An indirect tax imposed on the provision of goods and services is known as the Goods and Services Tax (GST). On July 1st, 2017, it went into effect in India, replacing a number of indirect taxes including the VAT, service tax, excise duty, and others. Businesses must register for GST if their yearly revenue exceeds Rs. 40 lakhs (Rs. 10 lakhs in the northeastern and hill regions). How much does GST registration cost, though?
Both yes and no, is the answer. GST registration is free of charge from the government. Businesses may, however, be required to pay professional fees to the Chartered Accountant or GST Practitioner who helps them with the registration procedure. Businesses must also supply their PAN, Aadhaar, and bank account information while registering, which may result in fees.
You might be wondering if you require a GST number as a sole owner. You must register for GST if your annual revenue exceeds the threshold amount of Rs. 40 lakhs (Rs. 10 lakhs for northeastern and hill states). However, GST registration is not required if your annual revenue is below the threshold. However, it could be advantageous to voluntarily register for GST since it may enable you to claim input tax credit and improve the legitimacy of your company.
Although operating as a sole proprietor is a common business structure, it has several drawbacks. The lone proprietorship has three drawbacks: unrestricted responsibility, insufficient resources, and discontinuity. Your personal assets may be at risk since, as a sole proprietor, you are personally responsible for all of the debts and losses incurred by your company. Additionally, since you are the sole source of funding for your company, it may run into resource issues. Additionally, if there is a lack of continuity, your company might not continue once you pass away or retire.
You must use the ITR-3 form to submit your income tax returns if you are a solo proprietor. If your revenue surpasses Rs 1 crore, you must also keep accurate records of your finances and have them audited. You have two options for filing your taxes: either use the income tax e-filing platform or get help from a Chartered Accountant.
You need to provide specific documents, including your PAN, Aadhaar, bank account information, and address verification, in order to register your sole proprietorship. If you are operating from a rented facility, you might additionally need to produce a rental agreement or ownership confirmation of your business location as well as a NOC from the landlord.
In conclusion, there are no government fees associated with GST registration, but firms could have to pay for assistance from professionals. If a sole proprietor’s yearly revenue reaches the threshold amount, they must register for GST and file their income tax returns using the ITR-3 form. While operating as a sole proprietor has its benefits, it also has drawbacks, including unrestricted liability, scant resources, and discontinuity. You must provide specific documents, including residence verification, PAN, and Aadhaar, in order to register your single proprietorship.