In our GST article last week, we looked at the GST structure, significance and relevance for the Indian ecommerce industry. Here’s taking a look at the registration process.
Step by step guide for GST registration
Step 1 – Verify preliminary details:
- A person has to create a login account on the GST website to begin with the registration process where the person has to submit his PAN, mobile number and Email ID on the GSTN portal.
- The PAN verification will be done online automatically.
- The mobile number and email ID shall be verified through OTP (One Time password) validation system.
- All these details are to be filed in form PART 1 of GST REG-01.
Step 2 – Submit application form:
- Once form GST REG-01 details verification is complete, one has to complete all the related registration formalities like uploading documents.
- Documents required for GST registration are as follows:
- Constitution of taxpayer (Example: – Partnership deed, COI, etc.)
- Proof of principle place of business (Example: – electricity bill, NOC, rent agreement)
- Bank Account details
- The application is submitted online through form GST REG-02.
Step 3 – Verification by officer:
- Once the application form GST REG-02 is filled and submitted, it will be forwarded to the GST officer who will then examine the application and the attached documents.
- If all details and document are found to be in order, then the GST registration will be granted within 3 working days.
- If any issues are found in the application, then it shall be communicated to the applicant within 3 working days in form GST REG-03.
- The applicant will have to respond with the necessary details within 7 working days through form GST REG-04.
Step 4 – No response from GST officer:
- If the officer does not respond to you either with any deficiencies or any approval, then the application for grant of registration will be considered as approved.
Step 5 – Registration Certificate:
- When the application is approved by the officer, then a registration certificate in form GST REG-06 shall be issued through a common portal which the applicant will be able to download easily from the common portal using their login ID and passwords.
Step 6 – Multiple branch registration:
- If you have different branches in different states, then separate registration needs to be applied for in each state where you are present.
- A registered taxable person eligible to obtain a separate registration for business verticals may file separate application in form GST REG-1 in respect of each such vertical.
Merits of GST
- Tax evasion will be de incentivized – If you don’t pay tax on what you sell, you don’t get credit for taxes on your inputs. Also, you will buy only from those who have already paid taxes on what they are supplying resulting in bringing currently underground transactions overground.
- Earlier, there was more tax on fewer items, but with GST, there will be less tax on more items.
- Transaction costs and unnecessary wastages will reduce – A single registration and single compliance will suffice for both SGST and CGST, provided government produces effective IT infrastructure and integration of state levels with the union.
- Multiplicity of taxation will be eliminated – Reduction in the number of taxation applications in a chain of the transaction will help to reduce paperwork and help to clean up the current mess that has been brought by the existing indirect taxation laws.
- One point single tax – People’s main focus will be on business rather than on their taxation that will be cropped at a later stage. This will help the business community to decide their supply chain, pricing propositions and in the long run, help the consumers be competitive with regards to goods as the price will no longer be a function of tax components but will be a function of sheer business intelligence and innovation.
- Reduces average tax burdens – The cost of tax that the consumers have to bear will be certain and there are possibilities of GST reducing the average tax burdens on consumers.
- In all cases except a few products and states, there would be uniformity of tax rates across the states.
Demerits of GST
- Rise in compliance cost, as there will be dual control on every business by Central and State Government.
- Tax on retail will be doubled.
- Imported goods will be taxed at a high rate by (around 6%).