In order to register under the GST scheme, people would have to give their official address. If they do not have this address, they will not be able to register under the scheme. Businesses have to ensure that they have an address they can use to register under the scheme.
A simple solution for the registration would be to use a virtual office address. A virtual office is a company that has a physical mailing address that businesses can make use of whenever they need it. We will discuss more how virtual offices can help with GST registration in the article. We will also explore the process of GST registration in depth.
Concept of Virtual Office
Although virtual offices have been around for many years, they have seen a recent surge in popularity. This is because most businesses and companies have come to the conclusion that many tasks can be completed from the comfort of someone’s home. They do not have to come to the office for each and every little thing. There are also many people who actually prefer to work at home because they find it to be more comfortable for them. Increased productivity has also been noted when people work at home. They are even willing to work for fewer salaries as long as they get to stay at home.
Components of Virtual Office
It is essential that business owners only select a virtual office after ensuring that they have the following essential components:
Mail handling services
The virtual office address can be used as the corporate mailing address for the business. All the emails that are being sent to the business will be received here. There will be a mail handling service or virtual office assistant who will take care of the mail. There are a few ways in which the mail can be handled. The mail can be placed in a locked, secure mailbox that only the virtual office for GST registration assistant and business owner are able to unlock. The mail can then be retrieved at any time.
The mail can also be forwarded to the business owner’s home address where they can receive it and sort it out. The virtual assistant can also choose to email or call the business owner once they have received the mail to get instructions on what to do with it. It is important that this service is available at the virtual office so that the business owner will not have any problems when it comes to handling their mail.
Call handling services
It is advised to create a separate business number that is specifically used for purposes related to the business and communicating with clients. This will add a nice professional touch to the organization and make it easier to separate between different kinds of calls. The business owner can also redirect their business number to their virtual assistant if they want to so they can handle calls on behalf of them.
A professional receptionist can be hired for the purpose of handling business calls. The receptionist can connect the client directly with the business owner if they are requested to. After receiving the call, the receptionist could send a voicemail to the business owner about what the client discussed with them. Having someone handle the calls is absolutely essential to maintaining a strong connection between the clients and the business.
Using Virtual Office Address for GST Registration
When it comes to the process of GST registration for the business, the business owner will have to provide their official corporate mailing address for their business. Since renting an office space and using its address may be financially burdensome, businesses can use virtual office addresses instead. This will help them save money and complete their registration. The virtual office address can also be used to register the business officially if this has not been done already.
Registering in multiple states using Virtual Office Address
Before the introduction of the GST scheme, there were different tax laws in each state. This led to many problems because businesses had to keep their warehouses in each state so they could be used to pay taxes. This led to a lot of financial problems and needless tedium for businesses who would have liked to keep those warehouses in strategic places that would have benefited their business instead.
Under the GST scheme, if the business owner had their business in different states, they would have to register their business in each one of those states. To make things much less complicated, a virtual office address can be used to complete this registration. Business owners can use the same virtual office address to register their business in multiple states. This will help protect them from the difficulty of registering separate addresses for the same business.
In case members of the business want to meet up or they want to meet their clients in person, a conference room would be very helpful. Although virtual conferencing apps like Zoom and Google Meet are available for communication, there are certain instances where in-person meetings are required. In certain virtual offices in India, meeting and conference rooms may already be available there.
However, not all virtual offices may contain this facility. The virtual office provider will allow the business to rent rooms that are at another location. The business owner should be sure to have a conversation with the virtual office provider about whether rooms are included in the plan for the virtual office for GST registration in India. If they are not, they have to be paid for separately. Business owners will have the freedom to only use rooms whenever they want to so they can save money. Buying rooms unnecessarily when they are not required can be a waste of money.
Documents that are needed for GST Registration
These are the documents that the individual will require in order to apply for the virtual office for GST registration:
- Business address proof(proof of the virtual office address)
- Bank details(account number, bank branch, name of the bank, and IFSC code)
- Authorization form for GST registration
- Constitution document
All of these documents will have to be uploaded online in order to obtain GST registration. The procedure to apply for GST registration will reveal when and where the documents will have to be uploaded by the individual.
Procedure to register under the GST scheme
The entire GST process can be completed online. This is great because normally, someone would have to run to different registration centres to register their business because of all the tedious paperwork involved. Now, they will be able to avoid that since everything can be done online. The business owner should carefully read through the given steps in order to successfully register themselves under the GST scheme:
- The individual should go to the GST portal online.
- On the website, the Taxpayers option should be found.
- The individual should then select the Register Now option.
- This is the beginning of the registration process under the GST scheme.
- A form will be displayed in which all the necessary details will have to be filled. The fields should be filled accordingly:
- Under the ‘I am a’ menu, the individual should select the Taxpayer option
- The state and district should then be filled in
- The name of the business should then be filled in
- The PAN number of the business should then be filled in
- An active email ID and phone number should be entered. OTPs will be sent to check if these are valid or not.
- An image will be displayed to the user on their screen which they will have to identify. The correct name of the image should be entered by the user.
- When the Proceed button appears, the user will have to select it in order to continue.
- The successful completion of the previous steps will push the individual to another page. On this page, they will have to check the OTPs that they got in their phone and email, and enter them.
- The Proceed option must be selected before the process can be resumed.
- The individual will receive a temporary reference number(TRN). They should note this down or commit it to their memory as they will need it later.
- The individual should go back to the homepage of the portal.
- They will have to go to the Taxpayers menu and choose the Register option which can be found under it.
- The Temporary Reference Number option will then have to be selected.
- The individual will have to enter the TRP number that they received previously.
- They will also have to enter the captcha details that are shown to them exactly as they are.
- The Proceed button should then be clicked on.
- The individual will get another OTP that will be sent to their phone number and email ID.
- The Proceed button should be clicked on once the user has entered the OTP they have received in the field that is on the next page.
- The status of the GST application will now be available to be viewed by the user whenever they want to do so.
- The Edit option which is under the right-hand side of the menu should be selected.
- All of the sections that are present on the next page must be properly filled in by the individual.
- All of the documents that have been requested of the individual must be uploaded properly.
- The individual can then go to the Verification page where they can check if all the details they have given are correct or not.
- The individual can submit their application in any one of the following ways:
- Using e-Sign- The individual will receive an OTP on their registered phone number(this number is the one that is linked to their Aadhar card).
- Electronic Verification Code(EVC)-The individual will receive the code on their phone number.
- Digital Signature Certificate(DSC)- This is needed when a business or company is applying for GST.
- Once this step has been successfully completed, a success message will be sent to the individual’s phone which is an indication that they have completed their registration successfully.
- They will now receive an Application Reference Number(ARN) on the phone number and email ID that they had given before.
- The individual can always go to the GST portal and check the status of their application using the ARN that they got.
Advantages and Disadvantages of the GST Registration
Now that we have discussed how to register for the GST scheme using the virtual office address and the basic concept behind virtual offices, let us now take a look at the advantages and disadvantages of a virtual office for GST Registration:
Advantages of GST Registration
We have discussed some basic advantages of GST registration:
Elimination of the cascading effect of taxes
Before the introduction of the GST scheme, there was this principle of taxing taxes that was followed. Taxes would be paid on top of others and this would lead to having to pay higher taxes. This was also a way to fool people into paying more than they actually had to. With the introduction of the GST scheme, the cascading effect of taxes was completely done away with. The following example will help you understand this concept in a clearer way. Imagine the following:
- Before GST was introduced- A consultant offered his services for a price of Rs 40,000 and asked for a service tax of 15% which would be Rs 6000. He would then purchase some other supplies for Rs 18,000 and pay a VAT of 5% for that which would be Rs 900. Thus, he would have to pay a total tax of Rs 6900 without having any deductions.
- After GST was introduced- A GST of 18% would be charged on Rs 40,000 which would be Rs 7200. The GST that had to be paid for the office supplies would be Rs 900. The net GST that would have to be paid can be obtained by deducting the Rs 900 from Rs 7200, Thus, Rs 6300 would have to be paid totally. This is less than what someone would have to pay before the introduction of the GST scheme.
Higher threshold for registration
Before the introduction of the GST scheme, the VAT structure was followed for taxation. If any business had a turnover that was greater than Rs 5 lakh, they would have to pay VAT. This threshold limit differed depending on the state. Under the GST scheme, the threshold has now been increased to Rs 20 lakh. This means that many small and medium-sized businesses would be exempted from paying taxes.
This is a wonderful scheme that was introduced so that small businesses having a turnover within a certain range would not have to pay as much taxes as they normally would. Reducing the tax burden for small businesses is definitely an encouraging step in the right direction.
As mentioned before, since GST is an online procedure, it makes it much easier to register under it. Offline procedures can be extremely tedious and require a lot of complicated paperwork. This would make it a lot harder for people as they would have to run around constantly to get the entire registration process completed.
In the old taxation scheme, there would be separate compliances for each and every tax that led to many difficulties. Taxpayers had to figure out the return fields for each tax separately and then pay them accordingly. Now, under the GST scheme, the compliances have been reduced greatly. Under the GST scheme, there is only a single field that has to be filled in.
GST Registration for e-commerce operators
There were variable VAT laws before the introduction of the GST scheme which made things difficult for the e-commerce sector. For example, e-commerce operators like Amazon had to file a VAT declaration and indicate the registration number of whatever truck was delivering the product, if a product was delivered to a particular state. There would be different rules for the transport of goods depending on the states that were involved. Under the GST scheme, clear provisions have been provided for the e-commerce sector that is applicable for all the states in the country. Thus, no more complications will arise like they used to.
Regulation of the unorganized sector
Before the introduction of the GST scheme, it was found that certain industries were not regulated or organized very well. Since there are so many clear provisions for all the compliances that are common to all the industries now with the GST scheme, it has become much easier to regulate all of the different industries.
Disadvantages of GST Registration
We have discussed some basic disadvantages of GST registration:
Increased costs due to software
Businesses will have to get specific GST-compliant software in order to resume their business and pay their taxes according to the GST scheme since everything is done online. It is hard to get this kind of software for a cheap price. This may be difficult for small businesses that may not have a lot of funds allocated for software like these.
Although the number of compliances has definitely been reduced under the GST scheme, small and medium-sized businesses may find it hard to understand the complexities that are present under this scheme. There are many things that have to be done when paying taxes under the GST scheme. Taxpayers will have to issue invoices that are GST compliant, keep their digital records in compliance with GST, and also file all of their returns periodically at the right time. The invoice that the taxpayer is issuing will need to have the GST Identification Number(GSTIN), the place of supply, Harmonized System of Nomenclature(HSN) codes, and other important details. Understanding all of these compliances may be hard to do.
Increase in operational costs
Business owners may have to hire tax professionals to help them with paying GST. This is to ensure that they are GST-compliant in all the steps they take to pay their taxes. This is not great for small businesses as they will have to hire experts and incur the additional cost associated with that.
This was also listed as one of the advantages. It is true that having an online taxation system may make things a lot easier. However, it can be hard for people to adapt to this if they are not used to filling forms and details online. This may be the case for small businesses that are used to filling in their taxes using pen and paper.
Greater tax burden
Businesses in the manufacturing sector may have to suffer tax burdens due to the implementation of GST. Before, only businesses having a turnover that exceeded Rs 1.5 crores had to pay excise duty. However, all businesses that have a turnover of over Rs 20 lakhs have to pay GST. Certain businesses will be able to use the composition scheme to their advantage if their turnover is up to 75 lakhs. However, they will not be able to claim an input tax credit(ITC). Many small businesses will have to make the difficult choice between the composition scheme and ITC. Thus, although there are so many advantages to the GST scheme, there are many disadvantages as well.
Role of Instaspaces
The team at InstaSpaces is happy that you read the article and hopes that you enjoyed it. InstaSpaces is a leading virtual office services provider that will help you get the virtual office that you need. We have a large collection of virtual offices from all over India that you can pick from. We will assist you in selecting the best virtual office according to whatever budget you may have. We will also help you get your business registered officially and also get it registered under the GST scheme.
If the GST registration turns out to be unsuccessful, you can expect a complete refund from us. We will provide you with all the documents that you need for the registration such as the address proof for the virtual office and the No Objection Certificate(NOC). We will also provide registration under the GST scheme for multiple states. We hope that you are as excited to work with us as we are with you. You can reach out to us using the number on our website whenever you want. If you have queries about virtual offices or the services that we provide, you can ask our virtual assistant, InstaBuddy, who is available on your website.
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