GST Registeration - An Overview

GST registration is an essential compliance step for many businesses and professionals in India. It involves obtaining a unique 15-digit Goods and Services Tax Identification Number (GSTIN). This registration makes a business liable to collect and pay GST, allowing authorities to monitor transactions effectively. Whether you meet the mandatory criteria, are starting a new venture requiring registration, or wish to voluntarily obtain GST registration, understanding the process is crucial. Trustra Advisory can assist you in completing the registration process and maintaining compliance under the GST framework.

Contact our experts today to help streamline your GST registration process!

Overview GST Registration India Online

Introduced on 1 July 2017, the Goods & Services Tax (GST) system replaced multiple Central and state-level taxes (like Service Tax, VAT, Excise Duty, etc.) to simplify India's indirect tax structure. Registration under GST is mandatory for service providers, traders, manufacturers, and freelancers once they meet specific criteria, primarily based on turnover.

The GST system provides an optional composition scheme for taxpayers with an annual turnover below a certain threshold (currently Rs. 1.5 crore for many), offering simplified compliance and tax payment at a fixed rate based on turnover.

GST applies at various stages of the supply chain, from raw materials to the final sale. It's a consumption-based tax, meaning the tax revenue generally goes to the state where the goods or services are consumed. For example, if a product made in West Bengal is sold to a consumer in Uttar Pradesh, the GST revenue (specifically the state component or relevant portion of IGST) is attributed to Uttar Pradesh.

It's important to note that while the government does not charge a fee for GST registration itself, professional services assisting with the application process will have their own service charges.

Key Components of GST Registration

The GST framework in India includes:

• Central Goods and Services Tax (CGST): Levied by the Central Government on intra-state (within the same state) supplies.
• State Goods and Services Tax (SGST): Levied by the State Government on intra-state supplies.
• Integrated Goods and Services Tax (IGST): Levied by the Central Government on inter-state (between different states/UTs) supplies and imports.

Who is required to register for GST?

GST registration is mandatory for the following (subject to specific conditions and current regulations):

• Businesses supplying goods: Primarily those with an aggregate annual turnover exceeding Rs. 40 lakhs (with specific conditions and exceptions). For special category states, the threshold is generally lower (often Rs. 20 lakhs).
• Businesses supplying services: Primarily those with an aggregate annual turnover exceeding Rs. 20 lakhs. For special category states, this limit is generally Rs. 10 lakhs.
• Entities dealing exclusively in GST-exempted goods or services are generally not required to register based on turnover.
• Entities previously registered under pre-GST laws (like VAT, Service Tax) that needed to migrate.
• Anyone making inter-state taxable supplies of goods.
• Casual taxable persons (occasional suppliers).
• Entities required to pay tax under the reverse charge mechanism.
• Input Service Distributors (ISD).
• E-commerce operators/aggregators.
• Non-resident taxable persons.
• Agents supplying on behalf of a principal supplier.
• Suppliers selling through e-commerce aggregators (who are liable to collect tax at source).
• Providers of online information and database access or retrieval (OIDAR) services from outside India to unregistered persons in India.

GST Registration Turnover Limit

While anyone can opt for voluntary GST registration, it becomes mandatory based on turnover:

• Service Providers: Required to register if aggregate annual turnover exceeds Rs. 20 lakhs (Rs. 10 lakhs in Special Category States).
• Goods Suppliers: Required to register if aggregate annual turnover exceeds Rs. 40 lakhs, provided they meet specific conditions:
  • Engaged exclusively in the supply of goods.
  • Not making supplies in certain specified states (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand).
  • Not supplying specified items like ice cream, pan masala, or tobacco.
  • If these conditions are not met, the threshold for goods suppliers typically reverts to Rs. 20 lakhs (Rs. 10 lakhs in Special Category States).
• Special Category States: Currently include Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand. (Note: List can change; always verify current status).
• Aggregate Turnover: Calculated PAN-wise and includes taxable supplies, exempt supplies, exports, and inter-state supplies (excluding certain taxes and inward supplies subject to reverse charge).

Meeting the criteria? Planning to apply for new GST registration? Trustra Advisory offers expert guidance to help streamline the registration process!

Advantages of GST Registration for Businesses

• Legal Recognition & Compliance: Operates as a legally recognized supplier, avoiding penalties.
• Input Tax Credit (ITC): Claim credit for GST paid on inputs/purchases against GST collected on sales.
• Smoother Inter-State Trade: Facilitates trade across state borders without cascading taxes.
• Reduced Cascading Effect: Lowers overall cost by taxing value addition at each stage.
• Enhanced Credibility & Competitive Edge: Builds trust with customers and partners.
• Access to Larger Markets: Required by many large businesses and for government tenders.
• Improved Logistics & Cash Flow: Simplified tax structure can aid efficiency.
• Potential for Better Credit Rating: Consistent compliance can be viewed positively.
• Simplified Online Procedures: Online filing and payment processes.
• Transparency: Promotes clear record-keeping.

GST Certificate

This official document, issued upon successful registration, confirms the business's GST status. It includes the GSTIN, legal name, and address. It's essential for:

• Collecting GST: Authorizes the business to charge GST.
• Claiming ITC: Necessary for availing input tax credits.
• Business Verification: Often required for loans, government tenders, and establishing market reputation.

GSTIN

The Goods and Services Tax Identification Number (GSTIN) is the unique 15-digit code assigned to registered taxpayers, used for all GST-related activities.

Voluntary GST Registration for Businesses

Businesses below the mandatory turnover thresholds can register voluntarily. Benefits include the ability to claim ITC, make inter-state sales without restriction, list on e-commerce platforms (often a requirement), and appear more established, potentially increasing competitiveness and growth prospects.

List of Documents Required for GST Registration Procedure