Summary: GST registration is a fundamental requirement for businesses under the Goods and Services Tax Act, 2017, to ensure compliance. Suppliers whose annual turnover exceeds ₹20 lakh (or ₹10 lakh for specified special category states) must register for GST. Registration is required State-wise, meaning businesses must register in each state or union territory where they conduct taxable transactions. However, registration exemptions apply to businesses only conducting non-taxable supplies, those engaged exclusively in exempt services, and cases under Section 23. Compulsory registration is mandated for specific situations, such as inter-state supply of goods and services, e-commerce operators, and certain reverse charge scenarios. Additionally, casual and non-resident taxable persons need special consideration regarding registration. Government adjustments to threshold limits and exemptions illustrate the GST system’s flexibility, aimed at accommodating various business circumstances while ensuring effective tax collection and credit distribution across states. Understanding these provisions helps businesses navigate compliance and benefit from GST’s input tax credit system.
Under any taxation law, registration is the most fundamental requirement for the identification of persons liable to pay tax thereby ensuring tax compliance in the economy. Under the indirect tax regime, without registration, a person can neither collect tax from his customers nor claim any credit of tax paid by him.
Under GST law, a supplier is required to obtain State-wise registration. There is no concept of a centralized registration under GST like the erstwhile service tax regime. A supplier has to obtain registration in every State/UT from where he makes a taxable supply provided his aggregate turnover exceeds a specified threshold limit. Such a supplier is not required to obtain registration in a State/UT from where he makes only a non-taxable supply.
Since registration in GST is PAN based, once a supplier is liable to register in any one State, he has to obtain registration in each of the States/UTs in which he makes taxable supply under the same PAN. Further, he is normally required to obtain single registration in a State/UT. However, where he has multiple places of business in a State/UT, he has an option either to get a single registration for said State/UT [wherein he can declare one place as principal place of business (PPoB) and the other places/branches as additional place(s) of business (APoB)] or to get separate registrations for each place of business in such State/UT.
Following sections of Chapter VI – Registration of the CGST Act shall be discussed in this chapter to understand the registration provisions:
| Section 22 | Persons liable for registration |
| Section 23 | Persons not liable for registration |
| Section 24 | Compulsory registration in certain cases |
| Section 25 | Procedure for registration. |
| Section 26 | Deemed registration |
| Section 27 | Special provisions relating to casual taxable person and non-resident taxable person |
| Section 28 | Amendment of registration |
| Section 29 | Cancellation or suspension of registration |
Section 22 – Persons liable for registration
General Threshold
Every supplier whose aggregate turnover in a financial year exceeds ₹20 lakh is liable to be registered under GST in the State/Union Territory from where they make the taxable supply of goods and/or services.
Special Category States
However, the limit of ₹20 lakh is reduced to ₹10 lakh if the person is carrying out business in Special Category States. According to Article 279A(4)(g) of the Constitution, there are 11 Special Category States, namely:
- Arunachal Pradesh
- Assam
- Jammu and Kashmir
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Sikkim
- Tripura
- Himachal Pradesh
- Uttarakhand
For GST registration purposes, as per the explanation (iii) to section 22, only the following are considered Special Category States with a threshold limit of ₹10 lakh:
- Mizoram
- Tripura
- Manipur
- Nagaland
Government Empowerment
The government is empowered to enhance the threshold limit of ₹20 lakh up to ₹40 lakh for a supplier engaged exclusively in the supply of goods, at the request of a State and on the recommendations of the GST Council. This shall be subject to such conditions. And now as of date Government of India based on the recommendation of the GST Council has increased the above-mentioned limit.
Section 24 – Compulsory Registration in Certain Cases
As we have seen, a supplier is liable to be registered under GST in the State/Union territory from where he makes the taxable supply of goods and/or services only if his aggregate turnover in a financial year exceeds the applicable threshold limit. However, there are certain cases where a supplier must obtain registration irrespective of the quantum of his aggregate turnover. These are the cases where a supplier is compulsorily required to obtain registration even though his aggregate turnover does not exceed the applicable threshold limit.
However, certain exemptions from registration have also been provided under section 23. These exceptions have been incorporated briefly at relevant places to provide a holistic picture. The exceptions are explained in detail in the next heading “Persons Not Liable for Registration.”
The categories of persons requiring compulsory registration under GST are enlisted below with the relevant exceptions:
1. Persons Making Any Inter-State Taxable Supply:
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- Threshold limit of ₹20 lakh (₹10 lakh in the case of Special Category States of Mizoram, Tripura, Manipur, and Nagaland) is available in the case of inter-state supply of taxable services and of notified handicraft goods and notified handmade goods.
2. Casual Taxable Persons (CTP) Making Taxable Supply:
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- Threshold limit of ₹20 lakh (₹10 lakh in the case of Special Category States of Mizoram, Tripura, Manipur, and Nagaland) is available in the case of CTP who is making inter-state taxable supplies of notified handicraft goods and notified handmade goods and is availing the benefit of exemption from registration as mentioned in point 1 above.
3. Persons Who Are Required to Pay Tax Under Reverse Charge on Inward Supplies Received:
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- However, persons engaged exclusively in making outward supplies, tax on which is liable to be paid on a reverse charge basis are exempt from registration.
Non-Resident Taxable Persons (NRTP) Making Taxable Supply.
1. E-commerce:
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- Every ECO (Electronic Commerce Operator) who is required to collect tax at source under section 52.
- Persons who supply goods and/or services, other than supplies specified under section 9(5), through such ECO who is required to collect tax at source under section 52. Threshold limit of ₹20 lakh (₹10 lakh in the case of Special Category States of Mizora, Tripura, Manipur, and Nagaland) is available in the case of suppliers supplying services through ECO.
2. Persons Who Are Required to Deduct Tax Under Section 51, whether or not separately registered under this Act.
3. Persons Who Make Taxable Supply of Goods or Services or Both on Behalf of Other Taxable Persons, whether as an agent or otherwise.
4. Input Service Distributors, whether or not separately registered under this Act.
5. Every Person Supplying Online Information and Database Access or Retrieval (OIDAR) Services from a Place Outside India to a Person in India, Other than a Registered Person.
6. Persons Who Are Required to Pay Tax Under Section 9(5).
7. Such Other Person or Class of Persons as May Be Notified by the Government on the Recommendations of the Council.
Understanding the provisions for GST registration is crucial for businesses to ensure compliance with the law and to take advantage of the benefits provided by the GST system. The GST registration process mandates that suppliers with an aggregate turnover exceeding ₹20 lakh (₹10 lakh for specified special category states) must register for GST. Additionally, certain scenarios require compulsory registration, irrespective of turnover, such as inter-state supplies, e-commerce operators, and specific categories of businesses.
Exemptions and special conditions, such as those provided for casual taxable persons, non-resident taxable persons, and businesses engaged in exclusively supplying exempt services, add to the complexity and need for careful consideration. The government’s authority to adjust threshold limits and the provision for input tax credit transfer highlights the dynamic nature of GST regulations.
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which section is used in GST DRC -03 in case of error of return gstr3b generation and what was the process ?
In case of an error in GSTR-3B generation, use:
– Section 73 of the CGST Act (non-payment/underpayment of tax without intent of fraud/willful misrepresentation)
DRC-03 Filing Process:
1. Identify the error/discrepancy in GSTR-3B.
2. Calculate additional tax, interest, or penalty.
3. Access DRC-03 form on GST portal (Dashboard> Services> User Services> My Applications>New Application)
4. Select cause of payment: “Liability mismatch – GSTR-1 to GSTR-3B”.
5. Enter required details:
– Section number
– Financial year
– Tax period
– Amount to be paid
6. Make payment (electronic/cash).
7. Submit DRC-03 form on GST portal.