Introduction:

The Goods and Services Tax (GST) is an indirect tax introduced in India to replace various indirect taxes like service tax, VAT, and others. All businesses whose turnover exceeds the threshold of Rs 20 lakh or Rs 40 lakh or Rs 10 lakh must be registered as a General Tax Person under Goods and Customs Tax (GST). Registering for GST is basically mandatory for some businesses. If an organization does business without registering under GST, it will be considered an offense under GST and may result in heavy fines.The basic objective of this article is to provide you a complete guide for GST Registration for Private Limited Companies, including the process related to registration, eligibility criteria, documents required for registration and details of benefits. etc. are included. A detailed understanding of GST registration for private limited companies can help a lot in solving the complexities of the Indian taxation system.

 

What is Private Limited Company: 

A private limited company is basically owned and operated by a small group of people. Private stakeholders are in charge of such institutions. The liability regime of a private limited company is less severe than that of an LLP or sole proprietorship, which puts the assets of the firm at risk in the event of financial distress. The limited corporation is basically responsible for the losses of the company. Shareholders can suffer such loss up to the number of shares held by them, meaning that a member's liability to compensate for any business losses is limited to the number of shares held by them

Required Documents for GST Registration Of Private Limited Company:

• PAN card of the company 

• Company Registration Certificate (CIN)

• MOA and AOA of the Company

• Pan Card and Aadhar Card of all Directors

• Phone Number and Email of all Directors

• Passport size Photo of all Directors

• Address Proof of all director such as bank statement or driving license

• Letter Of Authorisation

• NOC from Landlord

• Rent Agreement for Registered Place

• Canceled cheque of Company Bank Account ( if any )

 

Step-by-step Guide explaining GST Registration Process For Private Limited Company: 

Step.1)  Log in to the GST portal and navigate to ‘ Services ’> ‘ Registration’> then click on New Registration.

Step.2) Fill all the required details and then click on the proceed button.

Step.3) Enter the Mobile and Email OTP and then click on the proceed button.

After completing the Part A of the registration process, you will get the TRN number. 

Step.4) Fill the TRN Number and Captcha, then click on the proceed button.

Step.5) After filling the Mobile/Email OTP, click on the proceed button. Now, it will show your Saved Application.

Step.6) After clicking on the action button, fill all the required details including Business Detail, Promoter, Signatory Authorized, Authorized Representative, Principal Place of Business, Additional Place of Business, Goods and Services, State Specific Information and Aadhaar authentication.

Step.7) After filling all the required details and validating the final OTP received by you, your application will be successfully submitted

 

Advantages of GST Registration for Private Limited Company:

• Input Tax Credit: GST registration basically allows you to claim input tax credit, which means you can deduct the tax paid on purchases from the tax collected on sales. This will basically benefit you in that the overall tax liability of your company will be less.

• Enhanced Credibility: GST registration serves to provide credibility to your business because as we know it symbolizes compliance with tax rules. This promotes trust among financial institutions and also enhances your brand image to a great extent.

• Smooth Interstate Trade: GST has eliminated the cascading effect of tax and has facilitated seamless movement of goods across state borders. The basic advantage that GST registration gives you is that you can expand your business operations to any other state without any additional tax complications.

• Legal Security: If you are operating your business without registration, you may have to pay heavy fines for non-compliance of tax laws, but if you are operating your business by doing GST registration, then it will protect your business. Legal protection is provided to.

• Access to Government Contracts: Many government tenders require GST registration as a mandatory criteria for participation. You can get access to wide business opportunities including government contracts by doing GST registration.

 

Characteristics of Private Limited Company:

• Perpetual Existence: Any private limited company basically enjoys perpetual existence i.e. its existence is not affected by the death of any shareholder. This means that the operations of the company continue continuously and its stability is ensured.

• Limited Liability: A private limited company provides limited liability to its shareholders and this is its most important advantage. This means that the assets of the shareholders are fully protected and their liability is limited only to the amount they have originally invested in the shares of the company. If for any reason the company suffers a loss or the company faces legal issues then no shareholder will be liable to make the payment by selling his assets i.e. his assets will remain untouched.

• Separate Legal Entity: In the eyes of law, any private limited company is considered a separate legal entity. This unique legal identity provides credibility to a private limited company and also fundamentally increases its ability to conduct business transactions.

• Ownership and Shareholding: As we know, in any private limited company it is mandatory to have a maximum of 50 shareholders and a minimum of two shareholders. This is essentially what the close ownership structure allows. If we talk about ownership then ownership can be divided into shares and shareholders can transfer these shares subject to the articles of organization of the company.

• Privacy and Confidentiality: Private limited companies get the benefit of more privacy as compared to public companies. It is not easy for the public to get information about the shareholders, directors and financial people of a private limited company, that is, information about them is not easily available. This basically provides security to the people involved in the private limited company.

• Minimum Capital Requirements: A private limited company does not have stringent minimum capital requirements, unlike other companies. This flexibility makes it an attractive option for entrepreneurs starting a business without substantial initial investment.

• Board of Directors: In any private limited company, the board of directors is basically responsible for the management of the affairs of the company. Directors are appointed by the shareholders, they play an important role in representing the interests of the company, taking strategic decisions and ensuring compliance.

 

Conclusion: 

After a thorough reading of the blog, we come to the conclusion that, it is required for a private limited company to register themselves under GST because it provides legal security and credibility to your company . After GST registration, if you seamlessly move your goods to another state, you will not need to pay any additional tax for this. A private limited company is distinguished by a separate legal identity from its shareholders and directors, limiting their liability to the value of the shares they own. In this article, we told you in detail what is the complete process of getting GST registration for private limited company, what are the documents required for registration and what are the benefits of getting registration.