GST (Goods and Services Tax) is an indirect tax levied on the supply of goods and services. It is a tax imposed in stages and was introduced to replace multiple indirect taxes like VAT, excise duty, service tax etc. GST introduced a consolidated tax regime that has helped simplify indirect taxation and made it more destination-oriented.

Basics of registration

GST Registration is a process with which a taxpayer (qualifying a certain applicability condition) gets registered under GST. Once a business is successfully registered, a unique registration number gets allotted to them, which is known as the Goods and Services Tax Identification Number (GSTIN). This is a 15-digit number assigned by the central government upon successful GST registration.

Applicability of GST

Whether a business is liable to pay GST depends on the turnover limit, calculated on the business’s aggregate turnover. By law, aggregate turnover is the aggregate value of all taxable supplies, excluding the value of inward supplies on which tax is payable by a person on a reverse charge basis, exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same PAN, to be computed on an all-India basis. It excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

Earlier, the turnover limit was RS 20 Lakhs. Meaning, any business which incurred an aggregate turnover of more than INR 20 lakhs was liable to pay GST. However, in the 32^nd Council Meet, the GST Council decided to double the GST threshold exemption to Rs 40 lakhs for supply of goods.

Northern states and hilly states of India, flagged as special category states, previously had this limit as INR 10 lakhs. This limit has now been amended to INR 20 lakhs for supply of gods.

Compulsory GST Registration

Having said that, there are certain special cases where GST registration is compulsory, no matter the aggregate turnover amount. These cases have been elaborated under Section 24 of CGST Act 2017.

Persons making any inter-State taxable supply

Any persons making any inter-state taxable supply of goods has to mandatorily registere under GST irrespective of the aggregate turnover limit.

Casual taxable persons making taxable supply

A casual taxable person (a person without a fixed place of business, who occasionally engages in taxable value additions in a taxable terriroty) is required to register under GST without considering their turnover limit. However, an exemption has been given to a casual taxable person engaged in the supply of handicraft goods. Such a person need not register under GST if their turnover limit does not exceed Rs 20 lakhs.

Persons who are required to pay tax under reverse charge

A person who is required to pay tax under reverse charge is deemed liable to register under GST since he will need to register anyway to submit tax under reverse charge.

But it should be noted that Section 24 overrides Section 22 when any person who is exclusively in the business under Section 23 (any person engaged exclusively in the business of supplying goods or services not liable under tax or wholly exempt from taxation). Such a person is not required to get himself registered.

Moreover, a Person engaged exclusively in the manufacture of exempted products receiving a GTA service which is under reverse charge needs to register under GST as mandated by CGST Act. This is necessary so the person can discharge his duty liability under reverse charge.

In cases of mandatory RCM, the service recipient is mandatorily required to complete GST registration, pay tax, and abide by all the provisions of GST law.

Electronic Commerce Operator

An Electronic Commerce Operator who is required to collect tax at source under Section 52 has to compulsorily register under GST. But the operative condition is that such a person is required to collect tax at source as under Section 52 of CGST Act.

However, persons who are suppliers of service and supplying services through an ecommerce operator are not required to register under GST if their aggregate turnover is less than Rs 20 lakhs per annum. This relaxation was introduced by Notification No. 65/2017-CT dated 15-11-2017. However, this relaxation is not applicable for the supplier of goods.

Non-resident taxable persons making taxable supply

A non-resident person, making taxable supply in a taxable territory he has to take compulsory GST registration.

As per section 2(77) of CGST Act 2017, ”Non-resident taxable person” is 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 has no fixed place of business or residence in India.

Persons who are required to deduct tax under section 51, whether or not separately registered under this Act

A person who is required to deduct tax at source and falls under the authorities as notified a department or establishment of the Central Government, State Government, or local authority; or other governmental agencies has to get himself registered under GST. Additionally, any such persons or category of persons as may be notified by the Government are required to get registered under GST compulsorily.

Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise

A person who is acting as an agent or otherwise and also making taxable supply needs to register under GST as per Section 24 of CGST Act 2017.

As per section 2(5) of CGST Act 2017 “agent” means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer, or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another.

Input Service Distributor, whether or not separately registered under this Act

An input service distributor has to get compulsory registration under GST.

As per 2(61) of CGST Act 2017 “Input Service Distributor” means an officer of the supplier of goods or services or both which receives tax invoices issued under Section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax, paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office.

Every person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person

If a person is supplying online information and database access or retrieval from outside India, then that person has to get registered under GST, irrespective of the turnover in the previous year. For example, if Netflix provides such infotainment services outside India, then it has to get itself registered and pay taxes under normal charge.

Such other person or class of persons as may be notified by the Government on the recommendations of the Council.

Documents required for GST registration

GST Registration can become a simple process if you have the following documents handy:

1. PAN card
2. Aadhaar card (which needs to be authenticated)
3. Proof of business registration (Incorporation certificate)
4. Identity and Address proof of Promoters / Directors with Photographs
5. Address proof of the place of business
6. Bank Account statement / Cancelled cheque
7. Digital Signature
8. Letter of Authorization / Board Resolution for Authorized Signatory

If you need assistance with the GST registration process are are unsure whether you pass the GST applicability, reach out to us.

Besides these applicability rules, there are also other exemptions and special provisions under GST. We will explore those in Part 2 of this blog, about special cases for GST registration.