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Types of Registration Under GST

GST registration is differentiated between two types/schemes Regular and Composition. The difference between the two is summarized as under :

Particulars Regular Composition
Meaning It is a normal procedural scheme of payment of output tax and considering the eligible input tax credit. It is a simple and easy scheme for small taxpayers who can get rid of tedious GST formalities and pay GST at a fixed rate of turnover.
Returns 1) GSTR-1 (Monthly or quarterly as the case may be)

2) GSTR-3b (monthly basis)

3) Annual return in Form GSTR-9 or GSTR-9C

 1) GSTR-4 on an annual basis

2) Annual return in Form GSTR-9A.

3) GST CMP-08 – statement for tax paid on quarterly basis.
Supply Allowed Both Intrastate and interstate Only Intra-state
Tax Collection Allowed to collect taxes from customers at the prescribed rates of particular goods and services. Not allowed to collect composition tax.
Condition to opt Any person can opt Regular scheme at any time. A taxpayer whose turnover is below Rs 1.5 crore or Rs 75 lakh (In case of North-Eastern states and Himachal Pradesh ) can opt for Composition Scheme in the beginning of the Financial year.
Supply services The limit is 20 Lakhs and the tax rates are as per the particulars of the services. The limit is 50 Lakhs and the tax rate will be @6% of the turnover.
Who Cannot opt the Scheme No exceptions
  • Manufacturer of ice cream, pan masala, or tobacco
  • A person making inter-state supplies
  • A casual taxable person or a non-resident taxable person
  • Businesses which supply goods through an e-commerce operator
  • Supplier of non-taxable goods
  • Business whose turnover exceeds the prescribed limit.
Specified Condition of Scheme If a taxable person is registered under this scheme, then no other business under the same PAN take registration as composition scheme.
  • No Input Tax Credit can be claimed by a dealer opting for composition scheme
  • The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism
  • If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
  • The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
  • The taxpayer has to mention the words ‘composition taxable person, not eligible to collect tax on supplies’ on every bill of supply issued by him.
  • Composition Dealer can supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher.
GST payment The GST is payable as follows :

Output GST

– Input GST

+Tax on reverse charge

 GST Payment has to be made out of pocket for the supplies made as follows :

GST on supplies made.

+ Tax on reverse charge
Merits
  • Unlimited territory of business
  • Credit of Input Tax paid is available.
  • Sell through E-commerce.
  • Lesser compliance (returns, maintaining books of record, issuance of invoices)
  • Limited tax liability
  • High liquidity as taxes are at a lower rate
  • Not required to maintain detailed records.
Demerits More compliance (number of returns to be filled.)·

  • Less liquidity as high amount of tax will be stuck in the E- ledgers and he can avail the input only if supplier has filed the return.
  • Detail books of account are to be maintained.
  • A limited territory of business. The dealer is barred from carrying out inter-state transactions
  • No Input Tax Credit available to composition dealers
  • The taxpayer will not be eligible to supply exempt goods or goods through an e-commerce portal.
Good for 1) Your customer can claim Input Tax Credit (ITC) if eligible, so big buyer will not avoid buying from you.

2) Good for B2B model (selling to resellers)

3) It is suitable for the large scale of business.

 1) Beneficial for small suppliers, intra-state local suppliers and restaurant sector as It prevents them from various procedural compliance and gives a hassle free working environment.

Also, GST will increase the prices of the products.

2) Good for B2C business model (selling directly to end customers.)

3) Suitable for not so huge business.

Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

Documents Required for GST Registration :

CONSTITUTION OF BUSINESS ENTITY DOCUMENTS REQUIRED
Sole Proprietorship / Individual 1. PAN card,

2. Aadhaar Card,

3. Passport size photo of the sole proprietor.

4. Registered Office Address proof:-
– Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
– Rented property – Rent agreement and No objection

certificate (NOC) from the owner of the rented property.

5. Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement
Partnership/Limited Liability Partnership 1. Documents of Partners : PAN Card, Passport size photograph and Address Proof of Partners,

2. Partnership Deed,

3. PAN card of Firm,

4. Registered Office Address proof :
–Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
–Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

5. Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement

6. Additional documents in case of LLP– Copy of Board Resolution, Registration Certificate of the LLP
Proof of appointment of authorized signatory (Digital Signature Certificate of any one of the designated partner)
Private Limited / Public Limited / One Person Company (Indian or Foreign) 1. PAN Card of the company

2. Registration Certificate of the Company (Certification of incorporation) given by MCA

3. Memorandum of Association (MOA) /Articles of Association (AOA)

4. PAN card, Passport size Photograph and Aadhaar card of all Directors,

5. PAN card and Aadhaar card of the authorized signatory.

6. Board Resolution or any other proof of appointing authorized signatory

7. Registered Office Address proof:-
– Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
– Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

8. Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement
HUF 1. PAN card of HUF

2. PAN Card and Aadhaar card of Karta

3. Passport size Photograph of Owner

4. Registered Office Address proof:-
–Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
–Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

5. Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement
Society or Trust or Club 1. Pan Card of society/Trust/Club

2. Registration Certificate of society or club

3. Passport size Photograph and PAN Card of Promoter/ Partners

4. PAN card and Aadhaar card of the authorized signatory.

5. Board Resolution or any other proof of appointing authorized signatory

6. Registered Office Address proof:-
–Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt
–Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

7. Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement
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