The Goods and Services Tax (GST) is a comprehensive indirect tax applicable to the supply of goods and services across India. For companies operating in India, GST registration is a mandatory legal requirement if certain turnover thresholds or specific business activities are met. The Wholly Owned Subsidiaries (WOS) of foreign companies must obtain GST registration if they provide services to foreign entities and engage in interstate transactions. Once registered, companies are required to comply with ongoing obligations, including filing monthly, quarterly, and annual returns, maintaining proper documentation, and executing a Letter of Undertaking (LUT) for exports of services.
A proper understanding of GST applicability and compliance ensures legal adherence, facilitates smooth business operations, and enables efficient tax management for Indian companies.
1. Applicability of GST Registration
The Goods and Services Tax (GST) is a comprehensive indirect tax applicable to the supply of goods and services in India. Every Business exceeding the below-prescribed turnover threshold must register for GST:
- Annual aggregate turnover exceeds INR 40 lakh for goods and INR 20 lakh for services.
- The company engages in interstate supply of goods or services, irrespective of turnover.
- The company is involved in the export of goods or services.
- The company is required to collect tax at source (TCS) under GST.
- If availing the input tax credit on purchases.
For a Wholly Owned Subsidiary (WOS) or any corporate entity receiving funds from a foreign parent for back-office or service arrangements, the GST registration is mandatory if services are provided to the parent company or any other entity. These services are classified as export of services.
2. GST Registration Process for Companies
The GST registration process for companies in India is entirely online and is carried out through the GST Portal. The process involves the following key steps:
Visit the GST Portal
- Navigate to ‘Register New’ and select the type of taxpayer (Company / LLP / Partnership).
Fill Application Form (GST REG-01)
The form requires details such as:
- Company information (Name, PAN, Constitution)
- Director details
- Authorized signatory details
- Principal place of Business
- HSN/SAC code
Upload Documents
The company must upload supporting documents to validate its existence and operational address. The documents include:
- Proof of Establishment: Certificate of Incorporation (COI)
- Proof of Address of Principal place of Business:
- Sale deed, Lease/rent agreement;
- Electricity/telephone bill/Property Tax Receipt;
- No Objection Certificate (NOC) from the premises owner;
- Geo-tagged photograph of the authorised signatory;
- Photograph of Directors / Authorized Signatories
- Board Resolution authorizing the signatory (except in the case of proprietorship)
Digital Signature Certificate (DSC)
- The DSC of the authorised signatory is mandatory for Companies to sign the GST application.
GSTIN Issuance
After verification by GST authorities, the company is issued a Goods and Services Tax Identification Number (GSTIN). A certificate of registration is provided, confirming that the company is legally registered under GST and can commence its business operation.
Inspection by GST Officer During or After Registration
Under the GST regime, the authorities have the power to conduct verification or physical inspection of the business premises either before granting GST registration or after issuance of the GSTIN. Normally, GST registration is approved based on the online documents submitted. However, if the department finds any discrepancy, they may mark the application for physical verification.
During the inspection, the GST Inspector may visit the place of Business to verify the existence of the office, display of company name boards, availability of books/records, and actual business activity. A verification report with geo-tagged photographs is uploaded to the portal. Even after a GSTIN is issued, the department may conduct surprise inspections to check the genuineness of operations and compliance status. Proper maintenance of documents, signage at the business premises, and availability of authorized personnel help ensure smooth verification and prevent cancellation or suspension of GST registration.
3. GST Filing and Documentation Rules
Once a company obtains GST registration, it must adhere to several ongoing GST compliance requirements, including maintaining proper documentation, filing regular returns, and fulfilling export-related obligations where applicable.
Maintenance of Books and Invoices
- The company must issue GST invoices for all outward supplies of goods or services.
- Each invoice must contain mandatory fields such as GSTIN, invoice number, date, HSN/SAC code, taxable value, tax rate, and place of supply.
- For export of services, the invoice must clearly state, “Supply meant for export / Supply is an export of services under LUT.”
- The company is required to maintain proper books of accounts, invoices, etc.
Export of Services and LUT
- If the WOS provides services to a foreign entity (parent company or other), it may qualify as an export of services under GST.
- The conditions for export of services are:
- Supplier located in India
- Recipient located outside India
- Place of supply outside India
- Payment received in convertible foreign exchange
- To export services without payment of IGST, the company must file a Letter of Undertaking (LUT) annually with the GST authorities before export of services.
- If the LUT is not filed, IGST must be paid upfront and later claimed as a refund.
Filing GST Returns
Registered companies must periodically perform GST return filing, even if there is no turnover, sales, or purchases
A. Monthly / Quarterly Returns
- GSTR-1:
The GSTR-1 is the return of outward supplies (goods/services).
- Monthly for companies with a turnover above ₹5 crore.
- Quarterly for those under the QRMP scheme.
GSTR-3B:
The GSTR-3B is the return for claiming input tax credit, payments and net tax liability.
B. Annual Return
GSTR-9:
The GSTR-9 is mandatory for companies (except certain exempted categories).
It includes yearly reconciliation of sales, tax paid, and input tax credit claimed.
C. Refund: Export of Services
- If IGST was paid on export invoices or there is excess ITC in the electronic ledger, the company can apply for a refund of the IGST paid.
- Refunds can be claimed through the GST portal by filing RFD-01 along with supporting documents such as FIRC/BRC, invoices, and bank realization certificates.
Conclusion
The GST registration is a crucial compliance requirement for companies operating in India, particularly those engaged in inter-state supply or export of services, including subsidiaries providing support or back-office services to foreign parent entities. Once registered, a company must adhere to ongoing GST obligations such as issuing compliant tax invoices, maintaining proper records, filing monthly/quarterly and annual returns, and fulfilling export-related requirements like filing the LUT for zero-rated supplies.
For companies exporting services – such as Indian WOS entities serving foreign parents, timely compliance ensures smooth foreign remittances, eligibility for zero-rated benefits, and avoidance of unnecessary tax outflows. Robust documentation, accurate reporting, and timely adherence to GST regulations help minimize risks, prevent penalties, and ensure seamless operations under the GST framework.