GST Registration: Applicability, Advantages, Conditions & procedures

GST is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

In any tax system, registration is the fundamental requirement for identification of tax payers ensuring tax compliance in the economy. Registration of any business entity under the GST Law implies obtaining a unique number from the concerned authorities for the purpose of collecting tax on behalf of the government and to avail input tax credit for the taxes on his inward supplies. Without GST registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him.

Persons liable for Registration under GST

As per sec 22 of the CGST/SGST Act 2017, every supplier who makes a taxable supply i.e supply of goods and/ or services which are leviable to tax under GST law, and his aggregate turnover in a financial year exceeds the threshold limit of twenty lakh rupees shall be liable to register himself in the state or the union territory of Delhi or Puducherry from where he makes the taxable supply.

Sec 24 of the CGST act mention certain categories of suppliers, who shall be liable to take GST registration even if their aggregate turnover is below the said threshold limit of 20 lakh rupees.

Persons not liable for registration under GST

• Person supplying exempted goods or services which are not liable for tax under GST.
• An agriculturist to the extent of supply of produce out of cultivation of land. The following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit
• Persons making any interstate taxable supply
• Casual taxable persons
• Persons who are required to pay tax under reverse charge
• Every Electronic commerce operators
• Non resident taxable persons
• Input service distributor
• Supplier of online information
• Deductor of tax at source

Conditions and procedures for registration under GST

• Application for GST registration shall be made within 30 days from the date on which he becomes liable to GST registration, in every state or union territory in which he is so liable.
• A person seeking GST registration under this act shall be granted a single GST registration in a state or union territory.
• If a person has multiple business verticals in a state or union territory, he may be granted a separate GST registration for each business vertical.
• A person may have voluntary GST registration though not liable to be registered under the GST act and all provisions of this act are applicable to such person.
• A person will be treated as distinct persons for each GST registration for the purposes of this It means two or more units of the same person will be treated as distinct.
• Establishments in each state or union territory of a person, shall be treated as establishments of distinct persons for the purposes of this act.
• Permanent account number is compulsory for grant of GST registration.
• Where a person fails to obtain GST registration, the proper officer may, proceed to register such person in such manner as may be prescribed.

Effective date of registration under GST

Where the application for registration has been submitted within 30 days from the date on which the person becomes liable to GST registration, the effective date of GST registration shall be the date on which he became liable for GST registration.

Where an application for GST registration has been submitted by the applicant after 30 days from the date of his becoming liable to GST registration, the effective date of GST registration shall be the grant of GST registration.

In case of a person taking GST registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.

Advantages of taking registration under GST

• Legally recognized as supplier of goods or services.
• 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 supplied to purchasers or recipients.
• Getting eligible to avail various other benefits and privileges under the GST laws.

Amendments to the GST registration certificate

As per sec 28, the proper officer may, on the basis of such information furnished either by the registrant or as ascertained by him, approve or reject amendments in the registration particulars within a period of 15 common working days from the date of receipt of application for amendment.

It is to be noted that permission of the proper officer for making amendments for only certain core fields of information, whereas for the other fields, the certificate of registration shall stand amended upon submission of application in the GST common portal.

Cancellation of GST registration certificate

Any registration granted under this act may be cancelled by the proper officer, in circumstances mentioned in sec 29 of the CGST/SGST act. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed. As per the registration rules, an order for cancellation is to be issued within 30 days from the date of receipt of reply to SCN or from the date of receipt of application for cancellation.

Such circumstances include contravention of any of the prescribed provisions of the CGST act or the rules made there under, not filing return by a composition dealer for three consecutive tax periods or non furnishing of returns by a regular taxpayer for a continuous period of 6 months, and not commencing business within 6 months from the date of voluntary registration. However, before cancelling the registration, the proper officer has to follow the principles of natural justice.

(Author can be reached on Srinivas. [email protected])