FAQ’s on GST Registration

1. What is GST Registration?

• In the GST Regime, a business whose turnover exceeds Rs. 20 lakhs (Rs 10 lakhs for North-Eastern States and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.
• For certain businesses, registration under GST is mandatory even if turnover does not exceed the above threshold. If the organization carries on business without registering under GST, it will be an offence under GST and penalties will apply.
• GST registration usually takes between 2-6 working days.

2. Who Should Register for GST?

• Persons who were registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
• Businesses with turnover above the threshold limit of Rs. 20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
• Casual taxable person / Non-Resident taxable person
• Agents of a supplier & Input service distributor
• Those paying tax under the reverse charge mechanism
• Person who supplies via e-commerce aggregator
• Every e-commerce aggregator
• Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

3. What are the Documents Required for GST Registration?

• PAN of the Applicant
• Proof of business registration or Incorporation certificate
• Identity and Address proof of Promoters/Director with Photographs
• Address proof of the place of business
• Digital Signature
• Letter of Authorization/Board Resolution for Authorized Signatory

4. What is the Penalty for not registering under GST?

• An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.
• The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes

5. What is GSTIN?

• All businesses that successfully register under GST are assigned a unique Goods and Services Tax Identification Number also known as GSTIN.

6. When should a business apply for multiple GST registrations?

• If a business operates from more than one state, then a separate GST registration is required for each state. For instance, if a sweet vendor sells in Karnataka and Tamil Nadu, he has to apply for separate GST registration in Karnataka and TN respectively.
• A business with multiple business verticals in a state may obtain a separate registration for each business vertical.

7. What is Composition scheme and when should a business opt for it?

• Small businesses having an annual turnover less than Rs. 1 crore* (Rs. 75 Lakhs for NE States) can opt for Composition scheme.
• GST Council decided to increase the limit to Rs. 1.5 crores but notification is awaited.
• Composition dealers will pay nominal tax rates based on the type of business.
• Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers).
• They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
• Businesses that have opted for Composition Scheme cannot claim any input tax credit.
• Composition scheme is not applicable to: Service providers, Inter-state sellers, E-commerce sellers, Supplier of non-taxable goods, Manufacturer of Notified Goods

8. What are the benefits of registering under GST?

For normal registered businesses:

1. Take input tax credit
2. Make interstate sales without restrictions

For Composition dealers:

1. Limited compliance
2. Less tax liability
3. Higher working capital

For businesses that voluntarily opt-in for GST registration (Below Rs. 20 lakhs)

1. Take input tax credit
2. Make interstate sales without restrictions
3. Register on e-commerce websites
4. Have a competitive advantage compared to other businesses

Contributed By – Sachin Shetty