GST Registration: A Step by Step Guide For Small Businesses

With the introduction of GST, it is now mandatory for businesses and individuals that offer goods and services, to complete their GST registration. The new taxation era under GST that replaced the service tax and VAT has added an incremental value to businesses, especially MSMEs. This article sheds light on the key aspects and benefits of registration under GST for companies, especially small businesses:

 

A business that has an aggregate turnover of over 20 lakhs in a single financial year is required to register under the GST (Goods and Service Tax) regime, and the process is called GST registration. Goods and Services Tax registration is also necessary for those who are already registered under the excise duty, VAT, and other kinds of taxes from the pre-GST system, apart from e-commerce aggregators, taxable citizens, and non-resident taxpayers. Let us understand more about the process of registration below:

 

GST Registration Process

 

Taxpayers can register for GST online by visiting https://www.gst.gov.in./ and completing the GST login. Follow the procedure listed below to finish the registration:

Step 1: Click on the ‘Services’ tab on the left-hand side of the home page. Select the ‘Registration’ tab from the drop-down menu and click on ‘New Registration.’ 

Step 2: Under the ‘new registration’ page, mention if you are a taxpayer, GST practitioner, or non-resident person who pays taxes. Enter the name of the state or union territory along with the name of the respective district.

Step 3: Provide the official name of the business mentioned on the PAN card and fill in the Personal Account Number (PAN).

Step 4: Separate OTPs (One Time Password) will be sent to the registered email address and phone number after all the details are filled in.

Step 5: Click on ‘Proceed’ to generate the TRN (Temporary Reference Number). This completes PART A of the registration process. PART B has to be completed within the next 15 days using the TRN, and you no longer have to wonder how to GST registration.

Step 6: Go to ‘My Saved Applications’ to complete PART B of the form. Fill out the TRN and the CAPTCHA code, followed by clicking on ‘Proceed.’

Step 7: Enter the OTP sent to your registered mobile number or email id.

Step 8: After you click ‘Proceed,’ the ‘My Saved Application’ page is displayed.

Step 9: Go to ‘Action’ and fill out the information required in different tabs.

Step 10: After your online GST registration is verified, an acknowledgement of the same will be sent to your registered email id and mobile number along with an Application Reference Number (ARN).

These are the key steps required to complete the new GST registration process for your business.

 

Documents Required for GST Registration

 

Following are the documents that are required to be uploaded on the GST registration portal: 

• PAN Card.

• Aadhar Card.

• Memorandum of Association (MOA)/ Articles of Association (AOA) and partnership agreement.

• Rent agreement or electricity bill of the place of business and details.

• Bank account details such as:

1. Name of the account holder
2. MICR code
3. IFSC code 
4. Bank branch information.

• Digital signature for online GST registration.

• Address and identity proofs of business partners, along with photographs.

 

GST Registration Status Check Online

Here is how one can check the status of their GST application for registration:

GST Application Status Using ARN

 

After the completion of GST registration online, an Application Reference Number (ARN) will be sent. The GST application status can be checked through the following process: 

• Visit the official GST website at: https://www.gst.gov.in./ 

• Select the drop-down menu by clicking on ‘Registration.’ Select ‘Track Application Status.’ 

• Enter the Application Reference Number (ARN) and click on the ‘Search’ button.

• After checking the ARN, any of the following cases are possible-

Case 1: A Provisional ID has been issued.

Case 2: The application has to be verified.

Case 3: Resubmit the form for errors in the PAN details.

Case 4: The GST migration is successful.

Case 5: The GST registration is cancelled/rejected.

 

GST Application Status Using TRN

 

TRN or Temporary Reference Number will be sent to the registered email id or mobile number once the registration is completed. The application status of GST registration using TRN can be tracked easily. Here is a step-by-step guide-

Step 1: On the GST portal, click on ‘Services.’

Step 2: Click on ‘New Registration’ under ‘Registration.’

Step 3: Click on the TRN or ‘Temporary Registration Number’ option

Step 4: Enter the TRN and click on ‘Proceed.’

Step 5: Enter the OTP received on your registered email or mobile number and click ‘Proceed.’

Step 6: Move to ‘My Saved Application’ to check the status of the application.

 

 

GST Verification

 

After successfully finishing online GST registration, a taxpayer would be provided with a 15-digit alphanumeric GST code that is known as the Goods and Service Tax Identification Number (GSTIN). This number is based on the state where the taxpayer belongs and their PAN number. 

For GST verification online, taxpayers can visit https://www.gst.gov.in/ and follow the steps below:

Step 1: On the home page, click on ‘Search Taxpayer.’ Select the ‘Search by GSTIN/ UIN’ option from the drop-down menu.

Step 2: Enter the GSTIN number and click on the ‘Search’ button.

Step 3: If the GST number is correct, taxpayers can verify the authorized business name, name of the state, registration date, details of the partnership, and type of taxpayer.

 

GST Registration Certificate Download

 

The certificate of registration contains the GSTIN as well as other key details like the registered name of the company, its address, the date of registration, additional places of business, and the controlling authority of the business. Registered taxpayers can easily download their GST registration certificate by following the below-mentioned steps-

Step 1: Visit the GST portal.

Step 2: Do the GST registration login on the portal.

Step 3: Under ‘Services,’ click on ‘User Services.’

Step 4: Select ‘View/Download Certificates.’

Step 5: You will be directed to ‘Form REG-06’ for GST Registration Certificate.

Step 6: Click on ‘Download’ to save the certificate on your device.

 

GST Registration Process of Small Businesses

 

GST registration of small businesses, especially GST on travelling expenses, can be a daunting task. However, by keeping the above-listed documents ready and applying online by visiting http://www.gst.gov.in, this process can be made a lot easier. Simply register yourself and provide personal details, business details, goods and services along with HSN codes or SAC, and banking details as well. If everything is verified successfully, then you will get a GST number.

Let us now understand why registration of GST is so important for any business, but especially for MSMEs and SMEs, to make the most of their returns and save more.

 

Impact of GST Registration on Small Businesses

 

GST can have a significant positive impact on smaller businesses like the following:

Lowers Tax Burden- The unified taxation system under GST reduces the burden of tax and increases savings as companies no longer have to pay multiple different taxes like VAT, service tax, excise duty, etc.

Eliminates Cascading Effect- The GST era gets rid of the phenomenon where multiple taxes were levied on the same product, ensuring lower costs and higher price efficiency.

Composite Scheme for Small Businesses- This scheme levies taxes at a flat rate of 1% to 5% for companies that have a turnover of up to INR 75 lakh per annum. 

Business Loan- The taxpayers who have completed their registration of GST are eligible to get a collateral-free loan.

Input Tax Credit Under GST- Goods and Services Tax registration makes sure that corporates can make higher savings by claiming their ITC, especially GST on travel agency, airfares, accommodation, and more. The input credit can greatly reduce the overall tax that is paid on sales or purchases.

 

GST Exemption for Small Businesses

 

Small businesses get to benefit under the GST regime by opting for the Composition Scheme. This enables them to enjoy certain exemptions mentioned below-

• •  They need to file under the GSTR-4 return form and pay their taxes at a fixed rate, depending on the type of business and area. However, they are not eligible to claim the Input Tax Credit. 
• •  Under the Composition Scheme, any supplier from a State or a Union territory whose annual turnover is below INR 20 lakhs and INR 10 lakhs for the North Eastern States does not require to have registration of GST. 
• •  Manufacturers who are registered under the Composition Scheme have to pay 2% of their annual turnover, and trade dealers have to pay 1%. 
• •  Taxpayers cannot choose the Composition Scheme if the taxpayer supplies donated goods, manufactures tobacco, supplies goods through e-commerce operators, and if they are a regular or a non-resident taxpayer. 
• •  Dealers with the Composition Scheme have to pay tax under the Reverse Charge Mechanism, and they also have to pay taxes if they have purchased from an unregistered dealer, as well as the GST on the supplies.
• •  Unlike regular taxpayers, taxpayers under the Composition Scheme have a minimal amount to pay, and the profit margin is much higher.

 

GST registration helps business owners in many ways, like assisting them to avail of loans for expanding their business and get returns on their expenses through ITC, making it a progressive tax regime. 

Even though GST filing and claiming the Input Tax Credit under GST can be stressful, however, for travel expenses there are expert players like myBiz that can help you quickly start managing your expenses and increasing your savings. 

Once you have completed your GST registration, sign up with myBiz to begin making the most of travel tax benefits. Join now!

 

 

Frequently Asked Questions (FAQs)

 

Q1. Can the PAN ID be changed after GST registration?

Ans. No, the PAN ID, once entered during the registration process, cannot be changed since the GSTIN is based on it.

 

Q2. What does it mean if the status of the application says ‘Pending for Clarification’?

Ans. If the status of the GST application reflects ‘Pending for clarification,’ then it means that the tax officer has examined the application but needs more clarification or additional information or documentation. 

 

Q3. Can the GST registration certificate be downloaded online?

Ans. Yes, the GST certificate can be downloaded from the GST portal since the government does not issue any physical certificate.

 

Q4. What is the penalty for not completing registration of GST?

Ans. Any eligible taxpayer who fails to register under GST has to pay a penalty of INR 10,000 or a penalty of 10% of the tax, whichever is higher. This act can be deemed fraudulent, and a penalty as high as 100% of tax can be imposed on the defaulters.