GST Registration and Restrictions for One Person Company

Among the single owner company forms, ‘One Person Company’ in India is a new concept that has been introduced with the Company's Act 2013. In OPC, the company can be registered under MCA and Companies Act, 2013. If you want to start a corporation with less compliance, then One Person Company registration is the best one for you as the compliance requirements are lesser than that of a private company.

One person companies are a great business organization structure for medium-sized businesses. It is an improved and better form of a sole proprietorship. It is a fusion of Sole-Proprietorship  and Company form of business. In order to enable a person who is carrying on the business in the Sole-Proprietorship firm to enter into a corporate outline with relaxed or concessional requirements under the Act, the Companies Act 2013 had brought in the new concept of OPC. This business structure gives the single promoter a full control over the company and at the same time limiting his liabilities to safeguard his personal assets. Similar to Private Company, OPC may also appoint a distinct individual as director for its management. Appointment of a nominee is mandatory in case of OPC.

Apart from company registration, registration under the GST regime is mandatory for entities that clear its eligibility. Obtaining registration under GST implies obtaining a unique GST number from the concerned tax authority for the purpose of collecting tax on behalf of the government and to avail Input Tax Credit for the taxes on the inward supplies. In this article, we will guide you through the process of GST Registration for an OPC.

Applicability of GST Registration for OPC

As per the GST Act, every person (including company, LLP etc) has to register under GST if the total turnover crosses Rs.20 lakh (Rs 10 lakhs for special category states present in hill states and North-Eastern states). Hence, if your turnover is more than 20 lakh or is going to be more than 20 lakh, then you should go for online GST registration.

The registration process doesn’t require any manual intervention or physical paper submissions. It is normally completed within 4-6 working days and the supplier is allotted a 15-digit GSTIN (GST identification number) and a certificate of registration by the GST department.

GST Registration for OPC Company is mandatory if the company is in the business of supply of goods or service outside the state irrespective of annual turnover. Example OPC registered in Bihar supply goods to Punjab then GST Registration is mandatory. An Existing OPC having service tax / VAT / Excise registration must be required to enroll for GST Registration. The GST department initially provided provisional ID and Password for GST Migration.

Further, OPC Companies involved in supply of goods or service through e-commerce platforms are mandatorily required to apply for GST Registration. For Example OPC company supply goods on e-commerce platform Like Flipkart ,amazon etc. need to apply for registration of GST for work contracts in India.

Documents Required for GST Registration for OPC

OPC applying for online GST registration must submit the following documents while filling application:

- Aadhaar card & PAN of the Applicant and of all directors
- PAN card of company
- Registration certificate of company
- Memorandum of Association /Articles of Association
- Photograph
- Bank details – a copy of the canceled cheque or bank statement
- Proof of appointment of authorized signatory- letter of authorization
- Proof of address for the primary and secondary places of business (Copy of electricity bill/landline bill/water bill/municipal khata copy/property tax receipt from your own office. In the case of a rented office, the owner’s no-objection certificate (NOC) is required.)

Procedure of online GST Registration for OPCs

OPCs can apply for online GST registration on the official site of the government. The process to register is as under:

Step 1: Visit online GST portal https://www.gst.gov.in & Select ‘Register Now’ link under the ‘Taxpayers’ tab

Step 2: Click ‘New Registration’. Fill the required details, then click ‘Proceed’.

Step 3: A Temporary Reference Number (TRN) will be shown on the screen. Make a note of the TRN.

Step 4: Visit the GST portal again and click on ‘Register’ under the ‘Taxpayers’ tab.

Step 5: Enter the TRN and the captcha details and click on ‘Proceed’.

Step 6: You will receive an OTP on your email ID and registered mobile number. Enter the OTP on the next page and click on ‘Proceed’.

Step 7: The status of your application will be available on the next page. Click on the edit icon on the right side. There will be 10 sections on the next page. You must file all relevant details and submit the necessary documents.

Step 8: Visit the ‘Verification’ page and check the declaration, Then submit the application by using the DSC.

Step 9: Success message with ARN number will be sent to the registered mobile number and email ID which will be used to track the application status. The GST officer will verify all the documents submitted by the company. After checking all the documents, he will accept or reject an application within a week.You may have to provide some more proof if the GST officer demands so.

Benefits of Online GST registration for OPC

⤿ As GST is a unified and singular tax regime, the number of filings has come down, making it less hassle for entities to fear of maintaining compliance. Hence, it has lesser compliance as compared to the previous Indirect tax regime.

⤿ GST has almost entirely put an end to the tax-on-tax impact on goods and services which is seen as a major boon for small businesses.

⤿ There are no restrictions on interstate sales which will widen the scope of business for small entities.

⤿ Getting online GST registration builds a natural trustworthiness towards business from consumers and suppliers.

⤿ By getting registered, small businesses can avail ITC benefits by claiming the Input tax credit on the purchase of goods & services & can utilize the same for payment of taxes due on supply of goods or services.

⤿ Businesses get legal recognition as a supplier of goods or services which in turn helps in attracting more customers and growing business thereby increasing the competitive advantage.

Conclusion

If the authorities get to know that a business fulfilling the eligibility is carrying its operations without registering to GST, there could be major difficulties that could arise which include penalties, creating a negative image on authorities about the trustworthiness of you and your business, attracting frequent checks, or any unwanted issues. Hence, all eligible OPCs need to take GST registration and comply with the same as per time frame. Apart from GST, they also have to maintain other compliances as it is treated as a separate company. Hence, all taxes, Relevant ITRs and reports are to be filed at the prescribed period.