GST is the new taxation structure that came into force from 1st July 2017. It has changed the whole system of tax payment from the states and central government. Every business, individual, or company who is providing the services, or is within the field of manufacturing or in selling a product must be registered under the GST act if their financial transaction falls under the taxation slab. There have been 17 state and central taxes subsumed in one tax form i.e. GST. Every entity must get registered if they want to collect taxes from their customers or claim a tax credit on their tax.
The GST registration process is an online process carried out on the GST portal.
Who can register under GST
- Voluntary registration: – The name itself suggests that any entity can obtain GST registration voluntarily. It applies to those who aren’t within the parameters of registration and aren’t required under the GST.
- Aggregate turnover: – Any entity who is involved in the supply of goods whose aggregate turnover crosses Rs 40 Lakhs is required to obtain GST. Any entity that provides services whose turnover crosses Rs 20 Lakhs are required to obtain GST registration. If the business is located in special cities like northeastern states and hilly areas, the limit for them is Rs 10 Lakhs.
- E-commerce platform: – Any individual or a company who is supplying the goods through the online platform needs to register for the GST number. The registration shall be done regardless of the turnover.
- Casual entity: – An individual undertaking supply of Goods and Services seasonally or intermittently through a temporary stall or a shop must apply for GST. The registration shall be done regardless of the turnover.
Types of GST Registration
- Normal Taxpayer: – This type of GST registration, applies to the normal taxpayers of the business in India.
- Composition Taxpayer: – Taxpayers and small businesses whose annual turnover is up to Rs 50 Lakhs can register under this scheme. The entity has to file the return quarterly instead of filling every month and one annual return in this scheme. These entities can neither issue taxable invoices to their customers, nor did claim input tax credit. They have to pay tax on their own.
- Casual registration:- Any taxpayer establishing a shop or a seasonal stall shell register under this scheme. To register as a casual taxpayer, the taxpayer shall deposit the exact amount of the tax liability. The liability should match the active registration period.
- Non Resident taxpayers:- This category of the non-resident taxpayer is for the individual who is living outside India. The taxpayer should supply goods or services to the resident Indian.
GSTIN is a 15 digit unique code given to all taxpayers who have undergone the process of registering. GST is eventually aimed to reduce tax evasion. The first two digits of the GST number represent the state code that has been given as per the census report 2011. The following ten-digit is the PAN number of the individual. Thirteen digits are assigned signifies the entity number of the same PAN holder within the state.
The fourteen digits would be Z by default. The last digit is for the checksum digit.
Entities who are having multiple businesses in a state can register for each business separately. But they should have a different PAN for different businesses. If you have supplied in more than one state, you have to register for GST in all the states you supply Goods in.