Goods and Services Tax (GST) is an indirect tax implemented in India and applicable to the supply of goods and services. GST is a significant tax revamp designed to simplify the indirect tax system and lower the tax burden on businesses and consumers. Before GST was implemented, multiple indirect taxes existed, like excise duty, VAT, and service tax imposts by the central and state governments. GST is a destination-based tax wherein it is collected by the state where the goods and services are utilized rather than where they are produced. Depending on the business's turnover and nature, GST registration is optional for a proprietorship firm. As per the provisions of the GST Act, individuals engaging in taxable intra-state transactions of goods or services and whose annual aggregate turnover exceeds Rs 20 lakh (or Rs 40 or Rs 10 lakh, varying based on the nature of supply and the state/union territory), are bound to obtain GST registration. Additionally, those involved in inter-state transactions without any specified threshold limit must register with GST. If you want to register for GST as a proprietorship, read on to get insight into the required documents and the GST registration process.
Documents required for GST registration
Owner's PAN Card: This essential document contains the owner's 10-digit alphanumeric Permanent Account Number (PAN). It serves the purpose of identifying the owner and verifying income tax returns. An example of a valid PAN number is AABCD1234E.
Owner's Aadhaar Card: This 12-digit unique identification number, allocated by the Unique Identification Authority of India (UIDAI), is crucial for authenticating the owner's identity and address. An example of a valid Aadhaar number is 1234 5678 9012.
Bank Account Details: This includes the owner's bank account number, IFSC code, branch name, and the bank's address. These details are used to verify financial transactions and facilitate tax payments and refunds.
Proof of Business Registration: This document establishes the legal status and name of the business, such as a partnership deed, certificate of incorporation, or trust deed. It is important to confirm the nature and ownership of the business.
Address Proof of Owner and Principal Place of Business: This document provides the location and address of both the owner and the business. Examples include property tax receipts, municipal khata copies, electricity bills, rent or lease agreements, consent letters, or any government-issued document or certificate.
Passport-Sized Photograph of the Owner: A recent and clear photograph of the owner in JPEG format not exceeding 100 KB in size.
Shop Act License: A Shop Act License is a mandatory requirement for small firms or shops when initiating a business, ensuring the well-being of employees.
As of the latest update on December 21, 2021, Aadhaar authentication is mandatory for applying for the revocation of canceled GST registration under CGST Rule 23 in REG-21.
How to proceed with GST registration?
Visit the GST portal and click on Services > Registration > New Registration.
Fill in the required details, such as PAN, state, district, mobile number, and email. You will get an OTP on your mobile and email for verification. Enter the OTP and click on Proceed.
You will receive a TRN (Temporary Reference Number) on your email and mobile. Note it down for future use.
Go back to the GST portal and click on Services > Registration > New Registration. Select Temporary Reference Number (TRN) and enter your TRN and captcha code. Click on Proceed and enter the OTP you receive. Click on Proceed again.
You will see the status of your application as Draft. Click on the thumbnail to fill the application form.
The application form has 10 sections. You need to fill in the mandatory sections marked with a red asterisk. The sections are:
Business Details: Enter your trade name, legal name, constitution of business, and tax jurisdiction. You can also opt for Aadhaar authentication for faster approval.
Promoter/ Partners: Enter the details of the proprietor, such as name, date of birth, gender, designation, PAN, Aadhaar, mobile number, email, and address. You also need to upload a photograph, address, and identity proof, such as a PAN card, Aadhaar card, passport, or driving license.
Authorized Signatory: If the proprietor is also the authorized signatory, select the "Also Authorized Signatory " at the bottom of the previous section. Otherwise, enter the details of the authorized signatory and upload the relevant documents.
Principal Place of Business: Enter the address of your principal place of business, such as building name, floor number, street, locality, city, state, district, PIN code, and contact number. You also need to upload proof of ownership or possession of the premises, such as an electricity bill, rent agreement, or property tax receipt. You also need to select the nature of your business activities, such as manufacturer, trader, service provider, etc.
Additional Places of Business: If you have any additional places of business, such as branches, warehouses, or godowns, enter the details and upload the documents. Otherwise, leave this section blank.
Goods and Services: Select the HSN code of the goods or the SAC code of the services that you deal with. You can search for the codes using the search box or the link provided. You can add up to 5 goods and 5 services.
Bank Accounts: Enter the details of your bank account, such as account number, IFSC code, bank name, branch name, and address. You also need to upload proof of bank account, such as bank statement, passbook, or cheque.
State-Specific Information: Enter any state-specific information, such as professional tax registration, state excise license, or drug license. This section may vary depending on the state you select.
Verification: Verify the details you entered and select the verification checkbox. You also need to select the name of the authorized signatory and enter the place. You can submit the application using any of the methods given below:
Digital Signature Certificate (DSC): This method is mandatory for companies and LLPs. You need to have a valid DSC and register it on the GST portal. You also need to install the emSigner utility on your computer and run it as an administrator. You can then sign the application using your DSC.
E-Signature: This method is available for all types of applicants. You need to have a valid Aadhaar number linked to your mobile number. You can then sign the application using an OTP sent to your mobile.
EVC: This method is available for all types of applicants except companies and LLPs. You must have a valid PAN and mobile number registered on the GST portal. You can then sign the application using an OTP sent to your mobile.
After completing the application process, you will receive an Application Reference Number (ARN) on your mobile and email. You can use ARN to track the status of your application on the GST portal.
Once the GST officer verifies and approves your application, you will receive your GSTIN and GST registration certificate on your registered email. You can also download them from the GST portal.
The time limit for GST Registration
The time limit for GST registration is 30 days from the commencement date of business or crossing the turnover threshold, whichever is earlier. If you fail to register within this period, you may face a penalty of 10% of the tax due or Rs. 10,000, whichever is higher.
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