GST Registration Guide: Who Needs It and How to Apply

India’s Goods & Services Tax (GST) framework has changed the entire indirect tax system by aggregating separate taxes under one umbrella. GST registration will be necessary to use a supplier of goods or services, and for any business or person that provides goods or services that exceed the threshold limit of exemption. GST fulfills compliance, claims input tax credits, and conducts business under the tax ecosystem.

The guide outlines situations that necessitate registering for GST, documents required, how to conduct the registration online, and an overview of obligations for compliance. This will lead to a seamless and efficient online GST registration process.

Who Should Apply for GST Registration?

Assisting taxpayers to formally be included in the tax system and comply with GST legislation, certain businesses or individuals have to register for a GST number. Additionally, it also helps in avoiding operating illegally and incurring penalties. Let’s understand by examples, knowing who should apply for GST registration.

• Businesses whose aggregate turnover exceeds the threshold amount, which is usually ₹40 lakh for goods and ₹20 lakh for services, in almost all states of India. The exemption levels will only apply in a few states where these two exception thresholds are ₹20 lakh for goods and ₹10 lakh for services.

• Any person making an inter-state supply of goods or services, regardless of turnover.
• Casual taxable persons who occasionally supply goods or services.
• Non-resident taxable persons who undertake taxable activity in India.
• A company or individual that makes supplies through an e-commerce platform.
• An entity that pays tax under the Reverse Charge Mechanism.
• Input Service Distributors (ISDs).
• A person who deducts TDS/TCS under GST.
• An agent or someone acting on behalf of another registered taxable person.

Businesses that are below the exemption limits could register voluntarily for the goods & services tax to become eligible for valuable benefits such as

• The ability to claim an input tax credit
• Credibility
• To comply with the exemption limit and be GST-ready.

Key Eligibility Criteria for GST Registration

There are several determining factors for GST registration eligibility criteria. The proposed turnover, the expected nature of transactions, and all other provisions listed in the GST Act can all impact registration eligibility.

Understand the GST Number Registration Criteria

Suppliers in the following categories are required to compulsorily register for GST irrespective of turnover limits:

• Casual Taxable Persons: Suppliers who only occasionally supply goods or services in the state in which they do not have a fixed place of doing business. Such supply should be registered before commencement, and such registration is licensed for 90 days.
• Non-Resident Taxable Persons: Suppliers that are not resident in India and are serving taxable goods and services inside India must register for a GSTIN number.
• Inter-State Suppliers: Suppliers who are making any inter-state supply of goods and services must register, even if below turnover thresholds.
• E-commerce Operators and Sellers: Suppliers who only sell online, like Amazon or Flipkart, are required to register even if the threshold is below the turnover limit due to the deduction and collection of tax rules.
• Persons Paying Tax under Reverse Charge Mechanism (RCM): Purchasers that are required to pay GST instead of the vendor under RCM require GST registration for businesses.
• Tax Deductors or Collectors: Individuals or business entities who will be deducting TDS/TCS under GST must opt for a new GST registration. This includes various Government Departments or e-commerce operators.
• Companies Operating in More Than One State: Companies that are registered in more than one state should apply for a GST number, confirming requirements as a multi-state company.

Threshold Limits Triggering Mandatory Registration

If aggregate turnover exceeds the above-mentioned limits, the GST assumes registration is required, depending on the location of the business:

• For standard states, the aggregate turnover for goods must be ₹40 lakh and ₹20 lakh for services.
• For special category states, it is ₹20 lakh or more for goods, and for services, it is ₹10 lakh or more.

Aggregate turnover means the total turnover from all supplies made by the business throughout India. This includes exempt supplies, export, and interstate supplies, but does not include inward supplies for which the reverse charge applies.

Eligibility for Composition Scheme

Certain small businesses having turnover within ₹1.5 crore for goods and ₹50 lakh for services may opt for the Composition Scheme, requiring separate registration and simplified tax payment, but with restricted input credit claims and sales.

Eligibility for Voluntary Registration

Some businesses may have voluntary registration when their turnover is below the limits. This benefits businesses to claim input tax credits and increases credibility within the realm of legitimate suppliers of goods and services – e-commerce transactions included.

Essential Documents Required for GST Registration

While the documents would vary depending on the type of business or type of entity registering for GST, these would be the most common documents required for GST registration:

• The PAN card of the business or of the proprietor.
• Aadhar card of the owner or authorized signatory.
• Proof of business registration or incorporation.
• Proof of identity and proof of address of the promoter/director/owner.
• A statement of the bank account or a cancelled bank cheque.
• Provide proof of the business premises.
• A recent digital photograph of the applicant.
• An authorization letter or board resolution if the authorized signatory is subsequently an authorized signatory (applies to companies).

Having these documents ready ahead of time will expedite registration.

Step-by-Step GST Registration Process on the Official Portal

Defined below is a comprehensive and step-by-step GST online registration process.

1. Log onto the GST Portal https://www.gst.gov.in, then select Services → Registration → New Registration to start the process.
2. Fill Part A (Basic Details): Select ‘Taxpayer’ and enter the PAN number, your mobile number, and your email ID.
3. Verify your mobile number and email using an OTP sent to your mobile phone. You will get a Temp Reference Number (TRN).
4. Complete Part B (Business details): You will access your TRN and log in to input the business-related details. Business-related information includes:

• Business name and address
• Type of business and constitution
• Principal place of business
• Additional place of business, if applicable
• Details of partners/directors/promoters
• Bank account details

5. Upload Required Documents: You are required to upload the scanned copies of your identification, address proof, and bank details.
6. Verification and Submission: The applicant is to complete the declaration process and affirm it using a digital signature or electronically verified code (EVC).
7. Processing of Application: After you apply, the Goods and Services Tax (GST) Officer will review the application. The GST officer might approve the application and issue a GSTIN, or within 7 business days or less, they may ask you to send additional documents as a query.
8. GSTIN and Certificate Issuance: If the application is approved, you will be granted a unique GST Identifying Number (GSTIN) and the registration certificate. You can download it from the GST Portal.

Important Compliance and Post-Registration Obligations

Once the business registers, it will have compliance requirements, such as

• Invoice Requirements: GST-compliant invoices stating the GSTIN, HSN codes, and breakup of GST must be issued.
• Return Filing: File returns every month (GSTR-1 and GSTR-3B) and annually on a timely basis.
• Input Tax Credit (ITC): A business is allowed to claim the credit on GST paid on inputs purchased and used in its business.
• Recordkeeping: Keep records of its sales, purchases, and tax obligations that are adequate, comprehensive, and accurate for audit purposes.
• Notification of Updates: A business is expected to notify the authorities of any updates, for example, address changes or changes of directors, within the specified timelines.

Your Path to Seamless GST Registration Starts Here

It is also a basic requirement to have organized commercial business transactions and tax documentation for what was agreed to when providing products or services. Understanding when to register, the criteria to register for GST, the required documents, and the registration process to be compliant and timely is vital.

After obtaining a compliant GST registration, you will be able to claim input tax credit on your transactions, and it’ll give credibility to your structured business.

Frequently Asked Questions

1. What is the ideal turnover limit for registration?

For regular states, it is ₹40 lakhs for goods and ₹20 lakhs for services.  Special category states have lower limits; hence, refer to the GST registration eligibility rules for more information.

2. How long will GST registration take to get approved? 

If verification and documents are complete, registration of GST will take, on average, around 7 working days.

3. Should e-commerce operators be required to register for GST?

The e-commerce operator and seller have to register from day one, regardless of turnover, according to the GST registration rules.