The Goods & Services Tax (GST) applies to all service providers, traders and manufacturers. The procedure for GST registration is entirely online. Every product goes through multiple stages along the supply chain before the fi nal sale to the consumer.
Turnover
GST is mandatory for:
- Companies with turnover of more than Rs 20 lakh (supply of services) and Rs 40 lakh (supply of goods) annually.
- Businesses making inter-state outward supply of goods.
- Agents and brokers, selling on behalf of taxable suppliers.
- E-commerce sellers/aggregators if total sales are less than Rs 20 lakh.
Timelines
GST registration usually takes between 2-6 working days.
Documents
- PAN and Aadhaar of applicant
- Proof of business registration
- Identity and address proof of promoters
- Address proof of business
- Bank account proof
- Digital signature
- Letter of authorization
Penalty
A defaulter not paying tax or making short payments has to pay a penalty of 10% (genuine reasons) of the tax amount due subject to a minimum of Rs 10,000. The penalty will at 100% of tax amount if tax evasion is deliberate.
Multiple registrations
If a business operates from more than one state, the taxpayer should obtain a separate GST registration for each state.
Points to note
- Taxpayers with a turnover of less than `1.5 crore can choose composition scheme to get rid of tedious GST formalities and pay at a fixed rate of turnover.
- A business can choose to register for GST, even if the eligibility criteria is not met. Registering for GST helps get the business recognised as a legal registrant.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
