10 Common Mistakes to Avoid During GST Registration in 2024

10 Common Mistakes to Avoid During GST Registration in 2024

by GST Registration

The implementation of the Goods and Services Tax (GST) has brought about a significant change in the tax system in India, making indirect taxation more straightforward for companies of all sizes. Even yet, the intricacies of the Goods and Services Tax (GST) registration process can still result in errors, which can result in unneeded delays and penalties. In order to guarantee a hassle-free and smooth registration process in the year 2024, it is essential to avoid making the following typical mistakes:

First and foremost, accuracy is paramount. Incorrect business information like your firm’s name, address, or PAN can delay, reject, or even penalize your registration. Double-check everything before hitting submit!

Be aware of the threshold: Misinterpreting the turnover level (Rs. 40 lakhs for regular businesses, Rs. 20 lakhs for some states) can cause unnecessary compliance burdens or tax liabilities. Carefully assess your expected annual turnover to choose the right category.

Keep your paperwork ready: Missing documents like proofs of business address, bank statements, photo IDs, and Aadhaar cards will stall your application. Have everything readily available to avoid processing delays and possible rejection.

Unlock the code: Choosing the wrong Harmonized System of Nomenclature (HSN) codes for your products or services can lead to incorrect tax rates, miscalculated liabilities, and difficulties claiming input tax credits. Consult a tax advisor to identify the precise codes for your business activities.

Accuracy matters throughout: Errors in bank account details used for tax payments or refunds can cause delays, failed transactions, and even penalties. Before linking your bank information to your GST registration, meticulously verify its accuracy.

Compose wisely: The composition scheme comes with limitations like restricted turnover eligibility and limited input tax credit claims. Don’t opt for it without fully understanding its implications and potential future compliance challenges.

Consistency reigns supreme: Failing to file your GST returns on time, even during periods with no transactions, may attract late filing fees, interest penalties, and even suspension of your registration. Set reminders and establish a system for timely filing, regardless of transaction volume.

Invoice intelligence: Invoices that violate GST regulations (like missing details or inaccurate tax rates) may be rejected by counterparties, leading to tax liabilities and compliance issues. Ensure your invoices meet all GST requirements, including accurate HSN codes, appropriate tax rates, and complete recipient details.

Record the rhythm: Maintaining organized records of purchases, sales, and tax payments is crucial for GST compliance. Failing to do so can make responding to tax department queries challenging and potentially result in record-keeping penalties.

Seek expert guidance: Navigating GST registration and compliance on your own can be risky. Don’t shy away from seeking professional advice from a qualified tax advisor. They can guide you through the process, ensure your compliance, and help you optimize your tax liabilities.

By being mindful of these 10 common pitfalls and taking the necessary steps to avoid them, you can ensure a smooth and successful GST registration process in 2024. Remember, knowledge is power, and seeking guidance from experts can make the journey even smoother.

Conclusion

We’re your GST experts, here to help you navigate the complexity and ensure a smooth sailing experience. Our tax experts have the experience and ability to walk you through every stage of the process, from initial eligibility evaluation to post-registration compliance.

GST Registration

GST Registration

by CA Topics

GST Registration

GST Registration compliance

GST Registration is done by every supplier who is making a taxable supply of goods or services or both shall register in every State/Union Territory from where he makes taxable supply if his aggregate turnover exceeds 40 lakhs (10 lakhs for northeastern states) in a financial year.

Aggregate turnover means the value of all taxable supplies (excluding the value of inward supplies liable to tax on reverse charge basis), exempt supplies, exports of goods and services or both and inter-state supplies of persons having the same Permanent Account Number [PAN] to be computed on all India basis.

Mandatory GST Registration Criteria

The following person is required to take registration under GST irrespective of turnover:

  1. Person making interstate supplies
  2. casual taxable persons
  3. Persons who are required to pay tax under RCM
  4. Person who are required to pay tax under sub-section (5) of section 9
  5. Non-resident taxable persons making taxable supply
  6. Persons who are required to deduct tax under section 51
  7. Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise
  8. Input Service Distributor
  9. Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52
  10. Every E-commerce operator
  11. Every person supplying OIDR services from a place outside India to a person in India, other than a registered person.

Composition Scheme:

Small businesses having an annual turnover of less than Rs. 1.5 crore can opt for Composition scheme

Composition dealers will pay nominal tax rates based on the type of business:

  1. Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers).
  2. They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
  3. Businesses that have opted for Composition Scheme cannot claim any input tax credit.

Composition scheme is not applicable to :

  1. Service providers
  2. Inter-state sellers
  3. E-commerce sellers
  4. Supplier of non-taxable goods
  5. Manufacturer of Notified Goods

Input Service Distributor:

ISD means Input Service Distributor. It is like a head office that receives the tax invoices of input services and then further distributes the credit of tax paid by it to its units proportionately.

  1. Yes, the person can voluntarily cancel the registration on wish.
  2. Even proper office, on default of tax by taxable assessee, will cancel the GST registration by giving notice.

Documents Required:

  1. PAN of the applicant & Valid Mobile Number and E-Mail ID
  2. Identity PAN and address proof along with photographs of promoter
    1. Proprietary Concern – Proprietor
    2. Partnership Firm / LLP – Managing/Authorized/Designated Partners (personal details of all partners are to be submitted but photos of only ten partners including that of Managing Partner are to be submitted)
    3. Hindu Undivided Family – Karta
    4. Company – Managing Director, Directors and the Authorised Person
    5. Trust – Managing Trustee, Trustees and Authorised Person
    6. Association of Persons or Body of Individuals –Members of Managing Committee (personal details of all members are to be submitted but photos of only ten members including that of Chairman are to be submitted)
    7. Local Authority – CEO or his equivalent
    8. Statutory Body – CEO or his equivalent
    9. Others – Person(s) in Charge
  3. Business Registration Document
    1. Partnership – Partnership Deed
    2. LLP/ Company – Incorporation Certificate
    3. Society/trust/ club/ government department/ body of individuals – Registration Certificates
  4. Address proof of business
    1. Rental – Rental Agreement/ Electricity Bill with Consent
    2. Own – Property tax/ Municipal tax receipt
    3. SEZ – Certificate issued by Govt.
  5. Jurisdiction and Commissionerate
  6. Bank account Proof
    1. Cheque
    2. Bank statement
  7. Digital Signature Mandatory only in case of Company
  8. Declaration as authorized signatory – Board Resolution/Self Declaration
  9. Declaration regarding the type of goods and nature of business.