Businesses whose turnover exceeds Rs. 20 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration. CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification will come into effect from 1st April 2019.
GST Registration Process for New Business
Step 1: First login to GST portal
Step 2: Fill part –A of registration form 1
Step 3: You will receive an application reference number on your mobile and via e-mail
Step 4: Now, fill the second part of the form and upload the needed documents according to the business type
Step 5: Obtain a certificate of registration from the GST portal. In case of any query you have, you may have to visit the concerned department
Step 7: Submit the required documents within seven working days along with GST REG-04
Step 8: Watch out for error notification by email. In case of any errors, your application may get rejected and you will be notified about the same in form GST REG-05 of GST registration
Documents Required for GST Registration
Here is the list of documents required to register for GST:
- PAN card of the company/ business entity
- Aadhar card
- Proof of constitution like Articles of association, Memorandum of Association, Certificate of Incorporation, Partnership Deed etc
- Proof of place of business like Electricity bill
- Cancelled cheque of your bank account showing all the details of the account holder
- Photo of Director/ Partner/ Sole trader
- Letter of Authorization/Board Resolution for Authorized Signatory
- e-mail id and active mobile number.
Who is required to register for GST?
As per section 22 of the Central Goods and Service Tax (CGST) Act, 2017 following list of persons are liable for obtaining GST registration –
1. Supplier engaged in providing a taxable supply of goods or services or both is required to obtain GST registration in the State or Union territory from where the supply is initiated, in case the aggregate turnover exceeds INR 40 Lakhs in a financial year.
2. In case of special category states, supplier engaged in providing a taxable supply of goods or services or both are required to obtain GST reistration in case the aggregate turnover exceeds INR 10 Lakhs in a financial year.
3. Persons who are registered under the erstwhile law, on the day immediately preceding the appointment date, is liable to obtain GST registration.
4. The registered taxable person when transfers business to another person on going concern basis, whether on account of succession or otherwise, in such case the transferee or the successor is liable to obtain GST registration.
5. Transfer of company in case of amalgamation or de-merger in accordance with an order of a high court, tribunal or otherwise.
Compulsory GST Registration – Categories of persons who are required to obtain compulsory registration are listed herein below :
1. The person engaged in the inter-state taxable supply of goods or services or both;
2. A casual taxable person engaged in taxable supply;
3. Persons liable to pay tax under reverse charge mechanism;
4. A non-resident taxable person engaged in providing taxable supply;
5. A person liable to pay tax under section 9 (5) of the Act;
6. The person liable to deduct tax at source (TDS);
7. Input Service Distributor;
9. A person engaged in supplying goods or services or both through e-commerce operator who is required to collect tax at source (TCS);
10. The person engaged in supplying online information and database access or retrieval services from a place outside India to an unregistered person;
11. 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.
It must be noted that categories of the person covered under compulsory registration are mandatorily required to obtain registration irrespective of quantum of turnover.
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
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. A business with multiple business verticals in a state may obtain a separate registration for each business vertical.
What are the benefits of registering under GST?
- For normal registered businesses:
- Take input tax credit
- Make interstate sales without restrictions
- For Composition dealers:
- Limited compliance
- Less tax liability
- High working capital
- For businesses that voluntarily opt-in for GST registration (Below Rs. 40 lakhs*)
- Take input tax credit
- Make interstate sales without restrictions
- Register on e-commerce websites
- Have a competitive advantage compared to other businesses
- To know more about voluntary registrations*CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification will come into effect from 1st April 2019.
Cancellation of GST Registration
Cancellation of GST registration can be done by-
- Request by tax payer : when Turnover less than 40 lac or for any other reason ( The business has been discontinued, The business has been transferred fully, amalgamated, demerged, There is a change in the constitution of the business
- Tax officer
- Legal heirs, in case of death of taxpayer
Cancellation by Tax Payer
Application for cancellation, in case of voluntary registrations made under GST, can be made only after one year from the date of registration.
Note: Taxpayers who have not issued tax invoice no need to file form GST REG-16. If the taxpayer has issued any tax invoice then FORM GST REG-16 needs to be filed
Forms for cancellation
All those who cannot follow the above method must file an application for cancellation in FORM GST REG 16. The legal heirs of the deceased taxpayer will follow the same procedure as below.
- Application for cancellation has to be made in FORM GST REG 16.
- The following details must be included in FORM GST REG 16-
- Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
- Liability thereon
- Details of the payment
- The proper officer has to issue an order for cancellation in FORM GST REG-19 within 30 days from date of application. The cancellation will be effective from a date determined by the officer and he will notify the taxable person
Cancellation by Tax Officer
Why will the officer cancel registration?
The registration can be cancelled, if the taxpayer- (a) Does not conduct any business from the declared place of business OR (b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions) OR (c) Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)
(a) Does not conduct any business from the declared place of business OR (b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions) OR (c) Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)
Procedure
- If the proper officer has reasons to cancel the registration of a person then he will send a show cause notice to such person in FORM GST REG-17.
- The person must reply in FORM REG–18 within 7 days from date of service of notice why his registration should not be cancelled.
- If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in FORM GST REG –20.
- If the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.
Note: Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first along with payment of all dues amounts of tax, interest & penalty.
Clarifications relating to cancellation of registration
CBIC has issued Circular No. 69/43/2018-GST dated 26 October 2018 , clarifying various issues relating to cancellation of registration .
1. The requirement to apply for cancellation of registration within 30 days of the occurrence of the event warranting cancellation should be liberally interpreted, depending on the facts involved, since the cancellation of registration has no effect on liability of assessee for any acts of commission/ omission committed before or after date of cancellation.
2.The authorities should accept all applications for cancellation of registration within 30 days of filing the application except in cases where : Application is incomplete; or In case of transfer, merger or amalgamation where new entity has not obtained registration before the applicant has applied for cancellation.
3. In the exceptions mentioned above, the authorities should inform the applicant about any discrepancy and give time period of seven working days to reply. If no reply is received or reply is unsatisfactory, the authorities may reject the application, after giving the applicant an opportunity of being heard. A person whose registration has been cancelled will be required to file a final return in Form GSTR-10 within three months of the effective date of cancellation or the date of order of cancellation, whichever is later.
4. The applicant will need to pay the amount of input tax contained in the stock of inputs, semi-finished goods, finished goods and capital goods in stock on the day preceding the date of cancellation of registration or output tax payable on such goods, whichever is higher. Such payment can be made at the time of submission of final return in Form GSTR-10.