GST Registration Eligibility: Rules, Process & Benefits - Tally Solutions

GST Registration Eligibility


Introduction

The new Goods and Services Tax that is simply called as GST was introduced across the country on July 1, 2017. GST is a single tax that replaces several indirect taxes levied by both the State and the Central government.

All businesses are required to assess whether the business is liable to register for GST and accordingly obtain GST registration. The unique identification code must be obtained by every supplier effecting taxable supplies, subject to a threshold limit, by registering with the tax authorities so that all the operations and data relating to the business can be correlated and agglomerated.

Check out the below mentioned eligibility criteria for GST registration and assess whether your business needs to obtain GST registration.

1. What is GST Registration?

Every supplier effecting taxable supplies, subject to a threshold limit is liable to get his business registered with the tax authorities by obtaining a unique identification code (i.e. GSTIN) from the concerned tax authorities so that all the operations of, and data relating to the business can be agglomerated and correlated.

And this process we call it GST Registration process.

2. GST Registration Eligibility: Threshold Limit Study

Finer Point No.1 Threshold limit to mean Aggregate Turnover in an Financial Year
Finer Point No.2       i.        The statutory limit is Rs. 20 lacs for rest of India and it is Rs. 10 lacs for Special category states   ii.        Special category states to include Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand

3. Aggregate Turnover & GST Registration Eligibility

Example: ABC Pvt Ltd is manufacturing unit in Calcutta, West Bengal along with unit at Uttarakhand. Turnover details of all the units are as follows:

Calcutta Unit Rs. 8 lacs
Uttarakhand Unit Rs.11 lacs
Analysis with Results:
Analysis No.1   Uttarakhand unit falls under special category state   Hence the threshold limit stays as Rs. 10 lacs to determine GST Registration eligibility
Result   Hence, in the given case ABC Pvt. Ltd. would be required to take registration in Uttarakhand due to aggregate turnover exceeding  Rs. 10 Lakhs (Rs. 11 lacs in the given case)
 
Analysis No.2   Calcutta unit having a turnover of less than threshold limit i.e., Rs. 20 lacs as it does not fall under special category state.
Result  1. Still require to be registered separately by virtue of compulsory registration in state of Uttarakhand   2. In the given case, the supplier has to separately register for state of Calcutta.   3. The aggregate turnover limit of Rs. 20 lacs for other than special category state has to be overlooked in this case.

4. Separate Registration for each State vs.GST Registration Eligibility

From the results derived at Analysis 2, it clearly means that for each state for which the supplier is liable for registration, the supplier will have to take a separate registration even though he may be supplying goods or services or both from more than one State as a single entity.

5. Multiple Business Verticals and Eligibility for GST Registration

A person having multiple business verticals in one State may obtain separate registrations for each of the business vertical, subject to prescribed conditions to be eligible for GST Registration.

For this purpose a business vertical to means:

  • a. a distinguishable component of an enterprise
  • b. that is engaged in the supply of individual goods or services or a group of related goods or services
  • c. which is subject to risks and returns that are different from those of the other business verticals

6. Documentation Role in GST Registration Process

The person eligible for GST Registration must keep ready the following documents:

A Copy of PAN Card Address proof of place of business
A Copy of Aadhar Card Bank account statement/Cancelled cheque leaf
Proof of business registration or incorporation certificate Digital Signature
Identity and address proof of Promoters/Directors/Partners/Sole proprietor with photographs Letter of authorization/Board Resolution for Authorized signatory

7. Benefits to Follow: Determining the Eligibility for GST Registration

The registration will confer the following benefits to the registrant:

  • 1. Legally recognised as a supplier of Goods and/or Services;
  • 2. Proper accounting of taxes paid on the input goods and / or services;
  • 3. Utilisation of input taxes for payment of GST due on supply of goods and / or services or both;
  • 4. Pass on the credit of the taxes paid on the goods and / or services supplied to purchasers or recipients.
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