Eligibility for GST

GST registration serves as a cornerstone in effective business management, establishing credibility and legality. Companies must register under GST rules if their annual turnover surpasses ₹40 lakhs. Understanding eligibility for GST is crucial which includes meeting turnover thresholds, possessing a valid PAN Card and engaging in taxable supplies of goods and services.

Meeting these criteria not only ensures compliance but also offers various benefits such as reduced compliance costs, streamlined tax procedures and enhanced competitiveness. It's a strategic move for businesses to align with GST regulations paving the way for smoother operations and enhanced brand reputation.

What is GST Registration?

GST Registration refers to the process by which a business or individual obtains a unique identification number known as the Goods and Services Tax Identification Number (GSTIN). This registration is mandatory for businesses engaged in the supply of goods or services in India, provided their turnover exceeds a certain threshold.

Once registered the entity becomes liable to collect GST on its sales can claim input tax credits on its purchases and is required to file periodic GST returns to the tax authorities. GST Registration process involves submitting an application along with necessary documents to the GST portal after which the tax authorities verify the information and issue the GSTIN.

Who must compulsorily register for GST?

• E-commerce operators.
• Casual taxable persons. 
• TDS/TCS deductors.
• Input Service Distributors.
• Non-resident casual taxable persons.
• Persons making any inter state taxable supplies.
• Individuals working in the import export industry.
• Individuals representing a registered taxpayer.
• Individuals running an aggregator company.
• Who sells products on e-commerce sites.
• Businesses operating across state borders.
• Persons subject to reverse charge taxation.
• Entities previously registered under taxes like VAT, excise duty and service tax.
• Providers of Online Information Database Access and Retrieval services in India.

Who is not eligible for GST registration?

Few goods and services are exempt from GST including:

• Exporting agricultural produce and goods beyond India's borders.
• Goods supplied to Special Economic Zone (SEZ) developers are exempt from GST
• Goods such as petrol and alcohol meant for human consumption are exempt from GST.
• Items listed as zero rated with a fixed tax rate of zero percent are exempt from GST.
• Transportation services like public transport, metered cabs, auto rickshaws, metro services and similar modes of conveyance.
• Governmental and foreign diplomatic services.
• Transportation of goods with a total cost below ₹1500.

GST registration threshold limit

To be eligible for GST registration a company's annual turnover must meet specific criteria:

• Manufacturing sector: The threshold limit is ₹40 lakhs or higher.
• Service sector: The threshold is ₹20 lakhs or higher.
• Certain category states: The threshold is ₹10 lakhs or more.

Special Category States include Assam, Arunachal Pradesh, Manipur, Jammu & Kashmir, Meghalaya, Nagaland, Mizoram, Sikkim, Tripura and Uttarakhand.

• Jammu & Kashmir and Assam have a threshold limit of ₹40 lakhs for goods.
• Puducherry a regular category state has a threshold limit of ₹20 lakhs for goods.

What is included in the aggregate turnover under GST?

Aggregate turnover is the combined revenue generated by all businesses registered under a single PAN.

• Taxable purchases
• Exemption sales
• Exports

Items have not included Total turnover:

• Value of sales tax 
• The value of purchases where taxes are paid by the recipient instead of the supplier.
 

GST Registration Fees

There are no charges for completing the GST registration process. However, if businesses fail to complete registration they may face a penalty of either 10% of the due amount or ₹10,000. In cases of tax evasion the penalty is 100% of the due amount. After uploading the required documents businesses will receive an Application Reference Number (ARN) via SMS and email as confirmation of their registration.

Things to keep in mind before applying for GST Registration

• PAN is required for GST registration since GST Registration numbers are based on PAN.
• Casual or non resident taxable persons must apply for registration five days before starting their business.
• Individuals must apply for registration in every state where they are required to do so within thirty days of becoming liable.