Online GST Registration for Electronics Business: Process & Benefits

With the rapid expansion of online and offline businesses, the electronics industry in India is booming. In order to run an electronic business legally and remain profitable, it is important for electric business to register for GST. It helps business owners make their business tax-compliant. With GST registration, manufacturers, wholesalers or retailers will have smooth operations as well as long-term success. Electronic business needs to understand the process and its benefits. It will also help business owners take the right steps to ensure legal and financial stability. In this article, we will learn how to do Online GST Registration for Electronics Business.

What is GST registration?

GST refers to the goods and Service Tax. The government of India introduced GST to simplify the taxation system. GST was passed in the parliament on the 29^th of March 2017. This act came into effect on the 1^st of July, 2017. GST was introduced to replace the indirect tax system in India. The GST further unified the tax structure across the country.

GST refers to the indirect tax that applies to businesses that are involved in goods and services. If any business exceeds the turnover limit, it needs to register under GST. With GST registration, businesses can collect tax legally.

Key Components of GST registration:

GST, that is the Goods and Service Tax, consist of three main components. Below is the list of the components:

• CGST:

CGST stands for Central Goods and Service Tax. The central government imposes this tax on the sale and purchase of goods and services within a single state. It applies to businesses that do not cross the boundary of their particular state. The tax collected under CGST goes directly to the Central government

• SGST:

SGST is the abbreviation of State Goods and Service Tax. The State government levies this tax on goods and services that are sold within the particular state. The SGST applies alongside the CGST. This tax is mainly imposed on any transaction that is done within the state. With this tax, the state government also gets their share of the revenue.

• IGST

IGST stands for Integrated Goods and Services Tax. This tax is mainly imposed on transactions that occur between different states or from a state to a Union Territory. The central government collect the amount of the tax. Later, the amount is distributed to the state where the goods and services are consumed. IGST ensures that any business deals in inter-state trade must follow a unified taxation system.

Who Needs GST Registration for Electronics Business?

GST registration is mandatory for various businesses involved in the electronics sector. Listed below are the types of businesses that should register under GST:

• Manufacturers and Traders: Any business that deals in the trade of electronic items such as mobile phones, laptops, television and home appliances should register under GST. GST registration ensures that the business complies with the tax laws. It also ensures smooth operation and distribution of goods.
• E-Commerce Sellers:  Businesses that sell electronics on e-commerce platforms should register for GST. These platforms include Amazon, Flipkart and other marketplaces. Regardless of the turnover, businesses need to register under GST.
• Wholesalers, Resellers and Distributors: It is mandatory for businesses that deal with bulk sale or redistribution of electronic goods to register under GST. This helps them maintain proper tax records and ensures transparency in transactions.
• Importer and Exporters: Any business that imports electronics from abroad or exports them must register under the Goods and Service Tax scheme. After registration, businesses can trade their product freely in the international market. Business owners can also make proper tax credit claims and comply with customs rules and laws.

Benefits of GST registration for Electronic Businesses

With GST registration, electronic businesses can enjoy a lot of benefits. A few of the benefits are listed below:

• Legal Compliance

When an electronic business meets the threshold turnover, it becomes mandatory for them to register under GST. With GST registration, businesses can ensure compliance with the tax laws and regulations. It helps them avoid penalties, legal disputes or business disruptions. Businesses registered under this tax scheme can operate freely without any restrictions from tax authorities.

• Avail ITC

ITC stands for Input Tax Credit. It is one of the biggest benefits of registering a business under the Goods and Service Tax scheme. With ITC, businesses can deduct the GST they paid on raw materials, components and any other purchase from the tax that they collected on sales. This helps to reduce the overall tax liability as well as lower the cost of products. This, in turn, leads to better and more affordable pricing for customers.

• Simplifies Inter-State Trade

With the Goods and Service Tax scheme, the government has successfully replaced multiple state and central taxes, due to which businesses can do inter-state trade seamlessly.  Businesses can easily supply electronics across the country without paying state-specific tax. GST-registered businesses can easily expand to new markets smoothly.

• Mandatory for E-commerce Sales

Sellers must register with GST before they list their products on e-commerce platforms like Amazon, Flipkart, Myntra, etc. Without a GST registration certificate, owners can sell their electronics online. GST registration helps businesses ensure transparency and become a part of the uniform taxation across different digital marketplaces.

• Improve business credibility

GST registration helps electronic businesses gain the trust of the customers, suppliers, and investors. With the GST registration certificate, businesses can become legal as well as compliant with the rules and laws of taxation. With credibility, businesses can attract more partnerships. It will also help businesses gain customer trust, which in turn will lead to higher sales.

• Aids in business loans

GST is an important factor that financial institutions consider when they approve any loans. Banks and Non-Banking Financial Companies (NBFCs assess the GST record of a business to determine their revenue stability. It becomes easier for businesses with a valid GSTIN and proper tax filing records to secure funds required for expansion or as working capital.

• Simplifies the import and export process

The GST registration certificate plays a crucial role for businesses involved in the import and export of electronic goods. With this certificate, businesses can easily apply for IEC, or Importer and Exporter Code. It also helps to claim tax refunds under schemes like IGST refunds on export. This certificate also helps businesses speed up the customs clearance process, which in turn ensures smoother international trade.

• Enhances financial record keeping

GST registration allows businesses to maintain proper invoice, tax filing and transaction records. GST-registered businesses follow a structured bookkeeping system, which in turn helps them to be transparent as well as reduce errors and tax-related disputes. It also helps businesses in audits, financial planning and tax return filing.

• Competitive price through Tax benefits

GST-registered businesses can reduce their tax burden with ITC. This, in turn, allows businesses to offer better prices for their electronic goods. While non-registered businesses will not be able to claim ITC and hence have to pay higher taxes on input 

Hence, with better and affordable pricing, registered businesses get an edge over non-registered businesses. When businesses lower their cost in operations, they can easily provide a competitive price and also get a better profit margin.

• Eligible for government Schemes

GST-registered businesses can enjoy a lot of benefits, such as the MSME scheme, subsidies and tax refunds. With these initiatives, businesses can have better growth. This, in turn, will help them reduce their financial tax burden. It will also provide them with opportunities to scale operations in the electronics industry.

Eligibility Criteria for GST Registration

Businesses that deal in electronic goods must register under GST only if they meet the criteria detailed below.

Procedure for Online GST registration of Electronic businesses:

 Listed below are the steps that a business owner should follow to register their businesses under GST:

Step 1: Visit the GST Portal

To get GST registered, the applicant at first needs to visit the official website of the Goods and Service Tax. Navigate to the service option and click on the “New registration” option.

Step 2: Generate TRN

Once you have clicked on the New Registration option. If the portal shows that the applicant’s GST registration application is not complete. The applicant needs to fill out the form using the TRN number. Below is the list of the information that the applicant needs to upload to generate the TRN number:

• The applicant must select their type of taxpayer from the options in the portal
• The applicant needs to select the state of getting their GST registered  as per their necessity
• Fill in the legal business or entity name. The name should follow the Pan database. The portal will also verify the PAN; hence, you need to mention the PAN details.
• In the Pan that is Permanent Account Number of the portal, the applicant needs to enter the PAN of the business or the proprietor. In case of a company or LLP, you need the PAN details of the company or LLP.
• At last, the applicant needs to provide the mail address of the Primary Authorized Signatory.
• Then the applicant needs to click on the proceed button

Step 3: OTP verification and TRN Generation

Once the applicant has submitted the information,  the OTP verification page will be displayed. The applicant will receive two OTPs: in their mobile number and their email address. The OTPs will only be valid for 10 minutes. When they have received the OTPs, they need to enter the correct OTP in the respective field.

Step 4: TRN Generated

Post OTP verification, the applicant will get a Temporary Verification Number, which is TRN. Once they receive the TRN number, the applicant can use it to complete and submit their GST registration application.

Step 5: Logging in with the TRN

Once the applicant has received the TRN, the applicant can begin the GST registration process. In the TRN field, the applicant needs to fill in the TRN that they generated. After that, the portal will generate a captcha text.  Now the applicant has completed the OTP verification on both their mobile and email.

Step 6: Submit Business Information

To move forward in the GST registration process, the applicant needs to enter the following details about their business:

• The applicant needs to mention their tradename in the field marked as “Trade Name”
• Now the applicant needs to select the constitution of the business from the drop-down list.
• The applicant needs to enter their District and sector/ circle/ward/charge/unit from the drop down list.
• After they have filled in the above-mentioned details, the applicant needs to find the Commissionerate Code, Range Code and Division Code according to their criteria of application.
• If it is necessary, the applicant can opt for the Composition Scheme
• After filling in all the details, the applicant needs to mention the opening date of their business
• Now the applicant must choose when their business became eligible for GST registration. When the applicant mentions this date, they are filing in the date when their business’s yearly turnover exceeded the GST threshold. One must remember to apply for GST registration within 30 days of exceeding the threshold

Step 7: Submit the information of the Promoter.

Once the applicant has submitted their business information, they need to submit the details of the promoter and directors. If the applicant is the owner of the business, they need to fill in their information. In the registration application, the applicant can fill in information about ten promoters or partners of the business. Listed below are a few of the other details that an applicant needs to submit about the promoter or directors:

• Personal details that include name, address, date of birth, gender, mobile number and mail address
• Promoter’s Designation
• Details about the promoter’s citizenship
• PAN and Aadhaar card
• Residential Address
• Director Identification Number(DIN). This number is only required for some specific types of applicants. The applicant types are mentioned below.
  • Private Limited Company
  • Public Limited Company
  • Public Sector Undertaking
  • Unlimited company
  • Any foreign company that is registered in India.

If the applicant fills in their Aadhaar card details, they will be able to put an e-signature in their GST return instead of a digital Signature.

Step 8: Authorized Signatory Information Submission

The promoters of the company nominate the authorized signatory. The authorized signatory is the person who gets the responsibility to file the GST return of the company. The authorized signatory must maintain the required compliance of the business. The nominated person will also get full access to the GST portal. He or she will be able to handle all the required transactions on behalf of the promoters. 

Step 9: Principal Place of Business

Principal Place means the primary location from where the taxpayer operates the business.  In the case of companies or LLPs, the registered office is their principal place of business. In this step, the applicant needs to provide details about the principal place of the business. All the accounts and book of accounts are kept in this particular place. To verify the principal place of business, the applicant needs to mention the following details in their application.

• Proof of address of the principal place of the business
• Nature of possession of the premises,
• Contact details such as email address, mobile number, fax number with STD code as well as the telephone number with the STD code.

In case the principal place of the business is located in a SEZ that is Special Economic Zone or if the business plays the role of a Special Economic Zone developer, the business needs to prove their ownership or occupancy of the property. To prove the ownership, the applicant needs to provide adequate documents of the property that the Government of India have issued.

In the field mentioned as the “Nature of Possession of Premise”, the applicant needs to select the section relevant to them from the drop-down menu. Post selection, the applicant needs to upload all the necessary documents and evidence that will prove their ownership or occupancy rights. With this, the applicant not only maintains the guidelines but also simplifies the verification process. Below is the list of the fields that the applicant needs to choose in the “nature of possession of the premise” option

• Ownership of the Premises

If the applicant or the business owns the premises, they need to upload enough supporting documents. The documents will include a Municipal Khata copy, the tax receipt of the latest property or electricity bill.

• Leased or rented premises.

If the property of the business is under lease or rent, the applicant must attach supporting documents to prove the ownership of the premises. They must attach the Lease/ Rent Agreement, the latest receipt of the property tax, municipal khata copy or copies of the electricity bill.

• Premises that are not covered above:

In case the type of premises is not listed above, the applicant needs to upload a copy of the consent letter with other documents that will support their ownership of the property. The documents will include Municipal Khata or copies of the electricity bill. Even if the property is shared, the applicant needs to provide the same documents.

Step 10: Details of the bank account

After the applicant has filled in their information about the property, they need to enter the details of their bank account. The information will include details like account number, IFSC code, and the type of account. After filling in the information, the applicant needs to upload a copy of their passbook. They also need to provide their bank statement in the mentioned field.

Step 11: Verification of the application

The applicant must verify the documents after they have uploaded them. Once verified, the applicant needs to check the verification checkbox. After that, the applicant will have a drop-down option from which they need to choose the name of the authorized signatory. Once they have selected, the applicant needs to fill in the place from where they are filing the form.

Lastly, the applicant will digitally sign the form with their Digital Signature Certificate. The applicant can also sign the form with their E-signature or EVC. If the business is an LLP or a company, they need to upload their Digital Signature Certificate to sign the form.

Step 12: ARN Generated

Once the applicant has signed the application, a message will be displayed on the screen confirming the submission. The applicant will also receive an acknowledgement on their registered email address and mobile number.  Along with the acknowledgement, the applicant will also receive an Application Reference Number (ARN) on their registered email address and mobile number. With this GST ARN number, the applicant can check the status of their application.

For online GST registration of an electronics business, the following common documents are required, irrespective of the firm type:

1. Identity & Address Proof of Proprietor/Partners/Directors

• PAN Card (of owner/partners/directors)
• Aadhaar Card (of owner/partners/directors)
• Passport/Voter ID/Driving License (as additional ID proof)

2. Business Proof

Business Registration Certificate (like Partnership Deed, Company Incorporation Certificate, etc.)

• Trade License (if applicable)
• MSME Registration (if applicable)

3. Address Proof of Business Place

• Electricity Bill/Water Bill/Landline Bill (not older than 2 months)
• Rent Agreement (if rented) or Property Tax Receipt (if owned)
• Consent Letter (if business premises are on shared/rented property)

4. Bank Account Details

Cancelled Cheque / Bank Statement / Passbook Copy

5. Photographs

Recent passport-size photographs of the proprietor/partners/directors

6. Digital Signature Certificate (DSC) (if applicable for companies & LLPs)

7. Letter of Authorization (if an authorized signatory is appointed)

These documents are generally required for GST registration. However, additional documents may be needed based on the nature of the business and local regulations. Would you like assistance with filing the application or clarifying any specific legal requirements? Contact Online Legal India.

Common challenges in GST registration for electronics Business

GST registration is a crucial step for businesses, but there are many challenges the applicant faces. Listed below are a few challenges that an electronic business faces while registering for GST:

• Mismatch in Details

Applicants sometimes mismatch PAN and Aadhaar card details when they file their GST registration application. This leads to a delay in getting the application approved. It might also result in rejection.

Listed below are a few of the solutions that a company can opt to solve the mentioned problem

Verification: Businesses need to verify the name, date of birth and other details related to the PAN and Aadhaar. They should ensure that their details match the government records.

Updating: In case of any discrepancies, the applicant must update their details, such as PAN and Aadhaar, through the respective government portal.

Cross-checking: Before submission, the applicant needs to cross-check all the information.

• Incorrect HSN code for electronics

HSN stands for Harmonized System of Nomenclature. If the applicant uses the wrong HSN code, they can face issues in tax calculation as well as in compliance.

When a business uses an incorrect HSN code, it can opt for the solutions listed below:

Using the latest HSN code: While the applicant applies for GST registration, they need to use the latest HSN code available on the official government website

Consult a professional: During the application process, the applicant can consult a tax professional if they are not sure about the correct HSN code of their product.

Keep track: Tax regulations get updated. Hence, applicants should keep track of the updates in the HSN code list.

•  Delays in GST approval

When the applicant files their GST registration application, they should upload correct and complete documents. In case the applicant uploads incorrect or incomplete documents, their application might get delayed. Other than that, there can be a delay in the application process due to verification backlogs.  

Listed below are some solutions that a business can follow to solve the problems:

Save the ARN: ARN stands for Application Reference Number. Once the applicant has filled out their GST registration, they need to save their ARN.

Check the updates: The application must regularly check the GST portal for any updates on their application status

Prompt reply: When the GST department raises any queries, the applicant must respond to it promptly. This will help to speed up the approval process.

Hassle-free GST registration with Online Legal India:

Therefore, GST registration is quite crucial for businesses to operate legally and comply with the rules and laws of taxation. When businesses have a smooth registration process, they ensure that their operations are hassle-free. Businesses can also avoid penalties and delays with GST registration.

However, if there is an error in the application details, issues in document verification or glitches in the portal, it can lead to complications.  With proper guidance, businesses can avoid these challenges, which in turn helps them to speed up the process. Hence, the applicant needs to select the right platform to ensure accuracy, timely submission and compliance with GST norms.

Online Legal India is one of the most trusted platforms. They provide expert assistance, end-end support and real-time updates. Business owners can easily file GST registration with Online Legal India. Experts will help Online GST Registration for Electronics Business and compliance. Contact them today.