MSME GST Registration in India

The full form of MSME is Micro, Small, and Medium Enterprises and is formed as per the Micro, Small, and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). As per this MSMED Act, these are divided into two, namely:

1. Manufacturing Enterprises are engaged in the manufacturing or production of goods belonging to different industries.
2. Service Enterprises provides or renders services.

Features of MSME

Some of the important features which are held by MSME can be understood as follows:

1. MSME provides credit limits and support by providing funds to banks in the country.
2. MSME provides loans.
3. MSME is also providing wider employment opportunities.
4. MSME aids in the upgrading of technology and infrastructure as well as the growth of the whole sector.
5. MSME is also supporting new product and design development, innovation, and also bringing new packaging elements to the business.
6. Reasonable access and assistance shall also be provided to the domestic and export markets for business entities.

MSME and the Indian Economy

The MSME, with its production of goods for the domestic as well as the international market, is providing the Indian economy with a major makeover. They are providing employment opportunities and enabling the industrialization of small and remote places in the country, improving the living standards of the people. There is also a major contribution made by the MSMEs to domestic production, with low investment, operation flexibility, and low rate of imports.

GST for MSME

GST, or Goods and Service Tax, is a unified system of indirect taxes that allows consumers to pay one tax on the goods or services or both bought by them. This also keeps the problem arising from double taxation at bay, as it increases the tax burden of the consumers and the difficulty of tax compliance by the suppliers. So, we can say that GST was established by subsuming the following taxes, namely:
– Service Tax
– Central Excise Duty
– Additional Excise Duty
– Countervailing and Additional Customs Duty
– VAT or Sales Tax
– Purchase Tax
– Luxury Tax
– Entertainment Tax
– Entry Tax
– Such other taxes.

Other than the following persons specified below, all the MSMEs are required to register under GST:

1. For persons who are involved in the intra-state supply of taxable goods or services or both, the aggregate turnover earned during the relevant financial year does not exceed the specified threshold limit of exemption as per the GST Act.
2. Persons involved in an inter-state supply of services (alone and not goods) and the aggregate turnover earned is not exceeding the threshold limit prescribed by the GST Act for exempting such person from taking registration under GST.

Documents Required for GST Registration of MSME

The documents that would be required by MSME registration under GST shall be based on the type or constitution of the business. The same has been discussed below:

A Private Limited Company:

The documents would include the following:

1. Certificate of Incorporation or Registration
2. Copy of the PAN Card of the Company
3. Copy of the Memorandum of Association (MOA) of the company
4. Copy of Article of Association (AOA) of the company
5. Copy of the bank statement of the Current Account in the name of the company
6. Declaration of Board of Directors (BOD)
7. Copy of Board Resolution Passed
8. PAN Card copy of Directors
9. Aadhar Number or Passport Number of all Directors (an optional requirement)
10. Copy of electricity bill or water bill or such other bill for the registered place of business
11. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
12. Copy of rent agreement (commercial)
13. Passport-size photographs of all company directors.

Limited Liability Partnership (LLP)

1. Certificate of Incorporation or Registration
2. Copy of the PAN Card of Company
3. Copy of the Memorandum of Association (MOA) of the company
4. Copy of Article of Association (AOA) of the company
5. Copy of the bank statement of the Bank Account in the name of the company
6. Declaration made by Designated Partner of LLP
7. PAN Card copy of Partner’s
8. Aadhar Number or Passport Number of Partners of LLP (an optional requirement)
9. Copy of electricity bill or water bill or such other bill for the registered place of business
10. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
11. Copy of rent agreement (commercial)
12. Passport-size photographs of all Partners of the LLP.

Proprietorship or Sole Proprietor Entity

1. Certificate of Registration or Existing Certificate of Service Tax Registration or Shop Act License or Existing VAT or Sales Tax or Excise Duty Registration or such other certificate of existence
2. Copy of PAN Card of the proprietor
3. Copy of Bank Statement of the entity’s current account or the personal savings account of the proprietor
4. Declaration given by the proprietor
5. Aadhar card or Passport details of the proprietor (optional requirement)
6. Copy of electricity bill or water bill or such other bill for the registered place of business
7. NOC (No Objection Certificate) issued by the owner of the business premise if the same is taken on rent or lease
8. Copy of rental agreement (commercial)
9. Passport-size photograph of the proprietor.

Hence, we can now conclude that the MSMEs involved in the supply of goods or services or both should take registration under GST if they are earning a turnover over and above the threshold limit specified by the GST Act for providing the exemption.