Setting up a business in India can be incredibly fulfilling. But before you start selling products or providing services, your first step to compliance with laws on running a business will hinge on your business obtaining a Goods and Services Tax (GST) registration.
Founders of new businesses (startups), independent contractors (freelancers), people who sell goods (traders), manufacturers, and merchants who sell products online through an e-commerce platform to customers, will all need to understand GST registration, so they can ensure that their businesses operate legally and grow.
This article will provide detailed information about GST registration in India and will address eligibility, documents required to register, the process to be followed in order to complete registration, fees charged for registering, as well as benefits provided and compliance necessary to operate your registered GST business.
What is GST Registration?
GST Registration is the process of registering your business to receive a unique 15-digit GST identification number (GSTIN) through the Goods and Services Tax (GST) system created by the Government of India (Government) on July 1, 2017. GST created a single indirect tax system throughout India by replacing multiple taxes such as VAT, Service Tax, and Excise Tax (Duty).
If a business is registered under GST, the business will have the legal ability to:
- Collect GST from its customers
- Claim Input Tax Credit (ITC)
- File GST returns; and
- Conduct business throughout India without limitation (i.e., without tax restrictions).
GST registration is regulated by the Central Board of Indirect Taxes and Customs (CBIC).
Advantages of GST Registration
Some business owners see GST as just another tax to pay; however, it is so much more than that.
1) Legal Recognition - Having a GST-registered business adds credibility to one’s business and makes it legal.
2) Input Tax Credit (ITC) - You will be able to value the GST you have paid out on stock purchased and reduce the tax you are required to pay at the end.
3) Expansion of your Business - Once your business is registered under GST, you will not have any barriers to selling your products throughout England.
4) E-commerce - Platforms such as Amazon and Flipkart will not allow you to sell your products without GST Registration.
5) Business Reputation - Most clients will prefer to deal with a GST-registered business.
Documents for GST Registration
Depending on the structure of your business depends on the documentation you will require.
For Sole Proprietorship
- PAN Card of sole proprietor
- Aadhar Card
- Proof of Business Address
- Details of your Bank Account
- Passport photo
For Partnership/LLP
- PAN Card of Firm
- Deed of Partnership/LLP
- Proof of Identity and Address for partners in the firm
- Proof of Business Address
For a Private Limited Company
- PAN of Company
- Certificate of Incorporation
- MOA & AOA
- Details of Directors in the Company
- Board Resolution
- Proof of Business Address
How to Register Online
GST Registration is done via the internet through the official GST Portal.
Step 1: Access the GST portal
Go to the official website that the Goods and Services Tax Network (GSTN) has set up.
Step 2: Complete Part A
You need to complete the basic information required:
- The Legal name of your Company
- PAN Number
- Email address
- Mobile number
Once this is completed, you will receive an email confirmation advising you to proceed to the next stage of your application.
Step 3: Complete Section B
Provide your business information in detail, upload all necessary documents, and confirm everything with:
Aadhaar OTP
Digital Signature Certificate if you're a corporation.
Step 4: ARN Generation
You will receive an ARN after your application has been submitted.
Step 5: GSTN Issuance
Once your application is complete, you will generally receive your GSTN in 3-7 working days.
Common Reasons Applications are Rejected
- PAN Information does not match with the documents submitted.
- Incorrect Address Documentation
- Poor Quality Pictures
- Mismatched Signature
- Inaccurate Type of Business Activity Selected
Pre-Submission Review by an experienced professional is highly recommended to be better prepared for GST Application submission to reduce the potential for rejection.
GST Compliance after obtaining GSTIG
Obtaining your GSTN is the initial step towards compliance with GST. However, your new business entity is still subject to filing of GST returns on either a monthly or quarterly basis; maintaining proper GST records; payment of GST on time; and reconciliation of your input tax credit. Non-compliance can result in significant fines or the cancellation of your GST Registration.
Importance of Professional Assistance
The GST registration process appears to be simple to some. Unfortunately, many applications are delayed due to small technical errors that could have been avoided through the use of experienced GST Tax Consultants to assist with:
- Proper Document Preparation
- Appropriate Classification of Your Business Activity
- Minimize the Chance of Receiving a Notice or Your Application Being Denied
- Guidance with Post-GST Registration Compliance Issues
The overall result is an application will most likely be approved on time, providing your business with long-term compliance with various laws and regulations in the country.
In Summary
Obtaining your GST Registration is much more than a legal requirement; it is the cornerstone for all future growth of a business in India. If you are establishing a new company, expanding your existing company, or have plans to begin selling online, you can expect that your company will operate legally and efficiently by obtaining a GST Registration.
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