Overview of GST registration in Delhi NCR

The Goods & Services Tax was introduced in the year 2017 to address the inconsistencies & complexities in the previous tax regimes and offer an inclusive environment for start-ups & businesses under its Ease of doing business scheme.

Therefore, the Goods and Services Tax is a value-added tax levied on the supply of goods or services or both, based on destination-based consumption in India. The GST system of taxation is known to offer a consolidated structure under one taxation system with single standardized rates of taxation equally applicable in the whole country to avoid any kind of confusion.

With its unique features, the GST has resolved the pre-existing problems such as different rates of taxes under central & state taxes, their cascading effect, innumerable compliances such as multiple fillings and record-keeping and audits from time to time which increased the costs of production for businesses, etc. among others. Not only this, GST reduces the costs of manufacturing or supply for the businesses by offering input tax credit on the taxes paid on the purchase of raw materials, which is later allowed as a set-off from the taxes to be paid in the final.

 

GST registration in Delhi NCR

Delhi, officially known as the National Capital Territory (NCT) of Delhi, is India’s union territory and capital. Delhi shares boundaries with Uttar Pradesh and Haryana. The city was the capital of two major empires, the Delhi sultanate and the Mughal Empire, from the 13th to the mid-19th century. New Delhi, the southern region within Delhi, was declared the capital of the British Indian Empire. In the index of human development, Delhi ranks 5th. Besides this, Delhi has the second-highest GDP after Goa.

As per the 2011 census of India, the total population of NCT of Delhi is 16,753,235, with a population density of 11297 persons per square kilometer. The sex ratio of Delhi is 866 women per thousand men, and the literacy rate of Delhi is 86.34%.

The major service industries in Delhi are information technology, hotels, telecommunications, media, banking, and tourism. Besides these services, health, power, construction, real estate, and community services have also helped boost Delhi’s economy. The city currently has India’s most prominent and fastest-growing retail industry and is also the largest commercial center in Northern India. Some good companies have established manufacturing units in this city’s headquarters, which helped grow the manufacturing sector.

Hinduism is the predominant religion in Delhi, followed by Islam, Sikhism, Jainism, and Buddhism. Hindi is the most spoken language in Delhi, and other languages spoken in Delhi are Punjabi, Urdu, and Bengali. The city’s official language is Hindi, and Urdu and Punjabi are declared additional official languages.

The startup ecosystem in Delhi

As per the economic survey 2021-22, Delhi, the national capital of India, has replaced Bangalore as the startup capital of India. The Government of Delhi has the vision to transform the national capital into a global innovation hub. The government aspires to make Delhi the most preferred destination for startups by 2030.

With the help of the startup policy, the government will try to build a strong enabling ecosystem for an innovation-based economy. Through the policy, the government wants to foster entrepreneurs’ spirit with the help of a strong support mechanism. The government aims to encourage, facilitate and support 15,000 startups by 2030 with the help of the Delhi startup policy. The vision of the Delhi startup policy is to create entrepreneurs and business leaders out of Delhi youth. So, the startup policy of Delhi aims to attract the young population to become entrepreneurs and business owners. This will be done by teaching entrepreneurship to students from 9th to 12 standards. To aid them, the government will provide seed capital under the ‘Business Blaster Program.’ The Business Blaster Program is an initiative the Delhi government took to encourage the spirit of entrepreneurship in the school-going students of Delhi.

The Delhi government is trying to build a strong and supportive startup ecosystem in Delhi. Delhi already has a very strong startup ecosystem, but there is always room for improvement. The Delhi government’s vision is to attract young people to entrepreneurship and build a world-class startup ecosystem.

Effective startup ideas in Delhi

Delhi has replaced Bengaluru as the startup capital of India, which means that it is undoubtedly the best place to start a business. The city has several business opportunities, and wholesale products are readily available. With the help of readily available resources, it becomes easy to set up business in Delhi. So, if you are wondering about startup ideas in Delhi, then here are some of the best startup ideas in Delhi.

Hand crafted items

The crowd of Delhi is all about thrift stores and handcrafted items. In the 21st century, that trend of handmade or handicraft items is returning to India’s capital. The demand for handmade and ethnic items like decorative items, embroidered clothes, handbags, etc., is relatively high in Delhi markets. So, opening a business of handcrafted items is undoubtedly going to make you huge profits with less investment. Above all, you can design your website or collaborate with online stores to sell your handmade items. You can promote your handcrafted items through Instagram, Facebook, and other social media platforms.

Printed Clothes

Delhi is famous for its fashion sense and statement clothing. The young population in Delhi is more attracted to printed clothes, especially the ethnic ones. Opening a printed cloth business is undoubtedly a good idea in Delhi because clothes are more than just an attire in Delhi. For Delhiites, clothes are vibes, so the printed clothes business is small yet a profitable business idea. You can build your own website to sell the clothes you have printed, or you can sell the clothes to wholesale markets.

Online Dietician service

Delhi is all about food and fitness. So, starting an online dietician business is an excellent idea if you have a background in food and nutrition. People in Delhi are getting health-conscious nowadays. You will find people eagerly waiting to adopt a healthy lifestyle, so if you can help them regulate their diet, setting up an online dietician service is a good startup idea. With the help of the dietitian business, you will not only earn money but also make a difference in the life of people who are fitness and health-conscious but do not know how to maintain their health. This is a low investment yet profitable business idea in Delhi.

Hostel services

Being the hub of educational coaching institutes, Delhi attracts many students from other states. Many students across the country come to Delhi to get a quality education. Such students need accommodation facilities, so opening a hostel service is undoubtedly an excellent startup idea. To open a hostel, you need considerable capital to invest in the business. Though this idea needs considerable investment, it will surely yield you long-term high profits.

 

What is GST registration in Delhi NCR?

Registration under the GST Act means any person who is either compulsorily liable to obtain registration or voluntarily obtains registration under the Act to collect taxes on the part of the Government and avail tax credits on inward supplies (purchases).

The process of obtaining GST registration in Delhi NCR generally involves submission of a formal application of registering his name/name of the entity as a GST taxpayer through the GST portal made available by the GST Department under the Central Board of Indirect Taxes & Customs of India, Union Ministry of Finance.

In pursuance of the registration in Delhi NCR, the registered person is allotted a 15-digit unique identification number i.e. GST Identification number on the registered email address of the sole proprietor or authorized person in case of company/LLP/ partnership firm. Once received such a unique identification number is received, the applicant needs to mention the same in every official publication of the applicant. In case the applicant is operating his business in more than one state, he will be required to obtain a separate registration for each state of operation.

 

Who is required to obtain GST registration in Delhi NCR?

As aforesaid, some business entities need to compulsorily obtain GST registration despite not meeting the turnover-related criteria, while others may voluntarily obtain GST registration in Delhi NCR to avail of the benefits afforded to a GST. Provided below is the person who needs to mandatorily obtain registration-

  • Individuals registered under the pre-existing tax regimes such as Excise, VAT, Service Tax, etc.
  • Businesses holding an average annual turnover beyond the threshold limit i.e. 40L /Rs. 20 L / Rs.10 L as the case may be;
  • Non –Resident taxable person/Casual taxable person
  • Supplier/Input service distributor
  • Taxpayers liable to pay taxes through a reverse charge mechanism
  • Person supplying goods through an e-commerce aggregator
  • E-commerce aggregator
  • Person supplying OIDAR (online information and database access or retrieval services) from a place outside India to a person in India, to an unregistered person.

 

Types of GST registration in Delhi NCR

Primarily, there are four categories of registration under GST in Delhi NCR which include-

i. Normal taxpayers- This is the most common category of taxpayers in the country. Businesses that have exceeded their threshold limit of Rs. 40 L/ Rs. 20 L for normal category states and Rs. 10 L for North Eastern states of Tripura, Sikkim, Meghalaya, etc hilly states of Himachal Pradesh & Uttarakhand.

ii. Casual taxable individual- Businesses who undertake a business activity for limited seasons or timings during the year, need to register for GST mandatorily under the Act irrespective of their turnover. They are also required to make a deposit equal to the GST liability from the occasional operations

iii. Non-resident taxable individual- Individuals/businesses who are resident outside India but occasionally undertake supply of goods/services or both as principal person/agent /suppliers to Indian residents are required to obtain registration mandatorily before undertaking the supply of goods/services in India. Like a Casual taxable person, they are also liable to pay a deposit equal to the expected GST liability during the GST active tenure, which is usually 3 months.

iv. Composition registration– Businesses having an annual turnover up to Rs. One crore could opt for the composition scheme of GST taxation under which they are subject to minimal compliances & further required to pay a fixed sum as GST tax irrespective of their actual turnover.

 

Benefits of GST Registration in Delhi NCR

i. Elimination of cascading effect of Taxes

GST is an integrated taxation regime that has eliminated the cascading effect of taxation, which was prevalent under previous taxes, where there were different taxes applicable at the same time, but no set-off was available, which increased the business costs.

ii. Reduced Costs of Goods & Service

Since the Government has introduced the concept of ITC under GST, the manufacturers are allowed tax credits for the taxes paid during the purchase of raw materials and do not add the same in their costs to be ultimately borne by the final consumer leading to a remarkable reduction in the prices of goods and services.

iii. Higher threshold for registration

Unlike the previous taxation systems under VAT, CST, and Excise duty, where the threshold limit for mandatory registration was as low as Rs 5L, which again was not uniform throughout the country, the threshold limit for registration under GST is Rs. 40L/Rs. 20L and Rs.10 Lakhs for special category states, which exempts many small traders and service providers.

iv. Lesser Compliances

GST has been launched under the “One nation one tax” system which eliminates the need to obtain separate registration under each taxation system, to manage compliances and make tax payments at varying rates. Thus, under GST the taxable person is required to file only unified returns periodically. Not only this, the taxpayer’s with an annual turnover of up to Rs. 2 crores are exempted from the requirement of GST Audit.

v. Simple & Convenient Processes

The Govt has launched GST online portal which facilitates the entire process from registration to managing compliances and is simple, convenient & secure to involve fewer steps. This is especially advantageous for start-ups that could complete processes within their due time through the online portal and use their time to focus on business activities.

vi. Standardized Rates of Taxation

Under the GST regime, there are only four standardized rates of taxation for each good and service that are the same throughout India i.e. 5%, 12%, 18%, and 28% under GST, which avoids confusion & saves time.

vii. Reduces burden under Composition Scheme

Under GST, small businesses (with turnover up to Rs. 1 crore) have the option to avail registration as a composition dealer and pay taxes at a fixed amount irrespective of the turnover with minimal compliance requirements. This move has relieved smaller businesses by bringing down their compliance burden

viii. Concept of Input Tax Credit

Input Tax Credit means claiming the credit of the GST paid on the purchase of Goods and Services which are used for the furtherance of business, which reduces the burden of taxes to be paid by the manufacturer/supplier on the purchase of raw materials. The introduction of the Input tax credit mechanism is one of the unique features of GST and is often hailed as the ‘backbone of GST’.

 

Process of GST Registration in Delhi NCR

Process of GST Registration in Delhi NCRGST Registration is a simple & convenient process that is facilitated through the GST portal and the whole process takes around 5-7 days. Irrespective of a normal taxpayer or a composition dealer under the GST regime, the process of GST registration in Visakhapatnam, Andhra Pradeshis the same for all.

Provided below is the step–by–step process to be followed in order to complete GST online registration in Delhi NCR-

Step 1- Access the GST portal to create a user Profile in Delhi NCR

Access the GST Portal by logging on to www. Gst.gov.in and clicking Registration & selecting the New Registration option.

Step 2- Generation of Temporary Request Number (TRN) in Delhi NCR

On the ‘New GST’ Registration page, provide basic details related to the applicant of the GST including communication details such as – Taxpayer Type, State for which GST registration is required’, Legal Name of the Business entity, PAN details of the business entity or PAN number of sole proprietor, etc. Next, provide communication details such as the mobile number and email address of the Primary Authorized Signatory and Click ‘Proceed’.

Step 3- OTP Verification & TRN Generation in Delhi NCR

On submission of the information submitted earlier, two OTPs will be generated on the provided email address and mobile number which will be valid for only 10 minutes. On receiving OTP, enter in the field after which a TRN will be generated for GST online registration purposes.

Step 4-Form Submission with TRN in Delhi NCR

Now, after login with the TRN, start the process of GST registration by filling in details related to the following-

i. Details of the Business- Trade name, type of entity, registered address, Opt for the Composition Scheme, if necessary, date of commencement of business, and the date when the liability to register arisen, etc. or the date when the business crossed the aggregate turnover threshold for GST registration.

ii. Business Promoter Details-Insert details of the promoters and directors of the company (or proprietor in case of sole proprietorship) which includes their names, date of birth, DIN, proof of residence, etc. The form allows filling in details of up to 10 Promoters/Partners through the application

iii. Authorised Signatory Information– In the case of a partnership firm/company/LLP, the business entity will be required to nominate an authorized signatory who will be responsible to manage GST-related compliances.

iv. Details related to the Principal Place of Business/Branch-Here applicant will be required to fill in details related to the principal place/branch including-

  • Official registered address & contact details
  • Nature of possession of premises & and, in case the business is located in an SEZ or where the applicant acts as an SEZ developer, the applicant will be required to attach necessary documents/certificates issued by the Government of India, by choosing ‘Others’ like Possession of business premises.
  • Documents/attachments for ownership of property such as utility bills Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill.
  • In case the property is rented, a copy of the valid rent agreement/lease deed must be attached along with any supporting document for the ownership of the holder of property with proofs like the Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill.
  • If the premises are not covered above, then a copy of the consent letter with any documentary support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy. In the case of jointly owned properties, the same documents could be uploaded online.

v. Details of Additional Place of Business- In this section, the applicant shall be required to provide details of any additional place of business. For instance, in the case of an e-retail business that uses any seller warehouse, the details should be provided as an additional place of business.

vi. Details of Goods and Services– the taxpayer will be required to provide details of goods & services supplied or to be supplied along with the HSN code food goods & SAC code for services.

Step 5- Enter Bank Accounts Details in Delhi NCR

In this section, the applicant will be required to provide the details related to the business bank accounts held by the applicant including other details like bank account number, IFSC code, and type of account. Lastly, upload a copy of previous bank statements in the prescribed section.

Step 6- Verification of Application & ARN Generation in Delhi NCR

In this step, check the details submitted thoroughly once & after verification, select the verification checkbox, and select the name of the authorized signatory from the drop-down list and digitally sign the application using Digital Signature Certificate (DSC)/ E-Signature or EVC, before finally applying. Where the applicant has provided his e-Aadhaar, he could use the same for verification purposes, instead of using a digital signature online.

On successful submission, a success message followed by an acknowledgment of the registered e-mail address and mobile phone number containing an Application Reference number will be generated. The ARN number could be used to track the status of the application.

 

Time Involved & Validity for GST Registration in Delhi NCR

In case the approval authority needs any additional document/information required, it will issue an e-form GST REG-03 outlining the requirement for further documents, for which a response could be submitted by using the form GST REG-04 within seven working days of receipt of the form GST REG-03. However, if the information supplied through the form is not satisfactory or found to be missing adequate information, it may be rejected by issuing intimation in form GST REG-05.

However, if the authority gets satisfied via form GST REG-01 / GST REG-04 and considers it genuine & complete in all respects, the approval authority may issue a GST certificate containing 15 digits unique GSTIN number in the prescribed form GST REG-06 within 3-4 working days of the receipt of the request in form GST REG-01 / GST REG-04.

The GST certificate comes with lifetime validity and doesn’t require renewal until & unless it is canceled or suspended. But, in the case of a casual taxable person, it has a validity period of only 90 days which will be subject to renewal.

 

Documents Required for GST Registration in Delhi NCR

Documents Required for GST Registration in Delhi NCRDifferent sets of documents will be required depending upon the constitution of the business or the type of GST registration in Delhi NCR that is obtained.

  • Proof of identification such as PAN & Aadhaar for sole proprietor/partner or authorized signatory in case of company/LLP including foreign entities or branch registration.
  • Proof of constitution of business (MOA & AOA in case of a company, LLP Deed in case of LLP), etc.
  • Certificate of Incorporation/Registration(For Company/LLP)
  • Proof of residence for all directors/partners/proprietors of Company/LLP
  • Proof of registered office through utility bills such as Electricity Bill, Legal ownership document, Municipal Khata copy, Property Tax Receipt, Rent / Lease agreement, or Rent receipt with NOC (In case of no/expired agreement)
  • Letter of Authorisation or Copy of a valid resolution passed by BoD/ Managing Committee, for the nomination of authorized signatory in case of Company/LLP
  • Passport-sized photographs of promoters/partners/proprietors signed & attested
  • Digital signature certificate of director in case of company/designated partner for LLP.
  • Bank details- a copy of the canceled cheque or extract of the passbook/bank statement (containing the first and last page) must be uploaded.

 

Penalty for failure to Obtain Registration in Delhi NCR

Failure to obtain GST registration within 30 days from the date of arising of the liability to register under GST (aggregate turnover exceeds the prescribed limit) will attract a penalty up to Rs. 10,000 and no input tax credit for the default period.

 

Conclusion of GST registration in Delhi NCR

Therefore, the process of GST registration in Delhi NCR is a simple & convenient process that could be received in a maximum of 7-10 days. Though, it is also important to obtain proper guidance regarding registration processes & post-registration GST compliances applicable to the registered person. Choose a reliable source to complete your GST registration as any error or discrepancy in the application may further delay the process or even lead to rejection of the application.