Registration under GST – Complete provisions with Analysis

The provision of GST registration has been prescribed under chapter VI of the CGST Act, 2017 and Section 22 to Section 30 of the CGST Act, deals with the registration by the every supplier of goods and services.

1. Person liable for registration under GST

Section 22 of the CGST Act, specified that “ 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 twenty lakh rupees”

But the 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.

Every person who is holding a license or registration under the earlier laws shall be liable to be registered under this Act, with effect from 01.07.2017.

When a business carried on by a taxable person registered under this Act is transferred on account of succession or otherwise, to another person as a going concern, the transferee or the successor as the case may be liable to be registered with effect from the date of such transfer or succession.

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.

For the purposes of this section there are certain points has been clarified as under,––

(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.

Thus, from the above analysis there are two terms are very important needs to be defined before proceeding to further analysis of the topic and the two words are namely “supplier” and “aggregate turnover”

Section 2 (105) of the CGST Act, defines “Supplier” in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services;

Section 2(6) of the CGST Act, defines “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which 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 Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

2. Persons not liable for GST registration

Section 23 of the CGST Act, specified that 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) an agriculturist, to the extent of supply of produce out of cultivation of land.

The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration.

3. Compulsory GST registration in certain cases

Section 24 of the CGST Act, specified that the following categories of persons compulsorily shall be required to take registration under GST:

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.

4. Manner of registration under GST

Section 25 of the CGST Act, specified the manner of registration by the various taxable person as under:

1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is also liable within 30 days from the date on which he becomes liable to registration.

In case of a casual taxable person or a non-resident taxable person shall apply for registration at least 5 days prior to the commencement of business.

In case of any person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

2) Any person who is seeking registration under GST shall be granted a single registration in a State or Union territory.

In case a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical.

3) A person, though not liable to be registered under section 22 or section 24 of the CGST Act, may get himself voluntarily and comply the all provisions of GST Act as applicable to a registered person.

4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of the GST Act.

5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of the GST Act.

6) Every person shall have a Permanent Account Number issued under the Income-tax Act, 1961 in order to be eligible for grant of registration.

7) Where an eligible person fails to obtain registration, the proper officer may take suitable action as per law.

8) Any specialized agency of the UNO or any other organisation as notified by the commissioner shall be granted Unique Identity Number for all purposes including refund of taxes.

9) The registration or Unique Identity Number shall be issued as per procedure or shall be deemed to have been granted within period of 7 days.

5. Deemed Registration under GST

Section 26 of the CGST Act, specified that once the grant of registration or issuance of the Unique Identity Number to a person or applicant under the GST Act, and shall to be deemed to be granted or rejected within 30 days either the case may be.

6. GST Registration for casual taxable or non-resident taxable person

Section 27 of the CGST Act, specified that the certificate of registration issued to a casual taxable person or non-resident taxable person shall be valid for 90 days from the effective date of registration. The registration certificate can be extended further period of 90 days by the proper officer on sufficient reasons shown by the taxable person. The casual or non-resident taxable persons have to make an advance deposit of tax liability and make additional deposit of tax for extension period if so.

7. Amendment of GST Registration

Section 28 of the CGST Act, specified the provision of amendment of GST registration , every registered person or a person to whom a Unique Identity Number has been issued shall inform the proper officer of any changes in the information of registration within 15 days of the said changes.

The proper office may approve or reject the amendment in the registration of such particulars but the proper officer shall not reject the application for registration without giving the person an opportunity of being heard.

8. Cancellation of GST registration

Section 29 of the CGST Act, provides the procedure for cancellation of GST registration either by the proper officer or an application filed by the registered person or by his legal heirs in the following circumstances where,-

(a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or

(b) there is any change in the constitution of the business; or

(c) the taxable person, other than the person registered as voluntarily , is no longer liable to be registered under section 22 or section 24.

(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––

(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) a person paying tax under section 10 ( composition levy scheme ) has not furnished returns for three consecutive tax periods; or

(c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

(3) The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

(4) The cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration under this Act.

(5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed:

Provided that in case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher.

(6) The amount payable under sub-section (5) shall be calculated in such manner as may be prescribed.

9. Revocation of cancellation of GST registration

Section 30 of the CGST Act, specified the provision of revocation of cancellation of registration as per the following conditions:

1. Any registered person whose registration is cancelled by the proper officer, he can apply to such officer for revocation of cancellation of the registration within 30 days from the date of service of the cancellation order.

2. The proper officer either revokes cancellation of the registration or rejects the application, but before rejection of application the proper officer should be given an opportunity of being heard by the applicant.

3. The revocation of cancellation of registration under SGST Act, and UTGST Act, as the case may be shall be deemed to be a revocation of cancellation of registration under section 30 of the CGST Act.

Conclusion: In a nutshell, in the present day economic scenario, it is desirable to all persons dealing with taxable goods or services or both to take registration under GST to avoid penalty/ litigation and make their product and services more competitive in the market. With due registration only one can enjoy the benefit of cascading effects of taxes and meet the requirement of Customers. Certainly a registered person can only able to enhance his scope of business with due compliance under GST.