What is the Process of GST Registration for the Sole Proprietorship Firm?

A Sole Proprietorship Firm in the form of business which is managed and controlled by a single owner in his sole capacity. The proprietor is fully responsible for taking every decision in business and is ultimately responsible for every loss or debt the business incurred and is the sole recipient of every profit/income it made.

GST registration of proprietorship firm gives it the legal, valid proof for its existence. In this write-up, we will discuss the in-depth about the steps involved in GST Registration and its documentation.

GST Registration Process

Following is the registration process for GST registration:

·         Visit GST official website https://reg.gst.gov.in/registration/ for online GST registration and click drop-down menu "Services" and select new registration to proceed.

·         Complete the one-page form with details such as name, category of business, PAN number, mobile number, and email-id.

·         Once the form is completed and submitted, OTP is sent to registered email id and mobile number for "OTP verification"

·         After OTP is verified, a number generated online (Known as TRN) which can be used to enter GST portal for the further registration process.

·         Login using TRN and complete the details of form by furnishing the mandatory details.

·         Attach the documents in the format as asked such as photographs in JPEG format, PAN and Aadhar copy in PDF format.

·         Submit the final application.

·         Upon the receipt of the GST application, the department verifies the app, and if it found everything correct, the department issues the GST Certificate by sending it on registered email-id.

·         Documentation

Documents required for GST Registration:

·         Aadhar and PAN of sole-proprietor

·         Mobile number and email-id of sole-proprietor

·         Address proof for business premises such as electricity bill and rent agreement

·         Passport size photograph

·         Bank details of the proprietor

GST Compliance in India

Although GST registration is compulsory in case the annual turnover of the sole-proprietorship firm exceeds INR 40 Lakhs in the preceding year, certain proprietorship firms take the voluntary registration certificate to get legal recognition. However once registered under GST compliances, several compliances are mandatory, failing which department levies hefty penalty.

1.      Normal registration:

·         Turnover exceeding INR 1.5 Crore:- file the form GSTR 3B and GSTR 1 monthly

·         Turnover less than INR 1.5 Crore:- file the form GSTR 3B every month and GSTR 1 quarterly

2.      Registration under Composition scheme:

·         Quarter return: file form GSTR-4 every quarterly

·         Annual return: file form GSTR-9A every quarterly

Advantages of sole-proprietorship

Several benefits for starting the business as a sole-proprietor concern are:

·         Less Compliance: Unlike company and other business entities, Sole Proprietorship doesn't need to file hefty returns or separate tax returns unless its turnover increases beyond the limit.

·         Easily started: No mandatory registration or certificate required for starting a sole business and one can take GST registration as a voluntary certificate to give it legal existence.

·         Complete control: The owner controls the entire business in his sole capacity where every profit and income incurred goes in his pocket and is liable for all the debt and loss incurred. 

Wrapping up the Article

The government too encourages the young entrepreneur by creating legislation for regularizing and protecting the interest of the entity engaged in working solely. For complete guidance and assistance for getting the GST Registration Certificate and necessary GST compliance, contact us.