FAQ on the GST in India

Last updated on 27 October, 2017

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Registration

Basics

Who should register for GST?

Any business with an aggregate turnover, as specified below, should register for the GST. If you fall below the threshold, you can choose not to register, but you cannot add the GST charge to your customers’ purchases. If your turnover goes above the threshold at a later point in time, you need to register within 30 days.

Aggregate turnover is the combined value of all taxable and non-taxable supplies, exempt supplies, and export of goods and services of a person with the same PAN. The value of inward supplies, as well as those on which reverse charge is levied, are not included in this.

If you are already registered for one or more of the following taxes, you need to register for the GST during the registration window for your state:

  • Central Excise
  • Service Tax
  • State Sales Tax/VAT (except exclusive liquor dealers if registered under the VAT)
  • Entry Tax
  • Luxury Tax
  • Entertainment Tax (except for those levied by local bodies)

The following business have to register, irrespective of the turnover:

  • Businesses selling taxable goods outside the state
  • Casual taxable person
  • Businesses required to pay reverse charge
  • Non-resident taxable person
  • Businesses that are required to deduct tax (e.g. e-commerce business operating in a marketplaces such as Amazon)
  • The person supplying goods or services or both as an agent of any other person
  • Input Service Distributor
  • E-commerce operator
  • An aggregator who supplies services under his brand name
When should I register?

UPDATE: The window for registration for existing tax payers has opened for all states and Union Territories. The last date of registering has not been disclosed yet.

Why should I register?

Registered businesses can collect the GST on their sales. Additionally, their GST registration makes them eligible to claim input tax credits while filing their returns. Keep in mind that even if your turnover is below the threshold, you can choose to register for the GST.

What do I need to register?

You must ensure you have the following official documents ready before you begin the registration process:

  • Provisional ID received from State/Central Authorities
  • Password received from the State/Central Authorities
  • Valid email address
  • Valid mobile number
  • Bank account number
  • Bank IFSC

In addition to these, you are also required to present the following documents:

Limited Liability Company

  • Company PAN card
  • Registration certificate of the company
  • Memorandum of Association (MOA) /Articles of Association (AOA)
  • Copy of company’s cancelled cheque
  • Declaration to comply with the provisions
  • Copy of board resolution
  • PAN and ID proof of directors
  • Copy of electricity bill/landline bill/water bill
  • No objection certificate of the owner
  • Rent agreement (in case premises are rented)

Limited Liability Partnership

  • PAN card of the LLP
  • Registration certificate of the LLP
  • LLP partnership agreement
  • Copy of LLP’s cancelled cheque
  • Declaration to comply with the provisions
  • Copy of board resolution
  • PAN and ID proof of designated partners
  • Copy of electricity bill/landline bill/water bill
  • No objection certificate of the owner
  • Rent agreement (in case premises are rented)

Sole proprietorship

  • PAN card and ID proof of the individual
  • Copy of cancelled cheque or bank statement
  • Declaration to comply with the provisions
  • Copy of electricity bill/landline bill/water bill
  • No objection certificate fro the owner
  • Rent agreement (in case premises are rented)
How do I register?
  • Obtain your Provisional ID and password from your State VAT Authority. You will use this to log in to the GST portal.
  • Enter your mobile number and email address (or fill in the information of the authorized signatory). You will receive an OTP, which you need to enter. All future correspondence from the GST portal will be sent to this registered mobile number and email address.
  • Create a username and password, and answer the security questions that follow.
  • You will then be taken to your dashboard, where you can fill in your details. At the top of the page, there are eight tabs: Business Details, Promoters/Partners,Authorized Signatory, Principal Place of Business, Additional Place of Business, Goods & Services, Bank Accounts, and Verification. Enter the necessary information in these tabs.
  • Once you have filled all the details, click on the Submit with DSC button to complete the registration process. Make sure that you have updated your Digital Signature Certificate (DSC) in the same portal. You will receive an acknowledgement with a reference number in your registered mobile and email.

Note: You can update this information anytime you want from this portal.

For more information on how to register, click here.

When should a business have multiple GST identification numbers?

When a business has production centres or offices located in multiple states, then each branch must register for a separate GSTIN. If the branches are located within the same state, it’s not necessary to register for separate GSTINs.

Transition to GST

When I transition to GST from the VAT system, what will happen to the stock on hand and raw materials?

When moving into the GST taxation system, you need to file the Trans-1 Form with details of your unsold finished goods, raw materials on hand, and taxable services obtained before July 1st. The VAT paid on the purchase bills will be credited back as input tax credits to your account. 

My business was unregistered in the past but I got it registered under GST now. Will I be eligible for ITC on input goods and services that I purchased before getting registered?

Yes, you will be able to claim ITC on all of your pre-GST purchases, provided that you declared them during the registration process. Since you were unregistered under the previous regime, you will be required to file a Tran-2 form at the end of every month until December 2017 to claim ITC on those purchases. 

Note: You must claim your ITC on these pre-GST purchases before 31st December, 2017.

Eligibility

Should I register for multiple GST identification numbers if I have multiple businesses set up within a state? 

Under the current regulations, it is not necessary to register for multiple GSTINs  when a single company has multiple businesses in different verticals within the same state. 

For example, if a person has a department store and a fast food restaurant in the same state, it’s not necessary to register for separate GSTINs for each business. He can use the same GSTIN for both.

If my business turnover is more than 20 lakhs but my taxable supply is only around 2 lakhs, should I register? 

If your aggregate turnover exceeds 20 lakhs, you will need to register and pay GST on all of your taxable supplies.

Registration is optional for GTAs (Goods Transport Agencies), since they are not bound by threshold limits on turnover. Also, GST on GTAs’ services is usually paid by the receiver via reverse charge (except where the receiver is an unregistered dealer, in which case the GTA is responsible for paying the tax).

Should a business whose vendors or customers are located in different states register under GST, even if their aggregate turnover is less than 20 lakh rupees per annum? 

Businesses that participate in any form of inter-state supply of goods and services, whether it is sales or purchases, are required to register under GST. 

Can I apply for a common registration for businesses falling under in SEZ and DTZ? 

Common registration is not possible for businesses in Special Economic Zones (SEZ) or Domestic Tariff Zones (DTZ), since both these areas are governed by different rules under the GST law. Also, Special Economic Zones are treated like a separate state even if they are located within your home state region. 

Is GST registration mandatory for GTAs (Goods Transport Agencies)?

If the annual turnover of the GTA exceeds the prescribed limit, the firm should register under GST.

Composition Scheme

I have two businesses: trading and rentals. I make an aggregate turnover of 15 lakhs from trading and 6 lakhs from rentals. While my individual business turnovers are less than the GST threshold limit of 19 lakh rupees, together they exceed the threshold limit. Should I register under GST? If so, will I be eligible for the composition scheme?

Yes, you have to register your businesses under the GST law. That’s because your total aggregate turnover (trading + rentals) registered under your PAN is greater than 19 lakhs (if your business is located in North East India, this threshold is 9 lakhs). 

While registering yourself under GST, you can opt for the composition scheme as long as you meet the following criteria:

  • Your total turnover (in this case, trading + rentals) should be less than 75 lakhs per annum.

  • You must not buy or sell goods outside of your home state.

  • You must not trade online.

I have 2 businesses with different GSTINs where the income of each business per annum is less than 75 lakhs, but the sum of their aggregate turnovers exceeds 75 lakh rupees. Can I opt for the composition scheme?

In this case, you won’t be able to opt for the composition scheme, since the total aggregate turnover of all your businesses put together is greater than 75 lakh rupees.

E-commerce

Are e-commerce traders with a turnover of less than 75 lakhs eligible for the composition scheme? 

No, e-commerce traders are not eligible to register for the composition scheme. This is because e-commerce trading is considered to be a form of inter-state supply. Under the composition scheme, vendors are not supposed to carry out inter-state trade. Therefore, e-commerce traders have to register as normal taxpayers under the GST, irrespective of their aggregate turnover.

I sell exempted goods through an e-commerce website, and my annual turnover is less than the prescribed limit. Should I register under GST?

Yes, you must register regardless of your turnover, because you sell your products through an e-commerce platform. 

What should I mention as my place of business if I sell my wares through an e-commerce platform?

Place of business is the address of the principal  place where you do your work . If you work from your home, then your home address should be mentioned as the place of business.

I run a handicraft business and I’m a handicraft artisan card holder. The annual turnover of my business is less than Rs. 20 lakhs, and I sell my products online. Do I have to register under GST?

You don’t have to register unless you are selling through an e-commerce operator.  Registration  under GST is mandatory if:

  1. The business is involved in inter-state sales transactions.
  2. The business owner is planning on selling their wares through e-commerce operators.
  3. The business owner sells their products through their own website and the annual turnover exceeds Rs. 20 lakhs.

Penalties

What are the penalties for GST-eligible businesses that have not registered?

The offender will be fined Rs. 10,000 or the equivalent tax amount evaded.

What are the penalties for businesses that furnish false information during registration?

Furnishing false information will lead to a fine of Rs. 10,000 for the first offense, and continued offense will lead to fines of Rs. 100 per day, up to a maximum of Rs. 25,000. 

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