Akhil Amit And Associates-Income Tax, GST, Audit, FEMA & Company Law

GST Registration

GST is the product of the biggest tax reform in India which has tremendously improved ease of doing business and increasing the taxpayer base in India by including millions of small businesses. Tax complexities would be reduced due to the abolishing and subsuming of multiple taxes into a single, simple system.

The new GST regime mandates that all entities involved in buying or selling goods or providing services or both are required to register and obtain GSTIN. Registration is mandatory once the entity crosses a minimum threshold turnover or when an individual starts a new business that is expected to cross the prescribed turnover.

Businesses are required to register for GST if they fall into one of the following criteria.

Aggregate turnover

Any service provider who provides a service value of more than Rs. 20 Lakhs aggregate in a year is required to obtain GST registration. In the special category states, this limit is Rs. 10 lakhs. Any entity engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs is required to obtain GST registration.

Inter-state business

An entity shall register for GST if they supply goods inter state, i.e., from one state to another irrespective of their aggregate turnover. Inter state service providers need to obtain GST registration only if their annual turnover exceeds Rs. 20 lakhs. (In special category states, this limit is Rs. 10 lakhs).

E-commerce platform

Any individual supplying goods or services through an e-commerce platform shall apply for GST registration. The individual shall register irrespective of the turnover. Hence, sellers on Flipkart, Amazon and other e-commerce platforms must obtain registration to commence activity.

Casual taxable persons

Any individual undertaking supply of goods, services seasonally or intermittently through a temporary stall or shop must apply for GST. The individual shall apply irrespective of the annual aggregate turnover.

Voluntary registration

Any entity can obtain GST registration voluntarily. Earlier, any entity who obtained GST voluntarily could not surrender the registration for up to a year. However, after revisions, voluntary GST registration can be surrendered by the applicant at any time.

The types of GST registration varies depending on the kind of business undertaken and the supply location of goods or services.

Normal scheme

This category applies to taxpayers operating a business in India. Taxpayers registering under the normal scheme do not require a deposit and are also provided with unlimited validity date.

Non-resident taxable person

The category applies to individuals located outside of India. The taxpayers should supply goods or services to residents in India. The registration remains active for a period of 3 months.

Casual taxable person

Any taxpayer establishing a stall or a seasonal shop has to register under the casual taxable person scheme. To register as a casual taxable person, the taxpayer shall pay a deposit equal to the amount of GST liability. The registration remains active for a period of 3 months.

Composition scheme

An entity should enrol under the GST composition scheme to register as a composition taxpayer. Any taxpayer whose turnover is less than rs. 1.5 Crore can avail this facility. Entities enrolled under this scheme can pay a flat GST rate. However, they will not be allowed to claim input tax credit.

The following documents must be submitted by regular taxpayers applying for GST registration.

1

PAN card of the business

GST registration is linked to the PAN of the business. Hence, PAN must be obtained for the legal entity before applying for GST Registration.
2

Identity proof along with photographs

PAN, passport, driving license, aadhar card or voter’s identity card can be submitted as identity proof. Photographs of the promoters/ proprietors also need to be submitted.
3

Address proof of promoter

Documents like passport, driving license, aadhaar card, voters identity card and ration card can be submitted as address proof.
4

Business registration document

Proof of business registration must be submitted for all types of entities. There is no requirement of submitting this document for a proprietorship as the proprietor and the entity are essentially considered the same. In case of a partnership firm, the partnership deed must be submitted. In case of LLP or Company, the incorporation certificate from MCA must be submitted. The other types of entities like society, trust, club, government department or body of individuals must provide the registration certificate.
5

Business location proof

Address proof must be provided for all places of businesses mentioned in the GST registration application. The following documents are acceptable as address proof for GST registration.
- Own property- Any document in support of the ownership of the premises like the latest property tax receipt or the municipal khata copy or copy of the electricity bill.
- Rented or leased property- A copy of a valid rental agreement with any document in support of the ownership of the premises of the lessor like the latest property tax receipt or the municipal khata copy or copy of the electricity bill. If the rental agreement or lease deed is not available, then an affidavit to that effect along with any document in support of the possession of the premises like copy of electricity bill is acceptable.
- SEZ premises- If the principal place of business is located in an SEZ or the applicant is an SEZ developer, necessary documents/certificates issued by the government of India are required to be uploaded.
- 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 the municipal khata copy or the electricity bill copy. The same documents can be uploaded for shared property as well.
6

Bank account proof

Scanned copy of the first page of bank passbook or the relevant page of bank statement or scanned copy of a cancelled cheque containing name of the proprietor or business entity, bank account no., MICR, IFSC and branch details including code needs to be uploaded.

FREQUENTLY ASKED QUESTIONS

What is the deadline for getting registered under GST?

An entity liable to be registered under GST should apply for registration within 30 days of meeting the criteria. Casual taxable persons and non-resident taxable persons are required to be registered under GST prior to commencing business.

Who is the primary authorized signatory?

Primary authorized signatory is the person who is primarily responsible to undertake tasks on the GST portal on behalf of the taxpayer. It could be the promoted of the business or any other trustworthy person nominated by the promoters of the business.

Is PAN mandatory for obtaining GST registration?

Yes. PAN is mandatory for obtaining GST registration. In the case of proprietorship, the PAN of the proprietor can be used. In case of LLP or Company or Trust or other types of legal entity, PAN must first be obtained for the entity. However, PAN is not mandatory for GST registration of foreigners and foreign companies. For non-resident taxable persons, GSTIN with a fixed expiry date will be provided based on the other documents provided to prove existence.

What is the validity of GST registration?

GST registration does not have an expiry date. Hence, it will be valid until it’s cancelled, surrendered or suspended.Only GST registration for non-resident taxable persons and casual taxable persons have a validity period that is fixed by the authorities while issuing the GST registration certificate.

Can a person with no GST registration collect GST?

No, only persons registered under GST are allowed to collect GST from the customers. A person not registered under GST cannot even claim input tax credit on the GST paid.

What is an E Way Bill?

An E-way bill is an electronic document which serves as an evidence to the movement of goods having a value of more than Rs. 50,000. It available to a supplier or an individual transporting goods. It has two components; Part A, with details such a GSTIN of the supplier and recipient, place of delivery, value of goods, HSN code, reason for transportation and part B, with details of the vehicle and transport documents.

What are the benefits of E Way bill?

It is a wholly digital interface which eliminates the need for state boundary checks. It will facilitate faster movement of goods and improve the turnaround time of trucks thus reducing costs for the supplier.

When should an E Way bill be generated?

As per rule 138 of the CGST Rules, 2017, an e-way bill has to be generated prior to the commencement of transport of goods.

Is it mandatory to generate an E Way bill?

It is mandatory to generate E Way bill in all cases wherein the value of consignment is more than Rs. 50,000. However, it is not necessary to generate one wherein the goods are being transported by a non- motorised conveyance or if they are being transported from the port, airport, air cargo complex and land customs station for clearance by customs.

What is the penalty for not generating an E Way bill?

Any taxable person who transports any goods without the cover of specified documents (e-way bill is one of the specified documents) shall be liable to pay a penalty of Rs. 10,000 or the amount of tax sought to be evaded (whichever is higher).

What is a composition scheme?

Small businesses registered under the GST composition scheme can pay GST at a fixed rate of turnover every quarter and file quarterly GST returns. Composition levy would generally be related to small taxpayers who are supplying goods and services or both to the end consumer with a lower turnover.

What is the eligibility criteria?

Any existing taxpayer whose annual turnover did not cross the Rs.1.5 crore threshold in the preceding financial year. However, service providers with the exception of restaurants and caterers are not eligible, neither are casual taxable persons nor non-resident Indians.

Can input tax credit be claimed under composition scheme?

No input tax credit can be claimed by a dealer opting for composition scheme as he is out of the credit chain. He cannot take credit on his input supplies.

How long will the scheme be valid?

The validity of the composition scheme will depend upon the option exercised by a taxable person as long as all the conditions are fulfilled as specified in the law. However, individuals who are eligible for the scheme can also choose to opt-out of it by simply filing an application.

How will the aggregate turnover be computed?

It will be computed on an all India basis and will include the value of all taxable supplies. It would exclude inward supplies under reverse charge as well as central, state/union territory and integrated taxes and cess.

What is an inter state supply?

Inter-state supply of goods or service is when the supply location is a different state from the delivery location. In addition, the inter-state supply applies to the supply of goods or services by an SEZ unit or the export of goods or services.

What is intra-state supply?

An intra-state supply of goods or service applies when the place of supply is in the same state as the location of the supplier. Intra-state supply does not include the supply of goods/service to SEZ units or developers, imports or exports.

What is SGST?

As per the SGST Act, the State GST or SGST applies on intra-state supplies of goods and services. It is administered by the respective state government. SGST liability can be set off against SGST or IGST input tax credit only.

What is CGST?

Central GST or CGST would be levied under the CGST Act on the intra-state supplies of goods and services. Hence in case of intra-state supplies of goods and services, both the central and state government would combine their levies with an appropriate revenue sharing agreement between them.

What is IGST?

Integrated GST or IGST is the tax levied under the IGST Act on the supply of any goods and services in the course of inter-state trade across India. Further, IGST would include any supply of goods and services in the course of import into India and the export of goods and services from India.