Compulsory GST Registration | Section 24 | CGST Act 2017 |GST Series Part 16

1. As per section 24(1) of the CGST Act 2017, the following categories of persons are required to be registered, even if their aggregate turnover is below specified threshold limit and are exempt from registration under section 22(1).

2. Section 24(i): Inter-State Supply of Goods: Persons making an interstate taxable supply of goods are required to take registration irrespective of the thresh hold limit.

2.1 Exceptions:- Persons making inter-state supply of services are not required to register if aggregate turnover is less than Rs 20/10 lakhs – Notification No. 10/2017-IT dated 13-10-2017.

2.2 Supply of Handicraft Goods Persons engaged in inter-state supply of handicraft goods are exempt from registration if the aggregate value of all their supplies on all India basis is less than Rs 20 lakhs/10 lakhs per annum

3. Section 24(ii): Casual taxable persons: Casual taxable persons making taxable supply are required to take registration irrespective of thresh hold limit.

3.1 A casual taxable person means a person who occasionally undertakes transactions in a State where he has no fixed place of business. Suppose Mr. X registered in Maharashtra participates in the trade fair in Karnataka and making taxable supplies from there. He will be a casual taxable person and required to take mandatory registration in Karnataka.

3.2 Exception:- Persons engaged in the supply of handicraft goods are not required to obtain casual registration if they supply goods outside the State and the aggregate value of all their supplies on all India basis is less than Rs 20 lakhs/10 lakhs per annum. Notification No. 32/2017-CT dated 15-9-2017.

3.3 Casual taxable person registration is not required for the movement of goods on an approval basis. CBEC vide circular no. 10/10/2017-GST dated 18.10.2017 stated that in case of movement of jewellery (or any goods) on approval basis the suppliers are not able to ascertain their actual supplies while ascertainment of tax liability in advance is a mandatory requirement for registration as a casual taxable person.

Hence, it is clarified that the goods which are taken for supply on approval basis can be moved from the place of business of the registered supplier to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of delivery of goods. Thus casual taxable person registration not required for movement of goods on approval basis.

3.4 It is further clarified that all such supplies, where the supplier carries goods from one State to another and supplies them in a different State, will be inter-state supplies and attract integrated tax in terms of Section 5 of the Integrated Goods and Services Tax Act, 2017.

4. Section 24(iii) Reverse Charge Liability: persons who are liable to pay tax under reverse charge is required to take mandatory registration irrespective of the threshold limit. Section 9(3) of the CGST Act provides the specified categories of goods & services for which tax is to be paid under RCM. Section 9(4) specified the category of person who is required to pay tax under the reverse charge mechanism (RCM).

4.1 Mandatory registration is not required if such specified Goods or Services is exempted by way of notification . Notification No. 12/2017 CT(Rate) dated 28.06.2017 exempts services provided by a partnership firm of advocates or an individual as an advocate or senior advocate by way of legal services to a business entity with an aggregated turnover within the threshold limit.

5. Section 24 (iv): Persons who are liable to pay tax under section 9(5) are required to take mandatory registration. As per section 9(5) of the Act, In respect of following specified services, the tax shall be paid by the E Commerce Operator (ECO) on behalf of the service suppliers for services supplied through ECO:-

6. Section 24(v) Non-Resident Taxable Person: Non-Resident taxable person making taxable supply is required to take registration irrespective of the thresh hold limit.

6.1 Non-resident taxable person” means any person who occasionally undertakes transactions involving the supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

7. Section 24(vi) TDS Deductor: Persons who are liable to deduct tax under section 51 (TDS) are required to take separate registration as a tax deductor whether or not registered under GST Act 2017

7.1. As per section 51 of the CGST Act, 2017, (a), a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) (a) an authority or a board or any other body, – (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with fifty – one percent. or more participation by way of equity or control, to carry out any function; (b) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); (c ) public sector undertakings are liable for Registration as Tax Deductor under GST Act.

7.2 if it is not making any taxable supply of goods and/or services, it is required to register only as a deductor of tax at source on the basis of TAN/PAN.

8. Section 24(vii) Agents Persons who supply goods or services or both on behalf of other taxable persons whether as an agent or otherwise require registration under GST even if his turnover is below Rs 20/10 lakhs per annum.

8.1. It has been clarified that registration is required only by C&F agents who stock and sell goods on behalf of the Principal. Registration is not required by ordinarily commission agents who do not deal in goods or services themselves if their annual turnover is less than Rs 20/10 lakhs – CBI&C Circular No. 57/31/2018-GST dated 4-9-2018.

9. Section 24(viii) Input Service Distributor, whether registered or not under the CGST Act 2017, is mandatorily required to take registration as Input Tax Distributor.

10. Section 24(ix) Person supplying through Ecommerce Operators (ECO) Persons who supply goods or services or both, other than supplies specified u/s 9(5), through such electronic commerce operator have to compulsorily register under CGST Act. Mandatory registration is required where such E-commerce operators are required to collect tax at source under section 52 of the Act.

11. Section 24(x ) Electronic Commerce Operator: Every electronic commerce operator who is required to collect tax at source under section 52 inserted vide CGST (Amendment) Act, 2018 w.e.f. 1-2-2019. Thus, an e-commerce operator would require registration when he is required to collect tax at source under section 52 of the CGST Act.

12. Section 24(xi) Online information and database access or retrieval services (OIDAR): The mandatory registration is required for every person supplying online information and database access or retrieval services (OIDAR) from a place outside India to a person in India, other than a registered taxable person. Thus, if a person is already registered under GST, separate registration is not required.

13. Section 24(xii) Mandatory registration is required for such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the GST Council.

14. Other relevant provisions : Person dealing only in exempted products is not required to be registered under GST unless he is liable under reverse charge .Thus registration under GST will be compulsorily required if a person is liable to pay tax under reverse charge.

15. The provisions for compulsory registration are not applicable to persons who are not liable for registration under section 23 of CGST and SGST Act. Thus, following need not register even if they fall under any of category specified in section 24(1) – (a) persons who are supplying goods or services which are not liable to tax or (b) wholly exempt from tax or (c) agriculturist or (d) person supplying goods or services where service recipient is liable to pay tax.

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Part 17 of the series will cover the topic “Procedure for Registration GST Sec 25 of CGST Act.

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