Introduction to GST
The Goods and Services Tax (GST), launched on 1st July 2017, is a comprehensive, destination-based tax applied at every stage of production and distribution. It replaced multiple indirect taxes (like excise duty, VAT, and service tax) with a unified tax system aimed at eliminating the cascading effect of multiple taxes. GST embodies the “One Nation, One Tax” philosophy, streamlining compliance, enhancing transparency, and encouraging economic efficiency.
Benefits of GST Registration
- Input Tax Credit: Offset your tax liability by claiming credits on purchases.
- Interstate Trade: Conduct seamless business across India without constraints.
- E-commerce Eligibility: Sell via online platforms and avail digital marketplace benefits.
- Compliance Simplicity: Reduced documentation and easier monthly or quarterly filing.
- Lower Tax Liability: Strategic planning leads to higher tax efficiency.
Eligibility Criteria
GST registration is mandatory for:
- Goods suppliers with a turnover of> ₹40 lakh
- Service providers with turnover > ₹20 lakh
- Persons involved in interstate sales, e-commerce, or as a non-resident taxable individual
- Voluntary registrants, even if turnover is below the threshold, for business advantages
Understanding Turnover Thresholds
- Normal States: ₹40 lakh for goods suppliers, ₹20 lakh for services
- Special Category States (e.g., Arunachal Pradesh, Assam, Meghalaya, Uttarakhand, etc.): ₹20 lakh for goods suppliers, ₹10 lakh for services
- Interstate sales, e-commerce, and non-resident taxpayers are required to register regardless of turnover
Key Dates and Changes from GST Council Meetings
- Pre-April 1, 2019:
- Goods suppliers: ₹20 lakh (general), ₹10 lakh (special states)
- Service providers: ₹20 lakh
- Post-April 1, 2019:
- Goods suppliers: ₹40 lakh (general), ₹20 lakh (special states)
- Service providers: remained at ₹20 lakh
What Constitutes Aggregate Turnover?
Aggregate turnover includes:
- All taxable supplies
- Exempt supplies
- Exported or interstate supplies
- Excludes taxes on outward supplies and supplies under reverse charge
It is calculated on a PAN basis, combining all business locations.
Why Register Voluntarily?
Even if you’re below the threshold, consider registering for:
- Stand out as credible to B2B clients
- Claim input tax credit (ITC)
- Strengthen business reputation and expand reach
Documents Needed for GST Registration:
1. PAN Card
Linked to your PAN details and profile.
2. Identity & Address Proof (Director/Owner)
Submit scanned copies of:
- Passport / Aadhar / Voter ID / Driving License
3. Business Proof / Registration
- Private limited/LLP/Partnership: Certificate of Incorporation
- Sole proprietorship: PAN card alone suffices
4. Address Proof of Business Premises
- Owned: Utility bill, property tax, or khata
- Rented/Leased: Lease agreement + utility bill + owner’s ownership proof
- SEZ: Government-issued proof or SEZ license
5. Bank Account Proof
- First page of passbook, bank statement, or cancelled cheque
Step-by-Step Registration Process:
- Threshold Check
Confirm whether your business turnover or nature mandates GST registration. - Document Collation
Prepare and scan all necessary documents mentioned above. - Online Application
Apply via the GST portal (www.gst.gov.in), inputting business details, PAN, and address proof. - Upload Documents & Verification
Attach scanned documents and verify through OTP or DSC where required. - ARN & GSTIN Issuance
On successful submission, you receive an Acknowledgment Reference Number (ARN). The portal then issues your GSTIN within a few days. - Start Filing Returns
Begin filing your GSTR-1 (monthly outward supplies) and GSTR-3B (monthly summary). Annual forms include GSTR-9 and GSTR-9C, if applicable.
Conclusion
GST registration is essential for businesses above ₹20–₹40 lakh turnover, interstate trades, and those operating through e-commerce. Even without reaching thresholds, voluntary registration can offer significant tax advantages, market credibility, and scalability.
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