How to Apply for GST Number: Your Step-by-Step Guide to GST Registration in 2024: Simplify Taxes, Maximize Benefits

How to Apply for GST Number

Getting a valid GST number is a basic requirement for a business that is established in India. A GST number  (Goods and Services Tax) is an identification number specific to businesses that have registered under the new goods and service tax that amalgamates several indirect taxes in the country. This registration is not only obligatory for the business that exceeds a certain level of turnover but is also useful because it creates many opportunities that help to decrease business complexities and to avoid the violation of the law. 

One of the most important benefits of having your GST number is a legal acknowledgment. It helps in the official registration of a business entity with the government, thereby, increases the credibility of a business and an entity can work without any concealment. This legal standing can be important when dealing with other fellow companies, banks, or even with the government. 

Besides this, getting a GST number permits a business to collect GST from its clients, something which is crucial in obeying the laws of tax. Gathering GST helps in the input tax credit for businesses, therefore lowering their tax burden. It also prevents the firm from incurring penalties that come with failure to observe the requirements on compliance in the financial record keeping. 

GST also helps the business to be compliant with the Indian tax laws as it reduces the complexity of the tax system as various tax returns will be performed under a single system to enhance the ease for the companies tangling with tax issues. Complying with legal requirements in the case of GST can help avoid legal conflict and penalties in the course of running businesses. 

In this article, we will guide you through the process of obtaining a GST number by providing detailed information and step by step process to obtain a GST number effortlessly. Whether you’re a seasoned entrepreneur or just starting out, this guide will equip you with the confidence to navigate the GST registration process seamlessly.

Understanding GST and Its Importance

GST stands for the Goods and Services Tax which is an extensive, multi-point, value-added tax, which is levied at the destination stage. It was intended to supersede several other indirect taxes that were previously collected by both the central and state governments. Commenced from the 1st of July 2017, GST envisages simplification of taxes, removal of taxes within taxes and formation of one unified Indian market. 

One of the characteristics of GST is that it is an indirect tax which implies that it is recovered from the final consumer by the supplier. The business then pays this tax to the government or center and in the case of the export of raw materials, they are subjected to export taxes as well. Thus, it guarantees the unbroken chain of tax credits on the producer or the provider of the certain service to the retailer, which in its turn takes the overall tax load to the final consumer. 

Types of GST 

GST is divided into three main types, each with its own significance:

Central Goods and Services Tax (CGST):

Imposed on the supplies of goods and services where the seller and the buyer both are located within the same state and under the control of the Central Government.  A replacement to the Central Excise Duty and Service Tax, CGST is a levy collected by the central government. 

State Goods and Services Tax (SGST):

Imposed by the State Government on the transactions of goods and services within the state. Being administered by the specific state government, SGST supersedes state taxes like Value Added Tax, State Sales Tax, as well as Entertainment Tax. 

 Integrated Goods and Services Tax (IGST):

Imposed on central supplies of goods and services as well as on imported goods and services by the Central Government. IGST provides that the tax is paid to the central government followed by distribution between the center and the states.

Also Read :- How to File GST Return: Complete Guide to GST Return Filing Online with Step-by-Step Process

Why One Needs to Register for a GST Number 

For firms that are based in India, acquiring this number is not only advantageous, but in some cases, it is mandatory. Here’s why: 

Compliance with Tax Laws: The specific legal requirement for GST registration is stated under the GST Act which requires any business engaging in taxable supplies and with a specified annual turnover. There are always consequences and they may involve paying hefty fines or facing legal consequences. 

Legal Recognition: GST number is crucial to businesses as it means that the business gains credibility and that of its transactions from the side of the customers, suppliers, and the financial institutions that it deals with. 

Ability to Collect GST:  Only registered businesses can charge GST from the customers. This is important for businesses because they can benefit from input tax credits on their acquired items and products, which will help bring down their overall taxation amount. 

Market Competitiveness: The free practical trade competition makes it possible given that one has a GST number. Most B2B clients and big business influx strive to engage with compliant GST suppliers so they can be eligible to recover input tax credit. 

Simplified Taxation: GST makes the tax easier as it eliminates many indirect taxes that are there in the market and combines them into one tax. This helps to eliminate a potential problem in managing several tax returns, and complementary compliance with the complex stringencies. 

Who Needs to Apply for GST Number in India?

The GST is an indirect tax reform in India imposed at the national level through which taxes are imposed on every supply of goods and services. Organizations satisfying certain prescribed conditions are required to be GST registered in order to be governed by the regulations and to claim the credit on inputs.

Turnover Threshold: This is the main condition, according to which entities should register for GST. Any business, which crosses a particular threshold of turnover in a particular financial year, is required to get registered for GST. 

Rs. 40 Lakhs: This applies to most businesses supplying goods and services within a single state.

Rs. 20 Lakhs: This is the threshold for certain special category states like Sikkim, Nagaland, and Manipur.

Ecommerce Sellers: They have to have specific rules regarding GST for e-commerce companies due to the emergence of online marketplaces. Here’s when registration becomes mandatory:

Ecommerce Aggregators: Marketplaces like Amazon or Flipkart through which people sell products and others buy them are required to register for GST even if they themselves are not making major turnovers. 

Ecommerce Sellers: Any actual or prospective seller of goods, wanting to sell through a digital channel has to register for GST, if his aggregate annual turnover across the country is more than Rs. 20 lakhs. 

Interstate Supplies: That means any kind of trader who deals with interstate supplies of goods or services irrespective of the quantum of the sales turnover is required to obtain a GST registration. This helps in the smooth levying of taxes over the several states. 

Other Mandatory Registrations:  

Besides the above categories, certain other situations necessitate GST registration:

Casual Taxable Person: This means that if a business person occasionally sells materials that attract tax, whenever the sales exceed Rs. 10 lakhs in a year, the business must register for this tax. 

Agents of a Taxable Person:  Payers of TDS/TCS (Tax Deducted at Source/Tax Collected at Source) 

Consequences That Can be Faced By Business Which Failed to Register for GST 

There are criminal penalties and legal implications if one defaults GST registration where it is compulsory. These include: 

GST Liability and Late Fees: The business would be required to pay GST together with interest and late fees for all its supplies

Cancellation of GST Registration: If it is acquired later, then there are additional problems, for after obtaining necessary documents, the registration can be canceled by the authorities. 

Restrictions on Business Activities: The business may be limited on how to further engage in more taxable supplies.

Documents for GST Registration (India)

Below is the list of the documents required for GST registration in India

Identity & Address Proof: Below is the list of documents that can be used as proof of identity while applying for GST Number

• PAN Card: Permanent Account Number for business and authorized signatory.
• Aadhaar Card: Unique identification card for proprietor/partners (individual taxpayers).
• Alternative: Passport (if foreign national)
• Photographs: Passport-sized photos of proprietor/partners and authorized signatory.

Address Proof (Business & Residence):

• Property tax receipt, Electricity bill, Rent agreement (any one)
• For residence: Voter ID, Aadhaar card (if different from business address)

Business Registration:

Proof of Constitution:

• Partnership Deed (partnership)
• Certificate of Incorporation (company)
• Shop Act Registration (if applicable)

Bank Details:

Canceled cheque or bank statement reflecting account details and IFSC code.

Additionally one should upload on legible scanned copies and must check the file size limit if applicable on GST portal

Step-by-Step Guide to Apply for a GST Number

GST Apply Online Process

• Visit the Official GST Portal:  Go to the official GST portal  //www. gst. gov. in/. 

• Register on the Portal:  You can register by observing this step: locate the “Register Now” button on the home page. It is necessary to input simple credentials like the first name, last name, email address, and the mobile number. 

• Receive an OTP for Verification: Once you’ve filled in your information, you will be sent an OTP on the mobile number and email that you have given, enter the OTP as a confirmation that you own the account. 

• Create a Username and Password: After that, enter the GST portal and generate the GST account with a new username and password which should be strong. 

Submission of GST Application Form 

Log in to the GST Portal:

Login to the portal using the sign up id and password of the new account created 

• Navigate to the “New Registration” Section

•  From the main menu, just hover over “Services” and the drop down menu will appear. 

•  Go to “Registration” and then choose “New Registration. 

• Complete the Application Form (Part A)

• Other fields require entry of information like the name of the business, the nature of the business, the PAN and state. 

• Main promoter or first authorized signatory particulars ought to be entered. 

• Give the address of the principal place of business and include and phone numbers. 

Uploading Required Documents:

Prepare Scanned Copies of Necessary Documents:

Make sure you have saved sort of copies of the documents required in the right formats and sizes. 

Common documents include: 

•  PAN numbers of the business and promoters 
•  Registration of the business or incorporation certificate. 
•  Promoters and directors identity and proof of address 
•  Identity proof along with the proof of the current address of the place of business. 
•  The copy of the bank account statement or the canceled cheque. 

Upload Documents: 

These are the required documents you need to scan and upload as and when the application form requires. Make sure that the documents and images are clean and well printed so that there won’t be problems in the processing of documents such as rejection. 

Verification and Submission 

Review Information: A critical area of the application form is to cross-check and verify the correctness of all the information filled in the form. 

Submit the Application: Submit the application using one of the following methods: 

• Electronic Verification Code (EVC): Check along with a One Time Password sent to the entered mobile number. 

• Digital Signature Certificate (DSC): Use a DSC if you are a company or an LLP (Limited Liability Partnership).

Once submitted, you will receive an Application Reference Number (ARN) via email and SMS, which can be used to track the status of your application.

Tracking the Status of GST Application on the GST Portal

Tracking the status of your application is very simple through GST portal

• Simply login to your GST account
• Access the “Service” from you dashboard
• From the cascaded menu, select ‘Registration’ and then ‘Track Application Status’.
• Track the application status using the ARN number

Conclusion:

In the above guide we explained about the prerequisites for a GST number application, the required documents for obtaining the number along with the details of the status of your application on the GST portal. 

It remains necessary to acquire a GST number so that the business complies with tax regulations to engage in legal operations while enhancing the recovery of input tax. It also increases the credibility and expansion of your business because numerous clients and suppliers prefer working with organizations that are GST registered. 

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