Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Every business meeting the prescribed turnover threshold must register for GST to comply with tax regulations. However, many business owners are often confused about the fees associated with GST registration.
The good news is that GST registration is completely free of cost if done through the official government portal. However, if businesses opt for professional services for assistance in filing the application or handling compliance, there may be associated service charges.
In this guide, we will explain the GST registration fee structure, highlight key factors that influence the cost, and discuss penalties for non-compliance.
What is GST Registration?
GST registration is the process by which a business obtains a unique Goods and Services Tax Identification Number (GSTIN) from the government. GSTIN is a 15-digit unique number that enables businesses to collect GST from customers and avail input tax credits.
Who Needs to Register for GST?
- Businesses with Annual Turnover Above the Threshold:
- Rs. 40 lakh for goods (Rs. 20 lakh for special category states)
- Rs. 20 lakh for services (Rs. 10 lakh for special category states)
- E-commerce Operators: Businesses selling through online platforms must register for GST, irrespective of turnover.
- Interstate Suppliers: Businesses supplying goods or services across state borders are required to register for GST.
- Casual Taxable Persons: Individuals or businesses undertaking occasional supplies need to obtain temporary GST registration.
- Non-Resident Taxable Persons: Entities providing goods or services from outside India must obtain GST registration to comply with Indian tax laws.
Is There Any Government Fee for GST Registration?
No, GST registration is free of cost if done through the official GST portal The government does not charge any fee for registration, making the process accessible to all businesses.
Documents Required for GST Registration:
- PAN card of the business and applicant
- Aadhaar card of the authorized signatory
- Proof of business registration/incorporation
- Address proof of business premises
- Bank account statement or canceled cheque
- Digital signature for companies and LLPs
Professional Fees for GST Registration
Although the government does not charge any fee for GST registration, businesses often choose to hire tax consultants, chartered accountants, or GST service providers to assist with the process.
Why Do Businesses Opt for Professional Services?
- Error-Free Application: Professionals ensure that all information is accurate and complete, reducing the chances of rejection.
- Document Verification: Experts help in compiling and verifying required documents.
- Time-Saving Process: Outsourcing registration to professionals saves time and effort, allowing business owners to focus on their operations.
- Post-Registration Compliance: Professionals provide guidance on maintaining GST compliance and filing returns.
Typical Charges for Professional Services:
| Service Type | Estimated Cost (INR) |
|---|---|
| Basic GST Registration | ₹1,000 – ₹2,500 |
| Registration for Multiple States | ₹3,000 – ₹5,000 |
| GST Registration for E-Commerce | ₹2,500 – ₹4,000 |
| Registration for Non-Resident Taxable Person | ₹5,000 – ₹10,000 |
| GST Consultancy and Compliance | ₹5,000 – ₹20,000 per annum |
Note: These charges may vary depending on the complexity of the application, the nature of the business, and the consultant’s expertise.
Additional Costs Associated with GST
1. Digital Signature Certificate (DSC)
Companies and LLPs require a Class 2 or Class 3 Digital Signature Certificate (DSC) for GST registration and filing returns. The cost of obtaining a DSC ranges from ₹1,000 to ₹2,000, depending on the provider and the validity period.
2. Post-Registration Services
After obtaining GST registration, businesses need to comply with ongoing requirements such as filing GST returns, maintaining records, and responding to notices. Professional fees may apply for these services, depending on the volume and complexity of transactions.
3. GST Return Filing Charges
Regular GST return filing may incur additional service charges if outsourced to professionals. The cost can range between ₹500 to ₹5,000 per month, depending on the number of returns and complexity.
Penalties for Non-Compliance with GST Registration
Failing to register for GST when required can lead to penalties and legal consequences.
1. Penalty for Late Registration
If a business does not register for GST within the prescribed period, a penalty of 10% of the tax amount due (minimum ₹10,000) may be imposed.
2. Penalty for Non-Compliance
Non-compliance with GST regulations can attract severe penalties, including:
- ₹10,000 or 10% of the unpaid tax for unintentional errors
- 100% of the tax amount due for deliberate tax evasion
3. Interest on Late Payment
In addition to penalties, interest at 18% per annum is charged on the outstanding tax amount from the due date until payment.
How to Apply for GST Registration
Step-by-Step Process:
- Visit the GST Portal: Go to taxproclarity.com
- Click on ‘Services’: Select ‘Registration’ and click on ‘New Registration.’
- Enter Required Details: Provide business details such as PAN, mobile number, and email address.
- Receive OTP and Verify: Verify the OTP received on your registered mobile number and email.
- Fill Part B of Application: Upload necessary documents and provide additional details.
- Submit Application: After successful submission, you will receive an Application Reference Number (ARN).
- Track Application Status: Use the ARN to track the status of your application.
Once approved, you will receive a GSTIN and a Certificate of Registration.
Benefits of GST Registration
1. Legal Recognition and Credibility
GST registration provides legal recognition to your business, enhancing its credibility and trustworthiness.
2. Eligibility for Input Tax Credit (ITC)
Registered businesses can claim ITC on purchases, reducing the overall tax liability.
3. Expansion of Business Opportunities
GST compliance opens doors to trade across India without restrictions. Registered businesses can also explore e-commerce platforms for nationwide reach.
4. Avoidance of Penalties and Legal Hassles
Timely GST registration prevents penalties, ensuring smooth business operations.
Common Mistakes to Avoid During GST Registration
1. Incorrect PAN or Business Details
Ensure that the PAN and business details match the records with the Income Tax Department.
2. Incomplete Documentation
Upload all required documents, as incomplete submissions may lead to delays or rejections.
3. Choosing the Wrong Registration Type
Select the appropriate GST registration type based on your business activity to avoid complications.
4. Delayed Application Submission
Apply for GST registration promptly to avoid penalties and ensure compliance.
Conclusion
GST registration is a mandatory requirement for businesses that meet the prescribed turnover threshold or engage in interstate trade. While the government does not charge any fee for GST registration, professional assistance may involve service charges.
Timely registration ensures compliance with tax regulations, enhances business credibility, and provides access to input tax credits. Businesses should be vigilant about adhering to GST laws, filing returns on time, and avoiding penalties.
By understanding the fee structure, application process, and benefits, businesses can navigate GST registration smoothly and focus on their growth journey.
