GST registration is crucial for businesses in India. If your business revenue surpasses certain threshold levels or belongs to specific categories that require GST registration, it’s imperative to register following the GST regulations. ASK Associates can assist you in obtaining your GST registration seamlessly.

Contact our experts today to streamline your GST registration process!

Overview of GST Registration Online

Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover.

For taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.

The GST mechanism operates throughout various stages of the supply chain, from acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.

Key Components of GST Registration

The Goods and Services Tax (GST) in India is structured around three primary components:

• Central Goods and Services Tax (CGST): Levied by the Central Government on the supply of goods and services within a particular state. CGST applies to transactions carried out entirely within the boundaries of one state.

• State Goods and Services Tax (SGST): Charged by the State Government on the supply of goods and services within its jurisdiction. Similar to CGST, SGST is also limited to transactions happening within a specific state.

• Integrated Goods and Services Tax (IGST): Imposed by the Central Government on the supply of goods and services that occur between different states or between a state and a Union Territory. IGST is relevant for transactions where goods or services cross state or Union Territory boundaries.

Who is Required to Register for GST?

GST registration is essential for the following persons:

• Business Entities: Any enterprise with an aggregate annual turnover exceeding Rs. 40 lakhs. For special category states under GST, the threshold is Rs. 20 lakhs.
• Service Providers: Those with an aggregate annual turnover surpassing Rs. 20 lakhs. For special category states, this limit is Rs. 10 lakhs.
• Exemptions: Entities dealing exclusively in GST-exempted goods or services are not bound by these thresholds.
• Previously Registered Entities: Entities registered under older tax frameworks (like Excise, VAT, Service Tax, etc.) need to migrate and register under the GST regime.
• Inter-State Suppliers: Any entity or individual involved in the supply of goods across state boundaries.
• Casual Taxable Entities: Those who undertake taxable supply occasionally.
• Entities under Reverse Charge Mechanism: Businesses obligated to pay tax under reverse charge.
• Input Service Distributors & Agents: Distributors of input services, including their representatives.
• E-Commerce Platforms: Operators or aggregators of e-commerce platforms.
• Non-Resident Taxable Entities: Individuals or entities that are non-resident but engage in taxable supply within India.
• Supplier’s Agents: Representatives who supply on behalf of a principal supplier.
• E-Commerce Suppliers: Individuals or entities that offer goods or services through an e-commerce aggregator.
• Online Service Providers: Entities delivering online information, database access, or retrieval services from outside India to an individual in India, excluding those already registered under GST.

GST Registration Turnover Limit

GST registration can be obtained voluntarily by any person or entity, irrespective of turnover. GST registration becomes mandatory if a person or entity sells goods or services beyond a certain turnover.

Service Providers: Any person or entity who provides services with more than Rs. 20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers is Rs. 10 lakhs.

Goods Suppliers: As per notification No. 10/2019, any person engaged in the exclusive supply of goods whose aggregate turnover exceeds Rs. 40 lakhs in a year is required to obtain GST registration. To be eligible for the Rs. 40 lakhs turnover limit, the supplier must satisfy the following conditions:

• Should not be providing any services.
• The supplier should not be engaged in making intra-state (supplying goods within the same state) supplies in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.
• Should not be involved in the supply of ice cream, pan masala, or tobacco.

If these conditions are not met, the supplier of goods must obtain GST registration when the turnover exceeds Rs. 20 lakhs and Rs. 10 lakhs in special category states.

Special Category States: Under GST, the following are listed as special category states – Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

Aggregate Turnover: Aggregate turnover = (Taxable supplies + Exempt Supplies + Exports + Inter-State Supplies)*(Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies).

Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover.

Advantages of GST Registration for Businesses

Registering for GST offers a range of benefits to businesses:

• Legal Compliance: Ensures that businesses remain compliant with tax regulations, thus avoiding potential penalties.
• Input Tax Credit: Businesses can claim credits for the GST they’ve paid on purchases, which can then be set off against the GST charged on sales, reducing tax liability.
• Inter-State Trade Ease: Encourages businesses to transact across state boundaries without facing tax-related challenges.
• Elimination of Cascading Effect: By removing the effect of tax being levied on an already taxed amount, the overall cost of products or services is reduced.
• Competitive Edge: Being GST compliant can instill trust in potential customers, opening up more business opportunities.
• Access to Larger Markets: Major corporations often prefer collaborating with GST-registered vendors.
• Optimized Cash Flow: Efficient management and lower tax liability can enhance cash flow within a business.
• Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record can boost a business’s credit profile.
• Legal Safeguard: GST registration protects businesses and ensures their rights are upheld.
• Simplified Compliance: The GST process is streamlined, enabling businesses to file returns and make payments online easily.
• Transparent Operations: Ensures businesses maintain accurate records, promoting a sense of trustworthiness and professionalism.