GST Registration For Service Providers
July 23, 2019
GST Registration For Service Providers
The Indian tax system is the most complicated one in the world with the Centre, the States and the local bodies having powers to levy variety of taxes to earn revenue. Various kinds of taxes are collected at different levels like the direct taxes which affect the common man directly like the income tax and wealth tax, indirect taxes which the common man pays for goods and services availed of like VAT and service tax, corporate tax, etc. The new Goods and Services Tax (GST) is a unified tax structure that was implemented by the Government of India on 1 July 2017. It is one of the most historic tax reforms in Indian Taxation History. Indian taxation system has come a long way from closed, complicated one to open, simple and futuristic.
GST FOR SERVICE PROVIDERS
India is a strong services-led economy with the sector generating a significant chunk of employment opportunities and contributing to the GDP. Service providers now have to grapple with a completely new set of facts. It is no news that the implementation of the GST (Goods and service tax) will pose some major advantages and a few disadvantages to the services industry. GST is said to be a destination based or consumption based taxation. Also, as GST is a destination based tax, it might be a challenge to determine the destination of certain services (at present, services are taxed at the place of rendering the service). This may lead to a difficulty in determining state GST, central GST or inter-state GST on B2B and B2C transactions.
INTERSTATE AND INTRASTATE SERVICE PROVIDERS
If a service provider has operations in only one state then it is Intrastate Service Provider and GST is going to be excellent because without too much of compliance burden it tend to get more input-tax credits. But, if a service provider is operating in more than one state it is called Interstate Service Provider, and I believe the majority would have operations in multiple states; in that case it would be hugely different under GST.
GST REGISTRATION FOR SERVICE PROVIDERS
Generally any business in India irrespective of whether they deal with goods or services or both, if they have a turnover above the threshold limit as prescribed under the new GST regime has to get registered under GST. But there are certain exceptions to this general rule, where certain businesses are required to register under GST irrespective of their turnover. If the organisation carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.
THRESHOLD LIMIT FOR GST
Any business whose turnover exceeds the threshold limit of Rs. 20 lakhs (Rs 10 lakhs for North Eastern and hill states) will have to register under GST.
COMPULSORY REGISTRATION FOR CERTAIN SERVICE PROVIDERS
Every service provider who is registered under the Pre-GST laws (i.e., Excise, VAT, Service Tax etc.) needs to register under GST by default.
LATEST UPDATE IN THE THRESHOLD LIMIT FOR GST REGISTRATION
As per 23rd GST Council Meet on 10th November 2017
E-commerce sellers/aggregators need not register if total sales is less than Rs. 20 lakh – Notification No. 65/2017 – Central Tax dated 15.11.2017
As per 22nd GST Council meeting of 6th October 2017
Service providers providing inter-state services are exempted from registration if their annual turnover is below 20lakhs (10 lakhs for Special states. 20 lakhs for J&K)
Notification No. 7/2017 – Integrated Tax dated 14th September 2017
Job workers making inter-state supply of services to a registered person are exempted from registration if their turnover is below 20lakhs (10 lakhs for Special states)
SERVICE PROVIDERS – REGISTRATION IN MULTIPLE STATES
There has been much confusion when it comes to registration in different states and when does a service provider need to look at a multi-state registration. To make things very clear, merely because you provide services in a particular state, you are not required to register in that state. That is not required at all. It is only when you have operations in a particular state, which is a place of business or office that you have to register in that state.
GST REGISTRATION –A MIXED BAG FOR MULTIPLE STATE SERVICE PROVIDERS
In the past, even if you are operating in more than 10 states, you could have obtained just one registration, which is for the place where you are headquartered. Service provision is typically of a nature where in order to succeed in your business in a state, you will have to set up an office in that state. So if you are a Chennai-based company and if you are selling your solutions in Mumbai and Bangalore, at some stage in your evolutionary process you will set up your office in that city and have a person manning that office instead of you going there frequently.
When you have that kind of setup with more than one state of operation, you are required to obtain multiple registrations, you have to do the compliance of each of those registrations, the invoicing has to be organized according to that state and therefore the input tax credit also becomes state-centric. This is the reason that for multiple state service providers, it is a mixed bag.
DOCUMENTS REQUIRED FOR GST REGISTRATION
The following documents are required for GST Registration:
Valid Permanent Account Number (PAN)
Valid Indian Mobile Number
Valid e-mail address
Place of business
Valid Bank Account Number from India with IFSC
At least one Propreitor/ Partner/ Director/ Trustee/ Karta/ Member with PAN
An authorised signatory who is a resident of India with valid details including PAN
GST INVOICE FOR SERVICES
A Service Provider who has registered under GST can issue invoices and it can collect GST from its customers, in case if one has not registered under GST, they can issue a bill of supply without mentioning any GST.
GST has made doing business and trade very easy. The market size for every trader has grown. Now whole country is his market. With regard to service sector GST has positive impacts like streamlining of taxes for inter-state service providers, clear distinction between goods and services, input credit facility and regularised GST return filing.
How is Service Tax applicable in Jammu & Kashmir?
Tax Structure in India
Service Tax Calculation: Complete Guide & Free Calculator
How to avoid GST Registration
Property Registration In India
Property registration in India is governed by Section 17 of Registration Act, 1908. This Act is applicable to whole of India except the state of Jammu & Kashmir. It refers to registering the changes in ownership and transactions related to the land/ immovable property. To guarantee the legal title of land/immovable property that is just purchased it must be registered with the concerned authority. Moreover registration of property contains certain benefits such as easy settlement of disputes if any issue arises with respect to the ownership of that property at any later stage. The risk of fraud can be strictly curtailed. Also the public records help government in conducting censuses, surveys and maintenance of any other useful public database.
Now the process of Registration can be done with the help of Computerised system. It removes middlemen and also does transparent valuation of the documents.
ESTABLISHMENT OF THE REGISTRATION
Part II of the Act, from Section 3 to 16, deals with the Establishment of the Registration. It makes it clear that Registration of a property is a State Activity. Every State has Inspector-General appointed by each State Government. Each district contains Registrar and each Sub-District contains Sub-Registrar. The State Government shall provide for the office of every registering officer the books necessary for the purposes of this Act. The books so provided shall contain the forms from time to time prescribed by the Inspector-General, with the sanction of the State Government, and the pages of such books shall be consecutively numbered in print, and the number of pages in each book shall be certified on the title-page by the officer by whom such books are issued. The State Government shall supply the office of every Registrar with a fire-proof box, and shall in each district make suitable provision for the safe custody of the records connected with the registration of documents in such district.
Part III of the Act deals with Registrable documents. Section 17 makes compulsory to register certain documents whereas Section 18 does not make mandatory of registration of certain documents.
Documents of which registration is compulsory (Sec.17)
Gift deed (of immovable property);
Other Non-Testamentary instruments that contains value of not less than Rs.100;
Non-Testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such rights, title or interest ;
Lease deed (reserving rent for 1 year or of any term exceeding 1 year)
Transferring of any decree, order of the court or any award of not less than value of Rs.100.
Shares of a Joint Stock Company (containing assets in immovable property)
Debenture of a Joint Stock Company
Any endorsement of such Debenture of any company.
Any grant of immovable property by Government
Any instrument of partition made by a Revenue officer.
Any order for granting a loan or instrument of collateral security
Granting loan under Agriculturalists Loan Act, 1884
Any order made under Charitable Endowments Act,1890
Any endorsement under mortgage deed
Any certificate of sale granted under auction of public
Authorities to adopt a son and not conferred by a will shall also be registered.
Documents of which registration is not compulsory (Sec 18)
Value of Instruments less than Rs.100
Instrument of acknowledging the receipt or payment of any consideration
Lease deed ( not exceeding 1 year)
Decree, order or award of a court (Value less than Rs. 100)
Instruments related to Movable property
All other documents not required by Section 17 to be registered.
PROCESS OF REGISTRATION
Pre-appointment must be taken with the Sub-Registrar and the following documents must be presented before him.
Date of stamp: It is the date of purchase of the stamp paper or the date of certificate.
Date of execution: This is the date on which executants signed the document. Here, sub-registrar classifies the nature of document based on the stamp Act and registration act. As told earlier, date of execution should not be older than 4 months for property registration in India.
Consideration amount: It is the price which has been paid or has been agreed to be paid for that particular piece of immovable property. Consideration amount can be as high and can’t be put under question mark; however, there is a lowest limit of standard rates decided by the govt.
Market value: It is estimated by the market value committee or is taken as it is of consideration amount which has been shown in the document, whichever the higher. The registration fee and the stamp duty is paid on the market value which is higher.
Stamp duty: Here the sub-registrar checks that paid amount of stamp duty should not be less than the calculated stamp duty for that particular piece of land. If a difference comes, that would be paid by the party, either in form of a DD/challan. In case, party refuses to pay the difference, case is further subjected to district court. In a typical Delhi/NCR deal, stamp duty is fixed at 6% of land’s price in case of male purchaser; but if the purchaser happens to be a female, the duty is relaxed at 4%. 600 rupees is the registration fee and 100 rupees being the pasting charges.
Supporting documents attached: Registrar checks if all the appropriate documents have been attached; if any has left out, he advises you to attach it. i.e. NOC, Form No. 1,9,10 , declaration, affidavit etc.