HOW TO FILE GST IN INDIA IN DETAIL

05 Jul 2022

legaltax

HOW TO FILE GST IN INDIA IN DETAIL

 

OVERVIEW

The Goods and Service Tax is the biggest indirect tax reform which blends in all the other taxes into one single tax structure. Under the GST Regime, the goods and services are now taxed under a single law being Goods and Services Tax Laws. The taxes are levied at a single rate. The collection is then bifurcated between both Central and State Government in name of CGST and SGST or IGST. The Indian government enacted the Goods and Services Tax Act on 29th March 2017, and it came into force on 1 July 2017. The Goods and Services Tax (GST) is a multi-stage indirect tax that applies throughout the country.

GST is levied on both goods and services. It is an indirect tax that has essentially superseded several other indirect taxes in India, such as VAT, service tax, and excise duty. Since its inception, it has allowed for efficient tax collection and eliminated double taxation. There are also several other advantages to registering for GST, including fewer compliances, more efficiency, composition plan for small enterprise, and so on and so forth. With a view to abolish several other indirect taxes and to create a single taxation system, GST was introduced in India. Also, GST helps in the ease of collection and to enhance the efficiency of the process.

GST Registration is required for the businesses whose turnover gets over Rs. 40 Lakh for sale of goods (Rs. 20 Lakh for North Eastern- All hilly states for sale of goods). There has been no change in the threshold limits for service providers. Persons providing service need to register if their aggregate turnover exceeds Rs. 20 lakh (for normal category states) and Rs. 10 Lakh (for special category states).

WHAT ARE THE MULTIPLE STAGES FOR THE IMPOSITION OF GST REGISTRATION?

GST registration is mandatory and if the entity or an individual carries on business without getting the GST Registration, it will be treated as an offence under GST Act and heavy penalties will be levied.

GST Registration is an online process and GST is imposed at every step of the supply network to set off all the available tax benefits.

Every product goes through multiple stages which includes the purchase of basic material, manufacturing, whole selling, and the retailing products, and then the final sale to the consumer for consumption/usage. In a nutshell, GST will be levied on all of these three stages:

In a nutshell, every goods and services go through multiple stages which include:

a)      Purchase and manufacturing of basic material,

b)      Wholesaling and retailing the goods &

c)      Final sale to the consumer for consumption.

GST registration is required in the following cases:

·     Threshold limit of aggregate turnover exceeds

·     In case of certain businesses, Compulsory Registration is required.

·      Voluntary registration.

The GST is the final price of all the goods/services before its purchase that eliminates all the indirect taxes that have been obligatory by the central government and the state government beforehand in India.

WHAT ARE THE ELIGIBILITY CRITERIA FOR GST REGISTRATION?

The below mentioned person/entities are required to get registered under GST:

  • Any business entity whose aggregate turnover in a financial year exceeds Rs. 40 Lakh (Rs 20 lakh for special category states in GST)

Note: The clause does not apply if the entity is only dealing in supply of goods/services which are exempt under GST.

  •  Every entity who is registered under an earlier law of taxation (i.e. Excise, VAT, Service Tax, etc.) needs to get registered under Goods and Service Tax.
  •   Any entity or supplier dealing in inter-state supply of goods.
  • Casual taxable person.
  • A tax-payer under the reverse charge mechanism.
  • Input service distributor and its agent
  •    E-commerce operator or aggregator
  •     Non-resident taxable person
  •  Agents of a supplier
  •         A person who supplies through E-commerce aggregator
  •   Entities who are providing online information, acquiring database, or retrieval services from a place located outside India to a person in India, other than a registered taxable person.

WHAT ARE THE MODES OF GST IN INDIA?

For GST administration, a model was designed where the government (Central and State) have powers to impose and collect taxes through their respective legislations. The Modes of GST are given below:-

  • Central GST: CGST is the tax imposed on the Intra State supplies of goods and services by the Central Government. When the place of the seller and the buyer is in the same state it is termed as an Intra-state supply of goods or services. Here, a seller has to collect both CGST and SGST in which CGST remains with the Central government while the SGST is collected by the State government.
  • State GST: SGST is the tax levied on the Intra State supplies of goods and services by the State Government.
  • Integrated GST: Integrated GST is governed by the IGST Act, where the seller has to collect IGST from the buyer, and the tax collected will be divided between the Central and State Governments.
  • Union Territory GST: Union Territory GST is applicable when any goods and services are used in the Union territories (UTs) of India and the revenue is collected by the government of union territory.

WHAT ARE THE CONSTITUENTS OF GST?

  • Registration Number
  • Legal Name and Constitution of business
  • Trade Name
  • Period of validity
  • Types of taxpayer
  • Date of Liability
  • Signature of the applicant

WHAT IS THE STRUCTURE OF 5 SLABS UNDER GST?

GST regimes were made by considering all the layman and inflation rates in mind. To make it simpler and easier, the GST was structured following the four tiers structure. These four zones are given below, which are as follows-

  • Zero Rates: Zero rate tax means the - nil tax is to be applied on the goods and/or services.
  • Lower Rate: Lower tax rate determines the 5% tax rate which is applied on the CPI (Consumer Price Index) basket & mass consumption.
  • Standard Rate: Standard rate includes 12% & 18% of the tax rates.
  • Higher Rates: Higher rates tax includes 28% of the tax rate under GST Regulation.

 

 

WHAT ARE THE DOCUMENTS REQUIRED FOR GST REGISTRATION (in General) ?

·         PAN Card of the Business

·         Identity proof of the owner/directors/partners

·         Passport size photographs of the owner/directors/partners

·         Proof of address of the owner/directors/partners

·         Proof of business address

·         Copy of partnership deed/ incorporation certificate

·         Bank account details

 

DOCUMENTS REQUIRED FOR GOODS AND SERVICES TAX REGISTRATION (GST/GSTN):

FOR COMPANY

  1. Director’s PAN Card- All Directors
  2. Director’s Aadhar Card
  3. Soft copy of Photograph
  4. Board resolution for Authorising any Director
  5. PAN Card of Company
  6.  List of Sale & Purchase Items
  7.  Cancel Cheque
  8. Certificate of Incorporation
  9.  Rent Agreement
  10.  Address Proof of Shop/Branch/Godown/Store: Anyone of the following (should not be older than 2 months)

i)                    Electricity Bill

ii)                  Water Tax

iii)                Municipal Tax/House Tax Bill

·         Digital Signature Certificate (DSC) of at least one director

 

FOR PARTNERSHIP/LLP FIRM

Partner’s PAN Card –All Partners

  1. Partner’s Aadhar Card
  2. Soft copy of Photograph
  3.   Resolution for Authorising any Partner
  4. PAN Card of Company
  5. List of Sale and Purchase items.
  6. Cancel Cheque
  7. Partnership Deed/COL of LLP
  8. Rent Agreement
  9. Address Proof of Shop/Branch/Godown/Store: Anyone of the following (should not be older than 2 months)

i)                    Electricity Bill

ii)                  Water Tax

iii)                Municipal Tax/House Tax Bill

  1.  Digital Signature Certificate (DSC) of at least one partner in case of LLP

FOR PROPRIETORSHIP FIRM

Following documents of proprietor:

  1. PAN Card
  2. Aadhar Card
  3. Soft copy of Photograph
  4. List of Sale & Purchase items
  5. Cancel Cheque
  6. Rent Agreement in case of rented property or NOC if owned by relatives
  7. Address Proof of Shop/Branch/Godown/Store: Anyone of the following (should not be older than 2 months)

i)                    Electricity Bill

ii)                  Water Tax

iii)                Municipal Tax/House Tax Bill

  1. Digital Signature Certificate (DSC) of at least one partner in case of LLP.

For A HUF

  1. PAN Card of HUF and the Passport size Photograph of the Karta. 
  2. Id and Address Proof of Karta and Address proof of the place of business.
  3. Bank Account Details

WHAT IS THE PROCESS FOR GST REGISTRATION IN INDIA?

To successfully finish the GST registration process every taxpayer must follow the requisite process. The procedure for GST registration is mentioned below:

STEP1: The very first step of GST registration is to fill the online application, and for the same, the taxpayer shall visit the GST portal www.GST.Gov.in also the taxpayer (applicant) needs to create a username and password in the portal.

STEP 2: The Applicant needs to click the link on the GST portal and click on to the “New User Login”. By clicking on “New User Login” accept the window on the displayed declaration form and press ‘Continue’ to register yourself for GST registration.

STEP 3: The applicant is required to select ‘New Registration’ and Login to start the GST registration procedure.

STEP 4: The applicant shall fill the required details asked on the GST portal:

·         Select ‘Taxpayer’ under the drop-down menu.

·         Select the respective state and district.

·         Enter the details of the business (Name and PAN Card).

·         Provide the email ID and mobile number (that must be active as OTPs will be sent on the details in the respective boxes.

·         Enter the ‘Captcha’ shown on the screen and click on “Proceed”.

STEP 5: The next step after filing the required details is to enter the OTP sent to your email ID and mobile number in the respective boxes.

STEP 6: Click on the “Proceed” button once the details have been entered.

STEP 7: An applicant will receive the Temporary Reference Number (TRN) on the screen. Save the (TRN) for further processing.

Note: TRN is used to open PART-B in GST registration and to log in to the GST registration application.

STEP 8: After receiving the TRN, an applicant is required to open the GST portal again and click on ‘Register’ under the ‘Taxpayers’ menu.

STEP 9: Select the ‘Temporary Reference Number (TRN).

STEP 10: Enter the TRN selected and the captcha details.

STEP 11: Once the captcha details are entered click on the ‘Proceed’ button.

STEP 12: An applicant will receive an OTP on the email ID and the registered mobile number. Click on the ‘Proceed’ button by entering the OPT received.

STEP 13: The status of your application will be displayed on the next page. Click on the edit icon, mentioned on the right side of the page.

STEP 14: On the next page there will be various sections, where all relevant details are required to be filed along with the necessary documents.

STEP 15: Before submitting the application, click on the ‘Verification’ page and check the declaration. The below mentioned methods can be used for submitting the application:

·         Electronic Verification Code (EVC)

·         By the e-signed method.

·         In case the applicant is a company, the application must be submitted by using the Digital Signature Certificate (DSC)

STEP 16: Once the process is completed, a successful completion message will be shown on the screen. The ARN will be sent on the mobile and email ID registered by the GST Applicant.

STEP 17:  Check the status of the ARN on the GST portal.

 

HOW DOES GST REGISTRATION HELP US?

 GST registration not only helps you in getting your business recognized as a legal registrant but also opens a number of opportunities for your business. Benefits to GST registered business at glance are as follows: -

  • Become more competitive – You will be more competitive in comparison to your unregistered competitors since you will carry valid tax registration.
  • Expand your business Online – You cannot sell products or services on e-commerce platforms without GST registration. If you're planning to give a blow on e-commerce platforms like Flipkart, Amazon, Paytm, Shopify or through your own website, you must need a GSTIN.
  • Can take input tax credit – Only Registered GST holders can avail input of GST tax paid on their purchases and save the cost.
  • Can sell all over India without any restrictions – Without having GSTIN you cannot trade inter-state. This is possible only if you registered your business under GST.
  • Apply Government Tenders – Various government tenders require GSTIN to apply tender. If you don’t have one, you may miss the business opportunity.
  • Open Current Bank Account – Especially, in case of sole proprietor business Banks & Financial Institution does not open a current bank account in the name of business trade name unless you carry any government proof in the name of your business. A GST registration certificate can help you to open a current bank account.
  • Dealing with MNCs – Generally, MNC’s are not comfortable dealing with small business entities until they carry valid tax registration proof.

 

KEY BENEFITS OF GST REGISTRATION

  • Prior to 2017, start-up’s firms had to follow both service tax and VAT regulations. Start-ups that previously paid service tax and VAT separately can now file for both under the GST regime. 
  • With a single rate, GST registration makes invoicing easier.
  • Start-ups will be able to spend less time on tax compliances once they have registered for GST. 
  •  GST has resulted in fewer border inspections, which has significantly cut transit time, this means that the transfer of commodities across state lines is now more convenient, ultimately lowering transportation and logistical expenses. 
  •  Another significant benefit of GST registration for start-ups is that new businesses would not have to comply with different tax regulations in different states when conducting business across state lines.
  •   GST registered tax-payers can legally collect tax from their customers and carry forward the credit of the paid taxes to their customers or suppliers.
  •  Simplifies Taxation Services: GST has combined a number of indirect taxes under one umbrella and integrated the Indian market.
  • Reduction In Costs Of Products & Services: With the introduction of GST, the cascading effect of a series of VATs and taxes has been erased which has resulted in the reduction of cost of goods and services.
  •   Helps In Avoiding Lengthy Taxation Services: GST Registration helps the small businesses in avoiding the lengthy taxation services. As the service providers with a turnover of less than 20 lakhs and goods providers with a turnover of less than 40 lakhs are exempt from paying the GST.
  • Aimed At Reducing Corruption And Sales Without Receipts: GST was introduced with an aim of reducing corruption and sales without receipts. Also, it helps in reducing the need for small companies to comply with various indirect taxes.
  • Uniformity In Taxation Process: GST Registration brings uniformity in the taxation procedure and allows centralized registration. This helps the businesses to file the tax returns every quarter through an online process.
  • Minimizing Tax Evasion: With the introduction of GST, tax evasion is minimized to a great extent.
  • Higher Threshold For Registration: Earlier, in the VAT system, any business with a turnover of more than Rs 5 lakh was liable to pay VAT in India. In addition, service tax was exempted for service providers with a turnover of less than Rs 10 lakh. Under the GST regime, on the other hand, this threshold has been increased to Rs 20 lakh, which exempts a lot of small traders and service providers.
  • Composition Scheme For Small Businesses: Under GST, small businesses under turnover of Rs 20 to 75 lakh can benefit as it gives an option to lower taxes by using the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.
  • Simple And Easy Online Procedure: The complete process of GST (from registration to filing returns) is done online, and it is super simple. This has been advantageous for start-ups mainly, as they do not have to run from pillar to pillar to get diverse registrations such as VAT, excise, & service tax.
  • Compliances Is Lesser In Number: Previously, there was VAT & service tax, each of which had its own returns & compliances. Under GST, on the other hand, there is just one, unified return to be filed.
  • Regulations of Unorganised Sector: In the pre-GST era, it was often observed that certain industries in India like building construction and textile were largely unorganised and unregulated. Under GST, however, there are provisions for online compliances and payments, and for availing input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.

WHAT IS THE VALIDITY OF GST REGISTRATION CERTIFICATE?

The validity of any GST registration certificate depends on and condition to the type of taxpayer who is receiving the certification. It is valid throughout when the certificate is issued to a regular taxpayer. In such cases, it only invalidates if it is cancelled by the GST authoityor surrendered by the taxpayer himself.

Though, the validity is restricted to a period of 90 days from the date of registration or for the period specified in the registration application. Whichever is earlier in cases certificates issued for the casual tax payer or Non-resident Indian (NRI) tax payer. Moreover, the validity period can also be extended under the provisions of Section 27 (1) of the GST Act by the appropriate authorities.

WHAT ARE THE PENALTIES IN CASE OF NON-COMPLIANCE IN GST?

     IN CASE OF DELAY IN FILING GSTR

  • Late fee is Rs. 100 per day per Act. i.e., 100 under CGST & 100 under SGST.
  • Maximum of Rs. 5,000.
  • No late fee on IGST.

    FOR NOT FILING GSTR

  • Penalty 10% of tax due or
  • 10,000 whichever is higher.

 FOR COMMITTING A FRAUD

  • 100% of tax due or
  • 10,000 whichever is higher.
  • Additionally, in case of high value fraud cases also have jail terms.

  FOR HELPING A PERSON TO COMMIT FRAUD

    Penalty extending up to Rs. 25,000.

FOR CHARGING GST RATE WRONGFULLY

  In case of charging higher rate-

  • Penalty 100% of tax due or
  • 10,000, whichever is higher (if the additional GST collected is not submitted with the govt).

   FOR NOT ISSUING INVOICE

  • 100% of tax due or
  • 10,000, whichever is higher.

NON-REGISTRATION UNDER GST-

  • 100% of tax due or
  • 10,000 whichever is higher.

IN CASE OF ISSUING INCORRECT INVOICE

  • Penalty of Rs. 25,000

 

HOW THE APPLICANT WILL GET THE GST REGISTRATION CERTIFICATE ONLINE?

  • Once the ARN is generated, an applicant needs to visit the GST portal.
  • Consequently, an applicant needs to Login into his/her respective GST account, by entering the username and password created by you. Along with that, an applicant needs to fill the right captcha mentioned in the box and select the login button subsequently.
  • Select ‘User services’ in the ‘Services’ option from the drop-box, where an applicant needs to select the ‘View/download Certificates’ in the options displayed in the image.
  • The registration certificate will automatically start downloading when you will select the download option.
  • For downloading the GST Certificate, an applicant needs to visit the GST common portal https://www.gst.gov.in .

After that, you need to Log in to your GST account utilising the username and password created by you while registering your name for GST registration in the GST Portal. Along with, you need to enter the captcha correctly and select the login button afterwards.

You must note that the Registration Certificate will automatically start downloading, when you select the download option while proceeding. The Registration Certificate shall be downloaded to your device and can be accessible to view the same when required. You need to take a printout of this download certificate and accordingly must display prominently in the place of your business.

LEGALTAX PROCEDURE FOR GST REGISTRATION

Kindly utilise the steps given above to integrate legally and securely a GST Registration and get the benefits in the form of better-quality sales and satisfied clients. Our LEGALTAX experts will be at your disposal for assisting you with guidance concerning GST Registration and its compliance for the smooth functioning of your business in India.

LEGALTAX professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.

It is advisable that an attorney with “Taxation experience” must be appointed to overwhelm many of the potential pitfalls that creep around within GST Registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.

 

WHY LEGALTAX?

LEGALTAX is one of the platforms which coordinate to fulfil all your legal and financial requirements and connect you to consistent professionals. Yes, our clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and provide regular updates.

Our clients can also track at all times the progress on our platform. If you have any questions about the GST Registration process, our experienced representatives are just a phone call away. Legaltax will ensure that your communication with professionals is charming and seamless.

  • Purchase a Plan for Expert Assistance
  • Add Queries Regarding GST Registration
  • Provide Documents to Legaltax Expert
  • Prepare Application for GST Registration Complete all Admissibility Criteria for Preliminary Screening
  • Complete Procedural Actions
  • Get your GST Registration at your Doorstep!

 

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