If you own a business in India, you need to be aware of the GST Registration process under the Goods and Services Tax Act. The GST is a new tax that will replace all the other taxes currently in place in India. In this article, let’s check out the step-by-step process explanation for GST Registration. And how to use the online or offline GST portal for quick registration and what are the penalties for being not compliant with GST.
When it comes to GST filing, Online Registration is the easiest & all it requires is access to the internet. The alternative mode which is offline registration requires more effort than the online mode. Yet it’s less likely to need access to the internet. Here are the major things that you need to know about GST if you own a business.
GST registration online & offline methods in India: Step-by-step guide updated for 2022
- What is GST registration?
- Who should register for GST?
- Types of GST registration for taxpayers & business
- Major documents required for GST registration: Offline & Online
- Offline GST registration process
- Online GST registration process
- Section 1: Access the GST portal of India
- Section 2: Fill up the New GST application for registration
- Section 3: Complete the verification step to generate a TRN (Temporary Reference Number)
- Section 4: Log in with TRN & submit business information
- Section 5: GST registration status & GST Certificate Download
- Major GST Penalties: Late filing, Non-Compliance & More
- Key takeaways on GST registration for new businesses
- FAQs on GST registration
- Is GST registration free of cost?
- How many days does it take for GST registration?
- Can I file for cancellation of GST registration?
What is GST registration?
GST is an indirect tax levied on the supply of goods and services in India. Goods and Services Tax (GST) is a comprehensive indirect tax levied on manufacturing, sales, and consumption of goods and services throughout India. It is a value-added tax, levied at each stage of the supply chain, from the manufacturer to the final consumer.
GST registration is the process by which a taxpayer gets himself/ herself registered under the Goods and Services Tax (GST). GST registration is mandatory for all entities that are liable to pay tax under the GST act. The ‘Goods and Services Tax Identification Number’ (GSTIN) is 15 digits long, provided to a taxpayer after the successful registration of his/her business. It is a unique registration number allotted to each taxpayer.
Who should register for GST?
Any taxable person has to pay GST on the value of taxable supplies made by him/her during a financial year. Businesses with an annual total turnover of more than Rs.40 Lakhs have to register for GST services. (Turnover limit changes from case to case).
Look at these business turnover limits on the eligibility for GST registration:
| For Sale of goods: | ||
| Turnover for a Financial year | Registration Required | For |
| Exceeds Rs.40 lakh | Yes ✅ | Normal Category States |
| Exceeds Rs.20 lakh | Yes ✅ | Special Category States |
| For service providers: | ||
| Turnover for a Financial year | Registration Required | Applicable from |
| Exceeds Rs.20 lakh | Yes ✅ | For Normal Category States |
| Exceeds Rs.10 lakh | Yes ✅ | Special Category States |
List of businesses for which GST registration is mandatory irrespective of their turnover:
- Casual taxable person / Input Service Distributor (ISD)
- Non-resident taxable person
- Inter-state supplier of goods and services
- Supplier of goods through an e-commerce portal
- Any service provider
- Liable to pay tax under the reverse charge mechanism
- TDS/TCS deductor
- Online data access or retrieval service provider
- Sale made on behalf of someone else (as an agent/ Principal)
- Ecommerce suppliers
Types of GST registration for taxpayers & business
-
Normal taxpayers
For businesses operating in India, the normal category is the one that applies to most firms. A Normal Taxpayer with a turnover of taxable supplies exceeding Rs.40 lakhs must register under GST. For special category states Rs.20 lakhs.
-
Casual taxable individual
If your business is occasional or seasonal, then it falls under this category. This will allow you to pay GST only on the income you generate from your business activities.
Here are a few conditions you must meet to qualify for under the casual taxable category. Your business must operate once in a while(Seasonal). Also, it must not carry out regular trade activity. Additionally, your total annual income from all sources must not exceed Rs. 2 million.
-
Non-resident taxable individual
This is for Non-resident Indians who supply goods or services as agents in a seasonal method. This special category is applicable to non-resident taxable (NRT) individuals. Applicable only if their total revenue from all sources within and outside India is less than Rs. 20 lakhs/year.
The main benefit of registering as NRT is easy apply tax returns filing and exemptions in other states. Besides that ITC(Input tax credit) claim on goods and services is also possible. The conditions for ITC might change from case to case*.
-
Composite registration
Currently, any business with annual revenue of up to Rs 1 crore is eligible for the composition scheme. The Composition Scheme under goods and service tax(GST) offers simpler tax compliance. It offers lesser tax rates for businesses with a turnover of up to Rs 1 crore.
Under this scheme, businesses should file only one return every quarter and pay taxes at a fixed rate of 1%, 2%, or 5%.
Major documents required for GST registration: Offline & Online
1-Application form for GST registration
2-Copy of the PAN card of the proprietor or authorized signatory
3-Proof of the address of the principal place of business
4-Proof of appointment of authorized signatory, if applicable
5-Bank account details
6-Bank account statement(If applicable)/ Canceled cheque
7-Details of any other business registered under GST, if applicable
8-Partnership certificate(If applicable)
9-PAN cards, voter IDs, or Aadhaar cards of promoters and/or partners(If Applicable)
10-documents issued by the government(If applicable)
11-Digital signature(For Online Mode)
12-Passport size photograph of Owners/partners
Offline GST registration process
For businesses that do not have access to the internet or prefer not to register online can opt for this method. Applying for new GST registration by the offline method is quite simple & straightforward.
- Go to the nearest GST office/ center. (GST Seva Kendra)
- Collect the GST ‘registration form’ from the front office. (You can download this application form from the GST common portal as well).
- Fill up the form with correct & legit information with all the details intact. (Businesses need to provide their name, address, PAN, and contact information)
- Attach & submit photocopies of the registration certificate, trade license, and other documents as required.
- Once your application form is complete, attach all required documents. After a manual crosscheck of details, submit the form to the respective official. You can find this information by asking out an official in the GST office.
- After that, you will get an application tracking number. Use this application number to track the progress of your registration status.
- Wait till the registration process is complete and verified. Once it’s over, your business will get its GST registration number. (You can check the GST application status in the GST portal).
Online GST registration process
One of the most common & simplest ways to apply Online GST. Here is the step-by-step guide on how to do online GST registration.
Section 1: Access the GST portal of India
Step1: Go to the GST portal of India->> https://www.gst.gov.in
Step2: On the top menu bar, go to ‘service’->> ’Registration’->>’ New Registration’
Section 2: Fill up the new GST application for registration
Once you enter the ‘New GST Registration’ section,
Step3: Field: ‘I AM A’ ⇒ select the ‘taxpayer’ / other types from the drop-down.
Step4: Field: ‘State/UT’ ⇒ Select the ‘State’ of choice
Step5: Field: ‘District’ ⇒ Select the ‘District’ of Operation
Step6: Field: ‘Legal name of the business/entity, as mentioned in the PAN’ ⇒ Enter the ‘Name of Business’
Step7: Field: ‘Permanent Address” ⇒ Enter the ‘PAN’ Number (In the case of a company or LLP, enter the PAN of the company or LLP.)
Step8: Field: ‘Email Address’ ⇒ Enter the email address of the Primary allowed Signatory.
Step9: Field: ‘Mobile Number’ ⇒ Enter the Mobile number of the allowed Signatory.
Step10:Field: ‘Captcha’ ⇒ Enter the ‘Captcha’
Step11:Press “Proceed”
Section 3: Complete the verification step to generate a TRN(Temporary Reference Number)
After the submission of new member details, confirm the given contact details. You have to verify the email & Mobile number via OTP. (OneTime Password).
Step 12: Field: ‘Mobile OTP’ ⇒ Enter the OTP sent to your Mobile via Message.
Step 13:Field: ‘Email OTP’ ⇒ Enter the OTP sent to your Email. (Check all inboxes)
Step14: Click “Submit”/”Proceed”/”Verify”
Step15: Once you verify the OTPs, you will receive an acknowledgement on your screen.
Step16: A TRN number is generated. Use this TRN no. to complete your GST registration. (Store/ Save this TRN in your local storage)
Section 4: Log in with TRN & submit business information
Enter your TRN and CAPTCHA code to log in and start the GST Registration process. A Mobile & Email OTP verification will be done during log-in. Upon successful verification, you’ll be redirected to the next page.
Step17: Tab: Business Information
- Field: Trade Name⇒ Enter the ‘Trade name of the business.’
- Field: Constitution of the Business⇒ Choose the Business Constitution from the drop-down list.
- Field: State, District & Jurisdiction ⇒Select Appropriate from the dropdown list.
- Field: Commissionerate Code, Division Code & Range Code. Drop-down ⇒ Select Appropriate from the dropdown list.
- Field: Composition scheme ⇒ Opt for if necessary(Only if applicable)
- Field: Date of commencement of business ⇒ Date of start of your business.
- Field: Date on which liability to register arises ⇒ The date when the total turnover crossed the threshold for GST registration. Apply for new GST registration within 30 days from the date on which the liability to register arises.
- Submit details of existing registrations(Only if applicable)
- Cross-verify the details & Press ‘Save & Continue’
Step18: Tab: Promoters information
Under this tab, provide the details of promoters & in the case of proprietorship, the proprietors’ information must be submitted. Details of up to 10 promoters or Partners can be submitted in a GST registration application.
Note: He/she can use the Aadhaar E-Sign for filing GST returns instead of a digital signature. ( In cases where the applicant provides Aadhaar. )
- Personal details of the stakeholders. (Name, date of birth, address, mobile number, email address, and gender)
- Designation of the promoter.
- DIN of the Promoter, only for the following applicants:
- Private Limited Company
- Public Limited Company
- Public Sector Undertaking
- Unlimited Company
- Foreign Company registered in India
- Details of citizenship
- PAN & Aadhaar
- Residential address
- Cross-verify the details & Press ‘Save & Continue’
Step19: Tab: Authorized signatory
- An authorized signatory is a person nominated by the promoters of the company.
- The nominated person must hold responsibility for filing GST returns of the company.
- The authorized signatory must be an Indian resident and have a valid PAN card.
- The authorized signatory can be either an individual or a company.
- The person must also maintain the necessary compliance of the company. The authorized signatory will have full access to the GST Portal.
- The person must undertake a wide range of transactions on behalf of the promoters.
- Cross-verify the details & Press ‘Save & Continue’
Step20:Tab: Principal place of business
The applicant must provide the details of the principal place of business. The Principal Place of Business acts as the primary location within the State. It denotes the place where the taxpayer operates the business. It addresses the books of accounts and records. Hence, with a company or LLP, the principal place of business will be the registered office.
- Address of the principal place of business/ Official location of the Business Operations.
- Official contact of the Business. (Email address, telephone, mobile number, and fax number (with STD Codes))
- Nature of possession of the premises.
- Own premises ⇒ Any document to support the ownership of the premises. ( Property Tax Receipt, copy of Electricity Bill)
- Rented or Leased premises ⇒ A copy of the valid Rent / Lease Agreement. Attach any document in support of the ownership of the premises of the Lessor. Like the latest Property Tax Receipt or Municipal Khata copy or copy of the Electricity Bill.
- Premises not covered above ⇒ A copy of the Consent Letter. Attach any document in support of the ownership of the premises of the Consenter. Like Municipal Khata copy or Electricity Bill copy. You may use the same documents for shared properties also.
- Cross-verify the details & Press ‘Save & Continue’
Step21: Additional place of business
- If you have an additional place of business, you need to enter the details of that property in this tab.
- Example: Consider an applicant who is a seller on an e-commerce portal. He uses the eCommerce company’s warehouse to distribute the goods. Then that warehouse location can be an additional place for your business.
- Cross-verify the details & Press ‘Save & Continue’
Step22: Goods and services
- Provide details of the top 5 goods and services supplied by the applicant.
- For goods supplied, provide the HSN code, and for services, provide the SAC code.
- Cross-verify the details & Press ‘Save & Continue’
Step23: Bank accounts
- Enter the details of the Bank account of the Applicant.
- Include the number of bank accounts held by the applicant.
- Attach & upload a copy of the Bank statement/ other supporting proof for each account added.
- Cross-verify the details & Press ‘Save & Continue’
Step24: Verification & ARN generation (Application Reference Number)
- Once you have given all the details, verify the final application completed.
- Tick the verification checkbox & Select the Name of the authorized signatory.
- Enter the place of form filing/ registration.
- Complete the application with a digital signature. You can use Digital Signature Certificate (DSC)/ E-Signature or EVC. (Digital signing using DSC is mandatory in the case of LLP and Companies.)
- On signing the application, you will get the success message on display.
- An acknowledgement is also sent to the registered email and mobile phone number.
- Use this GST ARN Number to track the status of the application.
Section 5: GST registration status & GST Certificate Download
- Using your generated ARN number, you can always track your GST application status at any time.
- Wait for 15 days from the date of submission of your application. A typical GST registration process usually takes 15 days to get processed.
- During this wait time, the officer will verify your registration request. Completeness & accuracy of information is the main items checked in your GST application.
- If your application complies with the requisites, the process will be over within 3- 7 working days. Post that your GST application gets status updated to complete. (Days calculated from the date of submission of the application)
- If there is any deficiency in the application, then the officer will put your application on hold. You’ll also receive a notification of the same. Post that, you’ll get an opportunity to correct the faults in the application within 7 days.
- Once the application processing is complete, you’ll get a notification on the same. (Via GST registration tracking portal, registered mobile or email).
- Now, you can download the ‘GST Certificate’.
Major GST Penalties: Late filing, Non-Compliance & More:
1. Penalty for not filing GSTR
The penalty for not filing GSTR is Rs. 10,000 per month. This is along with the charge of late fees and interest. If you do not file your GSTR on time, you may also be subject to criminal prosecution.
2. Penalty for delay in filing GSTR:
Late registration attracts a penalty of Rs. 100 per day, subject to a max. Rs. 5,000.
3. Penalty for committing fraud:
The penalty for committing fraud is a jail sentence of up to 5 years and/or a fine. The amount of the fine depends on the severity of the fraud and can range from Rs. 25,000 to Rs. 5 crores.
Also, individuals or businesses that commit fraud may be subject to extra penalties. Like loss of GST registration or blacklisting.
4. Penalty for opting for composition scheme even though he is not eligible:
Case: A business is not eligible to opt for the composition scheme under GST, but still opts for it. In this case, the business becomes liable to pay tax at the regular rate and is removed from the scheme. Additionally, interest and penalties may also be applicable.
5. Penalty for wrongfully charging GST rate:
Businesses that charge wrong GST rates may get fines of up to 200% of the amount of tax they charged incorrectly. Also, they may be subject to other penalties. Like interest on the outstanding tax amount, or being banned from doing business in India. Thus businesses to understand the applicable GST rates for each type of good or service they sell.
6. Penalty for not issuing an invoice:
If a business is not registered for GST and does not issue an invoice, there is a penalty of Rs. 10,000. This penalty is in addition to the tax owed on the transaction. Businesses that are not registered for GST but do issue invoices may be subject to a penalty of Rs. 5,000.
7. Cases where no penalties but interest are applicable:
- Case: Penalty for an incorrect type of GST charged. IGST instead of CGST/SGST: Pay the correct GST & get a refund for the wrong type of GST paid earlier. No penalty.
- Penalty for incorrect filing of GST return: Interest at 18% on shortfall amount. No penalty.
- Penalty for delay in payment of invoice: ITC may reverse if not paid within 6 months. No penalty.
- Penalty for wrong GST rates — charging a lower rate: Interest at 18% applies to the shortfall. No penalty.
Key takeaways on GST registration for new businesses:
- As per the GST act, all taxable entities must register for GST within 30 days of the commencement of business. (Within 30 days from the date on which he/she became liable to register for GST.)
- Case: You are a business owner who is operating in many states. In this case, you will need to take separate GST registrations for each state.
- Case: Already Registered Businesses under GST. In this case, businesses must file GST every month.
- Case: New GST Registration. You can apply for GST registration by both Offline & Online Modes. A complete GST application will take about 5-7 days for processing and generation of GST no.
In conclusion, both online and offline methods are available for GST registration. The preferred mode is the online method as it is easy, fast, and convenient. Yet, the offline method is also a good option for cases like poor internet.
FAQs on GST Registration
1. Is GST Registration Free of cost?
Ans: GST registration is free of cost for businesses with an annual turnover of up to Rs. 20 lakhs. Firms with a turnover of more than Rs. 20 lakhs but less than Rs. 75 lakhs have to pay a registration fee of Rs. 1000. Businesses with a turnover of more than Rs. 75 lakhs have to pay a registration fee of Rs. 5000. The ideal fee for GST registration is zero to very less for most businesses.
2. How many Days does it take for GST Registration?
Ans: To register for GST in India, it takes 5-7 business days to the max. 15 days. The time frame is contingent on various factors. Like the completeness of the application and the accuracy of the information provided.
3. Can I file for Cancellation of GST Registration?
Ans: If you are registered under GST and have not been carrying out any business activities, you can file for cancellation of GST registration. The application for cancellation can be made using Form GST C-20. Combine the form with an affidavit that you have not carried out any business activities in the last 12 months.
