GST is now a reality, and it is knocking the doors. This article answers the most important question which is in everybody’s mind that who all are required to obtain registration under GST?
There are uncountable types of business running and starting on a daily basis. And with every such event, one question strikes the mind, “Am I required to obtain GST registration..??” Everybody has doubts, but there are few to answer.
We have tried to answer some of the categories of business. But before that, let us have a look at some of the important features:
- GST talks about supply and not sales, hence transfer of goods like the stock transfer is also liable to GST. And therefore we shall always say “Supplier” or instead of “Dealer” when we learn GST.
- Free supply of goods/services are also covered under GST. In other words, if you were running any scheme like ‘buy one gets one free’, then you are liable to pay GST on free supply as well.
- All existing dealers registered with due authorities will be granted provisional registration automatically. All dealers getting provisional registration will have to apply for GST final registration within the specified time limits.
Let’s now analyze what Draft GST law intends:
Section 22 to Section 30 deals with the matters related to registrations.
Section 22 provides that every supplier of goods or services should register in the State or Union Territory from where he supplies goods or services for the amount of more than 20 lakhs rupees. This means that it is not compulsory to register for the person having turnover of sales less than 20 lakhs rupees. At the same time, such turnover limits has been fixed at 10 lakhs rupees for special category states. And therefore the person shall register in the Special Category States from where he supplies goods or services only if the total value of supplies cross 20 lakhs rupees.
Every person/entity who are registered under an earlier law, shall be required to obtain registration under GST right from the day GST gets implemented. And therefore, for the entities who are registered under any earlier Indirect Tax Act, shall be allotted GST registration after following specified procedure and shall not be required to apply for registration freshly.
A person having multiple business verticals in a State may obtain a separate registration for each business vertical. All you need is to have a valid PAN allotted by Income Tax Authorities. A non-resident taxable person may be granted registration on the basis of any other document other than PAN. But one must not forget to note that every separate registration, whether in same State or different, of the same person/entity or establishment, shall be treated as distinct person for the purpose of GST.
In some of the cases, registration has been made compulsory. For such cases, aforesaid threshold limit of turnover for procuring registration shall not be applicable and therefore in such cases, the person shall have to take registration from the day one of the business. Here is the list of persons/entities who shall be required to obtain registration compulsorily as given in Section 24 & Section 22:
- Successor of business of already registered person, whether on account of succession or takeover or otherwise, as a going concern.
- The transferee entity as a result of amalgamation or de-merger or otherwise of two or more entities.
- A person/entity making any inter-State taxable supplies of goods or services.
- A casual taxable persons.
- A persons who are required to pay tax under reverse charge.
- A non-resident taxable persons.
- A persons who are required to deduct TDS under GST.
- A persons who supply goods and/or services on behalf of other taxable persons whether as an agent or otherwise.
- An Input service distributor.
- A persons who supply goods and/or services through electronic commerce operator and where electronic service provider is not liable to pay tax on behalf of such taxable person.
- Every electronic commerce operator.
- A 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.
Last but not the least, Authorities may specify any person/entity or class of person/entity who shall be required to take registration by notification issued in this regards. At the same time, The Government may also specify the category of persons who may not be required to take GST registration.
The only exceptions to obtain GST registration is available to the person/entity who deals only in the goods/services which are not taxable under any of the GST Acts or to the agriculturist to the extent of supply of produce out of cultivation of land.
Aforementioned person, who shall be required to take GST registration, should get itself registered within thirty days from the date on which he becomes liable to registration. But a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the starting of its business.
As India includes the territorial waters of India, and therefore a person supplying goods or services from the territorial waters of India should register in the coastal State or Union territory where the nearest point of the appropriate base line is located.
A person, other than the one who is required to get mandatory GST registration (listed above), may register voluntarily. And thenafter, Voluntarily registered person shall be considered as a normal registered taxable person and all provisions of GST shall apply normally. The benefit of aforementioned threshold limit of turnover shall not be available to Voluntarily registered person.
Any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization of the United Nations, Consulate or Embassy of foreign countries shall obtain Unique Identity Number in lieu of GST registration for the purpose of refund of taxes on the supplies of goods/services received by them or for any other purpose.
For casual taxable person and non-resident taxable person:
The registration of a casual taxable person or a non-resident taxable person shall be valid only for ninety days. It may be further extended for not more than ninety days. A casual taxable person or a non-resident taxable person shall make a payment of advance tax for an amount equal to the estimated tax liability. Where any extension of time is allowed, such taxable person shall deposit an additional advance tax for an amount equal to estimated additional tax liability.
Carrying out changes in the details of registration:
Every registered person shall inform the changes in the information of registration to respective jurisdictional officer within specified time. For amendments in certain particulars, approval of the proper officer shall not be required.
Application for de-registration should be filed if the business has been discontinued or business has been transferred for any reason including death of the proprietor or amalgamation or demerger or any other reason of shutting down the business. Application of de-registration should be filed even if there is any change in the constitution of the business e.g. A partnership firm now converted into a corporate body and therefore a partnership firm cease to exist. Application of de-registration should be also filed if the person is no longer required to pay tax under GST.
The respective jurisdictional officer may, by himself on his own motion cancel the registration if gets to know the above reason. Further he may also cancel the registration if he finds that the registered person has not obeyed the rules and regulations of GST or a registered person has not furnished returns for three consecutive tax periods or for a continuous period of six months as applicable or any person who has taken registration has not commenced business within six months from the date of registration.
The respective jurisdictional officer may cancel registration, with retrospective effect, if he finds that the registration has been obtained by means of fraud, wilful misstatement or suppression of facts.
Revoking the cancellation of registration:
Revocation application shall be filed by the registered dealer within 30 days from the date of receipt of cancellation order.
We have tried to explain you on legal aspects relating to registrations under GST. However, in case of any query or concern, you may drop your queries through CONTACT FORM. We shall discuss on other aspects of GST soon in coming articles. To know more on GST, keep following us on UnBoxGST.com
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