The applicability of GST registration is dependent upon the limit of annual turnover of the business. Businesses and individuals are required to register for GST if their annual turnover exceeds certain thresholds. Here are the specifics:
- Goods Suppliers: Registration is mandatory if the annual turnover exceeds ₹40 lakhs for normal category states and ₹20 lakhs for special category states
- Service Providers: Registration is mandatory if the annual turnover exceeds ₹20 lakhs for normal category states and ₹10 lakhs for special category states
- Goods and Service Providers: If a person/business are providing both goods as well services then registration is mandatory if the annual turnover exceeds ₹20 lakhs for normal category states and ₹10 lakhs for special category states
(Note-The special category states under GST Rules -Arunachal Pradesh, Assam, Jammu and Kashmir, Ladakh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh)
VOLUNTARY GST REG.
As per the GST Act, a person can voluntarily register for GST even if their turnover is below the threshold limit. This is known as voluntary registration.
Voluntarily registered businesses can claim input tax credit on their purchases. It can help businesses avoid penalties for non-registration. Such registration enhances the credibility of a business, especially when dealing with larger clients or government agencies. Registering voluntarily can help businesses prepare for future growth, as they may exceed the turnover threshold limit.
MANDATORY GST REG.
The following individuals and businesses are mandatorily required to GST enrollment, regardless of their turnover:
- Casual Taxable Persons
- Non-Resident Taxable Persons
- Interstate Suppliers
- Persons Required to Deduct TDS/TCS
- E-commerce Operators
- Input Service Distributors
- OIDAR (Online Information Database Access and Retrieval) Service Providers
HOW TO REGISTER UNDER GST ONLINE
GST enrollment can be done on the GST portal by following up the GST compliance registration process of filling up the required details in the registration form, uploading documents and verifying contact details. The complete GST system enrollment procedure, including receiving the GST number, takes 7 to 10 working days.
WHO IS NOT ELIGIBLE FOR GST REG.?
- Small businesses with annual turnover below the specified threshold limit (Turnover ₹20 lakhs for most states, ₹10 lakhs for special category states).
- Funeral, burial, crematorium, or mortuary services and related activities.
- Sale of land and completed buildings.
- Actionable claims, excluding those related to lottery, betting, or gambling.
- Services by any court or tribunal.
- Functions performed by Members of Parliament (MPs), Members of Legislative Assemblies (MLAs), and other public representatives.
- Duties performed by individuals holding constitutional posts in their official capacity.
- Employees providing services as part of their employment.
- Agriculturists supplying produce from cultivation.
- Entities dealing in exempt goods or services exclusively.
- Individuals supplying goods and services which are not liable to tax under GST.
Documents Required for GST enrollment
To register for GST, businesses must provide the following documents:
- PAN Card of the applicant/business entity.
- Aadhaar Card of the authorized signatory.
- Business Registration Proof (Company Incorporation Certificate, Partnership Deed, etc.).
- Address Proof (Utility Bill, Rent Agreement, or Property Tax Receipt).
- Bank Account Details (Canceled Cheque, Bank Statement).
- Digital Signature (for companies and LLPs).
Benefits of GST Reg.
- Legal Recognition: As a registered supplier of goods and services, you’ll gain legal recognition, enhancing your business credibility and reputation.
- Input Tax Credit Benefits:Claim tax on purchases and reduce your tax liability with Input Tax Credit benefits. This will help optimize your cash flow and increase profitability.
- Expansion Opportunities: Break geographical barriers and explore new markets with GST registration. Enable interstate sales without restrictions and expand your customer base.
- Improved Compliance : Ensure seamless compliance with Indian tax laws and avoid penalties. GST registration simplifies tax filing, reducing the risk of errors and non-compliance.
Why GST Reg. Matters
In today’s competitive business landscape, GST enrollment is no longer a choice, but a necessity. By registering under GST, you’ll not only avoid penalties but also.
PENALTY FOR NON-GST REGISTRATION
The penalty for non-registration can be up to ₹10,000 or an amount equivalent to the tax due, whichever is higher.
In addition to the penalty, interest on the tax due must be paid at the rate of 18% per annum.
In severe cases, non-registration can lead to prosecution, which may result in imprisonment for up to 5 years and a fine.
PENALTY FOR LATE REGISTRATION
The penalty for late registration can be up to ₹10,000.
Interest on the tax due must be paid at the rate of 18% per annum.
Frequently Asked Questions (FAQs)
1. Who is required to register for GST?
Businesses exceeding the turnover threshold, interstate suppliers, e-commerce sellers, casual taxable persons, and certain other entities must register for GST.
2. What happens if I don’t register for GST?
Failure to register can lead to penalties, fines, and legal consequences, including restrictions on business operations.
3. Can I voluntarily register for GST even if my turnover is below the threshold?
Yes, businesses can opt for voluntary GST enrollment to avail of input tax credit and enhance credibility.
4. How long does it take to get GST reg.
Typically, the GST registration process takes 3-7 working days if all required documents are submitted correctly.
5. Is GST registration mandatory for freelancers?
Freelancers providing services that exceed the threshold limit (₹20 lakhs for normal states and ₹10 lakhs for special category states) must register for GST.
6. Do I need GST reg. for selling online?
Yes, businesses selling through e-commerce platforms like Amazon or Flipkart must register for GST, regardless of turnover.
7. Can I apply for GST enrollment online?
Yes, GST enrollment can be done online through the official GST portal by submitting the necessary documents.
You can refer Article for different Types of GST Returns :Everything You Need to Know About the Different Types of GST Returns
CONCLUSION
Ensuring timely GST enrollment and compliance is crucial for businesses to avoid penalties and legal issues. By understanding the process and filing returns on time, you can streamline operations and maintain tax compliance. If you’re unsure about GST registration requirements, consulting a tax professional or GST expert can help you navigate the process with ease.
