Simplified GST Series- Section 24-25 /CGST ACT 2017 – Part-14
Article explains Section 24 and Section 25 of CGST ACT 2017 related to Compulsory GST registration in certain cases and Procedure for GST registration.
Section 24- Compulsory registration in certain cases –
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act, ––
Irrespective of threshold limit
1. Persons making any inter-State taxable supply
2. Casual taxable persons making taxable supply
3. Persons who are required to pay tax under reverse charge.
4. Persons who are required to pay tax under sub-section (5) of section 9 (electronic commerce operator)
5. Non-resident taxable persons making taxable supply
6. Persons who are required to deduct tax under section 51 (Tax Deduction at Source)
7. Persons who supply goods or services or both on behalf of other registered taxable persons whether as an agent or otherwise;
8. input service distributor
9. Persons who supply goods and/or services, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52.
10. Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.
- Key points to remember- Notification 10/2017–Integrated Tax, dated 13th October 2017– persons making inter-States supply of services and having turnover not exceeding Rs. 20 lakhs have been exempted from obtaining registration.
- Accordingly, only persons who make inter-State supply of goods have to compulsorily obtain registration irrespective of the aggregate turnover.
- Certain exemptions are provided by government u/s 23(2) from obtaining compulsory registration –
| Category of persons | Exemption granted |
| Persons making any inter-State taxable supply | Inter State supplies of taxable services and handicraft goods except when their turnover exceeds threshold limit . |
| Casual taxable persons making taxable supply | Casual taxable persons making taxable supplies of handicraft goods if the aggregate turnover does not exceed ` 20 lakhs |
| Persons who are required to pay tax under sub-section (5) of section 9 (electronic commerce operator) | Suppliers (in respect of whose turnover E-commerce operator would pay tax under 9(5)) would NOT be required to pay tax |
| Persons who supply goods or services or both on behalf of other registered taxable persons whether as an agent or otherwise | ‘agents’ will become liable to compulsory registration only if their transactions attract schedule I. |
| Persons who supply goods and/or services, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52 | Supplier providing services through an e-commerce operator if the aggregate turnover does not exceed ` 20 Lakhs |
| 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 taxable person | Exempt from filing Annual Return and Reconciliation Statement prescribed in section 44(1) and 44(2). |
Now let us discuss some issues related to Section 23 v Section 24- Section 24 overrides sections 22(1) i.e you are required to take compulsory registration irrespective of threshold limit specified but does not override section 23. For example-
The turnover of the hospital is ` 10 Crores. The hospital has imported certain services from outside India worth ` 5 Lakhs . In this case- not liable for registration u/s 23 as exempt supply but require to take registration to pay RCM on import of services.
Logical view – registration not required in above case.
Section 25- Procedure for registration –
Section 25 read with rules 8 to 26 of the CGST Rules related to registration provides a detailed road map on the procedural aspects of the registration.
(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:
Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
Analysis– The time limit for application is within 30 days (for persons other than casual taxable person or a non-resident taxable person) and casual taxable person or a non-resident taxable person shall have to obtain the registration at least 5 days prior to the commencement.
(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:
Provided that a person having multiple places 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
Analysis- Concept of business vertical has been removed from GST . Taxpayers can now opt for separate registrations in a State based on location for each of the business (though they are in similar line of business). Further, as per second proviso to section 25, a Special Economic Zone unit or Special Economic Zone developer shall make a separate application for registration as distinct place of business from its other units located outside the Special Economic Zone.
(3) A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person.
(4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act .
(5) Where a person who has obtained, or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.
Analysis- A person not liable to registration (i) may opt for voluntary registration and (ii) then will be liable to ‘all’ compliance ‘as if’ such person was liable for registration. The registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within a period of thirty days from such date. Where an application for registration has been submitted by the applicant after the expiry of thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of the grant of registration. Every registered person is considered a ‘distinct person’ for the limited purposes of GST and tax is levied on inter-branch transfers.
(6) Every person shall have a Permanent Account Number issued under the Income Tax Act, 1961 (43 of 1961) in order to be eligible for grant of registration:
Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.
In section 25 of the Central Goods and Services Tax Act, after sub-section (6), the following sub-sections shall be inserted, namely: —
(6A) Every registered person shall undergo authentication, or furnish proof of possession of Aadhaar number, in such form and manner and within such time as may be prescribed:
(6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification .
(6C) On and from the date of notification, every person, other than an individual, shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association, Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendation of the Council, specify in the said notification
6D) The provisions of sub-section (6A) or sub-section (6B) or sub-section (6C) shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, specify by notification.
Analysis- Every person who is liable to obtain registration or wants to obtain voluntary registration is required to have a Permanent Account Number (PAN).
Every person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number (TAN)
That CBIC to give effect sub sections (6A) -6(D) have come out with Notification no. 16/2020-Central Tax, 17/2020-Central Tax, 18/2020-Central Tax, 19/2020-Central Tax dt.23.3.2020.
- That notification no. 16/2020- Central Tax dt. 23.3.2020 is issued by which amendment in the Rule 8, Rule 9 and Rule 25 have been made which prescribes about procedure for doing Aadhar verification and/or for doing physical verification of principle place of business in the presence of person within a period of sixty days from the date of application.
- Notification no. 17/2020-central tax dt.23.3.2020–it has notified that provision of sub-section (6B),(6C) shall not be applied to a person who is not a citizen of India or to a class of person other than Individual, authorized signatory of all types, managing and authorized partner; and Karta of an HUF. Thus it is well clear that any foreign citizen person if make application for registration then compulsorily he shall be subject to physical verification
- Notification No. 18/2020-central tax–it is provided that in case of not having Aadhar number, the applicant shall be subject to verification as per Rule 9 which states about physical verification of the registered premises in accordance with Rule 25.
- Notification No. 19/2020-central tax dt.23.3.2020–it is provided that (a) authorized signatory of all types; (b) Managing and authorized partners of a partnership firm; and (c ) Karta of an HUF shall be subject to verification of Aadhar number and in case of not having Aadhar the applicant shall be subject to verification in accordance with Rule 25. now for new registration “AADHAR” shall be essential and in case of not having same the “PHYSICAL VERIFICATION” of registered premises shall be made in presence of applicant by registering authority in accordance with amended Rule 25 and of which physical verification report along with the other documents including photographs, shall be uploaded in Form GST REG-30 on the common portal with in a period of fifteen working days following the date of such verification.
- Rule 8 ,9,25 CGST RULES Referred to.
(7) Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed.
(8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed
(9) Notwithstanding anything contained in sub-section (1), ––
(a) any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries; and
(b) any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed.
(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed.
(11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed.
(12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period.
Analysis- A non-resident taxable person can obtain registration on the basis of any other document as may be prescribed
- Any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act,1947 (46 of 1947), Consulate or Embassy of foreign countries and any other person or class of persons as may be notified by the Commissioner, shall obtain a Unique Identity Number.
- The registration or Unique Identity Number, (UID) is granted/ issued with effective dates. The registration or UID is granted or rejected after due verification. A certificate of registration shall also be issued in prescribed form with effective date as may be prescribed.
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