Demystifying GST Registration in India 

One of the most common questions businesses have revolves around the requirement for GST registration. The obligation to register generally hinges on your business's aggregate turnover.

• For Businesses Supplying Goods: The threshold for mandatory GST registration is typically ₹40 Lakhs. However, this limit can be ₹20 Lakhs in certain "special category states."

• For Businesses Supplying Services: The threshold is generally ₹20 Lakhs, or ₹10 Lakhs in special category states.

• For Businesses Supplying Both Goods and Services: The threshold for registration is typically ₹20 Lakhs.

Important Note for E-commerce Sellers: If you are supplying goods or services through an e-commerce operator, GST registration is mandatory irrespective of your turnover. This means even if your sales are below the general thresholds, you still need to register.

Other Mandatory Registrations: Certain entities are required to register for GST regardless of their turnover, including:

• Casual Taxable Persons

• Non-Resident Taxable Persons

• Those liable to pay tax under the Reverse Charge Mechanism (RCM)

• Input Service Distributors (ISD)

• Agents of a supplier

• Companies registered under earlier indirect tax laws (e.g., VAT, Service Tax, Excise)

• Persons making inter-state taxable supplies

While compliance is a primary driver, GST registration offers significant advantages:

• Input Tax Credit (ITC): This is perhaps the most significant benefit. Registered businesses can claim credit for the GST paid on their inward supplies (purchases), effectively reducing their overall tax liability. This prevents the cascading effect of taxes, where tax is levied on tax.

• Enhanced Credibility: Being GST-registered signals to customers, suppliers, and financial institutions that your business is legitimate and adheres to national tax laws, thereby boosting your credibility and fostering trust.

• Wider Market Access: Many businesses, especially larger clients and government entities, prefer to deal with GST-registered suppliers as it enables them to claim ITC. This opens up new avenues for business expansion.

• Simplified Tax Structure: GST streamlined various indirect taxes into a single system, simplifying compliance and reducing the burden of multiple tax filings.

• Formalization of Business: For many small businesses, GST registration is a step towards formalizing their operations, which can lead to better access to credit and other business opportunities.

• Inter-State Business Facilitation: GST has largely removed state-specific barriers, making it easier to conduct business across different states without the complexities of varied state tax laws.

The GST registration process is largely online and involves a few key steps:

1. Accessing the GST Portal: The application is initiated on the official GST portal (www.gst.gov.in).

2. Part A Submission (Form GST REG-01): This involves providing basic details like your PAN, mobile number, email ID, and the state you wish to register in. An OTP verification process follows.

3. Temporary Reference Number (TRN) Generation: Upon successful completion of Part A, a TRN is generated, which is used for accessing Part B.

4. Part B Submission (Form GST REG-01): Here, more detailed information about your business, promoters/partners, authorized signatory, principal place of business, bank account details, and details of goods/services is provided. Relevant documents are uploaded.

5. Verification and Issuance of GSTIN: The application is reviewed by the tax authorities. If all details are in order, a unique 15-digit Goods and Services Tax Identification Number (GSTIN) and a registration certificate are issued.

While the exact list can vary slightly based on the business structure (Proprietorship, Partnership, Company, LLP, etc.), common documents generally include:

• PAN Card of the business entity/proprietor

• Identity and Address Proof of Promoters/Directors/Partners (PAN, Aadhaar, Passport, Driving License, Voter ID)

• Business Registration Document (e.g., Certificate of Incorporation, LLP Agreement)

• Proof of Principal Place of Business (e.g., Rent Agreement, Sale Deed, Electricity Bill, Property Tax Receipt)

• No Objection Certificate from Owner of Principal Place of Business.

• Bank Account Details (copy of cancelled cheque or bank statement)

• Digital Signature Certificate (DSC) for companies and LLPs

As Company Secretaries, we play a crucial role in ensuring that businesses navigate the complexities of GST registration and ongoing compliance seamlessly. Our services typically include:

• Advising on Applicability: Helping businesses determine if and when GST registration becomes mandatory for them, considering their turnover, nature of supply, and location.

• Documentation Assistance: Guiding businesses on the precise documents required and assisting in their preparation and verification.

• Application Facilitation: Supporting clients through the online GST registration process, ensuring accurate and timely submission of all required forms.

• Compliance Support: Post-registration, offering guidance on various GST compliances, including filing of returns (GSTR-1, GSTR-3B, etc.), managing Input Tax Credit, and understanding the Reverse Charge Mechanism.

• Amendments and Cancellations: Assisting with any amendments to registration details or cancellation of GST registration when required.

GST has undeniably reshaped India's indirect tax landscape. Understanding its nuances and fulfilling registration requirements are vital for establishing a compliant and thriving business. 

Pulkit Kinkhabwala & Associates aims to provide clarity and insights into this process. Should you have any questions, please feel free to reach out us on info.pknassociates@gmail.com or +91 9426173791 .