the documents required for it?
The GST Registration procedure is categorized into several different steps. Here is a step-by-step guide to help you navigate the GST registration process:
1. Application for GST Registration
As it name suggests, the very first step is to apply for Registration in the GST Portal.
The application step is further divided into two parts: PART “A” and PART “B”.
- Part A: It is the first step for registration in which you fill the basic details.
- Part B: After filling Part A, you can fill Part B. In this part, you’ve to submit some documents as proof.
Here’s a detailed explaination of what you’ve to do in both the parts:
In the GST Portal, you will need to provide details about your business, including your name, address, and PAN number. You have to enter your mobile number as well as e-mail to recieve an OTP for registration.
Once you register on the GST Portal, you recieve an OTP on your given mobile number and e-mail for verification. After verification, a Temporary Reference No. or TRN is generated. You can use TRN to complete “Part B” further.
Now, you have to make an Advanced Tax Payment to the GST Authority.
After filling Part A, move on to Part B for final steps.
Part B mainly covers “submission of the required documents” for GST Registration. The documents required to submit are already covered below.
Once you submit the required documents, the GST department will review your application.
If it is approved, you will receive a GST registration certificate. This certificate will include your GSTIN (GST Identification Number), which is a unique number assigned to your business for GST purposes.
For a detailed guide, check the GST Knowledge Portal for assistance.
2. Issue of Registration Certificate
Once the GST authority is satisfied with your application, it issues a Registration Certificate to you.
The Registration Certificate in GST refers to a document that serves as proof that a business is registered under the GST system.
This certificate is issued by the government to businesses that are required to pay GST, and it allows them to collect GST from their customers and claim input tax credits (ITC).
Concept of Deemed Approval in GST Registration
In the Goods and Services Tax (GST) system, deemed approval means the “automatic approval of a GST registration application”.
Under GST law, the tax authorities are required to either approve or reject a GST registration application within a certain time frame, typically within three working days.
If the authorities do not take any action on your submitted application within three days, it is assumed your application is APPROVED.
Documents Required for GST Registration
The following documents are required for GST registration:
- Proof of PAN: This can be a copy of the PAN card or a PAN allotment letter.
- Proof of address: This can be a copy of the business’s utility bill, rent agreement, or ownership documents.
- Cancelled cheque: This is required to verify the bank account details provided in the application.
- Declaration: This is a declaration form that needs to be signed by the authorized signatory of the business.
- Other documents: Depending on the nature of the business, other documents may be required, such as partnership deed, articles of association, etc in case of a Company or a Partnership firm.
Cancellation of Registration in GST
The cancellation may occur due to: Voluntary cancellation or cancellation by the GST authority.
1. Voluntary Cancellation
A GST registration can be cancelled (by a registered business) in the following circumstances:
- The business has closed down (winding up) or stopped operations.
- Transfer of business.
- Obtained registration by furnishing false or incorrect information.
- Not filed GST returns for six consecutive tax periods.
- Death of the owner of business.
2. Cancellation by GST Authority
The GST authority can also cancel the registration in some cases such as:
- If the business has not filed any GST returns for a continuous period of six months.
- If the business has not conducted any business activity for a continuous period of six months.
- Obtained the GST registration through fraud or misrepresentation of facts.
- The business has closed down or ceased to exist.
- If the business has provided incorrect or false information during the registration process.
- If the business has failed to comply with the GST laws and regulations.
- If the business has been found to be involved in any illegal or unlawful activity.
To cancel GST registration, the business needs to file an application for cancellation through the GST Portal. The GST officer will review the application and, if satisfied, will cancel the GST registration.
Download Registration Under GST Notes
Note that the notes are as per the B.com 3rd Sem Syllabus pattern!
You can download GST registration notes from our website or from various websites that provide information on GST.
The below given PDF notes provide a summary of the key aspects of GST registration, such as the threshold limits, Liability for GST Registration, and the procedure for registration and cancellation.
FAQs About GST Registration
Below are some of the frequently asked questions (FAQs) about Goods and Services Tax (GST) Registration:
What are the 3 types of GST Registration?
The followings are the main 3 types of GST Registration in India:
1. Compulsory Registration or Regular or Normal Registration
This is the most common type of registration in GST and is applicable to businesses that exceed the threshold limit for registration, which is currently Rs. 40 lakhs for normal states (and Rs. 20 lakhs for Special Category States).
2. Voluntary Registration or Optional Registration
This type of registration is available to businesses that are below the threshold limit for Registration, but still want to obtain a GSTIN.
3. Composite Scheme Registration (Registration under Composition Scheme)
This type of registration is available to small businesses with a turnover of up to Rs. 1.5 crores (normal states) and, Rs. 75 lakhs in case of Special Category States like the north-eastern states and hilly states.
Under the composite scheme, businesses are required to pay tax at a fixed rate on their turnover.
Is GST Registration free of cost?
GST registration is generally free of cost in India. There are no fees charged for obtaining GST registration or for filing GST returns.
However, businesses may have to incur some expenses in obtaining the required documents, such as proof of PAN, proof of address, and a cancelled cheque for the bank account.
What is the validity of GST Registration?
The validity of GST registration depends on the nature of the business and its turnover.
For businesses that are registered under the regular or composite scheme, GST registration is valid indefinitely, unless the Registration is cancelled due to any valid reason.
What is the deadline for Registering under GST?
The deadline for obtaining GST registration is 30 days from the date on which the threshold limit is crossed.
For businesses that are not registered under GST but still want to obtain GST registration, there is no specific deadline.
Can a person with no GST registration collect GST?
A person with no GST registration is not allowed to collect GST. According to the GST laws in India, only registered persons are authorized to collect GST on the supply of goods and services.
Winding up the Registration Concept
Without a doubt, Registration is highly important for businesses if they want to be more competitive in the market.
Registration in GST not only helps businesses keep track of their sales, expenses and taxes, but also enables them to become compliant with the laws and regulations of the GST regime.