Registration is the process through which a supplier enters into the GST ecosystem. It is the most fundamental requirement of identification of the business for tax purposes and for monitoring compliance requirements. No charges are levied to complete the GST registration process and can be done online through the GST portal. you can apply for GST without having a shop or an office. You can show your home address as your place of business if you are running a sole proprietorship or a partnership firm. The GST framework eliminates the complications of dealing with multiple taxes by replacing them with a single unified tax. GST reduces the overall tax burden on consumers by eliminating cascading taxes, leading to potentially lower prices for goods and services.
The GST law provides a minimum threshold in terms of aggregate turnover on pan India basis below which a supplier is not required to obtain registration. There are different threshold limits for suppliers exclusively supplying goods and for suppliers exclusively providing services or supplying both goods and services. Therefore, the GST law has provisions to ensure that the suppliers crossing the specified turnover threshold obtain registration and pay GST to the exchequer.
The registration in GST is PAN based and State specific. Supplier has to register in each of such State or Union territory from where he effects supply. Area up to 12 nautical miles in the sea is considered part of the nearest coastal State where the nearest point of appropriate base line is located. Area beyond 12 nautical miles and up to 200 nautical miles, which is not covered under any Union Territory is considered as a separate Union territory for the GST law. A person registered in one State is considered ‘unregistered person’ outside the State.
If a person has unit in SEZ or is a SEZ developer and also unit in domestic tariff Area (i.e. outside the SEZ) in the same State, then he has to take separate registration for his SEZ unit/ SEZ developer and DTA unit as a separate place of business of him.
If a supplier also wants to distribute credit to his same-PAN entities, then he will take separate registration as ‘input service distributor’ (ISD) in addition to his registration as ‘supplier’.
In GST registration, the supplier is allotted a 15-digit GST identification number called Goods and Services Tax Identification Number “(GSTIN)” and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTN common portal. The first 2 digits of the GSTIN is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code, and the last digit is checking code. Registration under GST is not tax specific which means that there is a single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses.
A given PAN based legal entity would have one GSTIN per State, that means a business entity having its branches in multiple States will have to take separate State-wise registration for the branches in different States. But a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business.
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PERSON REQUIRED TO TAKE GST REGISTRATION
GST registration can be obtained voluntarily by any person or entity who is engaged in supply of goods or services or both irrespective of turnover. However, GST registration becomes mandatory if a person or entity supply goods or services or both beyond a certain turnover. Chapter VI of CGST Act, 2017 contains legal provisions related to
Registration. The threshold limit for availing exemption from registration is as follows –
Service Providers: Any person or entity engaged in supply of services having aggregate turnover of more than Rs. 20 lakhs in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers is Rs. 10 lakhs.
Goods Suppliers: Any person who is engaged in the exclusive supply of goods, whose aggregate turnover crosses Rs. 40 lakhs in a year is required to obtain GST registration.
Categories of persons required to be registered under the GST Act:-
REGISTRATION UNDER GST
| 1 | Any business involved in the supply of goods whose turnover in a financial year exceeds Rs.40 lakhs for Normal Category states (Rs.20 lakhs for Special Category states) |
| 2 | Registered under an earlier law (i.e., Excise, VAT, Service Tax etc.) |
| 3 | Registered business transferred to someone/demerged, the transferee shall take registration with effect from the date of transfer. |
| 4 | A person making inter-state supplies |
| 5 | Casual taxable person (CTP) |
| 6 | Non-Resident taxable person (NRTP) |
| 7 | Agents of a supplier |
| 8 | Person who supplies via e-commerce aggregator |
| 9 | 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 taxable person |
| 10 | e-Commerce operator or aggregator |
| 11 | Input service distributor |
| 12 | Those paying tax under the reverse charge mechanism (RCM) |
| 13 | Any business involved in the supply of services whose turnover in a
financial year exceeds Rs.20 lakhs for Normal Category states (Rs.10 lakhs for Special Category states) |
Aggregate Turnover: Aggregate turnover is calculated based on the PAN India Basis. Hence, if one person has multiple places of business in one or more states, the turnover of each place of business must be summed up to arrive at the aggregate turnover on all India basis. Aggregate Turnover has been defined in Section 2(6) of the CGST Act, 2017. If the aggregate turnover crosses the threshold limit, then registration under GST has to be taken. As per Section 22 of CGST Act, 2017 the aggregate turnover includes all supplies made by the taxable person on his own or on behalf of his principles.
The following elements are included in the aggregate turnover (Section 2(6) of CGST Act, 2017) read with (Section 22 of CGST Act, 2017)
Aggregate Turnover
| 1 | All Taxable supplies |
| 2 | Non-taxable supply |
| 3 | Exempt Supply |
| 4 | Export of goods or services |
| 5 | Inter-State supplies to persons having same PAN |
Taxable Supplies as per Section 2(108) of the CGST Act, 2017 means a supply of goods or services or both which is leviable to tax under this Act. Activities/transactions undertaken shall be considered as taxable supplies only when such activities/transactions qualify as a “supply” in terms of Section 7 of CGST Act, 2017 and such supplies are chargeable to tax in terms of Section 9 of CGST Act, 2017. (Section 2(108), read with Section 7 & 9 of CGST Act, 2017)
Exempt supply as per Section 2(47) of the CGST Act, 2017 means supply of any goods or services or both which attracts ‘nil’ rate of tax or which may be wholly exempt from tax under Section 11, or under Section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply. (Section 2(47), & 11 of CGST Act, 2017) and (Section 6 of IGST Act, 2017)
Non-taxable supply as defined in Section 2(78) of the CGST Act, 2017 means a supply of goods or services or both which is not leviable to tax under the CGST Act, 2017 or under the Integrated Goods and Services Tax Act, i.e., supplies which are not leviable to tax are known as non-taxable supplies. Supplies which are excluded from the charging section i.e. Section 9 of CGST Act, 2017 are to be considered as non-taxable supplies as they are not leviable to tax under this Act. (Section 2(78) & 9 of CGST Act, 2017)
Export of goods or services or both is treated as a zero-rated supply under GST. Export of goods means taking goods out of India to a place outside India. Export of services means the supply of any service when-
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8 of Integrated Goods & Services Tax Act (IGST), 2017.
Inter-State supplies to persons having same PAN. This covers the supply of goods or supply of services or both to persons located in other States/Union Territories but are under the same legal entity. These are taxable supplies under GST and are liable to tax even if such supplies are made without consideration.
PERSONS NOT LIABLE FOR GST REGISTRATION under Section 23 of CGST Act, 2017
As per Section 23 of the CGST Act, 2017, persons who are engaged in supplying goods or services or both that are not liable to tax or wholly exempted from tax, are not required to obtain GST Registration. The following kind of persons are exempted from GST Registration (Section 23 of CGST Act, 2017): –
(i) Small businesses having all India aggregate turnover below Rupees 40 Lakhs, in case of supply of goods (Rupees 20 lakhs if business is in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand) and Rupees 20 lakhs, in case of supply of services or in case of mixed supplies (Rupees 10 lakh if business is in States of Manipur, Mizoram, Nagaland and Tripura) need not register. The small businesses, having turnover below the threshold limit can, however, voluntarily opt to register. (Section 22 of the CGST Act, 2017)
(ii) Persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land are not liable to register under GST. (Section 23 of the CGST Act, 2017)
(iii) In case the supplies being made by a supplier are taxable under reverse charge Mechanism (RCM) , there is no requirement for such a supplier to register in light of Notification No. 5/2017-Central Tax dated 19.06.2017.
(iv) Supplier of handicraft goods will not be required to register, if the turnover of the handicraft supplier is less than specified threshold limit, making inter-state supply. They will also not be required to obtain registration as a casual taxable person in other States (outside the state) for making supply of the handicraft goods.
(v) Small suppliers of services, including job workers (except in relation to jewellery, goldsmiths’ and silversmiths’ wares) whose aggregate turnover is less than Rupees 20/10 lakhs limit are exempted from registration, even if they supply services outside the State.
(vi) Supplier of services making inter-state supplies, whose aggregate turnover is less than Rupees 20 lakhs (10 lakh limit in case of specified states) are exempted from registration. (Notification No. 10/2017-Integrated Tax dated 13.10.2017, as amended by Notification No. 3/2019-Integrated Tax dated 29.01.2019)
(vii) Furthermore, persons supplying services through e-commerce operators are not required to register under GST if their aggregate turnover is less than Rs. 20 lakhs per annum (Rs. 10 lakhs in case of specified states) subject to the conditions mentioned in Notification No. 34/2023- Central Tax dated 31.07.2023.
Compulsory Registration under GST – Section 24 of CGST Act, 2017
The GST law enlists certain categories of suppliers who are required to get compulsory registration irrespective of their turnover that is to say, the specified threshold exemption limit is not available to them. Section 24 of CGST Act, 2017 makes it mandatory for certain type of persons to obtain registration irrespective of their turnover.
(a) Supplier of inter-state supply: ‘Inter-state supply’ means the location of the supplier and the place of supply are in different States or different territories. Persons engaged in such supplies shall be covered under compulsory registration criteria and they have to take GST number before making inter-state supplies.
Exceptions – Any person making the following inter-state supplies shall not be covered under compulsory registration eligibility criteria:
-
- Inter-state supply of services where the aggregate value of such supplies is not exceeding the exemption limit.
- Inter-state supply of hand-crafted goods, the aggregate value of such supplies does not exceed the exemption limit
- Job-workers having a turnover of less than the exemption limit. This clause shall not be applicable to jewellery, goldsmiths, and silversmith’s wares, and other articles manufactured on a job work basis.
(b) Casual Taxable Person (CTP): ‘Casual taxable person’ is defined under Section 2(20) of CGST Act, 2017 and it includes a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. GST registration is compulsory under Section 24 of the CGST Act for a Casual Taxable Person (CTP) before supplying goods or services in the taxable territory. However, CTP is exempted from this requirement if he is engaged in the supply of handicraft goods and the aggregate turnover of such supplies does not cross the GST threshold. (Section 2(20) read with section 24 of CGST Act, 2017)
(c) Taxpayer under Reverse Charge Mechanism: Under the reverse charge mechanism (RCM), the recipient of goods or services is liable to pay tax and all provisions of GST law shall be applicable to him. It is compulsory to get registered under GST law for a person, who is liable to pay tax under the reverse charge mechanism (RCM).
(d) Non-resident taxable person (NRTP): “Non-resident taxable person” is defined under Section 2(77) of the CGST Act 2017. “Non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. (Section 2(77) of CGST Act, 2017)
Registration under the GST is compulsory for the Non-resident taxable person if he is engaged in any kind of taxable supply in the taxable territory. Every Non-Resident Taxable Person (NRTP), whether an individual or company, making taxable supplies in India has to register under the GST regime irrespective of the frequency and amount of the transaction.
(e) E-Commerce Operator: Electronic Commerce Operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Hence, a person who is providing a platform for others to sell goods or services is considered an e-commerce operator. Main examples of such operators selling goods are Amazon, Flipkart etc. and operators selling services are Uber, Ola, Swiggy etc. Registration under the Goods and Service Tax Act is compulsory for the e-commerce operator if he is engaged in any kind of taxable supply in the taxable territory.
(f) Supplier of OIDAR Services: Online Information and Database Access or Retrieval services (OIDAR) is a category of services provided through the medium of internet and received by the recipient online without having any physical interface with the supplier of such services, for example, downloading of an e-book online for a payment. The IGST Act defines OIDAR to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply impossible to ensure in the absence of information technology. For example, advertisement on the Internet, providing cloud services, online supply of digital content (movies, television shows, music and the like); provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; providing data or information, retrievable or otherwise, to any person in electronic form through a computer network; digital data storage; online gaming, excluding the online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017 (12 of 2017); etc. Registration under the Goods and Service Tax Act, 2017 is compulsory for the supplier of OIDAR Services.
(g) Persons who are required to deduct tax (TDS) under Section 51 of the CGST Act, 2017 whether or not separately registered under this Act; (Section 51 of CGST Act, 2017)
(h) Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(i) Input Service Distributor (ISD), whether or not separately registered under the CGST Act, 2017;
(j) 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; (Section 9(5) read with section 52 of CGST Act, 2017)
(k) 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;
(l) Every person supplying online money gaming from a place outside India to a person in India;
(m) Such other person or class of persons as may be notified by the Government on the recommendations of the Council.
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