After 14 years of long effort by Dr. Kelkar Shah, Finally since 2017, The Government made 101st amendment in the constitution of india and implement GST Act, 2017 and lot many changes have taken place since then. Due to a large number of amendments in the Act, there is a confusion as regards to threshold limit for registration under the Act . In this article, an attempt has been made to explain the requirement for registration under GST.
Detailed analysis of Sec 22(1) ” Person liable registration”
As per section 22(1) of CGST/SGST Act, every supplier shall be liable to be registered in the State or Union Territory (other than special category states) from where he makes supply of goods or services or both, if his aggregate turnover in a financial year exceeds Rs. 20 lakhs or 40 lakhs after fulfilling certain conditions.
In case of ‘special category states’, registration is required if his aggregate turnover in a financial year exceeds Rs. 10 lakhs – first proviso to section 22(1) of CGST Act [renumbered vide CGST (Amendment) Act, 2018, w.e.f. 1-2-2019]
Analysis :- It clearly seems for above section that every supplier whose supply of goods and services or both exceeds 20 lakh/40 lakh in a financial year than he shall mandatory registration under GST act.
Suppose Mr. A is supplier of markers who supplies exceeds 20 lakhs in the month of September 2020 than he shall take registration and follow due compliance of GST. But at the end of financial year Mr. A estimate that he will suffer in next financial year due to uncertain reason and won’t able to do business of turnover exceeding 20 lakh in the year 2021-22 than as per sec 29(1) ” Cancellation of registration” Mr. A will file application in GST Reg 16 for cancellation of registration as per provisions of section 29(1)(c) where the registered person shall file application, if the taxable person is no longer liable to be registered under sec 22 or sec 24 or intends to opt out of the registration voluntarily made under 25(3).
So, As per above provisions of cancellation of registration, Mr. A shall cancel his registration after filing March 21 returns because Mr. A estimated that his aggregate turnover doesn’t exceeds 20 lakh in financial year 2021-22 and he is no longer liable for registration under sec 22 for the financial year 2021-22.
Where it is clearly written under sec 22(1) that ” If supplier aggregate turnover exceeds 20 lakh rupees in a financial year. Hence, Mr. A will take fresh registration if aggregate turnover exceeds 20 lakh in financial year 2021-22.