GST Registration Costs, Process and Compliances

Goods and services tax (GST) registration is a process where businesses obtain a unique GST identification number (GSTIN) from the tax authorities, which allows them to collect and remit GST legally. It is mandatory for businesses with a yearly turnover above Rs. 40 lakhs and Rs. 20 lakhs for service providers. It is also a necessity for those involved in interstate trade, e-commerce, or acting as agents for other taxable entities.

The registration process is free, but businesses may incur costs if they seek professional application assistance from chartered accountants or tax consultants to ensure a smooth application process. Proper GST registration ensures legal compliance, input tax credit benefits, and smooth business operations. In this article, we will discuss the GST registration cost based on business type.

Understanding GST Registration Cost

GST registration is completely free when done through the official website of GST. But some businesses charge a fee for professional assistance if they hire any chartered accountants, experts, or tax consultants to handle the application process. These professionals charge fees depending on their expertise and the complexity of the registration. If a business requires a Digital Signature Certificate (DSC), there will be a separate cost for obtaining it.

Businesses must file GST returns regularly once it is registered, which may involve compliance costs if they opt for expert services. Delays in registration or incorrect filing can result in penalties, which increase the overall costs. To avoid unnecessary expenses, businesses should ensure proper and timely registration. Professional help can simplify the GST registration process and ensure accuracy, especially for businesses that are unfamiliar with tax laws.

 GST Registration Cost Based On the Business Type

There is no fee for GST registration from the government. Businesses may need to pay a professional fee if they plan to hire an expert or consultant for assistance. These costs may vary depending on the professional, as they can charge a fee depending on their expertise and the complexity of the registration. It is mentioned as follows:

• Sole Proprietorship: A sole proprietorship is a business that is owned and run by a single person. The structure is very simple, and the professional fees range from Rs. 500 to Rs. 3000, which depends on the services needed. 
• Partnership Firm: A partnership firm is owned by two or more partners who share profits and losses. The registration process is a little more detailed, so the professional fee may range from Rs. 2000 to Rs. 5000.
• Private Limited Company (Pvt Ltd): This is registered under the Companies Act, which requires more documentation. Hiring an expert from a private limited company for GST registration can cost between Rs. 5000 to Rs. 10,000.
• Limited Liability Partnership (LLP): A business where partners have limited liability and the registration process is similar to a private limited company, with a professional fee ranging between Rs. 3000 and Rs. 8000.
• E-Commerce Sellers: Businesses selling online through platforms such as Amazon or Flipkart, and due to additional compliance, the professional fee can range from Rs. 3000 to Rs. 7000.
• Casual Taxable Person: A casual taxable person is a business operating temporarily in India, and the registration needs specific approvals with the fee ranging between Rs. 3000 to Rs. 6000.
• Non-Resident Taxable Person: Foreign businesses that sell in India and need expert assistance, the professional fee can range from Rs. 5000 to Rs. 15,000.

Additional Costs and Compliance Expenses in GST Registration

When registering for GST in India, businesses must be aware of several other costs and compliance expenses beyond the registration, which include the following:

Digital Signature Certificate (DSC) Costs

The price of a Class 3 DSC, which is commonly used for GST filings, varies based on the provider and validity period.

• 1-Year Validity: approximately between Rs. 850 to Rs. 1500
• 2-Year Validity: approximately between Rs. 990 to Rs. 2000
• 3-Year Validity: approximately between Rs. 1500 and Rs. 3000

Annual Compliance and Return Filing Costs

• Regular Filings: Businesses must file a monthly or quarterly GST return, such as GSTR-1, GSTR-3B, and an annual return, GSTR-9. The complexity and volume of transactions influence the cost of these services.
• Professional Fees: In this case, seeking help from a professional, like a chartered accountant or tax consultant, for accurate and timely filings is a good option. The fee can range from Rs. 1000 to Rs. 5000 for monthly filings and Rs. 5000 and above for annual returns.

Potential Penalties for Non-Compliance

• Late Filing Fees: There is a late fee in GSTR-1 and GSTR-3B that is Rs. 100 per day under the CGST and Rs. 100 per day under the SGST. This totals to Rs. 200 per day and can be up to a maximum of Rs. 5000.
• Interest on Late Payments: An interest rate of 18% per annum is charged on the outstanding tax amount for delays in tax payment.
• Other Penalties: For offenses such as tax evasion or fraud, the penalties can be as high as 100% of the tax due or Rs. 10,000, whichever is higher.

How to Reduce GST Registration Costs?

Here’s how you can reduce costs while ensuring a smooth registration process:

• Register for GST On Your Own

Individuals or businesses can register for GST at no cost by visiting the official website of GST and following the steps and instructions. The process is simple, which requires business details, PAN, and bank account information. If you basic understanding of business compliance, you can complete the application process on your own without hiring any expert.

• Choosing the Right Professional Service to Avoid Overpaying

Chartered accountants and tax consultants charge different fees based on the business type and complexity. Some service providers bundle GST registration with other compliance services, which increases costs. Ensure you are only paying for the service you need. Many online platforms offer affordable GST registration starting from Rs. 500 to Rs. 2000. You can choose a reliable service provider with transparent pricing.

• Ensure Timely Compliance to Avoid Penalties

Filing returns late can lead to penalties, which add to compliance costs. One should stay updated with GST return deadlines, which can help in avoiding unnecessary expenses.

Step-by-Step Process to Register for GST

Registering for GST is a simple online process that can be done through the official GST portal by following the steps below:

• Step 1: Go to the official portal of GST and click on “New Registration.”
• Step 2: Fill in basic details like business name, PAN, state, email, and mobile number.
• Step 3: Provide necessary documents based on your business type
• Step 4: You will receive an OTP on your registered mobile number and email for verification.
• Step 5: Complete the application and submit it for approval.
• Step 6: Once it has been verified, you will get your GSTIN within a few days.

Documents Required for GST Registration

The following list includes the documents needed for all business types:

• PAN card of the business owner or company
• Aadhaar card of the business owner
• Business registration certificate (if applicable)
• Address proof of the business
• Bank account details such as a bank statement or a canceled cheque

For Specific Business Types:

• Partnership Deed (for partnerships)
• Certificate of Incorporation (for Pvt Ltd/LLP)
• Digital Signature Certificate (for companies & LLPs)

Who Needs to Register for GST?

Not all businesses are required to register for GST, but in certain cases, GST registration is mandatory, regardless of the business size or type. Here are some situations where GST registration is mandatory:

• Businesses with High Annual Turnover

If your business earns more than Rs. 40 lakhs per year (for most states) or Rs. 20 lakhs per year (for special category states like Himachal Pradesh, Uttarakhand, and northeastern states), you must register for GST.

• Interstate Sales of Goods or Services

If you sell goods or services across different states, GST registration is mandatory, even if your turnover is below the threshold limit.

• Online Sellers & E-Commerce Businesses

If you sell products through platforms such as Amazon, Flipkart, Meesho, or your website, you must register for GST, even if the turnover is below the threshold limit.

• Businesses Supplying Taxable Goods and Services

If your business deals in taxable goods or services, GST registration is required to legally collect and file GST.

• Businesses Required to Deduct TDS Under GST

If you are a government entity or a business that deducts Tax Deducted at Source (TDS) under GST, you must register for GST, even if your turnover is low.

GST registration is essential for business growth and allows companies to legally operate, claim input tax credits, and expand into new markets. A properly registered business builds trust with customers and partners, which makes it easier to secure contracts and funding.

Timely and accurate GST registration helps avoid unnecessary costs, such as penalties for late filings or errors in documentation. It also ensures smooth tax compliance by reducing the risk of legal issues. This written piece of content provided a detailed guide to GST registration costs. Contact Online Legal India to get assistance in filing for a GST registration by professional experts.