What exactly is a GST Number? What facts and specifics surround the all-important number required for doing business in India? Continue reading to understand the 7 fundamentals of GST Number – what it is, why it is significant, how to apply for it, and so on. But before that, what exactly is GST?
What Exactly Is GST?
One Nation, One Tax, And One Market – Thus this is the concept for GST, one of the most significant economic changes implemented by the Government of India this century. GST is still a work in progress four years after being launched and implemented.
GST becomes the Goods and Services Tax.
The income tax is the only direct tax in India. We had a slew of indirect taxes before 2017: VAT, CST, service tax, central excise, customs duty, extra customs charge, luxury tax, entertainment tax, and so on. Thus, these taxes vary from one state to the next. Thus the minimize the consequent confusion and to streamline the system, the Government of India implemented GST, a single indirect tax that applies to all states and union territories.
Large and small firms will now be required to register for GST and be assigned a unique GSTIN or GST Number upon registration. What exactly is a GST Number?
Eventually, you may become a qualified GST Practitioner with the Best GST Course in India. Thus, industry professionals will teach you all you need to know about GST, from registration to refunds to return filing.
1. What Is A GST Number?
Any firm with a yearly turnover of over 20 lakhs must register for GST and get a GST number or GSTIN. What is the GST number now? Thus the GST Identifying Number is a unique 15-digit pan-based identification number issued to any entity registered under GST. GSTIN replaces the former system’s many registration numbers, such as TIN (Taxpayer Identification Number), CST, service tax, excise, etc.
Hence a single PAN might have several GST Numbers. Eventually, a person can operate numerous enterprises in a state or union territory under a single PAN number, each with its own GSTIN.
2. GSTIN Structure
The GST number is structured as follows:
- According to the Indian Census 2011, digits 1 and 2 represent the state code unique to each state and union territory. For example, the state of Jammu and Kashmir has the code 01, Himachal Pradesh has the code 02, Punjab has the code 03, Tamil Nadu has the code 33, Pondicherry has the code 34, and so on. Hence, click on the link for a comprehensive list of state codes.
- Digits 3 to 12 – the company concern’s or Taxpayer’s ten-digit alphanumeric PAN number.
- Digit 13 represents the number of registrations for the same PAN within a state. Thus, this can be alpha or numeric. If, for example, a business house A has only registered one company in a state, the GSTIN’s 13th digit will be 1. 2 firms will give 2, and so on, up to a maximum of 35 registrations, 1 to 9, and then A to Z.
- Digit 14 – The alphabet Z is at the 14th position by default.
- Digit 15 is a check code used to identify mistakes. This is also alphabetic.
3.Why Do We Require A GST Number?
Thus, there are several reasons why a GSTIN is becoming required for Indian businesses. Let’s have a look at them now:
- It is the legal recognition of the business.
- Thus, the GSTIN of both the supplier and the customer is required in every invoice produced in a trade to permit input tax credit. You can deduct the tax already paid on the purchase or input when you pay tax on your sales or production under the new GST regime. This is an example of an input tax credit. For example, if you are a distributor making a sale with a tax of Rs.600 and have previously paid a tax of Rs.400 on your purchase, you will owe only Rs.200 in tax. Input tax credits can also be claim for input services.
- Hence, every registered firm must file a GST return. If the GST submitted exceeds your GST due, you can request a refund using GSTIN.
- Possession of a GSTIN allows for unrestricted interstate trading.
- GSTIN is require to operate your E-commerce website or to register on an E-commerce site.
- GSTIN is require to get business financing for expansion or inventory reasons.
4.How to Obtain a GST Number
There are two ways to register for GST and receive a GSTIN. You can either go to the GST Seva Kendras set up by the Government of India for assistance with registration, or you can register online at the GST portal. Online registration is simple. Take the following steps:
- Go to the online GST portal.
- Under the Taxpayer (Normal/TDS/TCS) tab, click ‘Register Now.’
- Choose ‘New Registration.’
- Fill in the details asked, followed by two OTPs sent through email and mobile, and then the captcha. Click on ‘Proceed.’
- On the next page, fill in the OTP sent through email and mobile. Click ‘Proceed.’
- A TRN, Temporary Reference Number, will appear on the screen. Please make a note of it.
- Also, go back to the home page of the GST portal and click ‘Register now’ under Taxpayer.
- On the next page, choose the Temporary Reference Number option. Enter the TRN and captcha. Click on ‘Proceed.’
- Hence, fill in the OTP sent through email and mobile and click on ‘Proceed.’
- On the next page, you will be able to see the status of your application. Snap at the ‘Edit’ button on the right side.
- Thus, the details under ten sections must be filled and the necessary documents uploaded. Documents needed include Address proof of the business house, the Constitution of the Taxpayer, photos, bank details, and an authorization form.
- Hence, check the declaration on the Verification page. Submit either through EVC (Electronic Verification Code) or the E-sign method. In the EVC link, OTP will be sent through the register mobile number, and in the second, it will be sent to the mobile number link with the Aadhar card. The DSC or Digital Signature Certificate is to be used for company registration.
- A success message appears on the screen. Thus the Application Reference Number or ARN will be sent to your mobile number and email.
- Verification by the GST officer may take up to three working days. Additional information may be require, which must be provided within seven working days.
- Thus, the GST registration status can be checked on the GST portal. Click ‘Registration’ under the Services tab and click on ‘Track Application Status.’ Enter ARN and captcha. Click on ‘Search.’ Thus the registration status appears on the screen.
- Download the registration certificate with the following steps: Log in to the GST portal with username and password. Go to ‘User Services’ under ‘Services.’ Click on ‘View/Download Certificate’ and Download.
Thus the following documents are required for GST registration:
- Individuals and proprietors:
- The owner’s Pan card must be valid.
- The owner’s Aadhaar card must be valid.
- Photograph of the proprietor
- Address proof
- Bank account details
- For Partnership Firms and Limited liability Partnerships (LLP):
- Deed of Partnership
- Valid evidence of business address
- Partners’ valid Pan cards
- Photographs of the partners
- Address proof of the partners
- Any authorized signatory’s Aadhaar card
- Proof of the signatory’s appointment
- Proof of LLP registration
- Bank details
- For Hindu Undivided Families:
- Valid card of the HUF
- Address proof of the business house
- Photograph of the owner
- Valid Pan card of the patriarch of the HUF
- Bank Details
- For Private Limited Companies:
- The company’s Pan card is valid.
- All firm directors must have a valid pan card.
- The MCA Incorporation Certificate
- Articles of Association/Memorandum
- Proof of the Company House’s Address
- Address verification for the directors
- Bank Information
- Proof of Signatory Appointment
- Pan card of the signatory
- Aadhaar card of the signatory
5. Penalty For Not Registering Under GST Or For Non-Payment Of Tax
- Thus the penalty for not registering under GST is the total tax plus the entire amount due as a fine. The penalty for not paying tax or paying a lesser amount than the due amount is 10% of the tax amount as a fine or Rs10000, whichever is more.
- Certain firms, however, are excluded from GST registration, including:
- Businesses with annual revenue of at most 20 lahks.
- Companies that do not provide products or services. For example, the selling of a home, funeral services, etc.
- Businesses that sell or manufacture non-taxable items such as gasoline, natural gas, electricity, etc.
- Companies that sell Exempt or Nil Rated items.
6. GSTIN Verification
Some businesses may utilize a bogus GST to avoid paying taxes. They may include the forged GSTIN on their invoices. Thus if you have any doubts about the validity of a GSTIN, check it on the GST portal.
- Go to the GST Portal.
- Select ‘Search Taxpayer.’
- Enter the GSTIN that has to be validate and the captcha.
- Thus if the GSTIN is legitimate, the GSTIN status, registration date, and information about the kind of company and taxpayer will be display on the screen.
- If the GSTIN is invalid, an error notice will show on the screen.
7. GSTIN Advantages
GSTIN has various advantages. Here are a few examples:
- Possession of a GSTIN constitutes legal recognition of the company.
- Input tax can be claim on purchases of goods and services.
- You can freely trade across states.
- Online trading is possible.
- The GSTIN can be use to open a current bank account.
- The GSTIN can be use to get business financing.
- Because you may claim input tax, you will be the preferred location for traders.
Frequently asked questions.
1.Who needs GSTIN?
Businesses in India with a yearly revenue of over 20 lakhs must register for GSTIN. Furthermore, enterprises that trade in or manufacture non-taxable, exempt, or nil-rated items must register for GST and get a GSTIN.
2.How can I apply for a GSTIN?
You can go to the Government of India’s GST Seva Kendras or apply online through the GST site.
3.Is GSTIN free?
Yes. GSTIN has been made available free of cost by the Government of India. Hence if you enlist the services of a consultant to help you with the registration process, they may charge you.
4.How to identify GSTIN from PAN?
The PAN is an alphanumeric number having ten digits. Thus the, GSTIN is a fifteen-digit number that includes the ten-digit PAN number in the 3rd to 12th places.
5.Is GSTIN mandatory for online sales of products on Amazon or Flipkart or your website?
GSTIN is mandatory for online selling all products eligible for GST taxation, irrespective of your turnover.
6.Can GSTIN be canceled?
Yes, GSTIN can be cancel under the following three scenarios:
The taxpayer can request cancellation if they are shutting down their business, if turnover is less than the stipulated threshold or if the company format changes or from other causes.
The Tax Officer may cancel the GSTIN because of any irregularities they may find. In that case, a show-cause notice will be served to the taxpayer, who must reply within seven days. If the officer is satisfy, he will drop the cancellation. If not, he will pass an order for cancellation within 30 days of reply.
7.Can more than one GSTIN be applied on one PAN?
Yes. More than one GSTIN may be applied under the same PAN if the business house operates in more than one state when the taxpayer may have two different businesses in the same state.