1. The journey of GST commenced from 1st July 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.

2. A taxable person is required to take registration under GST in the following cases :-

(a) Crossing of Threshold limit of aggregate turnover

(b) Compulsory Registration

(c ) Voluntary Registration

3. The article covers provisions related to point (a) above ie crossing of threshold limit of aggregate turnover. Point (b) & (c) that is Compulsory Registration & Voluntary Registration will be covered in the next article

Threshold limit for registration under GST

4. As per section 22(1) of CGST 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.

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]

However, CGST (Amendment) Act, 2018 second proviso to section 22(1) has been inserted to provide that The Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be notified.

Accordingly, threshold limit remains rupees twenty lakhs for the States of Jammu and Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand w.e.f. 1-Feb- 2019 and rupees ten lakhs for the States of Manipur, Mizoram, Nagaland and Tripura.

The expression “aggregate turnover” has been defined under section 2(6) of the CGST Act. Aggregate Turnover is PAN based and not State/ Union Territory based

In the table below , Calculation of aggregate turnover and requirement of registration has been illustrated with the help of examples :-

Illustration 1
State Turnover in Rupees
Registration Requirement
Maharashtra 15,00,000 Since the turnover of the entire entity exceeds ` 20,00,000, (15,00,000+7,00,000) registration will be required in both the States.
Tamil Nadu 7,00,000
Illustration 2
State Turnover Registration Requirement
Maharashtra 9,00,000 Since the entity has presence in special category State, the threshold limit is only Rs.10,00,000. Since the entity crosses such limit, registration will be required in both the States*
Manipur, Tripura  

2,00,000

* Please note that the proviso to section 22(1) appearing in CGST Act also appears in SGST Act(s). As a result, for a taxable person in a non-Special Category State, who has a branch in Special Category State, the threshold becomes Rs. 10 lacs and not Rs. 20 lacs.

5. For calculating the threshold limit, the turnover shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals. Explanation (i) to section 22 of CGST Act

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.

Further, the supply of goods by a registered job worker, after completion of job work, shall be treated as the supply of goods by the “principal” referred to in section 143 (i.e. Job work procedure) of this Act. The value of such goods shall not be included in the aggregate turnover of the registered job worker. Thus , in case of job work, value of material will be included in aggregate turnover of principal and not of job worker

6. The Government , on recommendation of GST Council can grant exemption to specific category of person by issuing notification .Following category of person are not required to take registration :-

(a) Persons engaged in rendering taxable services where GST is payable under reverse charges by the recipient , are not required to take registration – (Notification No. 5/2017–Central Tax, dated 19.06.2017).

(b) A Job-worker with turnover less than 20/10 Lakhs is exempt from registration , even if he engaged in making inter-State supply of goods. This exemption is not available to jewellery, goldsmiths’ and silversmiths’ wares and other articles manufactured on job work basis – Notification No. 7/2017– Integrated Tax, dated 14.09.2017 as amended vide Notification No. 2/2019-Integrated Tax, dated 29-Jan-2019, w.e.f. 1-Feb-2019.

(c ) Persons effecting inter-State supplies of taxable services – where the aggregate value of supplies on PAN-India basis does not exceed Rs. 20 Lakhs in a year (Rs. 10 Lakhs for special category States- Manipur, Mizoram, Nagaland and Tripura) (w.e.f. 13.10.2017) – Notification No. 10/2017– Integrated Tax, dated 13.10.2017 as amended vide Notification No. 3/2019-Integrated Tax, dated 29-Jan- 2019, w.e.f. 1-Feb-2019.

(d) Categories of persons effecting inter-State taxable supplies of handicraft goods – where the aggregate value of supplies on PAN-India basis does not exceed Rs. 20 Lakhs in a year (Rs. 10 Lakhs for special category States- Manipur, Mizoram, Nagaland and Tripura) – (w.e.f. 22.10.2018) – Notification No. 3/2018–Integrated Tax dated 22.10.2018. This notification has superseded Notification No. 8/ 2017-Integrated Tax, dated 14.09.2017.

(e) Categories of casual taxable persons making taxable supplies of handicraft goods- where the aggregate value of supplies on PAN-India basis does not exceed Rs. 20 Lakhs in a year (Rs. 10 Lakhs for special category States-Manipur, Mizoram, Nagaland and Tripura) – (w.e.f. 23.10.2018) – Notification No. 56/2018-Central Tax, dated 23.10.2018. This notification has superseded Notification No. 32/ 2017-Central Tax, dated 15.09.2017.

(f) Persons providing services through an e-commerce who is required to collect tax at source, provided their aggregate turnover does not exceed Rs. 20 lakh (Rs. 10 lakh in special category States- Manipur, Mizoram, Nagaland and Tripura) (w.e.f. 15.11.2017). – Notification No. 65/2017–Central Tax, dated 15.11.2017 as amended vide Notification No. 6/2019-Central Tax, dated 29-Jan- 2019, w.e.f. 1-Feb-2019. The relaxation is not applicable to supplier of goods.

7. Note: W.e.f. 01.04.2019 – the basic limit beyond which obtaining registration becomes mandatory is increased from Rs. 20 lakhs to Rs. 40 lakhs for certain categories of persons vide notification No. 10/2019-Central Tax, dated 07.03.2019

As per the said notification, any person, who is engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed forty lakh rupees, except, –

a. persons required to take compulsory registration under section 24 of the said Act;

b. persons engaged in making supplies of the following goods,

S. No. Tariff item, sub heading, heading or chapter Description
1. 2105 00 000 Ice Cream and other edible ice, whether or not containing cocoa
2. 2106 90 20 Pan Masala
3. 24 All goods i.e. Tobacoo and manufactured tobacoo substitutes

c. persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand; and

d. persons exercising option under the provisions of sub-section (3) of section 25 [voluntary registration], or such registered persons who intend to continue with their registration under the said Act.

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

Note: The new exemption from registration (w.e.f. 01.04.2019) up till ₹ 40 lakhs is applicable only for those taxable persons, who are engaged in exclusive supply of goods. Therefore, in case a person in supplying goods but also earns a nominal amount of service income (whether taxable or not) such as commission income, or interest income say from bank (which is exempt), then he shall be liable to take registration above ₹ 20 lakhs and not ₹ 40 lakhs.

Conclusion:

In the nutshell we can conclude that

  • Exclusive intra state supply of goods the threshold limit of registration is Rs. 40 lakhs
  • Exclusive supply of services on PAN-India based the threshold limit of registration is Rs. 20 lakhs
  • Exclusive supply of handicraft goods either normal taxpayer or casual tax payer on PAN-India based the threshold limit of registration is Rs. 20 lakhs
  • Person providing services through an e-commerce, the threshold limit of registration is Rs. 20 lakhs
  • Job worker providing services on PAN-India bases the threshold limit is Rs. 20 lakhs.

(Republished with Amendments. Amendments been made by CA Anita Bhadra)

Author Bio

Qualification: CMA
Company: MARK Advisory & Consultancy
Location: New Delhi, IN
Member Since: 06 Jun 2019 | Total Posts: 1

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25 Comments

  1. Uday Patel says:

    Hi
    I am registered for GST as my rental income was over 20 Lakhs earlier, but now has dropped below 8 Lakhs, do I still need to charge GST and maintain my GST registration.
    I have been paying GST for the last 6 months, even though my income is below 6 Lakhs now, can I claim GST back ?
    Thanks

  2. Pradeep M says:

    Hi
    I am registered for GST as my rental income was over 20 Lakhs earlier, but now has dropped below 6 Lakhs, do I still need to charge GST and maintain my GST registration.
    I have been paying GST for the last 4 months, even though my income is below 6 Lakhs now, can I claim GST back ?
    Thanks

  3. Ramesh chandra says:

    If receipt from rental service or any other taxable service in f.y 2019-20 is 19 lac and internet from bank fd is 60000 and saving bank interest is 50000 and ppf interest is also Rs 50000 … Will this person liable to take gst registration

  4. Reetu Singh says:

    Sir I am eCommerce seller and registered in GST but we have a doubt,we make inter-state supplies online,but our turnover is less than 15 lakh. And also pay GST (GSTR 3B) every month on our sales, is it right we should pay GST tax or not.

  5. Jayaraman S says:

    We are starting a Nidhi company under Nidhi rule 2014..We will be doing business between members only.We collect deposit and give loan to members.
    The incomes are from loan interst,, loan processing fee/reminder intimation expenses and Locker .rent Except loan interest (major income) other miscellaneous incomes will be less than 20 lakhs for few years.
    Whether we have to register for GST.
    If so whether we have to submit any annual or quarterly return.I was told not to register till you reach threshold limit 230 lakhs
    Our unit in Tamilnadu
    Expecting reply ang thanking you

  6. Arun Karve says:

    I am Software consultant staying in Kalyan (Maharashtra).
    I am working for a Company in Rajasthan (Remote Service) on software implementation project for Company in Dubai.
    My total consultancy charges during 20-21 would be around Rs. 12 Lakhs.
    Do I need to register under GST?

    1. Mohit Arora says:

      Since export has been deemed to be an inter-state supply, export of goods would mandatorily be required to take registration under GST, but in case of export of service the threshold limit of Rs. 20 Lakh of turnover for GST registration is allowed.

  7. Harish Chand Sehgal says:

    i have only rental income which is below 30 lacs, this is treated as services, so shall i pay service tax, please clarify, thanx

    1. AMMAR ABUSAD KHAN says:

      rental income from residential dwelling is exempt from GST thus you need to mentioned the rental property in order to get the correct answer.

  8. SANJAY KOTWANI says:

    श्रीमान जी रेस्टोरेंट (cooked Food) कार्य में नया नंबर लेने की सेल्स लिमिट क्या है।

  9. harshita gupta says:

    it means if aggregate turnover of goods is 25 lacs and SB a/c intt is 500 then registration is required??? Plz confirm it..

  10. Sunil D says:

    In My view, the Explanation to Third Proviso of Sec. 22 (1) tries to give exclusion to the meaning of the WORDS “EXCLUSIVELY ENGAGED IN SUPPLY OF GOODS” and not for EXCLUDING from the calculation for the AGGREGATE TURNOVER. Kindly confirm.

  11. Vishnu Pachisia says:

    I am having retainer ship commission amount Rs. 20 Lac + in present financial year i.e. Apr 2020 to Mar 2021. Should I take GST Registration. Pl. suggest. with if taking registration which return I have to submit. How I have to raise invoice. The tax claimed if through inv. should I get credit of that. etc. Regards. If possible please send on my mail id written over here. Regards Vishnu

  12. Vinay Khanna says:

    I have a sole proprietorship ompany dealing with Grass Mowers. Total turn over over is
    a) inwards = 3 Lakhs
    b) Outwards = 5 Lakhs
    Iam registered and have a TIN
    Can i withdraw from GST reporting and pay on turn over basis

    1. Mohit says:

      Since export has been deemed to be an inter-state supply, all exporters would mandatorily be required to take registration under GST.
      If you need any further consultancy please call me at 8285370199

      1. mohitarora32 says:

        Since export has been deemed to be an inter-state supply, export of goods would mandatorily be required to take registration under GST, but in case of export of service the threshold limit of Rs. 20 Lakh of turnover for GST registration is allowed.

        1. chandrasekaran says:

          if export of service is a deemed Inter state supply can a registration be taken as a ” casual taxable person” and apply for a regn only 90 days in the state from which the export of service is done’

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