As a good citizen we must understand this new law and if you wish to undertake any economic activity in India, you must get the business registered under GST law.
Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail Input Tax Credit for the taxes on his inward supplies. Without registration, a person can neither collect tax from his customers nor claim any Input Tax Credit of tax paid by him.
Need and advantages of registration
Registration will confer the following advantages to a taxpayer:
- He is legally recognized as a supplier of goods or services.
- He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.
- He can claim Input Tax Credit for taxes paid and can utilize the same for payment of taxes due on the supply of goods or services.
- Seamless flow of Input Tax Credit from suppliers to recipients at the national level.
When I don’t need to Register?
Liability to register GST being a tax on the event of “supply”, every supplier needs to get registered.
Registration is not required when:
- Small businesses having all India aggregate turnover below Rupees 20 lakh (10 lakh if the business is in Assam, Arunachal Pradesh, J&K, Himachal Pradesh, Uttarakhand, Manipur, Mizoram, Sikkim, Meghalaya, Nagaland or Tripura) need not register. The small businesses, having turnover below the threshold limit can, however, voluntarily opt to register.
For Calculating “The aggregate turnover”: It
- includes supplies made by a dealer on behalf of his principals, but
- excludes the value of job-worked goods if he is a job worker.
- Supplying Exempt Supplies: Persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax.
- An Agriculturist, to the extent of supply of produce out of cultivation of land, are not liable to register under GST
Nature of registration:
The registration in GST is
- PAN-based and
- State-specific.
A supplier has to register in each of such State or Union territory from where he affects supply.
Ques: “Where are you supplying good or services from?”
Ans: You need to register in the state from where you supply.
Understanding GST Number & its significance:
In GST registration, the supplier is allotted a 15-digit GST identification number called “GSTIN”, and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTN common portal.
- The first 2 digits of the GSTIN is the State code,
- Next 10 digits are the PAN of the legal entity,
- The next two digits are for entity code, and
- The last digit is checksum number.
- Registration under GST is not tax specific, which means that there is single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses.
- A given PAN-based legal entity would have one GSTIN per State, that means a business entity having its branches in multiple States will have to take separate State wise registration for the branches in different States.
- But within a State, an entity with different branches would have single registration wherein it can declare one place as the principal place of business and other branches as an additional place of business.
- However, a business entity having separate business verticals (as defined in section 2 (18) of the CGST Act, 2017) in a state may obtain a separate registration for each of its business verticals.
When Does My Liability To RegisterArises?
Generally, the liability to register under GST arises:
- when you are a supplier within the meaning of the term, and
- your aggregate turnover in the financial year is above the exemption threshold of 20 lakh rupees.
However, the GST law enlists certain categories of suppliers who are required to get compulsory registration irrespective of their turnover, that is to say, the threshold exemption of 20 lakh is not available to them.
Compulsory Registration in GST:
Some of such suppliers who need to register compulsorily irrespective of the size of their turnover are:
- Inter-state suppliers
If you are supplying outside your state, you lose the benefit of threshold exemption and have to register under GST.
However, persons making inter-state supplies of taxable services and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees (ten lakh rupees for special category States except J & K) are exempted from obtaining registration vide Notification No. 10/2017-Integrated Tax dated 13.10.2017.
- A person receiving supplies on which tax is payable by the recipient on a reverse charge basis.
There are few categories where tax is to be deducted from those receiving supply called reverse charge basis. If you are receiving any such services, you have to register.
Reverse Charge means the liability to pay tax is on the recipient of the supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.More on Reverse Charge
- Casual taxable person who is not having fixed place of business in the State or Union Territory from where he wants to make the supply.
- Non-resident taxable persons who are not having fixed place of business in India.
- A person who supplies on behalf of some other taxable person (i.e. an Agent of some Principal)
- E-commerce operators, who provide a platform to the suppliers to supply through it.
- Suppliers who supply through an e-commerce operator
- Those e-commerce operators who are notified as liable for GST payment under Section 9(5)
- TDS Deductor
- Those supplying online information and database access or retrieval services from outside India to a non-registered person in India.
Persons supplying services through e-commerce operators need not take compulsory registration and are entitled to avail the threshold exemption of Rs. 20 Lakh as per Notification No. 65/2017-Central tax dated 15.11.2017.
Casual Trader:
Causal trader, govt of India, does not take you causally!!! You are equally liable to register and pay tax on that one-time business venture/ experiment
Who is a Casual Trader in GST?
A Casual taxable person is one who has a registered business in some State in India but wants to affect supplies from some other State in which he is not having any fixed place of business.
However casual taxable persons making supplies of specified handicraft goods need not take compulsory registration and are entitled to the threshold exemption of Rs. 20 Lakh. Handicraft goods are specified in Notification no. 33/2017-Central Tax dated 15.09.2017 as amended by Notification no. 38/2017-Central Tax dated 13.10.2017.
What needs to be done?
Such person needs to register in the State from where he seeks to supply as a Casual taxable person.
A Non-Resident taxable person is one who is a foreigner and occasionally wants to affect taxable supplies from any State in India, and for that, he needs GST registration. GST law prescribes a special procedure for registration, as also for the extension of the operation period of such Casual or Non-Resident taxable persons.
- They have to apply for registration at least five days in advance before making any supply.
- Also, registration is granted to them or period of operation is extended only after they make an advance deposit of the estimated tax liability.
In respect of supplies to some notified agencies of United Nations organisation, multinational financial institutions and other organisations, a unique identification number (UIN) is issued. Standardisation of procedures
A total of 30 forms/formats have been prescribed in the GST registration rules. For every process in the registration chain such as an application for registration, acknowledgement, query, rejection, registration certificate, show cause notice for cancellation, reply, cancellation, amendment, field visit report etc, there are standard formats. This will make the process uniform all over the country. The decision-making process will also be fast. Strict timelines have been stipulated for completion of different stages of the registration process.
Registration in GST
When to Apply?
- Regular Dealer: An application has to be submitted online through the common portal (GSTN) within thirty days from the date when the liability to register arose.
- The Casual and Non-Resident taxable persons need to apply at least five days prior to the commencement of the business. For a transferee of a business as going concern, the liability to register arises on the date of transfer.
Time Period for Grant of GSTIN
- If No Query is raised within 3 days of application: The Proper Officer has to either raise a query or approve the grant of registration within three working days failing which, registration would be considered as deemed to have been approved.
- If Query is raised within 3 days of application: The applicant would have to respond within seven working days starting from the fourth day of filing the original application. The Proper Officer would have to grant or reject the application for registration within seven working days thereafter. Maximum time period is 15-20 days
Amendment of registration
- Except for the changes in some core information in the registration application, a taxable person shall be able to make amendments without requiring any specific approval from the tax authority.
- In case the change is for legal name of the business, or the State of the place of business or additional place of business, the taxable person will apply for amendment within 15 days of the event necessitating the change.
- The Proper Officer, then, will approve the amendment within the next 15 days.
- For other changes like the name of day-to-day functionaries, e-mail IDs, mobile numbers etc. no approval of the Proper Officer is required, and the amendment can be affected by the taxable person on his own on the common portal.
Cancellation of registration
The GST law provides for two scenarios where cancellation of registration can take place;
- Voluntary cancellation: the one when the taxable person no more requires it, and
- Suo-Moto Cancellation: another when the Proper Officer considers the registration liable for cancellation in view of certain specified defaults (Suo-moto cancellation) like when the registrant is not doing business from the registered place of business or if he issues tax invoice without making the supply of goods or services.
Process of Cancellation:
- The taxable person desirous of cancellation of registration will apply on the common portal within 30 days of the event warranting cancellation.
- He will also declare in the application, the stock held on the date with effect from which he seeks cancellation. He will also work out and declare the quantum of dues of payments and credit reversal, and the particulars of payments made towards discharge of such liabilities.
- In case of voluntary registration (taken despite not being liable for), no cancellation is allowed until the expiry of one year from the effective date of registration.
- If satisfied, the Proper Officer has to cancel the registration within 30 days from the date of application or the date of reply to notice (if issued, when rejection is concluded by the officer).
- Revocation of cancellation In the case where registration is cancelled suo-moto by the Proper Officer, the taxable person can apply within 30 days of service of cancellation order, requesting the officer for revoking the cancellation ordered by him.
- However, before applying, the person has to make good the defaults (by filing all pending returns, making payment of all dues and so) for which the registration was cancelled by the officer. If satisfied, the proper officer will revoke the cancellation earlier ordered by him. However, if the officer concludes to reject the request for revocation of cancellation, he will first observe the principle of natural justice by way of issuing a notice to the person and hearing him on the issue.
Physical verification for registration
Physical verification is to be resorted to only where it is found necessary in the subjective satisfaction of the proper officer. If at all, it is felt necessary, it will be undertaken only after granting the registration, and the verification report along with the supporting documents and photographs shall have to be uploaded on the common portal within fifteen working days. More on Documents Required for GST Registration