Goods and Services Tax (GST) is a major improvement over the previous indirect tax regime. It is a consumption based tax that aims to integrate a host of indirect taxes into a single unified tax. Additionally, the input tax credit mechanism in GST proposes to remove the cascading effect of taxes.
Besides these structural changes, GST paves the way for a uniform IT landscape. For instance, the transition from manual to online GST compliance focuses on simplifying GST administration. The online application for registration, return and refund aims to bring efficacy and automation in tax compliance and procedures.
Hence, GST registration process is quite simple and less cumbersome. It is unlike the previous indirect tax regime, where separate registrations were required for varied taxes like VAT, Central Excise etc. And the tax compliances under GST also have reduced relatively.
Therefore, here is a complete guide on registration under GST if you are new to GST and want to register for GST number. This guide will help you with the following, step-by-step:
- What is GST Registration?
- Persons Liable For Registration
- Compulsory Registration
- Persons Not Liable For Registration
- GST Registration Procedure
- Application For Registration
- Verification of the Application and Approval
- Issue of GST Registration Certificate
What Is GST Registration?
Under GST law, registration of an entity means obtaining a unique number from the concerned tax authorities. This number is referred to as GST Identification Number (GSTIN). Such a number is obtained for the following purposes:
- collecting tax on behalf of the government and
- availing input tax credit for the taxes paid on inward supplies
But to avail GST Identification Number, there are some basic conditions that your business must meet.
Minimum Requirements For Registration
According to section 22 of the CGST Act, 2017, the minimum threshold turnover for GST Registration is Rs 40 Lakhs for goods and Rs 20 Lakhs for services . This means that if your annual aggregate turnover is more than the threshold limit, you are liable for registration under the Act. But for persons having business units in Jammu and Kashmir and North-Eastern states, the minimum turnover threshold is Rs 20 Lakhs.
Following table showcases the north-eastern states of India:
Additionally, there are persons who have place of business in various states. They might have one of the branches in Jammu and Kashmir or any of the North Eastern states mentioned above. In such a case, the threshold limit for GST would be reduced to Rs 20 Lakhs.
The term ‘Aggregate Turnover’ mentioned above includes:
However, it does not include the inward taxable supplies on inward charge mechanism.
Then, there are cases where agents supplies goods or services on behalf of the principal. In such a scenario, the supplies made would also be included in the aggregate turnover.
Therefore, once your entity’s aggregate turnover breaches the threshold, you are bound to register under GST. Such a registration is done based on your Permanent Account Number (PAN). Moreover, it is state specific.
Finally, upon registration, the online portal generates a Certificate of Registration that incorporates the 15 digit GSTIN. Such a certificate also showcases details like name of business and principal and additional place of business.
Thus, following section enumerates cases where a person has single and additional places of business.
Single and Multiple Registrations under GST
Under GST, single registration is required for different taxes. This means you are not required to register separately for CGST, SGST/UTGST, IGST and Cesses. Also, if your business has multiple branches in different states, you are required to register separately for each state.
However, if your business entity has multiple branches within the same state, single registration is required. In such a case, your entity shall declare:
- one place as principal place of business and
- other branches as additional place of business
Furthermore, there are business entities having separate business verticals within the same state. In such a case, the entity has to obtain separate registration for each of its business verticals.
So as now we have a fair understanding about GST registration, it’s imperative for us to know who is liable for registration. Sections 22, 23 and 24 of the Act list the persons who are liable or not liable for registration under GST.
Persons Liable For Registration
Section 22 of the CGST Act, 2017, lists the persons who are liable for GST Registration. Accordingly, following are the persons liable for registration under GST:
- A supplier making taxable supply of goods or services from any State or Union Territory other than special category States. Provided his annual aggregate turnover exceeds Rs 20 Lakh.
- Supplier making taxable supply of goods or services from any of the special category States. Provided his annual aggregate turnover exceeds Rs 10 Lakh.
- Every person registered or holding a license under an existing law on the day immediately preceding the appointed day. Such a person shall be liable for registration with effect from the appointed day.
- The transferee or the successor in whose name the business carried on by a taxable person has been transferred. Provided such a transfer is on account of succession or otherwise. In such a case, the transferee becomes liable for registration with effect from the date of such transfer or succession.
- Transferee in case of an amalgamation or demerger. He becomes liable with effect from the date on which the Registrar of Companies issues a certificate of incorporation.
There are certain category of persons who are required to register under GST compulsorily. Section 24 of the CGST Act, 2017 lists those categories. Accordingly:
- Persons making inter-state taxable supply
- Casual taxable persons
- Persons required to pay tax under reverse charge
- Individuals required to pay tax under sub-section (5) of section 9
- Non-resident taxable persons
- Persons who are required to pay Tax Deducted at Source (TDS) under section 51. This is immaterial of the fact that whether they are separately registered under the Act or not.
- Input Service Distributor, whether separately registered under the Act or not.
- Persons supplying goods or services other than supplies specified under sub-section (5) of section 9. Such supplies are made through an electronic commerce operator who is required to collect tax at source under section 52.
- Every electronic commerce operator
- Persons making taxable supply of goods or services on behalf of other taxable persons as an agent or otherwise.
- Any other person notified by the government on the recommendations of the Council.
- Persons supplying online information and database access or retrieval services from a place outside India. Such services are supplied to a person other than a registered person in India.
Persons Not Liable For Registration
According to section 23 of the CGST Act, 2017, following persons are not liable for registration under GST:
- Persons engaged exclusively in the supply of goods or services or both that are not liable to tax.
- An agriculturist to the extent of supply of produce from land cultivation
- Persons engaged exclusively in the supply of goods or services or both that are wholly exempt from tax.
- Specified categories as may be notified by the government
Once a person becomes liable for registration under GST, he has to undergo the complete registration procedure. Hence, following section sets out the registration procedure enumerated in Section 25 .
GST Registration Procedure
Section 25 of the CGST Act, 2017 lays down the procedure for GST Registration. Accordingly:
1. Time Limit For Registration
If you are liable for registration, you must register within 30 days from the date when you first became liable. However, casual taxable persons or non-resident taxable persons must register 5 days prior to the commencement of business.
Where casual taxable person is the one who occasionally makes a supply in a state where he has no fixed place of business. Such a supply is done in the course or furtherance of his business. Moreover, the supply is made either as an agent or principal or in any other capacity.
Similarly, non-resident taxable person is the one who occasionally supplies goods or services. But he has no fixed place of business or residence in India. Such a supply is done in the course or furtherance of his business. Moreover, the supply is made either as an agent or principal or in any other capacity.
2. Single Registration In case Multiple Branches Are In The Same State
If your business entity has several branches within a single state, your business can operate under a single registration. This is so long as one of the places is declared as Principal Place of Business (PPOB). Whereas the remaining are Additional Places of Business (APOB). Furthermore, all of your businesses under a single PAN can either register under composition levy or under normal levy. There is no facility of choosing the Composition Scheme for only few of your businesses under the GST Act, 2017.
3. Voluntary Registration
You may get yourself registered voluntarily even though you are not liable for registration under section 22 or 24. In such a case, all provisions of this Act shall apply as are applicable to a registered person.
4. Multiple Registrations
If you seek to obtain multiple registrations, you may be treated as a distinct person in respect of each such registration. Thus, there are persons who have an establishment in another State or Union territory. And such persons seek to obtain registration in respect of such an establishment under the Act. In such a case, all such establishments shall be treated as establishments of distinct persons.
5. Eligibility for GST Registration
In order to become eligible for GST registration, you must have a PAN issued under the Income Tax Act, 1961. However, if you are required to deduct tax under section 51, you must have a Tax Deduction and Collection Account Number issued under the said Act.
6. Registration of Non-Taxable Person
A non-resident taxable person may be granted registration on the basis of such other documents as may be prescribed.
7. Registration Failure
In case you fail to register despite being liable, the proper officer may proceed to get you registered under the Act.
8. Unique Identity Number
A Unique Identity Number may be granted to the following persons for purposes including refund of taxes on notified supplies received by them:
- any specialized agency of the United Nations Organisation
- Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947,
- Consulate or Embassy of foreign countries
- any other person or class of persons as notified by the Commissioner
The registration or the Unique Identity Number shall be granted or rejected after due verification.