What is compulsory registration under GST?


Why GST Registration is Important

1. Legal Requirement:
- Mandatory for businesses exceeding turnover thresholds.
- Necessary for certain types of businesses (inter-state sales, e-commerce, etc.).

2. Business Benefits:
- Enables claiming input tax credit on purchases.
- Enhances business credibility and trust.
- Facilitates seamless operations across state borders.

3. Avoid Penalties:
- Non-registration can lead to hefty fines and legal issues. 

Mandatory GST Registration

1. Turnover-Based Threshold:
Goods: businesses with an annual turnover exceeding ₹40 lakhs.

Services: Service providers with an annual turnover exceeding ₹20 lakhs.

special Category States: For certain states like Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Tripura, and Uttarakhand, the threshold is ₹20 lakhs for goods and ₹10 lakhs for services.

2. Inter-State Supply:
- Any business engaged in the supply of goods or services across state borders must register for GST, regardless of turnover.

3. E-Commerce Operators:
- Online marketplaces and platforms facilitating sales must register for GST.

4. Casual Taxable Persons:
- Individuals or businesses that occasionally supply goods or services in a territory where they don’t have a fixed place of business.

5. Non-Resident Taxable Persons:
- Non-residents providing taxable supplies in India must register, irrespective of the turnover threshold.

6. Agents and Input Service Distributor:
- Agents supplying goods or services on behalf of other taxable persons.
- Input service distributors who distribute credit among their branches.

7. Reverse Charge Mechanism:
- Persons liable to pay tax under the reverse charge mechanism (where the recipient of goods/services pays the tax instead of the supplier).

8. Businesses with Taxable Supply:
- Businesses engaged in the supply of goods or services which are taxable under GST.

9. E-Commerce Sellers:
- Individuals selling goods or services through e-commerce platforms must register for GST.

10. Other Specific Cases:
- Persons making supplies on behalf of another registered taxable person (e.g., agents, brokers).
- Individuals supplying online information and database access or retrieval services from outside India to a person in India, other than a registered taxable person.

Voluntary Registration

Businesses can opt for voluntary GST registration even if their turnover is below the specified threshold limits. Voluntary registration can be beneficial for:
- Claiming input tax credits.
- Improving business credibility.
- Facilitating inter-state sales without restrictions.

Key Points for Different Business Types

1. Manufacturers and Traders:
- Must register if turnover exceeds ₹40 lakhs (₹20 lakhs for special category states).

2. Service Providers:
- Must register if turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).

3. Small Businesses:
- Can opt for the Composition Scheme if turnover is up to ₹1.5 crores. However, this scheme has its own set of rules and restrictions. 

Documents Required for GST Registration

1. PAN Card of the Business or Applicant:
- Mandatory for all types of registrations (proprietorship, partnership, company, LLP, etc.).

2. Proof of Business Registration/Incorporation Certificate:
No specific registration document required.
Partnership Firm:
Partnership deed.
Incorporation certificate issued by the Ministry of Corporate Affairs.
Incorporation certificate and partnership deed.

3. Identity Proof of Promoters/Partners/Directors:
- PAN card.
- Aadhaar card.
- Voter ID card, passport, or driving license.

4. Address Proof of Promoters/Partners/Directors:
- Aadhaar card.
- Voter ID card, passport, or driving license.

5. Photographs:
- Passport-sized photographs of the promoters/partners/directors.
- Proprietorship: 1 photo.
- Partnership/LLP: Photos of all partners.
- Company: Photos of all directors.

6. Business Address Proof:
• Rented Premises:
- Rent agreement.
- NOC (No Objection Certificate) from the property owner.
- Latest utility bill (electricity, water, gas, etc.).
• Owned Premises:
- Property tax receipt or municipal khata copy.
- Latest utility bill (electricity, water, gas, etc.).

7. Bank Account Proof:
- Cancelled cheque.
- Bank statement (latest 2 months).
- First page of the passbook showing account details.

8. Digital Signature Certificate (DSC):
- Required for company and LLP registrations (Class 2 or Class 3 DSC).

9. Letter/Board Resolution:
- Authorization letter for authorized signatory.
- Board resolution authorizing a director or employee to act as the authorized signatory.

Additional Documents (if applicable)

1. Principal Place of Business:
- Address proof for the primary place of business operation.
2. Additional Place of Business:
- Address proof for any additional places of business operation.

Special Cases

1. Casual Taxable Person:
- Proof of casual business or event.
- Validity period for casual registration.
2. Non-Resident Taxable Person:
- Passport copy of the individual.
- Tax identification number or unique number based on the country of origin.

Steps to Gather Documents

1. Identify the Type of Business:
- Determine the specific documents required based on whether the business is a proprietorship, partnership, LLP, or company.
2. Ensure Validity:
- Ensure all documents are up to date and accurate.
3. Scan and Prepare Digital Copies:
- Have digital copies of all documents ready for upload during the online registration process.

If you need specific assistance or have more questions about GST registration, feel free to ask! https://taxrobo.in/gst-registrations

What is compulsory registration under GST?
Maniraj Anantham 21 May, 2024
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