At ProfitBooks, we are committed to making taxation simple for small business owners in India. Since GST is set to replace various indirect taxes, we have started this series on frequently asked questions on GST. This article is third in this series.
1) What’s the benefit of registering a business under GST?
Registration under Goods and Service Tax (GST) regime will confer the following advantages to the business:
- Legally recognized as a supplier of goods or services.
- Proper accounting of taxes paid on the input goods or services that can be utilized for payment of GST due to the supply of goods or services or both by the business.
- Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
2) What is the liability for GST registration in India?
As per section 22(1) of the CGST Act, 2017.
All the suppliers in the State or Union Territory are liable to register under this Act, other than special category States, from where he makes a taxable supply of goods or services or both if his overall turnover in a financial year exceeds 20 lakh rupees.
Under Provision of the information that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his overall turnover in a financial year exceeds 10 lakh rupees.
With effect from 1st April 2019, the below limits will be applicable for particular states.
|State||Threshold limit for persons engaged exclusively in the supply of goods||Threshold limit for persons engaged in the supply of services/ both goods & services|
|Other States||40 lakh||20 lakh|
|Puducherry||20 lakh||20 Lakh|
|Telangana||20 lakh||20 Lakh|
|Manipur||10 lakh||10 Lakh|
|Mizoram||10 lakh||10 Lakh|
|Nagaland||10 lakh||10 Lakh|
|Tripura||10 lakh||10 Lakh|
|Jammu and Kashmir||40 lakh||20 Lakh|
|Assam||40 lakh||20 Lakh|
|Himachal Pradesh||40 lakh||20 Lakh|
|Arunachal Pradesh||20 Lakh||20 Lakh|
|Meghalaya||20 Lakh||20 Lakh|
|Sikkim||20 Lakh||20 Lakh|
|Uttarakhand||20 Lakh||20 Lakh|
3) What is the registration process for GST in India?
The GST registration process will be online through a portal maintained by the Central Government of India. The government will also appoint GSPs (GST Suvidha Providers) to help businesses with the registration process.
Based on the information provided by GSTN, registration process looks like this:
The applicant will need to submit his PAN, mobile number, and email address in Part A of Form GST REG–01 on the GSTN portal or through the Facilitation center (notified by the board or commissioner).
The PAN is verified on the GST Portal. Mobile number and E-mail address are verified with a one-time password (OTP). Once the verification is complete, the applicant will receive an application reference number on the registered mobile number and via E-mail. An acknowledgement should be issued to the applicant in FORM GST REG-02 electronically.
The applicant needs to fill Part- B of Form GST REG-01 and specify the application reference number. Then the form can be submitted after attaching the required documents.
If additional information is required, Form GST REG-03 will be issued. An applicant needs to respond in Form GST REG-04 with the required information within 7 working days from the date of receipt of Form GST REG-03.
If you have provided all required information via Form GST REG-01 or Form GST REG-04, the registration certificate in Form GST REG –06 for the principal place of business as well as for every additional place of business will be issued to the applicant. A person with multiple business verticals within a state can file a separate application for the registration in Form GST REG-01 for each business verticals. If the details submitted are not satisfactory, the registration application is rejected using Form GST REG-05. The applicant who is required to deduct TDS or collect TCS shall submit an application in Form GST REG – 07 for registration. If he is no longer liable to deduct or collect tax at source then the officer may cancel and communicate the cancel of registration.
Documents required for GST registration:
- PAN Card of the Company
- Proof of constitution like partnership deed, Memorandum of Association (MOA) /Articles of Association (AOA), certificate of incorporation.
- Passport size photo of the applicant.
- Authorized signatory like List of partners with their identity and address proof in case of partnership firm or List of directors with their identity and address proof in case of a company.
- Proof of Appointment of Authorized Signatory. Any One of these: Letter of Authorisation, Copy of Resolution passed by BoD/ Managing Committee, and Acceptance letter.
- Proof of Principal Place of business (Any One) like Electricity Bill, Legal ownership document, Municipal Khata Copy, Property Tax Receipt, Rent Agreement,
- Proof of Details of Bank Accounts (Any One) like The first page of Pass Book, Bank Statement, Cancelled Cheque.
For registration, you need to submit different types of documents according to the type of company registration.
Find out the list of documents required for Sole Proprietorship or Individual, Partnership or LLP, Private Limited or Public limited or One Person Company, HUF and Society or Trust or Club.
Check out the complete list of documents required for GST registration.
Click here to start your GST registration process
4) Can a person without GST registration claim ITC and collect tax?
No. A person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him.
5) What will be the effective date of registration?
If an application for registration has been made within 30 days from the day the person becomes liable for registration under GST, then the registration shall be effective from the date on which he became liable to be registered.
If the person who is liable to get registration in GST applies for registration after 30 days, then the effective date of registration will be the date when the registration is granted under Rule 9(1) or Rule 9(3) or Rule 9(5).
In the case of Voluntarily Registration, while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of the order of registration.
6) Who are the persons liable to take a Registration under the Model GST Law?
As per section 22 of the CGST Act, 2017 following list of persons are liable for obtaining GST registration –
- Supplier engaged in the exclusive supply of goods and whose aggregate turnover in the financial year exceed forty lakh rupees is required to obtain GST registration in the State or Union territory from where the supply is initiated, (notification No. 10/2019-Central Tax, dated 07.03.2019)
- In special category states, suppliers undertaking a taxable supply of goods are required to obtain GST registration in case the aggregate turnover exceeds INR 20/10 Lakhs in a financial year. ( Some special category states ie Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarakhand opted for a turnover limit of Rs 20 Lakhs whilst Kerala and Telangana maintained status Quo- limit of Rs 10 Lakhs )
- Supplier engaged in providing a taxable supply of services is required to obtain GST registration in case the aggregate turnover exceeds 20 Lakhs in a financial year.
- Persons who are registered under the erstwhile law, on the day immediately preceding the appointment date, is liable to obtain GST registration.
- In case of transfer of the business to another person by the registered taxable person ongoing concern basis, whether on account of succession or otherwise, in such case the transferee is liable to obtain GST registration.
- Transfer of company in case of amalgamation or de-merger in accordance with an order of a high court, tribunal, or otherwise.
7) What is aggregate turnover?
It includes the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes taxes such as central tax, State level tax, Union territory tax, Integrated tax, and charges.
Inclusion in calculating Aggregate Turnover:-
Taxable supply, exempt supply, Nil Rated supply, Zero-rated supply, Non-GST supply, and supply to distinct person, need to be included in the calculation of aggregate turnover. Meaning of these supplies has been explained as follows:-
Taxable supply: – Taxable supply has been broadly defined and means any supply of goods or services or both which, is leviable to tax under the Act. (Sec 2(108) of CGST Act)
Exempt Supply:- As per section 2(47) of the CGST Act, 2017, Exempt Supply means the supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes Non- Taxable supply.
NIL Rated supply: – Nil rated supply is nowhere defined in GST Law. Basically, in nil rated supply and exempt supply, the tariff is higher than 0% in case of exempt supply. But no tax is payable due to exemption notification. Whereas for NIL rated supply, the tariff is payable at the NIL rate so there is no tax without the exemption notification.
Zero Rated Supply As per sec 16(1) of IGST Act any supplies made by a registered dealer as an export (Both goods or services) or supply to an SEZ qualifies for Zero Rated Supplies in GST.
Non-GST Supply: – The goods or services on which GST is not leviable are known as Non-GST supply. Some of the Non-GST supplies in common use are alcohol for human consumption, petroleum products, electricity, etc.
Supply to Distinct person:- According to section 25(4) of CGST Act a person who has obtained or is required to obtain more than one registration whether in one State or Union territory or more than one State or Union territory shall in respect of each of such registration be treated as “Distinct person”.
The aggregate turnover is an all-inclusive term covering all the supplies effected by a person having the same PAN.
Exclusion in calculating Aggregate Turnover:
The following charges must be excluded while calculating aggregate turnover:
Taxes & Cess with respect to CGST, SGST or IGST Acts
Value of taxes payable on reverse charge mechanism
Value of inward supplies of goods and services.
8) Which are the cases for compulsory registration?
These details and provisions are contained under section 24 of the Central Goods and Service Tax (CGST) Act, 2017.
Categories of individuals who are required to obtain compulsory registration as per the act are listed herein below –
- Individual who is engaged in the inter-state taxable supply of goods or services or both;
- A regular Indian taxable person engaged in taxable supply;
- Individuals liable to pay tax under the reverse charge mechanism;
- A non-resident person, who is taxable and engaged in providing taxable supply;
- Individual liable to pay tax under section 9 (5) of the Act;
- The person liable to deduct tax at source (TDS);
- Input Service Distributor;
- E-commerce operator;
- Individuals engaged in supplying goods or services or both through e-commerce platforms who is required to collect tax at source (TCS);
- People engaged in supplying online information and database access or data retrieval services from somewhere outside India to an unregistered person;
- Persons engaged in the taxable supply of goods or services or both on behalf of another registered taxable person, whether as an agent or otherwise.
Note: People listed in any category above are covered under compulsory registration and are mandatorily required to obtain registration irrespective of quantum of turnover.
9) What is the time limit for taking a Registration under GST Law?
Any person should take a Registration, within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed.
10) If a person is operating in different states, with the same PAN number, whether he can operate with a single Registration?
No, As per section 25(2) of CGST Act, 2017, Every person who is liable to take a registration will have to get registered separately for each of the States where he has a business operation (and making taxable supplies) provided his aggregate turnover exceeds the applicable threshold limit.
11) Whether a person having multiple business verticals in a state can obtain for different registrations?
Yes. In terms of the proviso to sub-section (2) of section 25, a person having multiple places of business in a State may obtain a separate registration for each place of business, subject to the prescribed conditions.
12) Is there a provision for a person to get himself voluntarily registered though he may not be liable to pay GST?
Yes. In terms of sub-section (3) of section 25, a person, though not liable to be registered under sections 22 or 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person.
13) Is possession of a Permanent Account Number (PAN) mandatory for obtaining a Registration?
Yes. As per section 25(6) and 25(7) of the CGST)Act, 2017, A Permanent Account Number is mandatory to be eligible for grant of registration.
There are provisions for A Non-Resident Taxable Person (NRTP). They may be granted on the basis of other prescribed documents
14) Whether the Department through the proper officer, can suo-moto proceed with the registration of a Person under this Act?
Yes. In terms Section 25(8) of CGST Act, 2017, where a person who is liable to be registered under GST law fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under CGST Act, or under any other law for the time being in force, proceed to register such person in the manner as is prescribed in the CGST Rules, 2017.
15) Whether the proper Officer can reject an Application for Registration?
Yes. As per section 25 of the CGST Act, 2017, the proper officer can reject an application for registration after due verification. However, it is also provided that the proper officer shall not reject the application for registration or the Unique Identity Number without giving the notice to show cause and without giving the person a reasonable opportunity of being heard.
16) Whether the Registration granted to any person is permanent?
Yes, the registration Certificate once granted is permanent unless surrendered, canceled, suspended, or revoked.
17) Is it necessary for the UN bodies to get registration under GST Law?
Yes. In terms of section 25(9) of the CGST Act, all notified UN bodies, Consulate or Embassy of foreign countries and any other class of persons so notified would be required to obtain a unique identification number (UIN) from the GST portal.
The structure of the said ID would be uniform across the States in conformity with the GSTIN structure and the same will be common for the Centre and the States. This UIN will be needed for claiming refund of taxes paid on notified supplies of goods and services received by them, and for any other purpose as may be notified.
18) What is the responsibility of the taxable person supplying to UN bodies?
The taxable supplier making supplies to UN bodies is expected to mention the UIN on the invoices and treat such supplies as supplies to another registered person (B2B).
19) Is it necessary for the Govt. organization to get registration?
A unique identification number (ID) would be provided by the respective state tax authorities through the GST portal to Government authorities / PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST registration) but are making inter-state purchases.
20) Who is a Casual Taxable Person?
As per Section 2(20) of CSGT Act, 2017, A casual taxable person is a person who has undertaken transactions involving the supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
21) Who is a Non-resident Taxable Person?
As per sub-section 77 of section 2 of CSGT Act, 2017 “non-resident taxable person” means any person who occasionally undertakes transactions involving the supply of goods or services or both, whether as principal or in any capacity, but has no fixed place of business or is not an Indian resident.
22) What is the validity period of the Registration certificate issued to a Casual Taxable Person and non-Resident Taxable person?
In terms of section 27(1) read with proviso thereto, the certificate of registration issued to a “casual taxable person” or a “non-resident taxable person” shall be valid for a period specified in the application for registration or 90 days from the effective date of registration, whichever is earlier. However, the proper officer, at the request of the said taxable person, may extend the validity of the aforesaid period of 90 days by a further period not exceeding 90 days.
23) Is there any Advance tax to be paid by a Casual Taxable Person and Non-resident Taxable Person at the time of obtaining registration under this Special Category?
Yes. As per Section 27(2) of CGST Act, 2017, A casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 25, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought:
Provided that where any extension of time is sought under sub-section (1), such taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought.
24) Whether Amendments to the Registration Certificate is permissible?
Yes. In terms of Section 28 of the CGST Act, 2017, the proper officer may on the basis of such information provided either by the registrant or as understood by him, approve or reject amendments in the registration particulars in the manner and within such period as may be prescribed. The permission of the proper officer for making amendments will be required for only certain core fields and cases, whereas for the other fields, the registrant can himself amend.
25) Whether Cancellation of Registration Certificate is permissible?
Yes. Any Registration granted under this Act may be canceled by the Proper Officer, in circumstances mentioned in Section 29 of the CSGT Act, 2017. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed.
26) Whether cancellation of Registration under the CGST Act means cancellation under SGST Act also?
Yes. The cancellation of registration under one Act (say CGST Act) shall be deemed to be a cancellation of registration under the other Act (i.e. SGST Act).
27) Can the proper Officer Cancel the Registration on his own?
Yes, As per Section 29(2) of CGST Act, 2017
The proper officer has the right to cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––
(a) A registered taxable person has violated such provisions of the Act or the rules made thereunder as may be prescribed; or
(b) An individual paying the taxes under section 10 has not furnished returns for three consecutive tax periods; or
(c) Any registered person, other than a person specified in clause (b), who is unable to furnish returns for a continuous period of six months; or
(d) Individuals with voluntary registration under sub-section (3) of section 25, but has not commenced business within six months from the date of registration; or
(e) Registration under fraud terms, willful misstatement or suppression of facts:
28) What happens when the registration is obtained by means of willful misstatement, fraud, or suppression of facts?
If the registration is obtained by means of willful misstatement, fraud, or suppression of facts then the registration may be canceled with retrospective effect by the proper officer as per Section 29(2) of CGST Act, 2017.
29) Is there an option to take centralized registration for services under GST?
No, the tax paper has to take separate registration in every state from where he makes a taxable supply of services.
30) If the taxpayer has different business verticals in one state, will he have to obtain a separate registration for each such vertical in the state?
No. However the taxpayer has the option to register such separate business verticals independently as per Section 25(2) of the CGST Act, 2017.
31) Who is an ISD?
ISD (Input Service Distributor) as per Section 25(1) means a division of the supplier of goods or services or both which receives the tax invoices issued towards the receipt of input services and issues document (under section 31) for the purpose of distributing the credits of central tax, State-level tax, Integrated tax or Union territory tax paid on the said services to a supplier of goods or services or both which are taxable and having the same Permanent Account Number as that of the said office; 32) Will ISD be required to be separately registered other than the existing taxpayer registration?
Yes. The ISD registration is for one office of the taxpayer which will be different from the normal registration.
33) Can a taxpayer have multiple ISDs?
Yes. Different offices of a taxpayer can apply for ISD registration.
34) What could be the liabilities (in so far as registration is concerned) on the transfer of a business?
The transferee or the successor shall be liable to be registered with effect from such transfer or succession and he will have to obtain a fresh registration with effect from the date of such transfer or succession [Section 22(3)].
35) Whether all assesses /dealers who are already registered under existing central excise/service tax/vat laws will have to obtain fresh registration?
No. GSTN shall migrate all such assesses /dealers to the GSTN network and shall issue GSTIN number and password. They will be asked to submit all required documents and information required for registration in a prescribed period of time. Failure to do so will result in the cancellation of the GSTIN number. The service tax assesses having centralized registration will have to apply afresh in the respective states wherever they have their businesses.
36) Whether the job worker will have to be compulsorily registered?
No. Job worker is required to obtain registration only if his aggregate turnover to be computed on all India basis in a financial year exceeds the limit
37) Whether the goods will be permitted to be supplied from the place of business of a job worker?
Yes. But only in cases where the job worker is registered or the principal declares the place of business of the job worker as his additional place of business.
38) At the time of registration will the assessee have to declare all his places of business?
Yes. At the time of registration, the assessee will have to declare all his places of business, principal place of business, and any additional place of business in the registration form.
39) Is there any system to facilitate smaller dealers or dealers having no IT infrastructure?
In order to cater to the needs of taxpayers who are not IT savvy, the following facilities shall be made available:-
Tax Return Preparer (TRP):
A taxable individual; may prepare his registration application /returns himself or can ask the TRP for assistance. TRP works for the preparation of the said registration document/return in the prescribed format on the basis of the information received by him from the taxable person. The responsibilities and legalities of the correctness of the information contained in the forms prepared by the TRP will rest with the taxable person only and the TRP shall not be liable for any errors or incorrect information.
Facilitation Centre (FC):
FC will have the responsibility for the digitization and/or uploading of the forms and documents including the summary sheet duly signed by the Authorized Signatory and given to it by the taxable person. After the process of uploading the data on a common portal using the ID and Password of FC, a print-out of acknowledgment will be handed over to the taxable person by FC for his records. The FC will scan and upload the summary sheet duly signed by the Authorized Signatory.
40) Is there any facility for digital signature in the GSTN registration?
Taxpayers would have the option to sign the submitted application using valid digital signatures (if the applicant is required to obtain DSC under any other prevalent law then he will have to submit his registration application using the same). For those who do not have a digital signature, alternative mechanisms will be provided in the GST Rules on Registration.
41) What will be the time limit for the decision on the online application?
If the information and the uploaded documents are found in order, the State and the Central authorities shall approve the application and communicate the approval to the common portal within three common working days. The portal will then automatically generate the Registration Certificate.
In case no deficiency is communicated to the applicant by both the tax authorities within three common working days, the registration shall be deemed to have been granted and the portal will automatically generate the Registration Certificate.
42) What will be the time of response by the applicant if any query is raised in the online application?
If during the process of verification, one of the tax authorities raises some query or notices some error, the same shall be communicated to the applicant and to the other tax authority through the GST Common Portal within 3 common working days. The applicant will reply to the query / rectify the error/answer the query within a period informed by the concerned tax authorities (Normally this period would be seven days).
On receipt of additional documents or clarification, the relevant tax authority will respond within seven common working days.
43) What is the process of the refusal of registration?
In case registration is refused, the applicant will be informed about the reasons for such refusal through a speaking order. The applicant shall have the right to appeal against the decision of the Authority. Any rejection of an application for registration by one authority (i.e. under the CGST Act / SGST Act) shall be deemed to be a rejection of an application for registration by the other tax authority (i.e. under the SGST Act / CGST Act).
44) Will there be any communication related to the application disposal?
The applicant shall be informed of the fact of grant or rejection of his registration application through an e-mail and SMS by the GST common portal. Jurisdictional details would be intimated to the applicant at this stage.
45) Can the registration certificate be downloaded from the GSTN portal?
In case registration is granted, the applicant can download the Registration Certificate from the GST common portal.
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