Insight: GST Registration Guide:- www.deekpay.com

I. Introduction to GST

In India, the Goods and Services Tax Act (GST) is an indirect tax levied on goods and services from the point of production to the point of final consumption - i.e., the consumer.GST replaces a variety of multi-point taxes at different rates, including service tax, luxury tax VAT, sales tax, and entertainment tax, among others, to simplify the compliance process.

II. Types of GST

GST is a consumption-oriented tax that targets the consumption of goods rather than their production. For this nationwide reform to work efficiently, strict rules must be implemented. To this end, the GST Council has laid down a detailed roadmap to categorise GST into three different categories so that the people can comply with the law.

1. SGST (State GST)

The GST levied by the state government on the movement of goods and services within the state is known as State GST (SGST). Being a state tax, its revenue is collected by the state governments.

The scope of SGST taxation includes:

- State VAT

- Luxury tax

- market tax

- Central sales tax

- immigration tax

- Entertainment / amusement / advertising tax

- Gambling/lotteries/lottery taxes

2. CGST (Central GST)

CGST is a tax levied by the central government on the movement of goods and services. It includes:

- service tax

- Central Excise

- Import tariff surcharge or CVD

- Special Additional Duty on Imports or SAD

3. IGST (Integrated GST)

IGST is a tax levied on interstate movement of goods and services. The revenue is collected by the Central Government. The main objective of introducing IGST is to ensure continuous flow of Input Tax Credit (ITC) across states.

III. Online GST registration

Compliance with GST regulations and registration is crucial. Although the reform was actively launched nationwide on 1 July 2017, you can still complete your registration if you have not already done so. Applications for registration must be submitted within 30 days from the date an individual becomes liable for registration.

The registration process is straightforward.

Register at https://reg.gst.gov.in/registration/

Required documents:

- photographs

- Taxpayer constitutive documents (partnership agreement, articles of association, business licence, etc.)

- Business details

- I.D. number

- Bank account details

- authorisation

IV. Eligibility for registration

Who can register for GST?

1. Turnover Enterprises: Individuals or entities with a total annual turnover of Rs. 200,000 must be registered. For some special states, the turnover criterion is Rs. 10 lakhs. If you own more than one business in different states, you must register each business separately/individually and provide your ID number.

2. Interstate supply: If an entity supplies goods and services in different states, it must register for GST regardless of total annual turnover.

3. Existing taxpayers: All service tax, VAT or Central Excise registered entities must be registered for GST.

4. E-commerce sellers: Entities supplying goods or services through an e-commerce website/online are eligible to register for GST If you are an e-commerce seller, then choosing a GST-enabled payment gateway will help you grow your business.

5. Non-fixed business taxpayers: Individuals who do not have a fixed place of business and make occasional supplies of goods. For example, a person who operates a fireworks business only during Diwali.

V. GST registration number

With this new reform, all 8 million taxpayers have been brought under a single platform for compliance and administration. These taxpayers will be given a Goods and Services Tax Identification Number (GSTIN).

GSTIN is a 15-digit code which:

- The first 2 digits represent the state code.

- The next 10 digits represent the ID number.

- The 13th digit is the entity code (based on the number of registrations in the state).

- The 14th digit defaults to "Z".

- The 15th or last digit may be a letter or a number.

VI. Reasons for denial of registration

Yes, the authorising officer may refuse your application if any of the following apply:

- Failure to submit tax returns for six consecutive months.

- Failure to commence business within six months from the date of registration.

- The return is incomplete or not submitted with all the necessary details or documents.

VII. Penalties for failure to register

- In case of fraud, the offender is liable to pay a penalty equal to the tax amount of TP3T1001.

- In the case of an unintentional offence or bona fide mistake, the penalty is 10% of the tax due.

- If the offender fails to pay the tax or makes an insufficient payment, the penalty is 10% of the tax, i.e., at least Rs. 10,000/-.

VIII. Exemptions from registration

- Any specialised UN organisational body.

- International consulates or embassies.

- Any other person notified by the Commission/Commissioner.

As a harmonised tax reform, GST has the potential to reduce tax evasion, harmonise markets, increase state revenues, improve tax governance and remove geographic location bias. While this new reform may initially seem out of step with the Indian economy, in the long run, with the elimination of middleman pricing, this indirect tax reform will strengthen the country's fiscal base.

If you own an online business or plan to start one in the near future, then the GST guide for online businesses will provide you with good guidance.