GST Registration for One Person Company in India
GST Registration for One Person Company in India
GST registration becomes mandatory for businesses established in India. It ensures an improved taxation system with greater transparency and minimal corruption. If you want to start a business as an individual, then it is necessary to understand GST registration for One Person Company (OPC). This article helps you know about the eligibility criteria, required documents, and the GST registration process for a one-person company.
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Register Now!What is One Person Company (OPC)?
One Person Company (OPC) is a business structure where a single person can start and run a company. Unlike other business forms, an OPC allows the sole individual to be the shareholder and the director, consolidating the ownership and management in one person. Previously, if a person wanted to start a business, they could only be a sole proprietor of the company with a minimum of two directors and two members. With the effect of the Companies Act 2023, a business can be established with just one member and one director. It gives entrepreneurs a sense of autonomy as it doesn’t need a partner to initiate a startup.
Establishing a one-person company (OPC) in India offers numerous advantages. Firstly, OPC provides limited liability, safeguarding the personal assets of the sole owner from the company’s debts. The ease of formation is notable, with a registration process that reduces bureaucratic complexities. This structure allows a single individual to initiate and manage a business without needing partners. Additionally, OPC benefits from perpetual existence, ensuring continuity even if the owner changes. The ability to enter into contracts, own property, and enjoy tax benefits further enhances its appeal. With flexibility in operations and management, an OPC in India provides a conducive environment for small businesses and startups, encouraging innovation and economic growth.
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GST Registration Applicability for One Person Company (OPC)
- According to the GST Act, any person, including companies and LLPs, must register under GST if their total turnover is more than Rs. 20 lakh (Rs. 10 lakhs for special category states in hill states and North-Eastern states).
- If your turnover is currently above 20 lakhs or expected to reach that point, it’s necessary to process the online GST registration.
- GST registration is mandatory for the OPC companies which supply goods or services outside the state, regardless of annual turnover. For example, GST registration is necessary if an OPC company registered in Assam supplies goods to Gujarat.
- Existing OPCs with service tax, VAT, or Excise registration must enrol for GST Registration. The GST department initially provides a provisional ID and Password for GST Migration. GST registration is necessary for existing OPCs with service tax, VAT, or Excise registration.
- An OPC company that supplies goods or services through e-commerce platforms must apply for GST registration. For example, an OPC company supplying goods on e-commerce platforms like Amazon, eBay, or Flipkart must register for GST, especially for work contracts in India.
- The registration process can be done digitally without the need for manual intervention or physical paper submissions.
- The registration is usually completed within 4-6 working days, and the supplier will get a 15-digit GSTIN (GST identification number) along with a registration certificate from the GST department.
Benefits of GST Registration for OPC in India
- Legal Recognition: OPC GST registration provides legal recognition to the business entity, making it a legitimate and compliant organization. It signals the authority to the customers.
- Trust and Credibility: GST registration shows the credibility and trustworthiness of the OPC in the eyes of customers, suppliers, and other stakeholders.
- Access to Input Tax Credit (ITC): Registered OPCs can utilise Input Tax Credit on the GST paid on goods and services. It can reduce the overall tax liability.
- Interstate Business Facilitation: GST registration is necessary for interstate trade businesses. It helps the OPCs to expand their market reach and engage in business transactions across state borders.
- Compliance with Government Regulations: GST registration ensures compliance with government tax regulations, minimizing the risk of penalties or legal actions. It provides the space to run a business without the disturbance of legal problems.
- Claiming Refunds: In certain cases, registered OPCs can claim GST refunds, especially if they deal with exports or zero-rated supplies
- Streamlined Tax Compliance: GST registration enables OPCs to streamline their tax compliance processes and meet reporting requirements efficiently.
List of Documents Required GST Registration for OPC
Ensure you have the following documents before the One Person Company Registration GST registration.
- PAN Card of the OPC
- Aadhar Card and PAN card of the sole proprietor or director
- Proof of Business Registration (Certificate of Incorporation)
- Address Proof for the registered office – Copy of electricity bill/ water bill/ landline bill/ municipal khata copy/ property tax receipt from your registered office. If it is a rented office, the owner’s no-objection certificate (NOC) is required.
- Bank Account Details – Canceled cheque or bank statement
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Digital Signature Certificate (DSC)
- Authorization Letter (if applicable)
- Board Resolution passed by the Board of Directors of the OPC
- Passport-sized Photographs of the sole proprietor or director
GST Registration Process for One-Person Company
Use the following step-by-step instructions to register under the Goods and Services Tax (GST).
- Login to the GST official website
- Fill out the Part-A submission form (Email address, mobile no, PAN, legal name of the business, etc.)
- The GST portal will verify your details through Email/OTP
- Upload all the necessary documents
- Access and fill the Part-B form carefully using the Temporary reference number (TRN).
- Then, you will get the Application Reference Number (ARN)
- GST officers will start to verify your submitted documents
- GST officer will either accept or reject your application within seven working days
- If further clarifications or proofs are required for the verification, you must provide the same.
- After completing all the clarifications, you will be allotted a GSTN number.
The above-mentioned GST registration process for One Person Companies (OPCs) is crucial in ensuring compliance with tax regulations.
Conclusion
One Person Companies(OPCs) must grasp the eligibility criteria, necessary documents and the procedure for a smooth GST registration process. Understanding these aspects ensures OPCs comply with regulatory frameworks, fostering a smooth and transparent business environment. This article’s guidelines and procedures help OPCs get through the GST registration process easily and enjoy its benefits. IndiaFilings provides a wide range of services, including GST registration, to ensure your business meets the legal requirements. It can help you invest your time in devising plans and strategies to improve your Business.
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