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Registration Process
under GST Regime
Model Law GST
ABSTRACT
[Registration is Assesse’s first interaction with
the Tax Department and one should be careful
in approaching Department as non-
registrations might invite penalties.
Registration also makes eligible to issue Tax
Invoice or Transfer of Input Tax Credits.]
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REGISTRATION PROCESS UNDER GST REGIME
1. Introduction ................................................................................................................................................... 3
2. Benefits to Taxable Persons taking registration under GST regime ................................................................ 3
3. Persons Liable to be registered ...................................................................................................................... 6
4. Assumptions for Registration Process under GST Regime .............................................................................. 7
5. Salient features of registration process .......................................................................................................... 8
6. Structure of GSTIN ....................................................................................................................................... 10
7. Switching over Compounding Scheme to Normal Scheme and Vice-Versa ................................................... 11
8. How to Obtain Registration under GST? ....................................................................................................... 11
a. Separate Application Forms for Registration ........................................................................................... 12
b. Persons Obtaining New Registration under GST ...................................................................................... 12
9. Approval Process .......................................................................................................................................... 14
10. Migration of Existing Tax Payers ............................................................................................................. 14
Migration Provisions are covered under section 142. ...................................................................................... 15
Section 143: Amount of CENVAT credit carried forward in a Return to be allowed as Input Tax Credit. ........... 16
11. Amendment In the Registration .............................................................................................................. 16
12. Cancellation or Surrender of Registration ............................................................................................... 17
13. Consequences for Non-Registration ........................................................................................................ 18
14. Source of this Article ............................................................................................................................... 19
15. DISCLAIMER ............................................................................................................................................ 19
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REGISTRATION PROCESS UNDER GST REGIME
As discussed in our earlier write up on GST Law & Practice Part-1, that three panels were
constituted to assist Empowered Committee on implementation on GST in India.
In 2015, Reports were issued by these committees with respect to:
Refund Process
Registration
Payment Process
Earlier we had discussed Returns proposed under GST Regime.
We would be discussing proposed Registration Process in Model Law GST. Registration
is assesse’s first interaction with the Tax Department and one should be careful in
approaching Department as non-registrations might invite penalties (Section 66(1)(x))
and other consequences. Registration also makes eligible to issue Tax Invoice (Section
23) or Transfer of Input Tax Credits (Section 37A).
GST Panel-1• Determination of Revenue Neutral
Rate (RNR)
• Place of Provision of Services Rules
GST Panel-2• GST on Inter State Supplies
• GST on Imports
GST Panel-3
• Dual Administrative Controls
• Threshold Limits & Other Exemptions including list of common exempted items.
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1. INTRODUCTION
Registration of a business with the tax authorities implies obtaining a unique identification
code from the concerned tax authorities so that all the operations of and data relating to
the business can be agglomerated and correlated. In any tax system this is the most
fundamental requirement for identification of the business for tax purposes or for having
any compliance verification program. Registration under Goods and Service Tax (GST)
regime will confer following advantages to the business:
Legally recognized as supplier of goods or services.
Proper accounting of taxes paid on the input goods or services which can be
utilized for payment of GST due on supply of goods or services or both by the
business.
Pass on the credit of the taxes paid on the goods or services supplied to
purchasers or recipients.
The taxable person will have to take a separate registration, even though the taxable
person may be supplying goods or services or both from more than one State as a single
legal entity.
2. BENEFITS TO TAXABLE PERSONS TAKING REGISTRATION UNDER GST REGIME
Registration under GST gives the following benefits under:
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Section 16(2): Manner of taking Input Tax Credit
A person who has applied for registration under the Act within thirty days from the date
on which he becomes liable to registration and has been granted such registration
shall, subject to such conditions and restrictions as may be prescribed, be entitled to take
credit of input tax in respect of inputs held in stock and inputs contained in semi-finished
Unique Identification
Link All Transactions
Proper Accounting
Passing of Tax Credit
Ease in Compliance
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or finished goods held in stock on the day immediately preceding the date from which he
becomes liable to pay tax under the provisions of this Act.
Thus if a person is not registered he will not be able to take Input Tax Credit. So to take
ITC one has to get registered within 30 days.
Case Study:
Case-1: ABC Ltd applies within 30 days but Registration is granted after 30 days. Will he
be able to take Credit?
Yes, as application was made within specified time i.e. 30 days though registration is
granted later. Because application should be filed within 30 days. Later approval of
registration will not affect its status to take credit.
Case-2: ABC Ltd applies within 30 days but Registration is Rejected by Department. Can
ABC Ltd eligible for credit?
NO, both conditions are not satisfied. Application was made within 30 days but there was
no approval as application was rejected.
Remedy: If he re-applies and that is approved by the Department then can he take credit
from beginning?
No, as re-applies will be considered new application and in such case such approval will
not make eligible ABC Ltd to take credit since beginning.
In such case ABC Ltd should file appeal against REJECTION ORDER and pursue
ORIGINAL APPLICATION and get Registration from original date then only ABC Ltd
will be eligible to take credit from beginning.
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3. PERSONS LIABLE TO BE REGISTERED
Section 19 deals with Normal Registration covered under Schedule III, Voluntary
Registrations etc. whereas Section 19A deals with Special Provisions for Registration of
Casual Taxable Person and Non-Resident Taxable Person.
The following Dealers providing services are required to be registered under GST:
Persons registered to pay Existing indirect taxes
All india Gross Turnover more than Threshold Limit
Making Interstate Supplies
Casual & Non-Resident Suppliers
Making Voluntary Registration
Specific Class of Persons
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4. ASSUMPTIONS FOR REGISTRATION PROCESS UNDER GST REGIME
Assumptions for Registration under GST are as follows:
A person can neither collect GST from customers nor claim the any input tax credit
of GST
There will be a threshold of Gross Annual Turnover including exports and
exempted supplies above which any person engaged in supply of Goods or
Services or both will not be required to take registration.
Any dealer exceeds the threshold limit is required to take mandatory Registration
under GST regime.
Effective date pf registration will date of application in all cases
A person can take voluntary registration under GST & can also enter the input
chain even prior to crossing the threshold limit, provided that he does not opt for
compounding scheme
There will be a higher threshold limit for persons opting for compounding scheme
& hence can opt to pay tax at a specified percentage of the turnover without
entering the credit chain.
Irrespective of turnover, if a taxable person carries out any inter-state supply and/or
is liable to pay GST under reverse charge, he will be compulsorily required to take
registration.
An individual importing services for personal consumption will not be liable to pay
GST under reverse charge or register under GST.
All UN Bodies seeking to claim refund of taxes paid by them would be required to
obtain a unique identification number (ID) from the GST portal.
A unique identification number will be given by the respective state tax authorities/
PSUs not making outwards supplies of GST goods (thus not liable to obtain GST
registration).
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The Input Services Distributor are required to obtain GST Identification Number
(GSTIN) for distributing the credit of GST paid on services proposed to be used at
multiple location which are separately registered.
All registered persons, whether with the Centre or State under any of the tax
statues being subsumed in GST, would be allotted a GST registration number
called Goods and Services Tax Identification Number on voluntary basis. Dealers
who are below the GST threshold will have option to remain in GST chain.
Tax Authorities, in case of enforcement cases, may grant suo-moto registration. If
such person does not have PAN, the registration would be initially temporary and
later converted into a PAN based registration.
5. SALIENT FEATURES OF REGISTRATION PROCESS
Salient features of registration process under GST Regime are as follows:
PAN will be mandatory for registration under GST
Unified Application to both Tax Authorities Central as well as State
Application to filled within 30 days after crossing the threshold limit
State-wise registration having presence in more than one state
Approval for the application within three working days
Within a PAN, separate registration for separate business verticals within a state
is possible with respect to certain condition:
o Input Tax Credit across the business verticals of such taxable persons shall
not be allowed unless the Goods or Services are actually supplied across
the verticals.
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o All Business verticals, separately registered will be considered as a single
legal entity for the purpose of recovery of dues.
Rejection of application for Registration under CGST/SGST shall be deemed
to be a rejection of application for Registration under SGST/CGST Act.
[Section 19(10)]
Grant of registration under CGST/SGST Act shall be deemed to be grant of
registration under the SGST/CGST Act provided that the application for
registration or the Unique Identity Number has not been rejected under
SGST/CGST Act within the time specified in Section 19(7). [Section 19(11)]
Application shall not be rejected without giving a notice to show cause and without
giving the person a reasonable opportunity of being heard. [Section 19(8)]
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6. STRUCTURE OF GSTIN
Structure of GSTIN will be as follows:
STATE
CODE
PAN ENTITY
CODE
BLANK
CHECK DIGIT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
15 Digit Assessee Code
State-Wise Allocation
Based on PAN
13 Digit for Business Verticals of entities with same PAN in same State
14th Digit left blank for Future Use
15th Digit to Checksum
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7. SWITCHING OVER COMPOUNDING SCHEME TO NORMAL SCHEME AND VICE-VERSA
Switching over from Compounding scheme to Normal scheme and vice-versa would be
dealt in the manner described below:
Any existing taxpayer not under Compounding Scheme under the present Acts
may opt for compounding scheme if eligible only from the beginning of the next
financial year.
Compounding dealer may be allowed to switch over to normal scheme even during
the year if they so want with a condition that they cannot switch over to
compounding scheme again during the same financial year.
Any existing taxpayer under the Compounding scheme upon crossing the
Compounding threshold will be switched over to the Normal scheme automatically
from the day following the day of crossing the Compounding threshold.
For the changes covered by 1st to 3rd Points above, the validation in the return
module should change automatically under intimation to the concerned taxpayer
and both the tax authorities.
8. HOW TO OBTAIN REGISTRATION UNDER GST?
There are various forms for various entities depending upon the type of registration. A
registration form is developed by GSTN as per the standard practices / protocols on IT
notified by the Govt. of India e.g. for digitally capturing a postal address, name etc. In
case there is no standard practice for any of the field, the same should be developed by
the GSTN and form designed accordingly.
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A. SEPARATE APPLICATION FORMS FOR REGISTRATION
Separate application forms are to be designed for:
Multiple registration for business verticals of same legal entity (it must be
registered already) within a State
Application for registration in more than one State (that can be filed at one go)
Amendments to existing Registration(s)
Option to avail / withdraw from the Compounding scheme
Enrolment of Tax Practitioner or Facilitation Centre if provided for in the GST Law
Assignment of Role (by a dealer) to TP/FC, as agent of the dealer if so provided
for in the GST Law
Application for new registration on account of Succession / Amalgamation / De-
merger etc. of existing GST registrants
Application by UN bodies for getting a Unique Identification Number (ID)
B. PERSONS OBTAINING NE W REGISTRATION UNDER GST
For Obtaining Registration all taxable persons are required to follow the following Steps:
All taxable persons are required to interact with the Tax Authorities through the
GST Common Portal set by the Goods and Service Network.
The process for obtaining voluntary as well as mandatory registration is same
under GST.
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Also the Same applicant can file more than one registration for other states where
the applicant seeks registration or for more than one business vertical located in a
single or multiple states.
Applications not submitted through Digital Signature to be supported by sending a
signed copy of summary extract o the form.
o Processing of application and grant of registration even before signed copy
received.
o Cancellation to be initiated if no signed copy received
Email and SMS based alerts to the applicants.
No application fee (Advance Tax in case of casual Suppliers)
Application can also be filed through Facilitation Centres (FCs) or through Tax
Return Preparers (TRPs)
Documents Required under the GST Registration process are as follows:
Proof for Constitution of Business
Proof for Principal Place of Business
Bank Details
Details of the Authorized Signatory
Photograph of the Authorized Signatory
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9. APPROVAL PROCESS
The Approval process will goes in the following format under GST:
Online verification of certain details like PAN, CIN, Bank Account (If possible) and
Aadhaar
Online communication of application to jurisdictional
authority by the backend modules of tax authorities
3 common working days for tax authorities to respond
Deemed approval after 3 days
Single opportunity to tax authorities to raise query, if any – 7 days for response
and 7 days for action
Mostly post registration visits based on risk profile
Online grant of registration
Log-in id and temporary password communicated to the tax payer
Downloadable Registration Certificate to be provided by GSTN
Refusal to register by one tax authority deemed as refusal by both
Communication of reason for refusal of registration
10. MIGRATION OF EXISTING TAX PAYERS
All existing registered persons, whether with the Centre or State under any of the tax
statues being subsumed in GST, would be allotted a GST registration number called
Goods and Services Tax Identification Number (GSTIN) on voluntary basis. Dealers who
are below the GST threshold will have option to remain in GST chain. [page 6 of Report
on GST Registration by Joint Committee]
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MIGRATION PROVISIONS ARE COVERED UNDER SECTION 142.
In case of existing Tax Payers who are either registered with states or with centre or with
both the system shall be designed to migrate cleaned and verified data form the existing
database to the GST Common Portal and a GSTIN is generated. With regards to the
migration of data of the existing registrants, following steps are necessary:
The process of migration of data must be started sufficiently in advance so that the
business of existing registrants does not suffer and transition from the present
system to GST is smooth.
State tax authorities will communicate the GSTIN/password to taxpayers, with
instruction to log on the GST portal and fill up the remaining data.
In case, PAN has been validated but the email or mobile numbers of dealers are
not available, such dealers may be advised through newspaper advertisement to
visit the GST portal and use the following data for user authentication:
o VAT-TIN
o PAN
o Date of Birth/Date of Incorporation in DDMMYYYY format. (This data is
available with PAN Database)
Date of birth of proprietor in case of Proprietorship firm.
Date of incorporation in case of all other types of dealers
In those cases where PAN has not been validated, State VAT department will have
to collect the taxpayers
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SECTION 143: AMOUNT OF CENVAT CREDIT CARRIED FORWARD IN A RETURN TO BE ALLOWED AS
INPUT TAX CREDIT.
A registered taxable person shall be entitled to take, in his electronic credit ledger, credit
of the amount of CENVAT credit carried forward in a return, furnished under the earlier
law by him, in respect of the period ending with the day immediately preceding the
appointed day in such manner as may be prescribed.
11. AMENDMENT IN THE REGISTRATION
Section 20 deals with Amendment of Registration
(1) Every registered taxable person shall inform the proper officer of any changes in
the information furnished at the time of registration, or that furnished
subsequently, in the manner and within such period as may be prescribed.
(2) The proper officer may, on the basis of information furnished approve or reject
amendments in the registration particulars in the manner and within such period
as may be prescribed.
(3) The proper officer shall not reject the request for amendment in the registration
particulars without giving a notice to show cause and without giving the person a
reasonable opportunity of being heard
Capturing registration information is not a one-time activity and any change in critical
information should be entered at the common portal within a stipulated time period.
Amendment in the registration will be done in the following way:
Changes to other registration data can be done on self-service basis
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Change to compounding scheme will require submission of reasons and
prescribed relevant documents
The same change is required to be approved by the Tax Authorities.
All amendments in the details in registration application form will be retained in the
database of the GSTN and will be made visible to the tax authorities.
12. CANCELLATION OR SURRENDER OF REGISTRATION
Section 21 deals with Cancellation of Registration
In the following cases, the registration can be either surrendered by the registrant or
cancelled by the tax authorities:
Closure of business of Tax Payer
Gross Annual Turnover including exports and exempted supplies (to be calculated
on all-India basis) falling below threshold for registration
Transfer of business for any reason including due to death of the proprietor of a
proprietorship firm
Amalgamation of taxable person with other legal entities or de-merger
Non-furnishing of Returns for three consecutive tax period by a Compounding
Taxable Dealer U/s 8. [Section 20(2)(b)]
Non-furnishing of Returns for continuous period of 6 months for dealers other than
Composition Dealers. [Section 20(2)(c)]
Non commencement of business by the voluntary tax payer within the stipulated
time period (6 months) prescribed under the GST laws. [Section 21(2)(d)]
In case of surrender, the system will send an acknowledgment by SMS and e-Mail to the
applicant regarding his surrender of registration and he will be deemed to be unregistered
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from the date of such acknowledgement. There will be a provision in the system to prompt
such surrendered registrants to update their address and mobile number at a prescribed
periodicity till all dues are cleared/refunds made.
The cancellation of registration may be done by tax authorities in the following situations:
In case signed copy of the summary extract of submitted application form is not
received even after a reminder;
In case a tax payer contravenes specified provision of the GST law
In case a taxpayer has not filed any return at all during a predetermined period
(say six months). In case a taxpayer has filed a nil return continuously for this
period, then the provisions of cancellation will not be applicable.
The cancellation of registration may be preceded by system generated notice
giving 7 days‟ time for furnishing reply by the taxpayer. Principle of natural justice
to be followed before cancellation, i.e., giving an opportunity to taxpayer to be
heard and passing of order.
If the taxpayer approaches the tax authority for revocation of surrendered or cancelled
registration, the surrendered / cancelled registration can be revoked. The action for
revocation would be initiated by that Authority which has cancelled the registration or had
earlier accepted the surrender of registration. The action for revocation / cancellation of
registration would have to be initiated by both Centre and State tax authorities. Once the
registration is cancelled by one authority it would be deemed to be cancelled by other
authority also. The cancellation or surrender of registration would always have
prospective effect.
13. CONSEQUENCES FOR NON-REGISTRATION
Non-Registration of a business might have following consequences:
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Penalty of Rs. 10,000/- (Section 66(1)(x))
Non eligible for Input Tax Credit (Section (Section 16(2)
Non eligible for issue of Tax Invoice (Section 23)
Non eligible for Transfer of Input Tax Credit (Section 37A)
Detention of Goods & Conveyance (Section 69)
Confiscation of Goods (Section 70)
Confiscation of Conveyances (Section 71)
14. SOURCE OF THIS ARTICLE
Report of the Joint Committee on Business Process for GST on GST
Registration (July’15)
PPT on Proposed Registration Process (Oct’15)
Model Law GST
15. DISCLAIMER
This document is for information only. All care has been taken for laws
but in case something has been missed request our readers to update
us. This should not be taken as any advice from our concern. We shall
not be liable for any loss if occurred for laws stated in this document.
Thanks & Regards Team GSTpanacea.com 7503031378
[email protected]