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As a Sole Proprietorship, an Indian business can be owned, run, and controlled by a single person. All of the money or profits you make are yours to keep. Because of the benefits of single proprietorships in India, it is also possible to avoid paying more than one tax. You are only required to file tax returns and pay taxes in your own name. Since this is the case, GST Registration in India for a Sole Proprietorship has many benefits. In this article, you will learn about the GST for Sole Proprietorship in India.
What is Sole Proprietorship?
Registration for a Sole Proprietorship can be a type of business entity. But registering as a sole proprietor does not mean making a separate legal entity.
Unlike other business structures, a proprietorship is run and controlled by a single person, the company’s owner. It’s pretty easy to get started, and there aren’t too many rules to follow because the owner is also the proprietor.
There can’t be any more partners or shareholders in a sole proprietorship because the owner is also the business. So, the owner of a single proprietorship is fully responsible for all of the business decisions he or she makes. So, this business structure should be used by small businesses with a few employees.
The registration of a sole proprietorship is not required. But it’s important for a Sole Proprietorship to have some registrations or licences, like a GST Registration, MSME Registration, or Trade License, so that the business runs well and makes money.
When should a sole proprietorship register for GST?
In the following situations, a sole proprietorship must register for GST:
When a business’s annual sales are more than 40 lakh rupees.
When a sole proprietorship sells goods or services outside of its home state (from one state to another)
When you are in the business of e-commerce,
A Proprietorship Firm must voluntarily register for GST in order to be able to get an input tax credit.
Documents required for GST registration for proprietorship firm
Personal Pan Card, Copy of the Proprietor Aadhar Card, Copy of the Proprietor Electricity Bill, Telephone Bill, or Water Bill of Business Location or Premise or Rent Agreement if Office is Rented Personal Bank Statement or Cancelled Bank Cheque or Passbook Frontpage A copy for the owner (Remember if you have already a current bank account on the Firm Name then instead of saving a bank account provide a current bank account for the same)
Photograph of the owner the size of a passport.
After registering for GST, what are the conditions for a sole proprietorship?
The GST Registration of a Proprietorship could be taken away if it doesn’t meet certain requirements. As a sole proprietorship, you have to file a GST return and pay tax every month. If you don’t make it, you will be fined per day. Also, you have to file a GST Return even if your business has no transactions or tax obligations.
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Tag : GST Filing, GST Registration, TDS Filing