The GST (Goods and Service Tax) Bill was approved by Narendra Modi, the Prime Minister of India, in an effort to replace all state or central government-imposed indirect taxes. As a result, it is now compulsory for entities engaging in the supply of goods and services across states to do GST registration online.
The GST bill was recently passed by the Lok Sabha on March 30th and it is going to directly affect everyone in the country. So, what is GST? GST stands for Goods and Services Tax. It will be imposed by the state and central governments and will be subsume most of the indirect taxes such as VAT, Service Tax, etc.
Anyone who has a valid PAN, is registered under the current Income Tax Law and crosses the turnover GST limit can register for GST. People who have to pay TDS, casual traders, etc., have to register for GST. Existing assesses have to get their provisional ID and password for GST portal from their state’s ACES or VAT website. After they login on to the GST portal, they will have to create a new user ID and password.
Mandatory GST Registration Online
All businesses whose turnover is above Rs.20 lakh, or Rs.10 lakh (for North-Eastern states), are expected to do GST registration as a regular taxable person. GST online registration is also mandatory for NRI taxable individuals, entities engaging in e-commerce, entities supplying goods and services via e-commerce operators, individuals who are eligible for TDS (Tax deducted at source), entities engaging in the provision of online information or retrieval services or database access, etc.
Most entities and businesses in the country are required to complete GST registration online. Even entities that are not mandated to complete GST online registration can do so on a voluntary basis as registration enables the entity to gain legal recognition as a supplier of goods and/or services, thereby allowing the entity to levy GST on customers who avail their goods or services. As such, entities that have completed GST registration online can be eligible to avail input tax credit.
How to do GST Online Registration
Here is a Step-by-Step Procedure to Complete GST Online Registration
- Log on to www.gst.gov.in.
- Click on the ‘Services’ tab on the menu at the top of the page.
- You will have three options, viz. ‘Registration’, ‘Payments, and ‘User Services’.
- Click on ‘Registration’ and select ‘New Registration’.
- You will be redirected to a new page wherein you will have to select whether you are a taxpayer or a GST practitioner before entering a few details such as the legal name of the business, the state and district in which the entity is located, Permanent Account Number, email address and mobile number. This is basically Part-A of the form.
- The details you have entered will have to be verified by the portal, so you will receive a one-time password or an email for confirmation.
- Based on the kind of business you are running, you will be required to upload a few documents as requested.
- Part-B of the form will then have to be filled in with a few details after which you will receive the Application Reference Number through email or SMS.
- Your application will then be verified by a GST officer and it could either be approved or you will be requested to provide some more details or documents until the authorities have all the required information to approve your application.
Separate registration has to be done for each state, if a trader has branches in multiple states. Businesses with more than 1 vertical can register separately for each of them.
As GST has just been introduced, it may take us a while to get used to it and understand it. At present, all assessees have been asked to register for GST and not procedure is in place for people who do not want to register for it. They can choose to cancel their registration after registering though.
Penalties for not Completing GST Online Registration
Offenders who do not pay tax or fail to make the full payment will face a penalty of 10% of the tax amount. The minimum amount of fine will be Rs.10, 000 if the 10% amounts to anything less. In case of deliberate tax evasions, offenders will be charged a penalty of 100% of the tax amount. The penalty will be 10% of the tax due in case of genuine errors.
News About GST Registration
GST Registration Not Required for Inter-State Supplies to the Extent of Rs.20 Lakh
Small service providers primarily offer inter-state services, but once in a while get small amounts from their clients in other states. The aggregate value of the services they offer on a country-wide basis is seldom above the threshold limit. The GST Council has taken a decision to ensure that service providers are allowed to engage in inter-state supplies to the extent of Rs.20 lakh without having to register under the new regime. These service providers can also buy commodities by paying GST and exporting the commodities either without payment of Integrated Goods and Services Tax.
17th October 2017
How CGST, SGST, and IGST differ from each other
Under GST, there are three main types of taxes:
- Central GST (CGST)
- State GST (SGST)
- Integrated GST (IGST)
In order to identify the tax that will be levied at a specific taxable event, you need to be aware of what intra-state transaction and inter-state transaction are.
Inter-state transaction - If the supplier is located at a different place/state to where the goods/services are supplied, then it is referred to as an inter-state supply.
Intra-state transaction - If the supplier and the place of supply of goods/services are located in the same state, then the supply is referred to as an intra-state supply.
On an inter-state supply, the Central Government charges IGST. On intra-state transactions, the Centre charges CGST and the State charges SGST.
- CGST - The Central Goods and Services Tax is levied on intra-state supply of goods/services, along with SGST. The Central and State Governments will decide on a proportion for revenue sharing on the imposition of CGST and SGST at a supply event. In no case will the rate of taxation exceed 14% each.
- SGST - The State Goods and Services Tax is, as mentioned above, levied on intra-state supply of goods/services. This tax money goes to the exchequer of the State Government.
- IGST - Integrated Goods and Services Tax is charged on inter-state transactions. This is also levied on export and import of goods/services. The proceeds from this taxation will go to the Central Government.
22nd August 2017