Welcome to PRVS BUSINESS, your dedicated partner in navigating the complexities of Goods and Services Tax (GST) registration. Our team, composed of Chartered Accountants (CAs), Company Secretaries (CSs), Advocates, Lawyers, and MBAs, is committed to providing businesses with seamless and professional guidance through the entire GST registration process. Whether you're a small entrepreneur or a large corporation, we ensure that you meet all regulatory requirements while enhancing your business efficiency and compliance.
What is GST Registration?
GST Registration is a process by which a business becomes legally registered under the Goods and Services Tax (GST) regime. Upon registration, businesses are assigned a GST Identification Number (GSTIN), enabling them to legally collect GST on taxable supplies and avail of Input Tax Credit (ITC) on taxes paid on business inputs. This process ensures that the business complies with the tax framework and is authorized to collect and remit tax to the government
Who is Required to
Register for GST?
Certain businesses must mandatorily register for GST
under the Act, while others may do so voluntarily. Here are the primary
categories of businesses that must register for GST:
1. Businesses Exceeding the Threshold Limit:
- For Goods Suppliers: ₹40
Lakhs (₹20 Lakhs for special category states).
- For Service Providers: ₹20
Lakhs (₹10 Lakhs for special category states).
- For E-Commerce Operators:
Irrespective of turnover, e-commerce businesses must register.
2. Interstate Suppliers:
- Any business involved in the interstate
supply of goods or services is required to register under GST,
even if the turnover is below the prescribed limit.
3. Casual and Non-Resident Taxable Persons:
- Casual taxable persons (businesses
with no permanent place of business) and non-resident taxable
persons must register before starting operations.
4. Other Special Cases:
- Input Service Distributors and agents of a supplier must
also register under GST.
Who is Exempt from
GST Registration?
While many businesses are required to register, certain
entities are exempt based on their nature of business or turnover. These
include:
1. Small Businesses Below the Threshold:
- Businesses with turnover below the threshold limits
do not have to register for GST, though they can opt for voluntary
registration.
2. Agricultural Producers:
- Farmers and agricultural producers engaged in the supply of exempt goods or
services are generally exempt.
3. Exporters of Goods/Services:
- Exporters are
exempt from GST registration, as their supply is zero-rated under
GST. They can still claim Input Tax Credit (ITC) on
inputs.
4. Charitable or Religious Institutions:
- Non-commercial entities,
including charitable or religious institutions, are generally exempt from
GST registration unless they engage in taxable activities.
Advantages of GST
Registration
Registering under GST offers a number of benefits for
businesses, including:
1. Input Tax Credit (ITC):
- Businesses registered under GST can avail of Input
Tax Credit on taxes paid for business-related purchases. This
reduces the overall tax liability as the tax paid on inputs can be offset
against the tax collected on sales.
2. Enhanced Credibility:
- GST registration enhances the business’s credibility with
customers, vendors, and government authorities, ensuring they are
recognized as a legitimate taxpayer.
3. Seamless Movement of Goods:
- GST facilitates the interstate movement of
goods by removing the need for various state taxes and permits,
leading to cost savings and smoother operations.
4. Better Compliance:
- Being GST-compliant ensures that businesses adhere
to the latest tax regulations, which helps avoid penalties, interest, and
legal issues.
5. Competitive Advantage:
- Businesses with GST registration can
deal with larger clients who may prefer working only with GST-compliant suppliers.
Moreover, they can participate in government tenders and contracts which
often require GST registration.
6. Simplified Tax Structure:
- GST consolidates multiple indirect taxes like VAT,
excise duty, and service tax into one single tax, simplifying the tax
structure and compliance.
7. Access to GST Exemptions and Refunds:
- Registered businesses can avail of exemptions available
under the GST law for certain sectors and refunds for any
excess taxes paid, especially exporters.
GST Tax Categories:
SGST, CGST, and IGST
GST is divided into three tax categories, depending on
the nature of the supply and its location:
1. SGST (State Goods and Services Tax):
- This is applicable when the supply of goods or
services occurs within the same state. The state
government collects SGST, and it is typically equal to the CGST rate
for intra-state transactions.
2. CGST (Central Goods and Services Tax):
- This applies when goods or services are
supplied within the same state. The central government collects
CGST, which is shared with the state government. For example, in an
intra-state transaction, both CGST and SGST are applicable.
3. IGST (Integrated Goods and Services Tax):
- IGST is applicable for the interstate supply of
goods and services. When goods are sold from one state to another, IGST is
levied by the central government, and it is shared between the states
involved. The tax is collected by the central government, but
the state’s share is transferred after the transaction.
Intra-state supply:
SGST + CGST
Interstate supply: IGST
Voluntary
Registration for GST: Who Should Consider It?
While GST registration is mandatory for
businesses crossing the turnover threshold, certain businesses may choose to
opt for voluntary registration under GST. Here’s why:
1. Businesses Below the Threshold Limit:
- Small businesses whose
turnover is below the threshold may voluntarily register under GST to take
advantage of Input Tax Credit (ITC) on their purchases.
2. Enhanced Credibility:
- Voluntary registration enhances a business’s
reputation by demonstrating commitment to legal compliance and
professionalism.
3. Ability to Deal with Larger Businesses:
- Many large enterprises prefer dealing with GST-registered
vendors, as it ensures proper documentation and the possibility of
claiming Input Tax Credit (ITC).
4. Expansion and Growth:
- If you plan to expand your business or engage
in interstate transactions in the future, voluntary
registration gives you the flexibility to grow without worrying about
crossing the threshold.
5. Access to Government Contracts and Tenders:
- Government tenders typically
require vendors to be GST-registered, making voluntary
registration a key to accessing these opportunities.
6. Smooth Operations for E-commerce Sellers:
- If you are an online seller or
running an e-commerce business, GST registration helps ensure
smooth operations, ease of dealing with e-commerce platforms, and
eligibility to claim GST refunds.
Penalties and
Consequences for Not Obtaining GST Registration
Failure to obtain GST registration, when required, can
result in serious penalties and consequences for businesses. Here’s an
overview:
1. Penalty for Non-Registration:
- As per Section 122 of the CGST Act, if a
person is liable to be registered under GST but does not apply for
registration, they can be subject to a penalty of ₹10,000 or
an amount equivalent to the tax due, whichever is higher.
2. Loss of Input Tax Credit (ITC):
- A business that is not registered under GST cannot
avail of Input Tax Credit (ITC) on any taxes paid on
purchases, leading to higher overall tax costs.
3. No Ability to Collect GST from Customers:
- A business that is not registered cannot legally
charge GST on its invoices to customers. This may cause
issues with clients who require GST-compliant invoices, especially in
cases of B2B transactions.
4. Inability to Deal with Large Businesses:
- Larger companies typically only engage in
transactions with GST-registered businesses, and failure to
register may limit your ability to work with such clients.
5. Legal Action and Prosecution:
- In cases of willful tax evasion, legal
action may be initiated by the GST authorities. This could lead to
prosecution under Section 132 of the GST Act, including imprisonment for
up to 5 years in cases involving tax evasion exceeding ₹5
crores.
6. Interest on Unpaid Taxes:
- If a business fails to register and collect GST on
taxable supplies, it will still be liable to pay the tax along with interest for
delayed payment. The interest rate can be as high as 18% per annum.
Documents Required for GST Registration
The documentation required varies depending on your business structure. Below is a list of common documents required for different types of entities:
- PAN Card of the proprietor.
- Aadhaar Card for verification.
- Proof of business address (Utility bill, rent agreement, etc.).
- Bank account details.
- Photograph of the proprietor.
Get Started with GST Registration Today!
PRVS BUSINESS is
here to assist you in completing your GST registration swiftly and accurately,
ensuring your business is fully compliant with the latest tax regulations.
- Market Price: 1499/-
- Our Price: 499/-
Let PRVS BUSINESS be your trusted
partner in simplifying GST registration and compliance.