Introduction: Navigating the intricacies of Goods and Services Tax (GST) registration is essential for businesses to ensure compliance and avoid penalties. Sections 22, 24, and 23 of the GST Act delineate the thresholds, exemptions, and obligations concerning registration. Let’s delve into the nuances of these sections to grasp their implications for businesses operating under the GST regime.
1. Section 22: Every Supplier of goods or services or both required to obtain registration in the State or Union territory from where he makes taxable supplies if his annual aggregate turnover (PAN Based) Exceeds specified Limits.
Annual aggregate turnover – Taxable supply + Exempt supply + Exports + Inter-state supplies under same PAN
Specified Limits
Specified Limit I– Manipur, Mizoram, Nagaland, Tripura (Special category states)– 10 Lakh (whether exclusive supply of goods or exclusive supply of services)
Specified Limit II – Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry, Telangana – 20 Lakh (whether exclusive supply of goods or exclusive supply of services)
Specified Limit II – Other States and Union Territories – 40 Lakh for Goods and 20 Lakh for Services
Exceptions of 40 Lakh Limit (By Notification No. 10/2019 dated 07.03.2019, the limit of 40 Lakh will not apply for the following cases, instead 20 lakh will be considered)
a) Person required to take compulsory registration u/s 24.
b) Person Engaged in making supplies of Ice cream, Pan masala, Tobacco products, Fly Ash bricks, Building bricks, Bricks of Fossil meal, roofing tiles.
c) Person opted for Voluntary Registration and intended to continue with their registration.
Registration required only for a place of business where taxable supply takes place.
If a person has only marketing office in a state and there is no taxable supply from that state, so he is not required registration in that state.
Further for Threshold limit, if an entity’s taxable supply form Delhi is 30 Lakh and Non-taxable Supply is 12 Lakh from Manipur, the applicable threshold limit will be 40 Lakh. But registration is required to be obtained only for Delhi because no registration is required for making exclusively non-taxable supply.
In case, where entity is making taxable supplies from both state in above example, the limit of 10 Lakh will be applicable.
Person liable for Registration in case of transfer of business. (In case of change in ownership, death of proprietor, amalgamation, demerger etc.)
2. Section 24. Compulsory registration in certain cases
1. Person making Inter-state Taxable Supply of goods: (Threshold limit will be applicable only for services and notified handicraft goods)
2. Casual taxable person making taxable supply
3. Persons who is required to pay tax under reverse charge on inward supplies received
4. Non-resident taxable person making taxable supply
5. E-Commerce Operator
(i) E-Commerce operator (ECO) who is required to collect TCS under section 52.
(ii) Person who supplies goods and/or services (other then supplies under 9(5)) through such E-commerce operator who is required to collect TCS under section 52.
– However, threshold limit of 20 lakh (10 Lakh for special category states) is available for suppling services through ECO.
– No such exemption was available for a person supplying goods through ECO.
– So, Vide Notification No. 34/2023 CT dated 31.07.2023, It was decided to provide an exemption from obtaining registration to unregistered persons making Intra-state supplies of goods through ECO having turnover less then threshold limit during current year or previous year w.e.f. 01.10.2023.
6. Persons who are required to deduct TDS under section 51 of this act.
7. Person making taxable supply of goods or services or both on behalf of other taxable persons as an agent or otherwise.
8. E-commerce operator who are required to pay tax under 9(5) on specified services.
9. Input services distributor, whether or not separately registered under this act.
10. Every person Supplying Online Information database access or retrieval (OIDAR) service from a place outside India to a person in India (Other than registered person).
11. Such Other persons as may be notified by the government on the recommendation of GST council.
3. Section 23: Persons Not liable for registration under GST (Persons will not be the taxable persons)
1. Persons engaged in Exclusively in supply of goods and/or services not liable to tax/wholly exempt from tax.
2. An agriculturist, to the extent of supply of produce out of cultivation of land.
Agriculturist – An individual or HUF who undertakes cultivation of land by own labour, by labour of family or by servants on wages hired on personal supervision.
3. Specified category of persons notified by the government exempted from obtaining registration.
a. Person making only reverse charge supplies.
b. Person making Inter-state supplies of taxable services up to 20 lakh (10 lakh for special category states).
c. Person making Inter-state supplies of notified handicraft goods/products up to 20 lakh (10 lakh for special category states).
Such persons have obtained PAN and required to generate E-way Bill
d. Casual taxable person making inter-state supply of notified handicraft goods up to 20 Lakh (10 lakh for special category states).
e. Commission agent under Agricultural produce marketing committee (APMC) Act.
Note –
Commission agent is mandatorily required to registered under GST if the following conditions are supplied-
- Principal should be a taxable person, and
- Supplies made by a commission agent should be taxable.
However, generally Commission agent under APMC act making supplies on behalf of an agriculturist who is not a taxable person if he supplies out of cultivation of land.
Such commission agents are not required to registered under GST.
However, where a commission agent is liable to pay tax under reverse charge, is mandatorily required to get register under section 24.
Conclusion: Understanding the nuances of GST registration requirements is vital for businesses to ensure compliance with tax laws. Sections 22, 24, and 23 of the GST Act delineate the thresholds, exemptions, and obligations concerning registration. By comprehending these provisions, businesses can navigate the GST regime effectively, avoiding non-compliance issues and fostering smooth operations within the tax framework.
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