GST Registration

If you're an exporter or supplying to Special Economic Zones (SEZs), it’s important to renew or submit your Letter of Undertaking (LUT) for the Financial Year 2025-26. The GSTN has now enabled the LUT filing option on the GST Portal. This ensures exporters can continue their tax-free exports without interruptions. Since the current LUT for FY 2024-25 is valid only until March 31, 2025, it’s necessary to file a new one before this deadline to avoid disruptions in your export operations. Exporters who wish to export goods or services without paying Integrated GST (IGST) must file an LUT every year. Missing this deadline may lead to delays and additional tax liabilities. Thankfully, the online process has been simplified – just log in to the GST portal, go to Dashboard > Services > User Services > Furnish Letter of Undertaking, select the relevant financial year, and proceed.

An LUT is a document submitted by exporters stating that they intend to export goods or services without paying IGST. This helps them avoid the burden of paying tax upfront and claiming refunds later. Filing an LUT is a more convenient and cost-effective way to handle exports under GST.

Only certain businesses are eligible to file an LUT. Firstly, you must be a GST-registered exporter, dealing with goods or services that are not exempt. You should also be up to date with your GST returns and payments and must not have any history of tax evasion or fraud. Exporters with a clean compliance record are more likely to get their LUTs approved.

There are several advantages to filing an LUT. Most importantly, it enables zero-rated exports, meaning you can export without paying IGST. This helps maintain better cash flow. It also removes the need to go through the refund process, making compliance much simpler. Moreover, exporters who use an LUT can price their offerings more competitively in international markets, giving them an edge.

To file the LUT for FY 2025-26, you will need a few important documents. These include your GST registration certificate, details of any previously filed LUT or bond, the GST RFD-11 Form, business information such as address and GSTIN, and proof of timely GST return filings. In some cases, financial details may also be required, especially for new exporters.

Filing an LUT is an easy online process. First, log in to the GST Portal using your GSTIN and password. Go to the ‘Services’ tab, then ‘User Services’, and click on ‘Furnish Letter of Undertaking (LUT)’. Select the correct financial year for the LUT and fill in the required information, such as the exporter’s name, GSTIN, address, and declaration of export without IGST payment. After reviewing your entries, submit the application. Once approved, a digitally signed copy of the LUT will be available to download from the portal.

Form GST RFD-11 is the form that exporters must use to submit their LUT. It should be filed on the GST Portal before you begin any zero-rated supplies. For FY 2025-26, the deadline to file this form is March 31, 2025.

LUTs must be submitted annually, and it is recommended to file them at the start of the financial year. New exporters can apply for an LUT once their GST registration is complete. Timely filing avoids complications such as the need for a bond or bank guarantee and ensures that IGST is not charged on exports.

If you already have an LUT, you must renew it for FY 2025-26 before the current one expires. Renewal follows the same process as the original filing. Log in to the GST portal, go to the LUT section, and choose the renewal option. Fill out the form, confirm that there are no pending dues, and submit it. After approval, the renewed LUT can be downloaded.

Failing to file or renew your LUT can cause serious issues. Without a valid LUT, exporters must pay IGST on their exports and then apply for a refund, which can delay cash flow. Non-compliance may also result in penalties or restrictions from GST authorities, affecting your ability to export smoothly.

In conclusion, filing and renewing your LUT under GST helps streamline your export process, improves cash flow, and ensures that your business remains compliant. Make sure you file your LUT on time to avoid unnecessary hurdles and continue enjoying the benefits of zero-rated exports.

Under the Goods and Services Tax (GST) system in India, tax compliance has become more structured, but businesses with multiple branches still face issues in sharing Input Tax Credit (ITC) for common input services. To tackle this, the government has made Input Service Distributor (ISD) registration mandatory starting April 1, 2025. ISD is a useful mechanism under GST that allows businesses with more than one location, operating under the same PAN but having different GSTINs, to distribute ITC received on input services. This helps in smooth credit flow across branches and ensures that tax benefits are rightly allocated.

The ISD system is meant for companies that incur centralized costs on services and want to share the related ITC with their other branches. In this setup, the head office functions as the ISD. It collects invoices for input services and shares the credit with other branches based on a fair method, usually proportionate to turnover or service usage. This arrangement prevents tax mismatches and supports better tax compliance.

To be eligible for ISD registration under GST, the business must have multiple offices or units that need to share input service credits. The head office should collect and distribute the ITC, and the business must be registered under GST with an active GSTIN. It should provide input services like legal, accounting, or consultancy services to its branches. Only the head office can be registered as an ISD, and it must follow all GST rules, including return filings. The services must be strictly for business use, and ITC on goods or capital goods cannot be distributed under ISD—only input services are eligible. Also, a business can have only one ISD registration per PAN and cannot register multiple ISDs across different states. Complete compliance with GST laws, proper records, and clear documentation are essential for maintaining the ISD registration.

For applying for ISD GST registration, certain documents are necessary. These include a GST registration certificate, PAN card, and documents proving the business structure—like a Certificate of Incorporation for companies or a partnership deed for firms. Businesses must also provide address proof, such as rent agreements or utility bills, and documents related to the authorized signatory like ID proof, photo, and authorization letter. Bank details are needed in the form of a cancelled cheque or bank statement, and the application should explain the business activity and how input services are distributed. Invoices for centralized services such as rent or consulting must be attached, and some authorities may ask for financial statements or even ISO certificates if applicable. A self-declaration affidavit may also be required to confirm compliance.

The process for ISD registration under GST starts with confirming whether the business qualifies. Once eligible, the business should log in to www.gst.gov.in and go to Services > Registration > New Registration, then choose ISD as the type of registration. The application will then require details such as the company’s name, PAN, contact info, and information about the authorized signatory. After filling in all details, the required documents must be uploaded, including PAN card, business address proof, and ID proof of promoters. After reviewing all the data, the application should be submitted using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). Once submitted, GST authorities will verify the application and issue the ISD registration certificate if everything is in order.

After getting the ISD registration, the head office is responsible for distributing ITC to its branches properly. The distribution must be based on the share of turnover or the usage of services by each branch. Only input services can be distributed—ITC on goods or capital assets is excluded. The ISD must file a monthly return in Form GSTR-6, detailing how much ITC was received and how it was distributed. Recipient branches must match this information in their GST returns to ensure correct credit reflection.

Depending on how services are used, the way ITC is distributed may vary. If a service benefits just one branch, the full credit goes to that branch. If the service is used by a few branches, the ITC is split among those. If it’s used across all branches, the ITC is shared based on each branch’s turnover. This ensures fairness and avoids disputes in credit sharing.

There are also important conditions that ISDs must follow. ITC must be distributed in the same month in which it is received, and the amount distributed should not be more than the available credit. From April 2025, ITC on reverse charge basis services can also be distributed. Each credit transfer must be done through a separate ISD invoice to maintain transparency. Inaccuracies in distribution could lead to penalties or GST scrutiny, so careful calculations and record-keeping are very important.

ISDs must also properly handle debit and credit notes. When a Debit Note is received, which increases ITC, the extra credit should be distributed in the same month it is reflected in GSTR-6. For a Credit Note, which reduces ITC, the credit must be adjusted accordingly. If the credit note amount is higher than the ITC available, the extra amount must be added to the recipient's tax liability. This ensures accurate ITC reflection and compliance with GST law.

Overall, ISD registration and credit distribution are crucial parts of managing GST efficiently for businesses with multiple branches. Following the steps carefully and meeting all compliance requirements helps avoid legal issues and ensures that each unit receives the correct tax benefit. Accurate handling of debit and credit notes further improves GST credit management and internal control.

In conclusion, the ISD mechanism under GST is a well-structured way for businesses to distribute input tax credit among branches. It reduces the tax burden on each unit, simplifies compliance, and makes GST management easier. Understanding and following the ISD registration and ITC distribution process is vital for businesses that want to maintain smooth tax operations.

If you need any support in ISD Registration under GST, then you can connect with Compliance Calendar experts through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

Who Needs to Register for GST?

Under the Goods and Services Tax (GST) system in India, certain individuals and businesses are required to register mandatorily, while others may opt for voluntary registration. The most common criteria for mandatory GST registration is based on annual turnover. If a business involved in the supply of goods has an annual turnover exceeding Rs. 40 lakhs, it must register under GST. However, this limit is lower for businesses providing services—Rs. 20 lakhs annually. For special category states such as those in the North-Eastern region (like Sikkim, Arunachal Pradesh, Mizoram, and others), the turnover threshold is even lower. In these states, businesses dealing in goods must register if their turnover exceeds Rs. 20 lakhs, and for service providers, the limit is ?10 lakhs. These reduced thresholds account for the unique economic conditions in such regions.

Additionally, inter-state suppliers—that is, businesses or individuals who supply goods or services from one state to another—must register for GST, irrespective of their turnover. This ensures that GST is properly accounted for in cross-border trade within India. Another group that must register are e-commerce operators and suppliers. These are businesses that either run online marketplaces or sell goods and services through such platforms. Since their operations often span across multiple states and customer bases, GST registration becomes necessary to track tax liabilities.

There are also special categories like casual taxable persons, who may not have a fixed place of business but temporarily engage in sales in a different state (like during exhibitions or fairs), and non-resident taxable persons, who operate from outside India but supply goods or services within India. Both of these must register under GST before starting their operations. Similarly, agents of suppliers, who act on behalf of other businesses in supplying goods or services, are also required to register. Another important category includes Input Service Distributors (ISDs), which are usually head offices distributing tax credits to their various branches—these too must be registered under GST.

Businesses that were previously registered under the old tax systems like VAT (Value Added Tax), Service Tax, or Central Excise Duty, are required to migrate to GST and obtain a GST registration to continue their operations legally. Even if their turnover is below the new GST threshold, they must register if they fall under these legacy categories.

On the other hand, voluntary registration is also allowed under GST. This means that even if a business or individual does not meet the turnover threshold or fall under the mandatory categories, they can still choose to register. Voluntary GST registration can be beneficial, as it allows the business to legally collect GST from customers, claim Input Tax Credit (ITC) on purchases, and enhance its credibility among clients and vendors. It also simplifies the business’s expansion plans, especially when dealing with government tenders or large corporates that require GST compliance. Thus, having knowledge regarding who needs to register under GST and the benefits of voluntary registration is essential for maintaining legal compliance and availing business advantages under the GST framework.

Composition Scheme under GST

The Composition Scheme under Goods and Services Tax (GST) is a simplified tax system crafted specifically for small businesses in India. It aims to reduce the compliance burden by allowing eligible businesses to pay a fixed rate of tax based on their total turnover, instead of dealing with the complexities of charging tax on every invoice, claiming input credits, and filing multiple returns. This makes it easier for small traders, manufacturers, and service providers to focus more on growing their business than navigating the detailed GST framework. In 2025, the scheme continues to be a practical and preferred solution for businesses that fall within the prescribed turnover limits.

To be eligible for the Composition Scheme, a business must meet certain criteria. The most important condition is the turnover threshold. Businesses having a total turnover of up to Rs. 1.5 crore in the preceding financial year can opt for the scheme, whereas for special category states like those in the North-East and Himachal Pradesh, the limit is Rs. 75 lakhs. Service providers are also allowed under this scheme, provided their turnover remains within Rs. 50 lakhs and they don’t exceed the additional supply limit of 10% of turnover or Rs. 5 lakhs, whichever is higher. Additionally, if a person operates multiple businesses under one PAN, they must either include all of them under the Composition Scheme or none at all—partial enrollment is not permitted.

However, not all businesses are allowed to choose the scheme. Ineligible categories include manufacturers of certain notified goods like ice cream, pan masala, and tobacco products. Also, businesses involved in inter-state supply of goods or services are barred from registering under the scheme. Companies selling goods through e-commerce platforms that collect TCS (Tax Collected at Source), casual taxable persons who operate without a fixed place of business, and non-resident taxable persons are also excluded. Moreover, if a business is engaged in supplying exempt goods or services, it cannot opt for the scheme.

For those who qualify, there are a few important conditions to follow under the Composition Scheme. Businesses cannot claim Input Tax Credit (ITC) on purchases, meaning they cannot reduce their tax liability using taxes paid on inputs. Additionally, they are not allowed to sell goods that are not taxable under GST—such as alcoholic beverages. Even if they are liable under the Reverse Charge Mechanism (RCM), they must pay such taxes at the normal GST rates. Importantly, all businesses operated under the same PAN must follow the scheme consistently. They must also visibly mention on their business premises that they are composition dealers and include the statement "Composition taxable person – not eligible to collect tax on supplies" on every bill they issue.

To opt for the Composition Scheme, an eligible business needs to file Form CMP-02 through the GST portal. This form must be submitted at the beginning of the financial year. In case someone wishes to switch to the scheme mid-year, additional forms and transition steps are necessary to ensure full compliance with GST laws. It’s always better to plan this in advance and consult a tax professional if needed.

Regarding billing under the Composition Scheme, such businesses cannot issue standard tax invoices like regular GST taxpayers. Instead, they must issue a Bill of Supply, since they are not permitted to charge GST separately to customers. Every bill must include a specific declaration that they are composition taxpayers and are not eligible to collect GST from customers, ensuring full transparency in transactions.

The GST rates under the Composition Scheme are quite nominal and vary by business type. For manufacturers and traders, the GST rate is fixed at 1% of turnover. Restaurants that do not serve alcohol pay 5%, and eligible service providers pay a rate of 6%. These rates are much lower than regular GST rates, which gives small businesses a financial edge by reducing their overall tax burden.

Even though the scheme simplifies compliance, composition dealers still need to file returns. They must submit CMP-08 every quarter to report turnover and pay taxes. This return must be filed by the 18th day of the month following the end of each quarter. Additionally, an annual return in GSTR-4 must be filed by 30th April of the next financial year. While GSTR-9A, the annual return for composition dealers, was waived in earlier years, any future requirements for 2025 will be based on government updates or notifications.

There are several benefits of opting into the Composition Scheme. First, compliance becomes much easier—there’s no need for maintaining detailed GST records or submitting multiple returns each month. The fixed tax rate also ensures lower tax liability, making it financially easier for small businesses to operate. With simplified tax payment methods and fewer formalities, businesses enjoy better liquidity and improved cash flow throughout the year.

However, the scheme also comes with certain limitations. Since businesses cannot make inter-state supplies, it restricts them from expanding across state borders. Another major drawback is the inability to claim Input Tax Credit (ITC), which means they cannot reduce tax liability using taxes paid on inputs. Lastly, if a business plans to expand or diversify, the composition scheme may no longer be a suitable choice, as its features are tailored more towards static, small-scale operations.

In summary, the Composition Scheme provides a great opportunity for small businesses to manage their taxes with minimal effort and cost. It helps reduce the complexity of GST for those with limited resources. However, before opting in, businesses must thoroughly understand the eligibility, limitations, and compliance responsibilities involved. Taking an informed decision ensures that the scheme truly adds value without affecting the long-term growth of the business.

If you need professional assistance regarding GST registration or help with the Composition Scheme, you can reach out to our experts by emailing us at info@ccoffice.in or by calling/WhatsApp at +91 9988424211.

Components of GST: CGST, SGST, and IGST

The Goods and Services Tax (GST) in India is a complete indirect tax system introduced to replace multiple taxes levied by the Central and State Governments. To ensure transparency and a fair distribution of tax revenue between the Centre and the States, GST is structured into three key components: CGST (Central GST), SGST (State GST), and IGST (Integrated GST). These components are designed to manage taxation on transactions within a state (intra-state) and between states (inter-state), as well as on imports, ensuring that revenue flows appropriately to the respective governments involved.

When a sale of goods or services happens within the same state—known as intra-state supply—both CGST and SGST are levied on the transaction. The total GST rate is split equally between the Centre and the State. For instance, if the applicable GST rate is 18%, then 9% will be charged as CGST and 9% as SGST. While the Central Government collects the CGST, the respective State Government collects the SGST. This dual collection ensures that both administrations receive their fair share of the tax generated from the transaction. For example, if a business in Delhi sells a product to a customer in Delhi itself, the transaction will attract both CGST and SGST.

On the other hand, when a transaction involves the movement of goods or services between two different states, it is treated as an inter-state supply. In such cases, IGST is levied instead of CGST and SGST. The Integrated GST (IGST) is collected by the Central Government and later apportioned between the destination and origin states as per the revenue-sharing formula set by the GST Council. This helps maintain a smooth flow of credit across state boundaries and avoids the complex tax-on-tax system that existed prior to GST. For instance, if a trader in Karnataka sells goods to a buyer in Maharashtra, IGST will be applicable on the transaction. The entire tax amount is initially collected by the Centre, and then the share belonging to Maharashtra—the destination state—is transferred accordingly.

IGST also applies to imports of goods and services into India. In such cases, the importer is liable to pay IGST, which enables them to avail input tax credit and offset it against future GST liabilities. This treatment ensures that imported goods are taxed at par with domestically produced goods, creating a level playing field for Indian businesses.

This three-fold division—CGST, SGST, and IGST—not only simplifies the tax system but also supports a strong credit mechanism. It helps businesses claim tax credits efficiently and reduces cascading effects. The design of GST components thus strengthens cooperative federalism by giving both the Centre and the States their rightful share of tax revenue while offering a transparent and uniform tax structure across India. Understanding how CGST, SGST, and IGST work is essential for every taxpayer to remain compliant and manage taxes effectively under the GST regime.

GST Registration Document Requirements 

GST Registration Document Requirements for various types of business entities, which you can also use as a checklist for a smooth registration process:

1. Sole Proprietor / Individual

For individuals running a business in their own name, the following documents are required:

• PAN Card of the Owner: Permanent Account Number issued by the Income Tax Department is mandatory for GST registration.
• Aadhar Card of the Owner: This is used for identity verification and Aadhaar-based authentication during GST registration.
• Photograph of the Owner: A recent passport-size photograph in JPEG format, not exceeding 100 KB in size.
• Bank Account Details: Any one of the following is acceptable – a copy of the bank statement, passbook, or a cancelled cheque showing the name of the account holder, account number, and IFSC code.
• Address Proof of Business Place: This can be a rent agreement, electricity bill, property tax receipt, or any legal ownership document. The address mentioned should match the place where the business is being operated.

2. LLP (Limited Liability Partnership) and Partnership Firms

For Partnership Firms and Limited Liability Partnership (LLP) formed under a partnership deed or LLP registered under the LLP Act, the following documents are needed:

• PAN Cards of All Partners: Each partner’s PAN is required, including that of the managing partner and the authorized signatory.
• Partnership Deed: A copy of the deed that outlines the agreement between partners, duly signed and notarized.
• Photographs of All Partners and Authorized Signatory: These must be in JPEG format and not exceed 100 KB each.
• Address Proof of Partners: Any government-issued ID such as a passport, driving license, voter ID, or Aadhaar card.
• Aadhar Card of Authorized Signatory: Required for Aadhaar authentication during the GST application process.
• Proof of Appointment of Authorized Signatory: This can be a letter or resolution signed by all partners appointing one partner or a third party as the authorized person to handle GST matters.
• LLP Certificate of Incorporation / Board Resolution (in case of LLPs): If the firm is an LLP, the incorporation certificate issued by the Ministry of Corporate Affairs and a resolution appointing the authorized signatory must be submitted.
• Bank Account Details: As with other entities, a copy of the bank statement or a cancelled cheque with proper details.
• Address Proof of Principal Place of Business: This should show the location of the head office or the main place from where business is conducted.

3. HUF (Hindu Undivided Family)

HUFs require the following set of documents for GST registration:

• PAN Card of HUF: As HUF is a separate legal entity, it must have its own PAN.
• PAN Card and Aadhar Card of Karta: The Karta (head of the HUF) is the authorized person for handling GST-related matters.
• Photograph of the Karta: The image must be recent, passport-sized, in JPEG format, and under 100 KB.
• Bank Account Details: Same as above – any bank document that verifies the account in the HUF’s name.
• Address Proof of Principal Place of Business: Should reflect the location from where the business is managed.

4. Company (Private, Public, Indian or Foreign)

Companies, whether incorporated in India or abroad, need to submit an extensive list of documents:

• PAN Card of the Company: Mandatory for Indian companies such as Private Limited Company, Public Limited Company, One Person Company, etc. For foreign companies, a similar registration document issued by the home country and certified appropriately is needed.
• Certificate of Incorporation: Issued by the Ministry of Corporate Affairs (MCA). This serves as the legal proof of the company’s formation.
• Memorandum of Association (MOA) and Articles of Association (AOA): These define the company’s constitution and rules governing its operation.
• PAN and Aadhaar Card of Authorized Signatory: The authorized signatory must be an Indian resident even in case of foreign company registration in India.
• PAN Card and Address Proof of All Directors: Every director’s identity and address must be verified. Valid address proofs include passport, driving license, voter ID, or Aadhaar.
• Photographs of Directors and Authorized Signatory: Passport-size photos must be in JPEG format and under 100 KB each.
• Board Resolution / Authorization Letter: This document confirms the appointment of an authorized signatory and should be in either JPEG or PDF format not exceeding 100 KB.
• Bank Account Details: A recent bank statement, cancelled cheque, or certificate confirming account details is required.
• Address Proof of Principal Place of Business: Similar to other entities, this must confirm the location of the company’s registered office or main business premises.

Note:

• Bank Account Details: For all entities, it’s recommended to open a bank account in the name of the business before applying for GST registration.
• Address Proof: If the place of business is rented, a rent agreement and the latest utility bill (electricity or water) in the owner’s name should be submitted. If self-owned, property documents or tax receipts can be used.

GST Registration Process 

The following is the process for Online GST Registration:

1. GST Registration for New Applicants

For businesses and individuals who are applying for GST registration for the first time, the following steps need to be followed using the official GST portal gst.gov.in:

Step 1: Access the GST Portal

To begin the registration process, visit the official GST portal. The portal is maintained by the Government of India and provides all forms and procedures for GST registration.

Step 2: Navigate to the Registration Tab

Once on the home page, click on the ‘Services’ tab, then go to ‘Registration’ and select ‘New Registration.’ This opens up Part-A of Form GST REG-01, which is the initial form for GST registration.

Step 3: Fill Part-A of GST REG-01

In Part-A of the form, the applicant needs to provide the following details:

• PAN (Permanent Account Number) of the business or individual.
• Mobile Number and Email ID, which must be active and accessible.
• State/UT where the business is located or where GST registration is being sought.

Step 4: OTP Verification and Generation of TRN

After entering the above details, an OTP (One-Time Password) is sent to both the mobile number and email address provided. This OTP is used to verify the contact details. Once verified, the portal generates a Temporary Reference Number (TRN) which is used to continue the application process.

Step 5: Acknowledgment in Form GST REG-02

Once Part-A is successfully submitted, the system generates an acknowledgement receipt in Form GST REG-02, confirming that the first step has been completed.

Step 6: Fill Part-B of Form GST REG-01

The applicant then logs in using the TRN and completes Part-B of Form GST REG-01. This part requires detailed business information, including:

• Legal name of the business
• Trade name (if any)
• Type of business entity (e.g., proprietorship, partnership, LLP, company)
• Details of promoters/directors
• Details of the principal place of business
• Nature of business activity
• Details of the authorized signatory
• Bank account details
• Uploading of required documents in specified formats

Once all information is filled out, the application must be signed electronically using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Step 7: Additional Information, If Required (Form GST REG-03 & REG-04)

If the GST officer finds any discrepancy or requires further clarification, they will issue a notice in Form GST REG-03. The applicant must respond to this notice by filing Form GST REG-04 within 7 working days, along with the requested clarifications and additional documents.

Step 8: Rejection of Application (Form GST REG-05)

If the officer is not satisfied with the response or finds the application to be incorrect or incomplete, the registration request may be rejected. The rejection will be officially communicated via Form GST REG-05.

Step 9: Grant of GST Registration (Form GST REG-06)

Upon successful verification of all information and documents, and if the officer is satisfied with the application, the GST registration certificate is issued in Form GST REG-06. This certificate includes the GSTIN (Goods and Services Tax Identification Number) and allows the applicant to legally collect GST and file returns.

2. GST Registration for Existing Central and State Tax Dealers

Before the introduction of GST, many businesses were already registered under old tax laws such as VAT, Service Tax, and Excise. These businesses needed to migrate to the GST system. Here's how:

Step 1: Validation of Email and Mobile Number

All existing taxpayers who have been provided with a Provisional ID and Password need to visit the GST portal and validate their email ID and mobile number. This step is necessary to access and complete their GST enrollment.

Step 2: Submission of Form GST REG-24

The dealers must complete and submit Form GST REG-24 on the GST portal. This form requires them to furnish additional business details, upload supporting documents, and complete the registration process. The form must be filed within 3 months from the date of receiving the provisional ID.

Step 3: Issue of Provisional Certificate (Form GST REG-25)

Once the basic details are submitted, the GST system issues a Provisional Registration Certificate in Form GST REG-25. This provisional registration is temporary until the final registration is granted.

Step 4: Single Provisional Registration for Multiple Registrations

If a business had multiple registrations under earlier tax regimes (e.g., VAT in one state, service tax in another), only one provisional GST registration will be granted per PAN for each state.

Step 5: Provisional Registration for Service Tax Centralized Registrants

For service providers who had centralized service tax registrations, the GST portal issues a single provisional GST registration in the state where the principal place of business is located under the old regime.

Step 6: Final Registration – Form GST REG-26

Once all required information is verified and deemed satisfactory, the GST officer will issue the final GST registration certificate using Form GST REG-26. This confirms the permanent transition from the old tax system to GST.

Step 7: Show Cause Notice (Form GST REG-27)

If the information submitted by the taxpayer is insufficient or incorrect, the officer may issue a Show Cause Notice in Form GST REG-27. This gives the applicant a chance to justify and rectify the issues raised.

Step 8: Cancellation of Provisional Registration

If the taxpayer fails to respond to the show cause notice or the justification provided is not acceptable, the provisional registration issued in Form GST REG-25 will be cancelled. This is done through an official cancellation order in Form GST REG-26.

The GST registration process in India is clearly laid out and can be completed online through the official portal. Whether you're a new applicant or a business migrating from older tax regimes, the registration involves filling specific forms (REG-01 to REG-06), verifying identity, uploading documents, and complying with timelines. Failure to comply can lead to delays, show cause notices, or rejection of your application. Hence, it is essential to understand the step-by-step process and keep all necessary documents and information ready before initiating the registration.

If you need assistance in completing the GST registration process, feel free to connect with experts at Compliance Calendar LLP via info@ccoffice.in or Call/Whatsapp at +91 9988424211.

Filing GST Returns

Under the GST regime, once a business obtains GST registration, it becomes mandatory to file GST returns on a regular basis. These returns are essential records submitted to the government that contain detailed information about a business’s sales, purchases, tax collected on outward supplies, and tax paid on inward supplies. GST returns help in the transparent reporting of transactions and allow businesses to claim Input Tax Credit (ITC) on eligible purchases.

Even if a business has not conducted any transactions during a tax period, it is still required to file a NIL return. Failure to do so may result in penalties, interest on tax due, and even temporary suspension or cancellation of GSTIN. Regular and timely return filing ensures smooth compliance and reduces the risk of audit scrutiny.

Businesses can file their returns online through the official GST portal (gst.gov.in) or by using accounting and billing software integrated with the GST system. Various forms like GSTR-1, GSTR-3B, GSTR-4, and GSTR-9 are used based on business type and turnover. Filing accurate and timely GST returns is not just a legal obligation but also helps in maintaining the financial health and reputation of the business.

GST Late Fees Calculation

The following are the GST Late Fees:

Late Fee Structure for GSTR-3B

Businesses registered under GST are required to file GSTR-3B, a monthly summary return. If this return is not filed on time, a late fee is imposed. In the case of NIL returns, where there are no sales, purchases, or tax liability during the period, a reduced late fee of Rs. 20 per day is charged—Rs. 10 each for CGST and SGST. For returns with any tax liability, the late fee is Rs. 50 per day, which includes Rs. 25 under CGST and Rs. 25 under SGST. However, to protect businesses from excessive penalties, the maximum cap is Rs. 10,000 per return—Rs. 5,000 for CGST and Rs. 5,000 for SGST. It is important to note that late fees are calculated from the due date until the actual date of filing, and returns for a particular month cannot be filed unless pending late fees from previous months are paid.

Late Fees for GSTR-1

For GSTR-1, which is the return used to report outward supplies (sales), the government imposes a significantly higher late fee. The penalty for failing to submit GSTR-1 on time is Rs. 200 per day—split equally as Rs. 100 for CGST and Rs. 100 for SGST. However, unlike GSTR-3B, currently, the government does not accept late payments for GSTR-1, and it has not been considered in late fee calculators. Therefore, timely filing of GSTR-1 is essential to avoid any compliance issues or inability to upload sales data.

GSTR-9 and GSTR-9A Late Filing Penalty

When it comes to annual returns, which are filed using GSTR-9 (for regular taxpayers) and GSTR-9A (for composition scheme dealers), the late fee is also Rs. 200 per day, comprising Rs. 100 under CGST and Rs. 100 under SGST. However, this late fee is capped based on the turnover of the taxpayer. The total penalty cannot exceed 0.50% of the turnover, which is further divided as 0.25% for CGST and 0.25% for SGST. Businesses must ensure timely filing of annual returns to avoid hefty penalties and maintain good standing with tax authorities.

Penalty Details for GSTR-10 (Final Return)

GSTR-10 is the return that needs to be filed when a business surrenders or cancels its GST registration. Delayed filing of this return attracts a late fee of Rs. 200 per day—with Rs. 100 under CGST and Rs. 100 under SGST. Unlike other GST returns, there is no maximum limit to the late fee for GSTR-10. The taxpayer must pay the applicable late fee in full to successfully file the final return. Hence, businesses looking to cancel their registration should complete this process promptly to avoid accumulating daily penalties.

Interest on Late GST Payment

If a taxpayer does not pay their GST liability by the due date, they are liable to pay interest at 18% per annum on the outstanding tax amount. This interest is calculated from the day immediately after the due date until the date the payment is actually made. The interest liability is separate from the late fee and must be paid even if the return is filed late by just one day. Accurate and timely tax payments are essential to avoid additional financial burdens due to interest charges.

General Penalty for Missing GST Return Deadlines

Under GST law, missing the return filing deadline attracts a general penalty in the form of a late fee. If the taxpayer has any tax liability, the late fee is Rs. 50 per day, split as Rs. 25 under CGST and ?25 under SGST. However, for NIL returns, where there is no tax payable, the reduced late fee of Rs. 20 per day applies—Rs. 10 each for CGST and SGST. In both cases, the maximum amount that can be charged is Rs. 5,000 per return. Non-compliance not only leads to financial loss but also causes suspension of GSTIN and disruption in business operations.