Good and Services Tax (GST) has replaced and simplified the indirect taxation process in India. You can also choose to apply for the registration online. Hassle-free registration services are offered. One of the major motives of introducing GST was to have a single tax in the entire nation. GST is governed by the Goods and Services Tax Act that was passed in 2017. It was passed on 29th March, 2017 and was implemented nationwide on 1st July, 2017. GST registration is mandatory in India for any business engaged in the supply of a goods or services. However, the annual turnover should exceed the specified limit to get GST registration. The limit specified for different states varies.
GST registration number is a 15-digit code. It is PAN-based so that everyone gets a unique code. The first two digits of the GST number represent the state code, i.e.; which state the individual or company belongs to. The law of GST exempts some goods like fruits or vegetables, which means GST is not applicable to them.
Various annual turnover limits are specified for different states. Hence, it is necessary to check the turnover limit for your state before applying for GST registration. Moreover, it is recommended that businesses should not wait to attain or cross the turnover limit. On the general note, most of the states have given the threshold of INR 40 Lacs for the supply of goods and INR 20 Lacs for the supply of services.
Some businesses are required to attain GST registration as soon as they start their operations. The annual turnover limit is not applicable to them.
A few goods are exempted from GST. It includes - Fruits and Vegetables, Cereals, Unprocessed Fish, Meat that is not frozen or packed, Cane Jaggery, Tender Coconut Water, silkworm laying, Raw silk, Cotton used in Gandhi Topi, Cotton used in Khadi Yarn, coir fibre, puja samagri, All seeds, Live animals except horses, coffee beans, green tea leaves, human blood, firewood, wood charcoal, postal items, clay lamps, Agriculture Implements, Handloom, Hearing Aids, etc. So, if you are a dealer of the above-mentioned goods, then you will not have to apply for a GST registration number.
Before applying for a GST registration, a company or a startup is required to check a few things necessary for the process.
- A copy of the board resolution passed by the Director or Authorized Signatory.
- Certificate of Incorporation, AOA and MOA
- Cancelled cheque by the authorised signatory.
- Self-attested PAN card and address proof of the director, partner or proprietor. The address proof may include Aadhaar card, Voter ID or Passport.
- 2 photographs of all Partners, Director and Proprietor.
- NOC from the owner of the property on stamp papers of Rs. 10 that is notarized as well.
- Rent Agreement
Create TRN and you will need this number to login to the GST website.
Fill in the required details about your company and select the regional department.
Fill in the KYC details of the director and upload his photograph in the portal.
Upload the documents such as electricity bill, cancelled cheque, board resolution.
Select HSN or SAC code depending on the nature of business you are involved in.
After filling in the necessary details, affix the digital signature on to it and upload it to the portal to submit the application form.
GSTIN is allocated by the department in about 8-10 days.
The department allocates GSTIN to a company or an individual who has applied for GST registration. It is a unique 15-digit PAN-based number that represents the registration of a business or a person under GST.
A company or a start-up engaged in the supply of goods or services is required to take GST registration based on the turnover criteria.
Four different rates are applicable under GST. They are - 5%, 12%, 18%, and 28%. It depends on the nature of goods and services. Further, compensation cess is also applicable on few luxury supplies.
This scheme is generally introduced for small businesses and taxpayers. Any business or individual taxpayer with an annual turnover is less than 1.5 crores can freely move to a composition scheme.
Reverse Charge Mechanism refers to a mechanism where the amount of GST is deposited to the government by the recipient of the service. For instance, in case of services availed from the lawyers, the service recipient is liable to deposit the GST.
ARN stands for Acknowledgement Reference Number. It is provided by the department after GST registration is completed. TRN stands for Temporary Reference Number, it is basically referred to as a tracking number provided before filing registration.
Government has prescribed many goods like Fruits and Vegetables which are exempt in nature.
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