When Registration in GST is Compulsory? Who are Exempt? from April 2020
Registration under GST:
Registration in GST is PAN based and state specific. Under GST one registration per state or Union territory is required. Thus, there are no centralized registration under GST, person having multiple place of business in a state or union territory may be granted a separate registration for each such place of business subject to such conditions as may be prescribed. GST identification number called “GSTIN” a 15-digit number and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTN common portal. GST registration is not tax specific i.e. registration is for all the taxes.
What are the advantages of getting registered under the GST?
Registration under GST will confer the following benefits:
- You will get legally recognized as a supplier of goods or service
- Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business
- Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services to purchasers or recipients
Who is liable for registration under GST from April 2020 onwards?
As per section 22, a person is liable for registration under if the aggregate turnover for the previous year exceeds Rs. 20 lakhs where the person is engaged in supply of goods or service or both, in case the person supplies only goods then the turnover limit will be Rs. 40 lakhs for the previous year. If the person is having place of business and making taxable supplies from special category states like Manipur, Mizoram, Nagaland and Tripura then the threshold limit for GST registration will be reduced to Rs. 10 lakhs.
Summary of above provision of Registration:
|Person||Turnover limit for the previous year|
|Person engaged exclusively in supply of goods||Rs. 40 lakhs|
|Person engaged in supply of goods or service or both||Rs. 20 Lakhs|
|Person engaged in supply of goods or service or both in states of Manipur, Mizoram, Nagaland and Tripura||Rs. 10 Lakhs|
Meaning of turnover under GST:
As per section 2 of the CGST act 2017, Turnover for the purpose of GST registration includes and excludes the following:
Inclusion in Turnover:
- Taxable supplies
- Exempt supplies
- Export supplies
- Interstate supplies
The turnover to be calculated on all India basis of persons having the same PAN.
Exclusion in turnover:
- GST on supplies i.e. CGST, SGST, IGST, UTGST and cess
- Inward supplies on which tax has been paid on reverse charge basis.
Who is the person not liable for registration under GST?
Section 23 of the CGST act 2017 provides the detailed list of persons not liable for GST registration. As per the said section the following are the persons not liable for registration under GST:
- Person engaged exclusively in supplying goods or services or both not liable to tax.
- Person engaged exclusively in supplying goods or services or both exempt from tax.
- Agriculturist engaged in supply of produce cultivated out of land.
- Any other person as may be notified by the government.
Till date the government has notified the following persons who are not liable for registration under GST:
- Person making interstate supply of service and having an aggregate turnover not exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in case of Mizoram, Nagaland, Manipur and Tripura).
- Persons who are engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both as per section 9(3) of the CGST act, 2017.
- Persons making interstate supply of notified handicraft goods and having turnover not exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in case of Mizoram, Nagaland, Manipur and Tripura).
- Casual taxable person making interstate taxable supply of handicraft goods and other notified handicraft goods not exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in case of Mizoram, Nagaland, Manipur and Tripura).
- Job workers engaged in interstate supply of services to a registered person except person who is liable to get register as per section 22 of the CGST act, 2017 i.e. he is liable for registration after the threshold limit is crossed.
- Person supplying goods through e commerce operator and whose aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in case of special category states of Mizoram, Tripura, Manipur and Nagaland.
- Person engaged in exclusive supply of goods and whose aggregate turnover in the previous financial year exceed Rs. 40 Lakhs except:
- Person who are requires to get compulsory register under law as per section 24 (discussed further below)
- Person engaged exclusively in supply of goods being:
- Ice cream and other edible ice, whether or not containing cocoa
- Pan masala
- Tobacco and manufactured tobacco substitutes
- Persons engaged in making intra state supply in the state of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand
- Person registered under the previous laws i.e. Service tax act or VAT or CST etc.
Which person are compulsorily required to register under the GST Act?
As per section 24, the following category of person are compulsorily required to get registered under the GST act irrespective whether the turnover has crossed the threshold limit or not:
- Person making interstate taxable supply except person who is engaged exclusively in interstate supply of service having aggregate turnover up to RS. 20 lakhs and Rs. 10 lakhs in case of special category states
- Casual taxable person who does not have a fixed place of business in the state or union territory from where he wants to make supply. However, threshold limit of Rs, 20 lakh/ Rs. 10 lakhs in case of special category states of Mizoram, Tripura, Manipur and Nagaland is available in case of person who is engaged in exclusive supply of notified handicraft goods.
- Persons who are required to pay tax under reverse charge mechanism
- E commerce operator who are required to pay tax on specified services
- Persons who are required to deduct TDS under section 51
- Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
- Non resident taxable person making taxable supply
- Input service distributor whether or not separately registered under the act
- Person who is supplying goods or service through e commerce operator and whose aggregate turnover exceed Rs. 20 lakhs (10 Lakhs in case of special category states of Mizoram, Tripura, Manipur and Nagaland.
- Every e commerce operator who is required to collect tax at source as per section 52
- Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person and
- Any other person as may be notified by the government on the recommendation of the GST council