Non-compliance to pay GST can lead to hefty penalties, ranging up to 10% of the outstanding taxation amount or Rs.10,000, whichever is higher. In the event of deliberate tax fraud or evasion, this penalty can be up to 100% of the outstanding tax amount.
Thus, businesses eligible to pay this tax have to undergo GST registration and clear their liabilities.
What is the GST registration?
Businesses owners need to register their companies under Goods and Services Tax if the annual turnover exceeds Rs.40 lakh. For businesses located in the North-Eastern states or hilly areas, the maximum GST-free slab is up to Rs.20 lakh.
For certain enterprises, GST registration is mandatory irrespective of their yearly earnings. The registration process is simple, and one can complete it just a couple of days.
GST registration process
You can register for GST online by following the steps mentioned below –
- Step 1: Visit the official GST portal.
- Step 2: Select ‘Register Now’ and choose ‘New Registration.’
- Step 3: Fill in relevant details, including PAN, business name, email, etc.
- Step 4: Check the email ID you entered for an OTP and enter it on the registration portal.
- Step 5: After you proceed, note down the Temporary Reference Number or TRN.
- Step 6: Open this GST portal once more and select the ‘Taxpayers’ option, which is located under the ‘Register’ menu.
- Step 7: Choose the TRN option and enter this code which you received at the end of step 5.
- Step 8: An OTP will be forwarded to your registered mobile number and email ID.
- Step 9: Enter the OTP on the next page to proceed with the registration.
- Step 10: This next page will notify you regarding the status of your application. Click on the edit icon on this page.
- Step 11: Fill in all your relevant details on the next section and submit all necessary documents as well.
- Step 12: Next, in the Verification page, you need to check all declarations and submit your registration application.
- Step 13: After successful completion, you should receive an Application Reference Number. Using this ARN, you can check the status of the application.
List of documents necessary for GST registration
To simplify the process further, here is the list of documents that an applicant will require during the registration process.
- Address proof for the business.
- Photographs of the owner.
- Details of accounts for the enterprise, including IFSC number, account number and more.
- Taxpayer’s constitution.
After the application is processed, your business should receive its unique GSTIN or GST Identification Number, which is a 15-digit alphanumeric code.
Taxpayers need to know all about GST to comply with all its regulations. A business owner must also learn how to file GST returns to avoid penalties and other consequences.
Benefits of GST registration
Some of the advantages of GST registration include -
Upon registration, a business becomes liable to pay taxes only when its annual revenue crosses Rs.40 lakh per annum. Previously, these enterprises needed to bear VAT payments even with revenue as low as Rs.5 lakh per annum.
The GST regime has simplified management and payment of tax liabilities for businesses by eliminating the cascading effect of indirect taxes or double taxation.
Additionally, registered entities can avail business loans from all reputed financial institutions in the country by being GST-compliant. They can opt for NBFCs like Bajaj Finserv, which provides such loans against minimum documentation.
The company also provides pre-approved offers to simplify the loan availing procedure, which ease the application process for individuals. These offers are available on a range of financial products, including personal loans, business loans, etc.
Taxpayers can use an ERP to calculate their liabilities. Also, manufacturers can use GST calculators to determine the same based on GST rates in India. This should help companies prepare financially to comply with the due taxes and align their finances accordingly.
