Goods and Services Tax (GST), the new taxation structure, was implemented on July 1st, 2017. It has changed the whole scenario of how manufacturers, distributors and end-customers pay taxes to both central and state governments. Every individual, business or company that provides services or manufactures or sells products, would have to go register for GST registration if their financial transactions fall under the taxation slab. As all 17 state and central taxes have been clubbed into one tax form — the GST — every entity will have to get registered if it wants to collect tax from customers and claim tax credits of the tax paid by them.
Entities having the annual turnover of Rs 20 lakhs and above will have to register under GST. The limit is Rs 10 lakhs in case of businesses operating in north-eastern states.
- Casual Entity
- Composition Dealers
After 1st July, only GST would be charged. So taxpayers registered under state VAT or Central Board of Excise and Customs (CBEC) would have to switch to the GST platform to file all taxes and share information with taxation authorities.
Once a person registers at the GST portal, he gets a Goods and Services Taxpayer Identification Number (GSTIN) which would be used to store his details and taxation history. This number would be used for all administrative and compliance purposes. It is expected that 8 million taxpayers would be migrating from different platforms to GST.
GSTIN is a unique 15-digit alphanumeric code that is allotted to all taxpayers who have undergone the GST registration process. The government has ensured that everything under GST is digital so that there is maximum transparency and minimum corruption which would eventually reduce tax evasion.
The first two digits of the GST registration number represent the state code which is given as per the 2011 census. Next 10 digits are the PAN number of the entity. The thirteenth digit assigned signifies the entity number of the same PAN holder in the state. The fourteenth digit would be Z by default. The last digit is for check sum digit.
Existing service tax payers and dealers paying VAT would have to migrate to the GST platform. In order to migrate from these platforms, CBEC and state VAT authorities would issue provisional IDs and passwords to registered users. However, these IDs would be issued only to those users who have their PAN registered with authorities concerned.
Provisional ID would not be provided to businesses having an invalid PAN registered with Central Excise/State Tax authorities. If the taxation authority has already issued the provisional ID and the person requests for another ID, he would not be provided another ID. In case there are multiple registrations under the same PAN in a state, the authority would issue only one provisional ID and that too for only the first registration in the alphabetical order.
The person will have to login to the GST portal at https://www.gst.gov.in/ using the provisional ID and password provided by the tax authority. He will have to duly fill and submit Form 20 along with required documents.
For all those who fail to register under GST will have to pay a penalty of 10% of the tax amount or Rs 10,000, whichever is more. This will be applicable to defaulters not paying tax partially or completely. In case of deliberate fraud, the penalty can be as high as 100% of the tax due.
Entities having multiple businesses in a state can register for each business separately. However, PAN would be mandatory in each case. In case of non-residents, GST registration can be done on the basis of other documents. Registrations rejected under CGST Act would not be approved under SGST Act and vice versa.
In order to register for GST online, the user needs to first logon to the GST online portal at https://www.gst.gov.in/ and fill up the Part-A form and provide his PAN, mobile number and email address. The portal would verify the mobile number and email id by sending OTP and verification mail.
Once verified, the user will get the Application Reference Number (ARN) on both e-mail and mobile. He will then have to fill Part-B of the GST registration form using the received ARN. The user needs to upload documents as per the business type after which the GST officer would verify the application and approve it within three working days. Once approved, the user will get the GST registration certificate.
In case the GST officer does not approve the application and asks for more documents in support of claims made in the application, the applicant has to provide the required documents within seven working days. If the application is approved, the applicant would get the GST registration certificate within seven working days.