GST Registration for Branches and Business Verticals

India is a developing country that has witnessed economic growth throughout the years on a global level. The market at this point is highly favorable for businesses to develop and expand. If you have been planning to open a business or a branch, this is the right time for you to get started with a branch and get it registered under GST law. It is a scary task and needs to be planned and executed properly to avoid any issues and help in the expansion of a company.

When running a business, you need to look out for growth opportunities. These can come in two forms: expanding your business or starting a completely new one. Branch expansion is crucial if you want to grow your business. In this piece of writing, you will learn the process of GST Registration for Branches and Business Verticals, and more.

What do you mean by GST Registration?

GST or Goods and Services Tax is an indirect tax applied to the supply of goods and services. The Indian government initiated an act on July 1^st, 2017, known as the GST Act or the Goods and Services Act. It was formed to put an end to several other indirect taxes and to create one single tax regime making the collection easier and the process more efficient.  

GST registration is a way to acquire a special identification number for any business that is liable to pay the tax. It has been made mandatory for businesses with a huge annual turnover to get registered for GST. The registration process is very simple and takes hardly 2 to 6 days to complete. GST can be divided into four categories based on their transaction type.

SGST

State Goods and Services Tax or SGST refers to the tax that is payable on the sale of products or services within a state. Its main purpose is to replace previous taxes like value-added tax, entry tax, state sales tax, and entertainment tax.

CGST

Central Goods and Services Tax or CGST is a tax implemented on the supply of intra-state products. The tax is charged by the central government. It replaced many taxes applied by the center like service tax, CST, customs daily, and central excise duty.

UTGST

Union Territory Goods and Services Tax or UTGST applies to the services and products in Union Territories such as Daman and Diu, Andaman and Nicobar Islands, Chandigarh, and Dadra.

IGST

Integrated Goods and Services Tax or IGST refers to the sale of inter-state services and products which leads to taxation. When businesses transfer products or services from one state to another state they need to pay by this GST form.

Importance of GST registration in Branches and Business verticals

GST Registration has had a major impact on branches and business verticals and all possible sectors of the economy.

Launching a Business Has Become Easier

The previous tax regime declared that if your business had operations across different states then you would have to register for VAT to carry out business activities there. A VAT or Value Added Tax is a tax implemented by the central government on the sale of services and products when sold to the final customers. It is charged and paid for by the producers of the services and goods and finally is applied to the consumers who buy the services and goods. So all you would need is to complete and submit an online form to acquire a GSTIN or GST identification number.

The Process of Taxation Has Become Simpler

the main purpose of adding GST is to remove the cascading taxation. A cascading tax is a type of repeating tax that is implemented on products at every stage in the supply chain from raw material to customer purchase. Every buyer in the supply chain pays the price of the cost including the previous taxes that have been charged. The taxes on services and goods implemented under VAT, purchase tax, and luxury tax can be merged into one single tax with one common return. By spending your time managing multiple taxes you can relax under the new tax regime as paying and filing taxes is easier with the GSTN portal.

Reduced Costs of Logistics

The current regime has created a lot of issues for the transportation sector. The large crowd at checkpoints and inter-state entry areas have caused a lot of vehicles and transportation to just stand by for long periods which leads to fuel costs and labor costs. The businesses transferring goods to different states had a difficult time filing paperwork and paying for entry taxes at the state borders leading to delays in delivering goods.

Increased Threshold Limits for New Business

Under this tax regime, businesses making Rs 5 lakh in some states and Rs 10 lakh in other states are obliged to register and make VAT payments. GST has eliminated this and not every business has to register or pay if their annual turnover is less than Rs 20 lakh. Businesses making an annual turnover between Rs 20 to 50 lakh will be able to pay GST at lower prices. This has created a positive image for small businesses and other startups by relieving them of tax burdens.

GST Registration for state Branches

The place from where the supplies are developed and the annual turnover are the two elements that determine the registration of a GST. All the supplies are under a PAN across different areas as the annual turnover is PAN-based. You need to register in every state and the place from where you intend to make external supplies.

• The CGST act declares that all the providers of taxable services and goods should register with the GST in the Union Territory or the state where the supply of those services or products occurred.
• Submitting proper and appropriate documents is mandatory for the applicant during GST registration. For companies with various business verticals, the candidate needs to submit a different and separate GST registration application for every branch that is located inside a state.
• Every separately registered business vertical is needed to provide a proper tax invoice. They need to pay taxes when providing different services or products to another registered business vertical of the same company.

People who are eligible for GST should register it in each state and Union Territory from where they will make a taxable supply of services and goods. The first two numbers of a GSTN indicate the state of registration, therefore the change of the first two numbers will happen if the business is operated in two different states.

GST Registration for Special States

The yearly turnover limit is different for some special states. They have a minimum limit of Rs 20 lakhs for goods and Rs 10 lakhs for services. These special states include Manipur, Arunachal Pradesh, Nagaland, Mizoram, Meghalaya, Sikkim, Assam, Uttarakhand, Himachal Pradesh, and Tripura. Even with a yearly turnover of Rs 40 lakh for the special states, the GST council has recommended registering for GST irrespective of their state.

Benefits of GST registration for special states

Lawfulness

It ensures that a company or business is working within a legal framework. This can add legitimacy and value for businesses seeking funding or contracts from the government.

Access to Markets

As GST is a tax system nationwide, it simplifies the activity of goods across other state borders. Due to this, businesses can boost their efficiency to reach the desired market beyond their state.

Simple tax Structure

GST replaces the indirect taxes that have been smooth running the tax process for businesses. This simple structure can lead to saving costs in terms of administration and compliance.

Boosting Business Image

GST registration can create a business’s value, credibility, and prominence in the market making it attractive to consumers, financial organizations, and suppliers.

The Minimum GST Turnover Limit for Business Verticals

With an annual turnover of more than Rs 40 lakhs for goods and Rs 20 lakhs for services, businesses are required to register and pay taxes for goods and services. The complete threshold limits are different for special states as previously discussed.

Calculating GST Turnover

Turnover can be calculated by taking the value of all the activities together that have been carried out all over India. There are some factors that you should keep in mind when calculating the turnover limit for GST registration.

Exempt Sales Value: Exempt sales refer to any business or company making a purchase is free from paying taxes.

Taxable Sales Value: Taxable value means the price that has been paid or can be payable and the buyer and the supplier are not related in any terms and the main consideration is the price.

Export of Goods and Services: It refers to the sale of services and goods from one country to another country and can include insurance, transport, license fees, travel, and other services.

Interstate Supplies: Interstate supply means supplying services and goods from one state to other states or union territories.

Process to GST Registration for Branches

As the GST Act states, all businesses are obliged to pay service tax or have to register under the goods and services taxes. The entity registering or applying for branches or businesses within the same state shall apply for FORM GST REG-01. The applicant or the person in charge must start by creating a profile to initiate the GST registration process online on the official GST registration portal. During the application process, the candidate needs to submit certain appropriate documents for GST registration. Once the application is submitted, the portal will generate ARN (Application Reference Number) immediately. The ARN is used to track the status of the GST registration. With its help, the candidate can check their status on the portal and post any queries if needed. After the application is submitted the authorized officer shall verify the application form and the documents submitted. When the approval is done by the GST officer, after successful document submission, you will receive the certificate within 7 working days. You will be able to download it from the GST registration official site.

Documents required for GST registration

Individual

• Address proof
• PAN card
• Aadhar card
• Bank account details
• Passport photograph

Partnership firms

• PAN card
• Address proof
• Bank account details
• Copy of partnership deed
• Registration certificate or board resolution (for LLP)
• Photographs of authorized signatories and partners
• Proof of appointing an authorized signatory

Company (private and public)

• Address proof
• PAN for company
• PAN and Aadhar card of authorized signatories
• Bank details
• Article of association
• Proof of appointment of an authorized signatory
• Photographs of directors and the authorized signatory
• A certificate that has been provided by the Ministry of Corporate Affairs.

Charges for GST Registration

The Government of India does not charge any fee for GST registration from the portal. If you try to register it from any agency or third-party professionals, they may charge accordingly.  

It is time-consuming but a simple process that requires businesses to correct various details regarding their work. There are mainly three types of charges that is as follows.

• An Application fee, which is required when applying for GST registration
• A Professional fee is required when any GST practitioner is assisting with the registration.
• A Government fee is payable to the government after the GST registration approval.

When a business is eligible and does not get registered under the GST Act, it can be fined up to 10% of the amount that is due or Rs. 10,000 and above in case of non-compliance. If there has been a case of tax evasion the penalty can be charged at 100% of the total amount due.

GST has been introduced in the new tax system in India since 2017. With the coming of GST, it has become a lot easier for businesses to handle and deal with taxes. Through this piece of writing, you learned the process of GST Registration for Branches and Business Verticals.  If you want GST registration for any business, you can contact Online Legal India, and get assisted in with your registration process quickly, without any hassles.