Who Should Apply for GST Registration – FAQs on Compulsory GST Registration

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Who is required to register under GST? In our previous articles, we have given the meaning of GST and who are not liable for GST registration. So today we are providing an article about people who should apply for GST number (जी एस टी  नंबर). A ‘taxable person’ under GST, is a person who carries on any business at any place in India and who is registered or required to be registered under the GST Act(जी एस टी बिल). Any person who engages in economic activity including trade and commerce is treated as taxable person. ‘Person’ here includes individuals, HUF, company, firm, LLP, an AOP/BOI, any corporation or Government company, body corporate incorporated under laws of foreign country, co-operative society, local authority, government, trust, artificial juridical person. Let’s check complete details.

Also Check : GST Registration Details, Requirements, Eligibility, Certificate, Rules & Conditions

Who Should Apply for GST Registration

Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.

Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

Also check : Who are not liable for GST Registration

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.

Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

Explanation––For the purposes of this section, ––

  1. the expression “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals
  2. the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.

PERSONS LIABLE FOR GST REGISTRATION [SECTION 22]

Following are the persons who should apply for GST Registration

  • Individuals who registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
  • Casual taxable person / Non-Resident taxable person
  • Businesses with turnover above the threshold limit of Rs. 20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
  • Agents of a supplier & Input service distributor
  • Person who supplies via e-commerce aggregator
  • Every e-commerce aggregator
  • Those paying tax under the reverse charge mechanism
  • Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

(i) Threshold limit for registration

  • Every supplier of goods or services or both is required to obtain registration
  • in the State or the Union territory from where he makes the taxable supply
  • if his aggregate turnover exceeds Rs. 20 lakh in a FY.

However, the limit of Rs.20 lakh will be reduced to Rs.10 lakh if the person is carrying out business in Special Category States except Jammu and Kashmir, i.e. limit Rs.10 lakh is applicable for States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

(ii) Aggregate Turnover

The term aggregate turnover as defined under section 2(6) of the CGST Act has been analysed as follows:

Outward Supplies taxable under reverse charge would continue to be part of the ‘aggregate turnover’ of the supplier of such supplies

(A) Aggregate turnover to include total turnover of all branches with same PAN

[su_box title=”Example :” box_color=”#3e3e3e”]A dealer ‘X’ has two offices – one in Delhi and another in Haryana. In order to determine whether ‘X’ is liable for registration, turnover of both the offices would be taken into account and only if the same exceeds Rs. 20 lakh, X is liable for registration.[/su_box]

If a person with place of business in different States across India has one branch in a Special Category State, the threshold limit for GST registration will be reduced to Rs.10lakh.

(B) Value of exported goods/services, exempted goods/ services, inter-State supplies between distinct persons having same PAN, to be included in aggregate turnover.

[su_box title=”Example :” box_color=”#3e3e3e”]Rohan Oils, Punjab, is engaged in supplying machine oil as well as petrol. Supply of petrol is not leviable to GST, but supply of machine oil is taxable. In order to determine whether Rohan Oils is liable for registration, turnover of both non-taxable as well as taxable supplies would be taken into account and if the same exceeds Rs. 20 lakh, Rohan Oils is liable for registration.[/su_box]

(C) Aggregate turnover to include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.

[su_box title=”Example :” box_color=”#3e3e3e”]Mohini Enterprises has appointed M/s Bestfords & Associates as its agent. All the supplies of goods made by M/s Bestfords & Associates as agent of Mohini Enterprises will also be included in the aggregate turnover of M/s Bestfords & Associates.[/su_box]

(D) ‘Aggregate turnover’ Vs. ‘Turnover in a State’: The aggregate turnover is different from turnover in a State. The former is used for determining the threshold limit for registration as well as eligibility for composition scheme. However, the amount payable under composition levy would be calculated on the basis of ‘turnover in the State/UT’.

(iii) Registration required only for a place of business from where taxable supply takes place

A person is required to obtain registration with respect to his each place of business in India from where a taxable supply has taken place. However, a supplier is not liable to obtain registration if his aggregate turnover consists exclusively of goods or services or both which are not taxable under GST.

(iv) Person liable for registration in case of transfer of business

Where a business is transferred, whether on account of succession/any other reason, to another person as a going concern, the transferee/successor, is to be registered with effect from the date of such transfer/succession. Where the business is transferred, pursuant to sanction of a scheme/ arrangement for amalgamation/ de-merger of two or more companies, pursuant to an order of a High Court/Tribunal, the transferee is to be registered with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order.

COMPULSORY REGISTRATION IN CERTAIN CASES [SECTION 24]

Following category of persons are mandatorily required to obtain the registration under GST irrespective of their turnover:

(i) Persons making any inter-State taxable supply

However, threshold limit of Rs. 20 lakh (Rs. 10 lakh in case of Special Category States other than Jammu and Kashmir) is available in case of inter-State supply of taxable services and of specified handicraft goods [Elaborated under next heading].

(ii) Casual taxable persons (CTP) making taxable supply

However, threshold limit of Rs. 20 lakh (Rs.10 lakh in case of Special Category States other than Jammu and Kashmir) is available in case of CTP making taxable supplies of specified handicraft goods [Elaborated under next heading].

(iii) Persons who are required to pay tax under reverse charge

However, persons engaged exclusively in making supplies, tax on which is liable to be paid on reverse charge basis are exempt from registration [Elaborated under next heading].

(iv) Non-resident taxable persons (NRTP) making taxable supply.

(v) E-commerce:

  1. Every ECO (Electronic Commerce Operator),
  2. person who are required to pay tax under reverse charge under section 9(5) and
  3. persons who supply goods and/or services, other than supplies specified under section 9(5), through such ECO who is required to collect tax at source under section 52, but threshold limit of ` 20 lakh (` 10 lakh in case of Special Category States other than Jammu and Kashmir) is available in case of suppliers supplying services through ECO.

(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act.

(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.

(viii) Input Service Distributor, whether or not separately registered under this Act.

(xi) every person supplying online information and data base access or retrieval (OIDAR) services from a place outside India to a person in India, other than a registered person 2; and

(x) such other person or class of persons as may be notified by the Government on the recommendations of the Council.

CONCEPT OF TAXABLE PERSON under GST

As per section 2(107) of the CGST Act, taxable person means a person who is registered or liable to be registered under section 22 or section 24 [Discussed in detail earlier]. Thus, even an unregistered person who is liable to be registered is a taxable person. Similarly, a person not liable to be registered, but has taken voluntary registration and got himself registered is also a taxable person.

We hope, now you understand that who should apply for GST number. If you are eligible to apply for GST number (GST नंबर) then don’t forget to check this article ” GST Registration Process ”  (जीएसटी रजिस्ट्रेशन). Still, if you have any doubts regarding eligibility and registration procedure then you can ask in “Forum“. Our experts and members will try to solve your problem.

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