GST Registration- Section 22 to 24- CGST Act 2017

GST or Goods or Services Tax is a consumption based tax, it is an indirect tax which levied on sale, manufacturing, consumption, import and export of Goods or Services. The Act made effective with the view to remove cascading of taxes which were there in India. There were number of taxes which were imposed on the goods or services and the input of different taxes paid by the taxpayer were not available to him in different stages due to which the price of the goods as well service increased when ultimately consumed by the consumer. In order to provide the benefit of the input at various stages and in order to cascade the effect of tax GST Act, was introduced. After implementation of GST Act, all the taxes like VAT, CST, Entry tax, entertainment tax and different other tax as well as duties were subsumed and only one tax ie,., GST was introduced. One nation One Tax was the mantra.

In this regard, Constitution (101st Amendment) Act, 2016 was introduced in 2016 where the article 366(12A) inserted to define the term GST. GST means “any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption”.

Further, as we know that in order to recognize taxpayer a system of registration should be in place, this is for the compliance purposes, anyone who is not registered under the Act cannot collect the tax as well as claim the benefit of input. The GST Act contains the provisions with regard to registration of taxpayer. Here Section 22 and Section 24 are very important. Under Section 22, the limits has been prescribed crossing the same, will attract registration requirement. Apart from this, individual who are mandatory required to take registration under GST are defined in section 24 of the GST Act.

SECTION 22 OF GST ACT- PERSONS LIABLE FOR REGISTRATION

(1) 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 forty 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.

(2) 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.

(3) 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.

(4) 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,––

(i) 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;

(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;

(iii) the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.

In simple word, one can say that any supplier who is having aggregating turnover in a financial year exceeding 40 Lakhs, except in case of special category states. In case of special category states a person is liable for registration if his aggregating turnover in a financial year exceeding 10 Lakhs.

Further, if any person is already registration or hold a license in any existing Act, then he shall be liable for registration under the Act.

Here special categories states include Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

SECTION 23 OF GST ACT- PERSON NOT LIABLE FOR REGISTRATION

A person shall not be liable to take registration under the Act if he is

a. Engaged in any business of supplying goods or services which are not liable to tax or wholly exempt from tax under Act or under the IGST Act.

b. an agriculturist, to the extent of supply of produce out of cultivation of land.

Further, the government can also exempt any person from taking registration through a notification in the official gazette.

SECTION 24 OF GST ACT- Compulsory registration in certain cases

Here is the list of person who are compulsory required to get themselves registered under the Act

(i) persons making any inter-State taxable supply;

(ii) casual taxable persons making taxable supply;

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

(iv) person who are required to pay tax under sub-section (5) of section 9;

(v) non-resident taxable persons making taxable supply;

(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;

(ix) persons who supply goods or services or both, 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;

(x) every electronic commerce operator;

(xi) 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 person; and

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

Documents for GST Registration

1. PAN card

2. Valid Phone no. and Email id for OTP.

3. Passport size photograph of the Applicant.

4. Proof of principle place of business (any one)

• Electricity bill
• Legal ownership document
• Municipal khata copy
• Property tax receipt

5. Proof of details of Bank Account

• The first page of the passbook
• Bank statement
• Cancelled cheque

6. Other details

• List of Goods and Services
• Proof of appointment of Authorized Signatory (Letter of Authorization or copy of board resolution)
• Authorized Signatories photo
• Incorporation certificate (for Company and LLP)
• DSC

How to file an application for Registration

The application for registration has to be made within 30 days through online mode from the date of person becomes liable to register, or his turnover exceeds the specified limit defined under GST. The GST certificate shall be issued within 3 days from the date of application submission if no discrepancy is found by the authority. However, due to COVID 19 it is taking more than the time as prescribed.

*****

About Author: Praveen Singh is a Founder and Managing Partner of TRIJURIS (Legal & Taxation Service Provider in Delhi). The head office of the firm is based in Delhi. The firm inter-alia engaged in providing services related to Corporate and Commercial laws advisory, Indirect taxation, Setting up industries in India as well as outside India, Legal recovery services and other regulatory matters. The firm has actively participated in assisting MSMEs in India and small businesses to scale there business and closing working with them in respect of recovery of their legitimate dues.