GST is a product of the biggest tax reform in India that has tremendously improved the ease of doing business and also increased the taxpayer base in India by including millions of small businesses under one uniform tax system. The tax complexities have reduced considerably due to the introduction of GST in India. As multiple tax systems are abolished and subsumed into a single, simple tax system under GST.

The GST regime mandates that all the entities that are involved in buying or selling the goods or providing services or both are required to register and obtain the GSTIN.

What is GSTIN?

GSTIN is a unique 15 digit code that is allocated to every taxpayer that has valid GST registration in India. It is a unique code that is allocated to every taxpayer which is given based on the state and the PAN. GSTIN is mandatory for businesses when the annual turnover is exceeding Rs.20 lakh. If the business is carrying out a business e-commerce platform it is necessary to obtain the GSTIN.

GST registration is mandatory once the entity is crossing a minimum threshold turnover or when the individual starts a new business that is expecting to cross the prescribed turnover.

Who is eligible to obtain GST registration?

Businesses are required to get a GST registration if they fall in the below categories.

  1. Aggregate turnover

A service provider that is providing services valuing more than Rs.20 Lakhs aggregate in a year is needed to get GST Registration. Whereas an entity that is engaged exclusively in the supply of the goods whose aggregate turnover crosses Rs. 40 lakh is required to get GST registration mandatorily. In the case of Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and North-Eastern states, the turnover of the business should exceed Rs.10 lakh.

  • E-commerce platform

Any individuals that supply goods or services through the E-commerce platform should get the GST registration in India. The individuals shall register under GST irrespective of the turnover. To commence with an E-commerce business it is necessary to obtain the GST registration.

Persons undertaking a supply through e-commerce operators are also required to obtain GST registration irrespective of sales turnover. Hence, any person who intends to sell on Flipkart or Amazon or Snapdeal must obtain GST registration.

  • Casual taxable persons

An individual who is undertaking the supply of Goods or services seasonally or intermittently through a temporary stall or shop is required to get GST registration. Irrespective of the turnover the individual should apply for GST registration

  • Voluntary registration

An entity can obtain GST registration voluntarily; earlier an entity that has a voluntary GST registration was not able to surrender GST registration for up to a year. After the recent revisions, voluntary GST registration can be surrendered by the applicant at any time.

  • Persons for whom GST registration is compulsory under section 24

Following persons have to take compulsory GST registration no matter what is frequency and amount of turnover in a year.

  1. Inter-state supplier
  2. Taxpayer under reverse charge mechanism
  3. Casual taxable person
  4. Non-resident taxable person
  5. E-commerce operator
  6. Person who requires to deduct tax under section 51 of the CGST act, 2017
  7. Input service distributor
  8. Any person who is engaged in supplies on behalf of another taxable person whether as an agent or otherwise.
  9. Every person supplying online information and database access or retrieval services (OIDAR services) from a place outside India to an unregistered person in India
  10. Other persons may be notified by the government

There are certain exceptions to compulsory registration criteria as well which means the above-mentioned persons are not required to enroll under section 24 of the GST Act in certain cases. These exceptions have been incorporated briefly at the relevant places in the discussion in order to provide a holistic picture. Let’s take up each case one by one. 

Inter-state supply

Inter-state supply means the location of the supplier and the place of supply are in different states or different territories. Persons engaged in such supplies shall be covered under compulsory registration criteria and they have to take GST number before making inter-state supplies.

Exceptions of inter-state supply –

Any person making the following inter-state supplies shall not be cover under compulsory registration eligibility criteria:

  • Inter-state supply of services and the aggregate value of such supplies not exceeding the exemption limit.
  • Inter-state supply of hand-crafted goods and the aggregate value of such supplies does not exceed the exemption limit
  • Job-workers having a turnover of less than the exemption limit. This clause shall not be applicable to jewelry, goldsmiths, and silversmiths wares, and other articles manufactured on a job work basis. 

Taxpayer under reverse charge mechanism

Under the reverse charge mechanism (RCM), the recipient of goods or services is liable to pay tax and all provisions of GST law shall applicable to him as he is a person who liable to pay tax. It is compulsory to get registered under GST provisions for a person, who is liable to pay tax under the reverse charge mechanism (RCM).

It is relevant to note that a supplier who is making only reverse charge supplies is not required to register if his aggregate turnover of supplies is less than the exemption limit.

Casual taxable person

Casual taxable person is defined under section 2(20) of CGST Act, 2017. As per GST law, “casual taxable person means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.”

GST registration is compulsory under section 24 for a casual taxable person (CTP) before supplying goods or services in the taxable territory. However, CTP is exempted from this requirement if he is engaged in the supply of hand-craft goods and the aggregate turnover of such supplies does not cross the GST threshold.

For example, Mr. Ravi, a tax consultant, having a place of business in Gurgaon. He is providing tax consultancy in Mumbai where he does not have a fixed place of business. In the given case, according to section 24, Mr. Ravi is required to take compulsory GST registration in Mumbai before providing such services.

E-commerce operator

“Electronic commerce” and Electronic operator” is defined under section 2(44) and 2(45) of CGST act.

As per section 2(44) of the CGST Act, “Electronic commerce means the supply of goods or services or both, including digital products over a digital or electronic network”

As per section 2(45) of CGST Act, “Electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce”

It is mandatory to take GST registration for an e-commerce operator if he is required to collect tax at source under section 52. Moreover, any person, who engaged in the supply of goods or services through such an e-commerce operator, also required to obtain compulsory registration under GST.

Exception:

However, Supplies through e-commerce operator in the following cases shall not be covered under compulsory registration criteria

  •  Supplies notified under section 9(5) of CGST Act.
  • Any person who provides services and the aggregate value of such services does not exceed the threshold limit. 

Non-resident taxable person

”Non-resident taxable person” is defined under section 2(77) of the CGST Act 2017. ”Non-resident taxable person means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India”

Registration under the Goods and Service Tax is compulsory for the non-resident taxable person if he is engaged in any kind of taxable supply in the taxable territory. Please note that every NRI individual or company making taxable supply has to register under the GST regime irrespective of frequency and amount of transaction.

Person who is required to deduct tax under Section 51 of CGST act

Following persons are required to deduct tax under section 51 of CGST act-

  1. Local authority
  2. A department or an establishment of the Central Government or State government
  3. Government Agencies
  4. Such persons or categories of persons may be notified by the government.

Input service distributor

Input Service Distributor (ISD) is an office of the supplier which receives the invoice of its branches and distributes the input to such branches proportionately by raising an ISD invoice. ISD is required to obtain compulsory registration under GST no matter what is the amount of turnover in a year.

OIDAR services from a place outside India to an unregistered person in India

OIDAR services refer to services provided through the medium of the internet without the physical interaction of the supplier and recipient of services. For example – advertising on the internet, providing cloud services, online supplies of digital content, digital data storage, online gaming, etc.

Every non-resident service provider providing OIDAR services to the unregistered person in India is required to obtain GST registration compulsorily. Further, such service providers have to appoint an authorised signatory (Indian) in India possessing a valid.

                                                            ———————–

Composition Scheme

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of 1% to 6% of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore*.

Eligible taxpayers for Composition scheme –

Manufacturer or trader with aggregate turnover of less than INR 1.5 crores (INR 75 lakhs for northeastern states and Himachal Pradesh).

Restaurant service providers except those serving alcoholic liquor for human consumption.

Service providers with aggregate turnover of less than INR 50 lakhs in preceding financial year (subject to exceptions as covered under ineligible taxpayers heading in point 4 below) (Notified vide CGST (Rate) Notification no 2/2019 dated 7 March 2019). 4. Ineligible taxpayers for composition scheme –

 

Persons who cannot opt for the composition scheme

  • Supplier of service other than restaurant owners(Serving foods and non-alcoholic drinks)
  • Supplier of non-taxable goods
  • If the person in engage in the inter-state supply of goods/Services
  • Supplier supplying goods through E-commerce operator, who is eligible to collect TCS
  • Supplier of tobacco, pan masala, and ice cream

Documents Required for the GST Registration

Category of persons Documents required for GST registration
Sole proprietor / Individual – PAN card of the owner
– Aadhar card of the owner
– Photograph of the owner (in JPEG format, maximum size – 100 KB)
– Bank account details*
– Address proof of principal place of business **
Partnership firm (including LLP) – PAN card of all partners (including managing partner and authorized signatory)
– Copy of partnership deed
– Photograph of all partners and authorised signatories (in JPEG format, maximum size – 100 KB)
– Address proof of partners (Passport, driving license, Voters identity card, Aadhar card etc.)
– Aadhar card of authorised signatory
– Proof of appointment of authorized signatory
– In the case of LLP, registration certificate / Board resolution of LLP
– Bank account details*
– Address proof of principal place of business**
HUF – PAN card of HUF
– PAN card and Aadhar card of Karta
– Photograph of the owner (in JPEG format, maximum size – 100 KB)
– Bank account details*
– Address proof of principal place of business**
Company (Public and Private) (Indian and foreign) – PAN card of Company
– Certificate of incorporation given by Ministry of Corporate Affairs
– Memorandum of Association / Articles of Association
– PAN card and Aadhar card of authorized signatory. The authorised signatory must be an Indian even in case of foreign companies/branch registration
– PAN card and address proof of all directors of the Company
– Photograph of all directors and authorised signatory (in JPEG format, maximum size – 100 KB)
– Board resolution appointing authorised signatory / Any other proof of appointment of authorised signatory (in JPEG format / PDF format, maximum size – 100 KB)
– Bank account details*
– Address proof of principal place of business**

For bank account details, a copy of cancelled cheque or extract of passbook/bank statement (containing the first and last page) must be uploaded.  (in JPEG format / PDF format, maximum size – 100 KB)

**Address proof: Upload any one of the following documents:

Address Proof for Place of Business

The concerned individual shall provide the address proof for all the places of business mentioned for GST registration. The following documents are acceptable as address proof for GST registration.

For Own premises

Any document in support of the ownership of the premises like the latest property tax receipt or Municipal Khata copy or copy of Electricity Bill/ Sale Deed/Registry Deed etc.

For Rented or Leased Premises

A copy of the valid rental agreement with any document in support of the ownership of the premises of the Lessor like Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill, Sale Deed/Registry Deed etc. If a rental agreement or lease deed is not available, then an affidavit/NOC to that effect along with any document in support of the possession of the premises like copy of an electricity bill is acceptable.

SEZ Premises

If the applicant operates his/her’s principal business in an SEZ or the applicant registered as an SEZ, the applicant shall upload all the required documents as provided by the Government.

All Other Cases like Shared property/Consent arrangement

For all other cases, a copy of the consent letter of the owner of the premises with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy. For shared properties also, the same documents can be uploaded.

Digital Signature

All application for GST registration must be digitally signed with a Class 3 Digital Signature for in case of companies and Limited Liability Partnership (LLPs) and for other except companies and Limited Liability Partnership, Digital Signature is optional but if their Aadhar Card is not linked with active mobile number then in that case Digital Signature is also mandatory for them.

————————————————————————————————————–

09263192482