Complete GST Registration Step-by-step Guide
Steps to Take After Acquiring GST Registration
In previous articles, we discussed when to obtain GST Registration and the basic turnover limit relevant for obtaining GST Registration. In this article, we will go over all of the immediate steps that must be taken to remain GST compliant after obtaining the GST registration certificate.
The registration shall become effective thirty days after the date on which a person becomes liable to registration if the application for registration is submitted within thirty days of such date. However, if the application is submitted after the 30-day deadline, registration will be effective from the date of registration grant. Please keep in mind that if you conduct business in multiple states, each one must be registered separately under GST. As a result, each of these GSTINs must comply with these GST rules independently.
Display GST Registration details in place of business
Every company must showcase the GST Registration Certificate in a notable or visible location within the premises of the main place of business and every other place of business.
Once the GST identification number (GSTIN) has been obtained, every registered business must display it on the name-board located at the entrance to its registered office or factory.
Identify the place of supply to decide whether to charge CGST & SGST or IGST
Determine the nature of the transaction—whether the supply is within or outside the state. The place of supply provisions of GST law must be referred to in order to identify this. CGST & SGST or IGST will be charged depending on whether the place of supply is within the State or across the State. For goods and services, the rules for the place of supply differ.
Businesses that have a turnover of more than Rs.40 lakh, Rs.20 lakh, or Rs.10 lakh must register as a normal taxable person under the Goods and Services Tax (GST). It is known as GST registration. GST registration is required for certain businesses. If the organisation conducts business without registering for GST, it commits a tax evasion offence and will face severe penalties. GST registration typically takes 2-6 working days. Team Clear can assist you in obtaining GST registration in three simple steps.
- (For example, Excise, VAT, Service Tax, and so on.)
- Businesses with a turnover of more than Rs.40 lakh, Rs.20 lakh, or Rs.10 lakh, as the case may be
- Non-Resident taxable person / Casual taxable person
- Supplier’s agents and input service distributors who pay tax through the reverse charge mechanism
- A vendor who sells through an e-commerce aggregator.
- Every e-commerce aggregator Person providing online information and database access or retrieval services to a person in India who is not a registered taxable person from a location outside India
All about the GST registration process
- GST registration is available through the GST portal. To apply for GST registration, fill out Form REG-01 on the GST portal and follow the steps outlined in our article “How to Apply for GST Registration?”
- ClearTax’s GST registration services, on the other hand, assist you in getting your business GST registered and obtaining your GSTIN.
- Clear GST experts will advise you on the applicability and compliances of GST for your business, as well as register your company for GST.
Documents Required for GST Registration
- Aadhaar card PAN of the Applicant
- Proof of business registration or incorporation certificate, as well as the identity and address proof of the promoters/directors, along with photographs
- Proof of business address Bank Account Statement/Cancelled Cheque
- Authorization Letter with Digital Signature/Board Resolution for Authorized Signatory
GST Registration Fees
GST Registration is a time-consuming 11-step process that necessitates the submission of numerous business details and scanned documents. Although there are no fees prescribed by the GST law for obtaining GST registration on the GST portal on your own, purchasing the GST registration plan with ClearTax will save you a significant amount of time and effort. You can choose Clear GST Registration services, in which a GST Expert will assist you from start to finish with GST Registration.
Penalty for not obtaining GST registration
An offender who fails to pay tax or makes insufficient payments (true errors) must pay a penalty of 10% of the tax amount due, subject to a minimum of Rs.10,000.
When the offender has purposefully avoided paying taxes, the penalty will be 100 per cent of the tax amount due.
Start issuing the GST compliant invoices
The GST invoice issued will serve as the foundation for a buyer to eventually claim the correct input tax credit. As a result, upon obtaining GST Registration, every business must begin issuing valid invoices that comply with all invoicing rules. After obtaining GST registration, a business must issue revised invoices against previously issued invoices for the period beginning with the effective date of registration and ending with the date of issuance of the GST registration certificate.
The deadline for completing this task is one month from the date of issuance of the registration certificate. When making taxable supplies, a GST invoice must be issued, whereas a bill of supply must be issued by a composition dealer when making exempt supplies. When supplying both taxable and exempt supplies to an unregistered person, a single invoice-cum-bill must be issued. Certain invoice fields must be completed. The following are some of the mandatory invoice fields mandated by the CGST rules:
- A serial number with up to 16 alphanumeric characters and special characters that is unique for a fiscal year.
- The supplier’s GSTIN
- Date of issue of a GST registered recipient’s GSTIN, along with the recipient’s name and address, and for delivery
- Product or service description
- The tax rate
- HSN code for the amount of tax levied on taxable supplies as CGST, SGST/UTGST, or IGST.
- In the case of inter-state trade, the location of supply, as well as the name of the state, is required.
- Whether the tax is payable on a reverse charge basis or not.
- Supplier’s signature
The law specifies a time limit for issuing GST invoices. A tax invoice must be issued in the case of goods at the time of removal, and in the case of services, it must be issued within 30 days of the service being rendered.
GST must be charged and collected on all taxable sales
Begin charging GST at the rates specified in the law on all taxable supplies affected. Currently, four GST rates of 5%, 12%, 18%, and 28% are set for various classes of goods or services, based on unique HSN code assigned to each of these classes.
Taxpayers who are registered for GST must keep track of the tax rates and include them in their GST invoices. Failure to do so may result in penalties. Except in the case of a composition dealer’s sale, GST is charged and collected from buyers in all cases. As a result, the price paid by buyers to a GST registered seller includes GST.
Before filing GSTR-3B, the GST collected by the supplier must be deposited with the government by paying it online via challan. The reverse charge cases, which are discussed in the following section, are an exception to this rule.
Fill out ITC-01 to claim the input tax credit for the stock of goods that is lying around
Fill out form ITC-01 within 30 days of becoming eligible to claim the Input Tax Credit (ITC), i.e. within 30 days of receiving GST registration. ITC-01 is used to claim the CGST, SGST, or IGST paid on the purchase of inputs or input services used in the manufacture of finished goods.
Aside from raw materials, the finished goods stock will also include consumables and raw materials used. As a result, the GST paid on these purchases, which are now part of finished goods in stock, will be eligible for ITC claim.
Begin taking advantage of input tax credits for purchases
ITC claims will be allowed for all purchases made after the effective date of GST registration. Claim such ITC on purchase in GSTR-3B, which is filed on a monthly basis, on a provisional basis. Before claiming ITC in GSTR-3B, businesses can also check and reconcile with the GSTR-2A, which is available on the GST portal. This ensures that no surplus or insufficient ITC is claimed.
It should be noted that a composition dealer is not eligible to claim the ITC on his purchases. The declared ITC amount will be accumulated in the electronic credit ledger for the specific GSTIN. The available ITC can be used to pay off the GST liability. There are some conditions that must be met in order to receive ITC.
Take the tax invoice or debit note issuance by your supplier in your ownership; goods must be delivered; and the supplier must file GSTR-1. Obtaining ITC aids in the reduction of prices throughout the supply chain, with the ultimate consumer benefiting the most from the lower price.
Keep good accounts and records in accordance with GST law
The GST law strictly defines the maintenance of certain documents and records that confirm the transactions carried out by a GST-registered business. Accounts or records for a specific fiscal year must be kept for at least 72 months from the due date of filing annual returns in GSTR-9 or GSTR-9A for that fiscal year. Some of the records that the business must begin compiling are:
- Goods production
- Goods and services are supplied both externally and internally.
- ITC is available for stock registers.
- Payable and paid output tax
Businesses can keep their books of accounts in an electronic format, such as an ERP application or cloud-based software, which is legal.
- GSTR-3B or GSTR-4
When obtaining the GST registration, taxpayers must make a note of the specific GST returns that apply to them. To avoid interest and penalties, they must begin filing it within the specified deadlines. All GST returns can be filed on the GST portal, which is accessible to all taxpayers in India. Normal taxpayers must file GSTR-1 returns for sales details and GSTR-3B returns for a sales summary and ITC reporting. Pay your taxes and then submit GSTR-3B.
All composition dealers must file a single GSTR-4 return once a quarter. Other additional returns are required by the act to be filed in certain circumstances. For example, an input service distributor must file GSTR-6 in order to allocate ITC amounts to each of its branches/units across India that have used the specific goods or services for which ITC is available. Some taxpayers may be required to file forms with the department on a regular basis.
Form ITC-04 is one example. The manufacturer files it on a quarterly basis to proclaim the position of goods sent on job work. Furthermore, the taxpayer must declare whether any ITC reversal is required due to a delay in the return of goods. Aside from these, special types of enrollments necessitate the submission of specific GST returns. Learn more about the various types of GST returns and who is required to file them.
There are certain rules that must be followed once the GST registration has been obtained! The supplier collects GST from the recipients and deposits it with the government for the majority of transactions. A GST registered recipient, on the other hand, must deposit GST with the government under the reverse charge mechanism. The CBIC has published a list of goods and services for which tax is paid by the recipient rather than the supplier.
Aside from that, beginning on February 1st, 2019, any purchase from an unregistered supplier may be subject to the reverse charge rule. In this case, however, the list of specified goods or services has yet to be notified.
MUDS provides a FREE incorporated tool for GST listed firms to track and check their level of compliance for GST Returns filed. Every GSTIN can now use the GST Health Check tool to obtain the following information in an excel spreadsheet:
- A summary of the health check
- Status of GST returns filing
- Report on GSTR-1 vs. GSTR-3B (tax difference)
- Report on GSTR-3B vs. GSTR-2A (ITC difference)
- Report on Vendor Compliance