Registrations under the Goods and Services Tax (GST) are mandatory for certain businesses in many countries, including India. GST is a comprehensive indirect tax levied on the supply of goods and services. The registration process involves submitting an application online, providing essential business details, and obtaining a unique GST identification number (GSTIN). Registered businesses must comply with GST rules, maintain proper records, and file regular GST returns. The registration threshold may vary, and businesses exceeding the threshold must register within a specified time. GST registration enables businesses to collect and claim input tax credits, enhancing transparency, streamlining tax administration, and promoting a unified tax system.
GST registration provides legal recognition to businesses, enhancing their credibility and facilitating easier access to loans, credit, and other financial services.
Registered businesses can claim input tax credits for the GST paid on purchases made for business purposes. This reduces the overall tax liability and improves cash flow.
GST registration is necessary for businesses engaged in interstate trade. It enables them to avail of the benefits of seamless input tax credit and eliminates cascading effects of taxes.
GST registration ensures compliance with tax laws and regulations. It promotes transparency, reduces the risk of tax evasion, and protects businesses from penalties and legal consequences.
Registered businesses can compete effectively in the market as they can charge GST on their supplies and claim input tax credits, making their products or services more competitive.
Small businesses with an annual turnover below the threshold limit can avail of exemptions and simplify their compliance requirements.
GST has simplified tax procedures, including a unified tax system, streamlined registration process, and online filing of returns, making it easier for businesses to comply with tax obligations.
Regular Registration- GST Registration is a process by which a taxpayer gets himself registered under GST. Once a business is successfully registered, a unique registration number is assigned to them known as the Goods and Services Tax Identification Number (GSTIN). This is a 15-digit number assigned by the central government after the taxpayers obtain registration. Please note – If you are operating from more than one state, then you will have to take separate registration for each state you are operating from. All the businesses supplying goods whose turnover exceeds Rs 40 lakh in a financial year are required to register as a normal taxable person. However, the threshold limit is Rs 10 lakh if you have a business in north-eastern states, J&K, Himachal Pradesh and Uttarakhand.
The turnover limit is Rs 20 lakh, and in case of special category States, Rs 10 lakh, for the service providers.
Also, here is the list of certain businesses for which GST registration is mandatory irrespective of their turnover:
Casual Registration- “Casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. A casual taxable person (other than those making supply of specified handicraft goods) making taxable supply in India has to compulsorily take registration. There is no threshold limit for registration.
Composition Registration-Composition scheme is a scheme for payment of GST available to small taxpayers whose aggregate turnover in the preceding financial year did not cross Rs. 1.5 Crores.
In the case of the following States, the limit of turnover is Rs. 75 lakhs:-
Following persons are not allowed to opt for the composition scheme:
NRI Registration- “Non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.
A non-resident taxable person making taxable supply in India has to compulsorily take registration. There is no threshold limit for registration. A non-resident taxable person cannot exercise the option to pay tax under composition levy. He has to apply for registration at least five days prior to commencing his business in India using a valid passport (and need not have a PAN number in India).
A business entity incorporated or established outside India, has to submit the application for registration along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its Permanent Account Number, if available.
A non-resident taxable person has to make an advance deposit of tax in an amount equivalent to his estimated tax liability for the period for which the registration is sought.
It is mandatory for a trust to get the registration under section 12AB of the Income-tax Act, 1961 so as to claim exemption under Section 11.
Newly inserted provisions namely section 12AB and clause (ac) in subsection 1 of section 12A in The Income-tax Act, 1961 (Act) have changed the procedure for trusts/ institutions to get themselves registered under the Act. For trusts/institutions which intend to get themselves registered for the first time have to follow the new procedure which is as under –
Step no 1: Getting Provisional Registration
Step no 2: Converting Provisional registration into Final Registration
(there is no such phrase as Final registration used in the Act, it is just used to avoid confusion and general understanding)
Documents to be furnished along with application form?
(a) Self Certified copies of Trust deed/ certificate of registration/ Certificate of Incorporation
(d) self-certified copy of the documents evidencing adoption or modification of the objects, if any;
(e) where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, self certified copies of the annual accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up; note on the activities of the trust or institution;
(f) self-certified copy of existing order granting registration under section 12A or section 12AB, as the case may be; and
(g) self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AB, as the case may be, if any.
The public charitable trust is one of the possible form of not-for-profit entity in India. Typically, public charitable trusts can be established for various purposes, including the relief of poverty, education, medical relief, provision of facilities for recreation, and any other object of general public utility. Public Trusts are generally irrevocable.
Typically, a public charitable trust must register with the office of the Charity Commissioner having jurisdiction over the trust (generally the Charity Commissioner of the state in which the trustees register the trust) in order to be eligible to apply for tax-exemption. In the metro city of India, Trust can be registered in the office of Sub-Registrar.
Societies are membership organizations that may be registered for charitable purposes. Societies are similar in character to trusts, although there a few essential differences. While only two individuals are required to form a trust, a minimum of seven individuals are required to form a society. The applicants must register the society with the state Registrar of Societies having jurisdiction in order to be eligible to apply for tax-exempt status.
Societies are usually managed by a governing council or a managing committee. In general, Indian citizens serve as members of the managing committee or governing council of societies, although there is no prohibition in the Societies Registration Act against non-natural legal persons or foreigners serving in this capacity. Societies are governed by the Societies Registration Act 1860, which has been adapted by various states. Unlike trusts, societies may be dissolved.
A trust can be made by completing a trust deed; the trusts are of two types. A private trust which is created for the benefit of an individual also know as a beneficiary or particular group and the second one is a public trust also known as charitable trust is created or made for the benefit of the general public.
The first and foremost step to register a trust starts from drafting a good trust deed. IT is important that any trust deed is to be created on appropriate non-judicial stamp paper, every state has its rate of stamp duty. The second step is to book an appointment based on the registered office of the trust jurisdiction with the sub-registrar office, along with the government registration fee.
As per the appointed date assigned by the sub-registrar all trustees along with trust deed need to be present with two witnesses. It takes approx. two weeks for the registration process by the office of the sub-registrar, after that collect Registered deed can be collected. The third and most important step is to get the PAN Number and TAN Number allotted for the trust and then you can open a Bank A/c with any bank for your registered trust.
Trust for any legal purpose(s) can be formed or created by Any individual over 18 years of age. Apart from individuals, an association of persons, a company, society or firm is also eligible for creating trust. In a special case of a minor, the permission of a principal civil court of original jurisdiction is required to create a trust on behalf of a minor.
Any company which fall into below list of category will be called as “Startup” and eligible to be recognised by the DPIIT to avail the benefits from the Government of India.
Under the Startup India Initiative, the companies which are registered under DPIIT are eligible to receive the following benefits:
Eligible startups are exempted from paying income tax for 3 consecutive financial years out of their first ten years since incorporation.
Eligibility to avail tax exemption under 80IAC:
Exemption under Section 56(2)(VIIB) of Income Tax Act
Eligibility to avail tax exemption under Section 56
The following features make the scheme a stand-out factor:
Micro Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.
MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:
Udyam registration (Udyam Registration) is not a statutory requirement. However, the Udyam Registration process in India has been conceptualised to provide maximum benefits to all types of enterprises. After registration, any enterprise becomes qualified to reap the benefits offered under the MSMED Act. Some of the benefits from Central Government include easy sanction of bank loans (priority sector lending), lower rates of interest, excise exemption scheme, exemption under certain tax laws and statutory support.
The state government and union territories also have complied their own package of facilities and incentives for MSMEs. Some of the benefits provided by the state government for MSMEs include the development of specialized industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support.
Both the centre and the state, whether under law or otherwise, target their incentives and support packages generally to units registered with them.Banking laws, excise law and the direct taxes law have incorporated the word MSME in their exemption notifications. Therefore, the registration certificate issued by the registering authority is seen as proof of being MSME and is required to avail the benefits sanctioned for MSMEs. Some of them are detailed below.
MSME Registration process:
Any individual, co-operative society, company or partnership firm can file an application for setting up of Special Economic Zone. The application is to be made in Form-A to the concerned State Government and the Board of Approval (BOA) in the Department of Commerce, Government of India. However the application would be considered by the BOA only when the State Government recommendation is received.
A SEZ or FTWZ other than a SEZ for IT/ITES, Biotech or Health (other than hospital) service, shall have a contiguous land area of 50 hectares or more. In case a SEZ is proposed to be set up in Assam, Meghalaya, Nagaland, Arunanchal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttarakhand, Sikkim, Goa or in a UT, the area shall be 25 hectares or more.
There shall be no minimum land area requirement for setting up a SEZ for IT/ITES, Biotech or Health (other than hospital) services but the minimum built up processing area requirement shall be applicable as per SEZ (3rd Amendment) Rules, 2019 notified vide notification dated 17.12.2019.
Once the BOA gives formal approval and the concerned Development Commissioner gives an inspection report certifying the contiguity and vacancy of the area, the area is notified as SEZ.
Businesses need to determine if they meet the criteria for mandatory registration under GST based on factors such as turnover, interstate operations, and nature of the business.
Businesses must gather the necessary documents, including proof of identity, address, business constitution, bank account details, and other relevant certificates or licenses.
The application for GST registration is filed online through the GST portal provided by the tax authorities. The applicant needs to create an account and complete the registration form with accurate details.
Once the application is submitted, it undergoes verification and validation by the GST authorities. They may request additional information or documents if required.
If the application is approved, the GST authorities will issue a unique Goods and Services Tax Identification Number (GSTIN) to the applicant. The GSTIN serves as a unique identifier for the business for all GST-related transactions.
Registered businesses are required to comply with various GST regulations, including maintaining proper books of accounts, filing regular GST returns, collecting and depositing GST on sales, and claiming input tax credits.
Registered businesses need to file periodic GST returns, which involve reporting details of their sales, purchases, and tax liability. These returns can be filed monthly, quarterly, or annually based on the turnover and nature of the business.
GST authorities may conduct audits or assessments to ensure compliance with GST provisions. Businesses are required to cooperate and provide the necessary information and records during these processes.
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