Welcome into the world of GST
GST registration is covered by Section 22 to 28 of Central Goods and Services Tax Act 2017 and CGST Rules Related to Registration. Article explains deals with Who is liable to get GST registration, Who doesn’t require GST registration, Mandatory GST Registration, Procedure for GST Registration, Deemed GST Registration, Special provision– Casual taxable person and Non – Resident person and Amendment of GST Registration.
GST Registration – Section 22 to 28
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 made taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds INR 20 lakh for services/INR 40 lakh for goods.
Government may exceed the threshold limit for special category states on request of special category state and on the recommendations of council, enhance the aggregate turnover from 10 lakhs to 20 lakhs – subject to such conditions and limitations, as may be notified.
Proviso – for Special Category States – Registration requirement is aggregate turnover Rs.20/10 Lakhs.
|General State||Rest of India||20 Lakhs – Services
40 Lakhs – Goods
|Special Category States
Article 279A (4) (g) of the constitution (Except J&K)
|Arunachal Pradesh, Assam, Meghalaya, Sikkim, Himachal Pradesh, Jammu and Kashmir and Uttarakhand
Manipur, Mizoram, Nagaland and Tripura
20 Lakhs – Goods and Services
10 Lakhs – Goods and Services
– Aggregate Turnover –Shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals. (Example – C&F agents)
– Supply of goods, after completion of jobwork, by a registered jobworker 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 jobworker.
Discussion on Threshold Limit
1. Limits of 40 lakhs for goods – Is Exclusive exemption. If minor element of service is there say commission income – Threshold limit is Rs. 20 Lakhs
2. No benefit of 40 lakhs is applicable –
– if mandatory registration is required
– If Person dealing in Ice Cream and other edible ice, whether or not containing cocoa, Pan Masala and Tobacoo and manufactured tobacoo substitutes
– If person is located in special category states
– If person has obtained voluntary registration
– If he is supplying handicraft goods (Threshold limit is Rs. 20 Lakhs)
– For job workers – threshold limit is Rs. 20 Lakhs
3. Calculation of exemption of Rs. 40 lakhs will be excluding interest on deposits, loans and advances. explanation to section 22(1) of CGST Act. However, this exclusion is not available while calculating exemption limit of Rs 10/20 lakhs.
Discussion on Aggregate Turnover
Section 2(6) – Aggregate Turnover
Aggregate turnover means the aggregate value of all taxable supplies (excluding the value of inward supplies on which is tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter state supplies of persons having the same PAN, to be computed on all India basis but excludes CGST, SGST, UTGST, IGST and cess.
Section 2(47) – Exempt Supply includes
– Nil rated supply
– Exempt Supply (Section 11 – CGST Act, Section 6 – IGST Act)
– Non-Taxable Supply
Which are the transactions not a supply?
1. Not qualify definition of supply
2. Not a supply as per Schedule III of CGST Act
– Employer – Employee relationship (Salary + Perquisites)
– Services by Court or Tribunal
– Function performed by MP/MLA/Panchayat Members/Municipalities Members/Local Authorities or State Legislature
– Actionable Claims (Except – Lottery, betting and gambling)
– Sale of land
– Services of funeral, burial, cremation or mortuary including transportation of the deceased
– International Merchant Trade – Goods sold before entered into India – Like from USA to China
– High Sea Sales – Sale before entering into India before home consumption.
2. Transfer of business by a registered person – by way of succession or otherwise – As a going concern – Transferee or the successor liable to get registered by immediate effect.
3. In case of amalgamation, demerger – Transferee shall be liable to be registered – from date of issue of certificate of incorporation giving effect to such order of high court or tribunal.
1. The following persons shall not be liable to registration, namely:
(a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
(b) Agriculturist to the extent of supply of produce out of cultivation of land.
2. Specified category of persons notified by the government
|Notification||Exemption from Registration|
|Notification No. 05/2017 – Central Tax dated 19.06.2017||Persons engagedonly in making taxable supplies where total tax is liable to be paid on reverse charge basis|
Let’s discuss the registration requirement with an illustration
|Head of Income||Amount||Amount||Amount||Amount||Amount||Amount||Amount|
|Sale of Services||13||–||–||18 (RCM Supplies)||18 (RCM Supplies)||1 (Instal-lation)|
|Sale of Goods||–||–||17 (Nil Rated)||–||18 (Nil Rated)|
|Rent – Comm-ercial||2||–||–||3||1|
|Rent – Residential||1||18||2.50||–||2||2|
|SEIS /MEIS Incentive||0.25||–||–||–|
|Balances Written off||–||–||–||–||1||2|
|Verdict||Not Requi-red||Not Requi-red||Requi-red||Requ-ired||Not Requi-red||Requi-red||Not Requ-ired|
Gujarat Authority – Advance Ruling No. GUJ/GAAR/R/2020/10
Shree Sawai Manoharlal Rath
Whether interest received on PPF, saving bank account, personal loans to be considered in threshold limit?
The Gujarat Authority for Advance Rulings (GAAR) has directed that any interest or income earned on the Public Provident Fund (PPF), savings bank account, and extended deposits/advances shall be included while computing the aggregate turnover under GST.
GAAR treated this income as exempted income and includes in definition of aggregate turnover.
Some Questions: –
Where do I require registration?
1. Construction Contracts
Reply – Is the site or immovable property be treated as a place from where the person is making supply.
Answer to be find in context of place of supply
Karnataka Advance Ruling Authority (AAR) in the case of M/s T & D Electricals (31.03.2020) – No separate registration required
Discussion on Fixed Establishment
Place (Other than registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services or to receive and use services for its own needs.
2. Renting of Immovable Property
3. Job Worker
It starts from notwithstanding – overrides section 22(1) – Means aggregate turnover is not a criterion for determination of registration.
Who require mandatory registration?
1. Interstate supplies
2. Casual taxable persons – who occasionally undertakes transactions involving supply of goods or services or both in the course of furtherance of business, whether as a principal agent or in any other capacity, in a state or a union territory where he has no fixed place of business.
3. Person required to pay taxes under RCM
4. Person required to pay tax under section 9(5) – Persons making supplies through E-commerce
5. Non-Resident taxable person
6. PSU, Government – Mandatorily required to deduct tax under Section 51
7. Agents or otherwise – Making supply of goods or services on behalf of others
(As per sec 2(88) of CGST Act, the term ‘principal’ applies to clearances made by C&F Agent on behalf of Principal. It does not apply to clearances made by job worker.)
8. Input Service Distributor
9. E-commerce operators
10. Persons making supplies through e-commerce operator [Other than those mentioned in Section 9(5)]
11. Non – Resident OIDAR Service Providers supplying services to unregistered suppliers in India
12. Other Notified persons by Government
Relaxation from Mandatory Registration
|Notification||Exemption from Registration|
|Notification No. 7/2017- IGST dated 14.09.2017||Job worker engaged in making interstate supply of job work services except jewellers business|
|Notification No. 8/2017- IGST dated 14.09.2017||Person making interstate taxable supplies of handicraft goods.|
|Notification No. 32/2017 Central Tax dated 15.09.2017||Casual taxable person making taxable supplies of handicraft goods.|
|Notification No. 65/2017 Central Tax dated 15.11.2017||Suppliers of services through an ecommerce platform (Benefit of Threshold Limit given)|
|Notification No. 10/2017 Integrated Tax dated 13.10.2017||Persons making interstate supplies of taxable services not exceeding 20 lakhs|
Discussion on interplay of Section 22, 23 and 24.
1. Registration is required in every such state or UT in which he is so liable
2. Registration to be applied within 30 days
3. Casual Taxable person or Non – Resident – Apply registration at least 5 days prior to the commencement of business
4. SEZ units – Apply for separate registration. (Every SEZ unit must be separate registered than normal registration in same state)
5. Person making supply in territorial waters – Have to take registration in the coastal state or UT where the nearest point of the appropriate baseline is located.
6. Single registration is granted in a state or Union territory. However separate registration for multiple place of business or different business vertical can be granted subject to satisfaction of prescribed conditions.
7. Person can take voluntary registration – All provisions of this act shall apply on him.
8. Every registration is unique – Same person having different registration will be treated as distinct person. Establishments of same person having different GSTIN will be treated as distinct.
9. Registration is PAN based. However, for persons who are liable to deduct tax under Section 51 – TAN number is required for granting the registration.
10. For NR – Registration can be granted on such other prescribed documents like passport, tax identification of that particular country.
11. Specialised agencies of UN, Multilateral Financial Institutions, notified organisation of UN, Consulate, Embassy of foreign countries or any other notified person by commissioner – shall be granted Unique identity number.
1. UIN or GST Registration under this Act deemed to be registered under SGST and UTGST
2. UIN or GST Registration under this SGST/UTGST Act deemed to be registered under SGST and UTGST
1. Grant of registration – for 90 days maximum. It can be till the time period specified in application or 90 days whichever is earlier.
2. However, the said registration can be granted for more 90 days by the proper officer on shown of sufficient cause.
3. Business can be commenced after issuance of certificate but not prior to it.
4. Casual taxable person or Non-Resident person have to make advance deposit of tax based on estimated liability for the registration period.
5. If there is any extension in registration period – more amount to be deposited for such period
6. Advance deposit of liability shall be credited in Electronic Cash Ledger of said person and utilised in manner prescribed in Section 49.
– Intimation to the proper officer regarding any changes
– Proper officer- either approve or reject
– No rejection of application without giving opportunity of being heard
– Deemed approval or rejection in SGST/UTGST Act.
1. GST Registration to be grant within 3 working days of receipt of application
2. Any deficiency in application to be communicated within 3 working days of application
3. Time limit to file clarification, information or documents electronically within a period of seven working days of receipt of notice
4. Deemed approval of registration application
If officer doesn’t respond within 3 days of fresh application and within 7 days of reply to notice.
5. Composition of GST Number – Lets understand it
07 – State code (First Two Characters)
AMGPA5027P – PAN/TAN of recipient (Next Ten Characters)
1 – Number of Registrations (13th Character)
Z – Entity code (14th Character)
X –CheckSum character (15th Character)
6. Effectivity of Registration –
If applied within thirty days – The date on which person liable to get registered
If not apply within 30 days – Date of registration.
7. Every GST certificate must be signed by proper officer under this Act.
8. In case of multiple registration in same state – Either composition scheme or normal tax -payer scheme can be opted. Both schemes cannot be opted together.
9. Suo-Moto Registration
– Temporary Registration granted on identification of person not get registered however he was liable to be registered. – Find due to Survey, Enquiry, Inspection, Search or any other proceedings. Officer shall pass an order for issuing temporary registration.
– Effective Date of registration – Date of order of granting registration
– Suo-Moto registration is temporary one – Final registration is to be applied within 90 days of grant of such registration.
– Effective date of final registration is the date of order passed of temporary registration.
10. Display of GSTIN Certificate
– At entry of principal place of business and every additional place of business
11. Amendment in GST Registration
– Must be done within 15 days of registration
– Officer must act on amendment in 15 days of application
– If change in constitution leads to change in PAN – Fresh registration needs to be applied
– Core Fields – Require approval of officer for amendment – These are legal name of business, Principal place / additional place business address and change in management details.
– Non-Core Fields – does not require approval of officer – certificate of registration shall stand amended upon submission of application
– Deemed amendment – Within 15 days of application or within 7 days of SCN – If no response from officer.