Procedural aspects of registration under Goods and Services Tax

Introduction:- It is well know that after introduction of GST, Whole India will become one market and there will be free flow of Goods, Services and Input tax credit (Cenvat Credit) from one place to another.  From taxpayers point of view registration is one of the important factors to proceed with GST.  The provision relating to registration is covered under the Chapter IV of Model Goods and Services tax Act 2016. Government has already published business process on registration. By combined reading of these two documents, it seems that the process of registration is much easier in GST Law. The exemption limit under proposed GST law has also been drastically narrowed [Rs 10 laks/Rs 5 Lakhs] as compared to limit as stated in Central Excise Law[ Rs 150 Lakhs].  Many provisions as stated in Central Excise, Service tax and VAT law are kept as there are and new concept like casual dealer has been added. It seems that all the procedure relating to registration are online but in case need arises, physical verification, also can be done.

Who needs to be registered under GST regime?        

The provisions related to registration are provided under Chapter VI of Goods and Services Tax Law 2016 (hereinafter referred as An Act). According to Section 19, every person who is registered or holds a registration certificate under Central Excise law, Service tax law, Central Sales tax or under State VAT law shall be liable to be registered under this Act with effect from date of enactment of this Act.

In Case of a person who is not registered under any of the above act shall be liable to be registered under this act if his turnover in financial year exceeds the taxable threshold. The threshold limit of turnover for the purpose of registration is kept Rs. 4 Lakhs for North East States including Sikkim and Rs 9 Lakhs for other States.   

For this purpose turnover means all India Gross Annual turnover including turnover of exempted goods, exempted services and exports. So if any person is doing the business from more than one location, turnover of all such units shall be considered for this purpose.  

It may be noted that if a person having turnover below threshold limit but wants to get registered under GST act can apply voluntarily for the same under section 19(3). However a person doing following activities has to apply for registration irrespective of his turnover;

1. Inter-state supply
2. Person liable for payment of GST under reverse charge basis
3. Casual Taxable person
4. Non-resident taxable person
5. Person Supplying a goods on behalf of other person as an agent or otherwise
6. Input service distributor
7. Person supplying goods and/or services [other than branded goods] through electronic commerce operator     
8. Electronic commerce operator.
9. An aggregator supplying goods under his own brand name

What is the time limit for the registration?

Every Manufacturer or a Service provider or a dealer registered under Central Excise Act or under Service tax law or State Vat law will get automatic Pan based registration number without fresh application.

In case of new dealer, he has to apply online for the registration within a specified period as stated below

How to apply for the registration under GST?

Every person who wants to obtain a registration needs to apply for registration through Goods and Services Tax Network portal (GSTN Portal). In Case of fresh registration a person needs to follow following procedure

A] Procedure for fresh registration under GST

1. Application for Registration:- A person needs to apply online for registration either through GSTN Portal or through Facilitation Center in such form along with such documents as may be prescribed. The application must be signed using digital signature. In absence of digital signature, taxpayer would have to send a signed copy of the summary extract of the submitted application form printed from the portal to a central processing center to be operated by GSTN.

2. Confirmation Message:- Once a completed application is submitted online, a message asking for confirmation will be sent through e-mail and SMS to the authorized signatory of the applicant. On receipt of such confirmation from the authorized signatory, Acknowledgement Number would be generated and intimated to the applicant.

3. Documents required for registration:- Following documents shall be required for the purpose of registration

1. Proof of Constitution such as Partnership deed, Registration Certificate under various statute, etc.
2. Details & Proof of place of business such as copy of electricity bill, municipal tax receipt, rent agreement, etc.
3. Details of bank account such as name of Account Holder, MICR code, IFSC code and bank branch details.
4. Details of authorized signatory
5. Photograph of
   1.  Proprietor in case of  Proprietary Concern
   2. Partners in case of  Partnership Firm / LLP – Managing/ Authorized
   3. Karta in case of HUF
   4. Managing Director or the Authorised Person in case of  Company
   5. Managing Trustee in case of Trust
   6. Members of Managing Committee in case of Association of Person or Body of Individual
   7. CEO or his equivalent in case of Local Body
   8. CEO or his equivalent in case of Statutory Body
   9. Person in Charge in case Other than above category of person –

4. Verification of Filed Information:- On receipt of the online application GSTN system shall carry out a preliminary verification of documents like CIN number, PAN Number, Adhar Number with various authorities through inter-portal connectivity. A copy of signed application along with the documents as stated above shall be sent to the GSTN portal.

After primary verification GSTN portal shall forward such application to Central/State tax authorities for further verification. Central/state authorities shall within 3 working days verify the correctness of details as shown in the application and will communicate the same to the GSTN portal. If the details as filed by the applicant are correct, registration certificate shall be granted to the applicant. If registration is refused the reason for the same shall be communicated to the concerned person. However reasonable opportunity of being heard shall be given to the applicant (Section 19(8))

5. Grant of Registration Certificate:- The Central/State authorities must respond on application to GSTN portal within 3 working days, either communicating approval or raising a query. In case non communication of approval or rejection, the application shall be deemed to be approved by the authorities and GSTN portal shall generate the registration certificate and will communicate to the Applicant through e-mail and SMS. Applicant can download the RC from GSTN Portal 

In case if tax authorities raise any query, same shall be communicated to applicant. Applicant will have to respond to the same within a period of 7 working days failing which the application will be rejected. Within next 7 working days, tax authorities will respond to the applicant and will grant the Registration Certificate. 

B] Procedure for migration of existing registrants under GST

1) Migration of Data in GSTN:- All existing registrants, who have registered themselves either under Central Law or with State Law or with both shall get automatically migrated into GST. The migration activity is conducted by NSDL with the co-ordination of central and state tax authority.

2) Collection of additional information:- Currently for the purpose of registration under Central & State Law, 50 to 107 fields are required to be filled in. Under proposed GST, 120 fields are designed for registration. Thus there is gap of 13 to 70 fields for which the data will have to be collected from the taxpayer.

The GSTN shall provide a provisional registration number based on the data filtered by the NSDL. The user name and password shall be communicated to tax authorities who shall communicate the same to taxpayer. After getting user id and password, taxpayer will have to complete the remaining details of registration form along with the requisite document within the stipulated time.

3) Grant of Registration Certificate:- After completion of form, tax authorities shall verify the same with the documents filed by the taxpayer and will communicate the same to the GSTN. After approval from tax authorities, GSTN shall generate the registration certificate and shall communicate the same to the taxpayer through E-mail and SMS.   

4) Registration Number:- After successful completion of registration process, GSTN portal shall provide 15 digit alpha Numeric registration number. The registration number will be known as Goods and Service Tax Identification Number (GSTIN). The structure GSTIN will be as follow

State code shall be taken from the Indian Census 2011. Entity code denotes number of registered entities under a state. E.g. if a legal entity is having single registration in a particular state, “1” shall be the 13th code of registration. This way 35 business vertical of same legal entity can be registered in a state. 14th and 15th digit is intentionally kept blank for future use.      

Whether amendment in registration certificate is possible?

1. It is possible that the details as provided in the application form for registration may change subsequently. In such event taxpayer must intimate such change to the tax authorities under section 20(1) of an act in such manner as may be prescribed. 
2. In case of change to composition scheme will require submission of reason along with the documents to the tax authorities.
3. The officer reserves a right to approve or reject the amendments under section 20(2) of an Act. Cancellation of amendments can’t be done without giving a show cause notice and without giving an opportunity of being heard.

In what circumstances registration can be cancelled or surrendered?

The proper officer may, either on his own motion or on an application of the taxpayer cancel the registration within such period as may be prescribed.  In the following cases, the registration can be either surrendered by the registrant or cancelled by the tax authorities:

1. the business has been discontinued or transferred fully
2. there is any change in the constitution of the business; or
3. The taxable person, other than the person registered under sub-section (3) of section 19, is no longer liable to be registered under Schedule III.
4. The proper officer may, in the manner as may be prescribed, cancel the registration of taxable person from such date, including any anterior date, as he may deem fit, where, -

(a) The registered taxable person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) A person paying tax under Section 8 has not furnished returns for three consecutive tax periods; or

(c) Any taxable person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

(d) Any person who has taken voluntary registration under sub-section (3) of section 19 has not commenced business within six months from the date of registration.

5. Where any registration has been obtained by means of fraud, willful misstatement or suppression of facts, the proper officer may cancel the registration with retrospective effect, subject to the provisions of Section 29.

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.

If the taxpayer approaches the tax authority for revocation of surrendered or cancelled registration, the surrendered / cancelled registration can be revoked under Section 22 of the Act. The action for revocation would be initiated by that Authority which has cancelled the registration or had earlier accepted the surrender of registration

Multiple registrations in case of multiple locations

In case a person is doing business from multiple locations in a State, he has to apply separately for registration for each and every location of business under sub Section (2) of Section 19 of the act.

For each State, 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

Registration as a casual dealer

Sometimes a taxable person wants to do a business in a State or States for a limited period. In such case, he needs a temporary registration for that period only. In such event a taxable person can apply for the registration as a casual taxable person. Casual taxable person is defined under section 2(21) as a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business.

Casual taxable person or non-resident person can apply for registration under Subsection (1) of Section 19A along with the deposit equivalent to his estimated tax liability for the said period. The proper officer shall grant such registration certificate for the period of ninety days. The said period can be further extended up to next ninety days by the authority on the request.  Such additional period shall be granted only on the receipt of additional deposit towards estimated tax liability for said additional period.   

Disclaimer:- All the views  expressed in this article are based on the Model law as published by Government of India and the position may vary in actual GST Law. Readers are advised to consult the professionals for understanding applicability of the newsletter. Due care has been taken while preparing this document, however existence of error or omission is not ruled out. 

The author is practicing Cost Accountant and can also be reached at cmadipakjoshi@gmail.com