GST registration is the process where a taxpayer registers himself under the GST and enjoys the benefit of collecting tax on behalf of the Government and availing the ITC (Input tax credit) benefit on his inward supplies.
When is GST Registration mandatory?In the terms of the GST regime, every business whose aggregate turnover in the financial year exceeds Rs. 40 lakhs and Rs. 10 lakhs in the case of North-Eastern states are required to mandatorily register under GST.
North-Eastern States (special category states) - As per explanation (3) of CGST act 2017, "special category states" shall mean the States as specified in sub-clause (4) of article 279A of the Constitution. They are-
1. Arunachal Pradesh
2. Assam
3. Jammu & Kashmir
4. Manipur
5. Meghalaya
6. Mizoram
7. Nagaland
8. Sikkim
9. Tripura
10. Himachal Pradesh
11. Uttarakhand
However, Jammu & Kashmir may enjoy the benefit of a minimum threshold limit of Rs. 20 lakhs.
Who should mandatorily register under GST?
As per Sec 24. in certain cases the registrations are mandatory irrespective of aggregate turnover in the Financial Year.
They are as follows:-
1. Interstate taxable supply.
2. Taxable supply by Casual Taxable Persons.
3. Taxable supply by the E-commerce operator.
4. Person liable to pay tax under reverse charge mechanism.
5. Taxable supply by a Non - Resident Indian.
6. Person who is required to deduct tax under Sec 51, whether or not separately registered under this Act ;
7. Taxable supply of goods or services or both on behalf of other taxable people whether as an agent or otherwise.
8. Input Service Distributor, whether or not separately registered under CGST ;
9. Supply of goods or services or both, other than supplies under Sec 9(5), through such electronic commerce operator who is required to collect tax at source under Sec 52;
10. Person who is required to pay tax under RCM [Reverse Charge Mechanism]
11. Every person who supplies online information and database access or retrieval services from a place outside India to a person in India, other than a registered person.
12. Such other person or class of persons may be notified by the Govt of India on the recommendation of the council.
Advantages of GST registration
Every person who registers under GST enjoys the following benefits -
1. He gets legal recognition as a supplier to supply both goods and services.
2. He can legally collect taxes from his customers and avail of ITC benefits.
3. He is legally authorized to claim ITC on taxes paid and pass the credit on the taxes paid on the goods and services supplied to the recipient.
4. He can enjoy smooth inter-state transactions.
5. He can supply his goods digitally.
6. He can gain the trust of his customers widely.
7. He is eligible to apply for Government bids or contracts or assignments.
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Penalty for not registering under GST
As per section 122(1)(xi) of CGST Act, 2017 any taxable person who fails to register under GST even if he/she is legally bound as per the GST Act needs to pay the following amount of penalty:
As per section 122(2)(a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or ten percent. of the tax due from such person, whichever is higher;
Otherwise, as per section 122(2), (b) is 10,000 INR or the amount of tax evaded whichever is higher.
Every GST taxpayer has to mandatorily register under the GST regime within 30 days from the date on which he becomes liable for registration:-
- Name of the entity
- PAN
- Aadhar Card
- Mobile number
- E-mail ID
- State or Union Territory
- Address proof
- Bank account details
Procedure for GST registration -
Login to the GST common portal.
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Fill Part A of Form GST REG-01 (By declaring above mentioned documents)
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The portal verifies the details of the OTP
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On successful verification, a reference number is generated.
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Fill out Part B of Form GST REG- 02, using the reference number.
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Upload the required documents.
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GST officer will verify the application within 3 working dates.
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If these documents are found in order, the Proper officer approves the registration.
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A certificate of registration will be generated
