Registration for GST is compulsory if the company’s total revenue during the financial year exceeds the threshold limit. But, in some cases, compulsory registration under GST is required even if the turnover is less than the prescribed threshold limit. A taxpayer can apply for GST Registration through the GST Portal.
What is registration under GST?
GST registration is the process by which taxpayers can register with the GST Council through an official tax-only portal run by the government. The taxpayer will receive the Goods and Service Tax Identification Number (GSTIN) after the GST Registration process. Central Government issues 15-digit GSTIN. Taxpayers need GSTIN to calculate GST on inward supplies and to claim an input tax credit of GST.
What is deemed registration under GST?
The grant of registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a grant of registration or the Unique Identity Number under this Act subject to the condition that the application for registration or the Unique Identity Number has not been rejected under this Act within the time specified in section 25910).
Notwithstanding anything contained in sub-section (10) of section 25, any rejection of the application for registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a rejection of the application for registration under this Act.
What do you mean by compulsory registration?
Section 24 of the CGST Act requires certain individuals to register under GST even if their aggregate turnover is below the applicable exemption limit.
Thus, it may be necessary for suppliers to get registration even if their aggregate turnover does not exceed the applicable threshold.
Failure to meet this mandatory GST registration criteria may result in severe penalties.
What is the cut-off turnover limit for compulsory registration?
When an aggregate turnover exceeds Rs. 20 lakhs for the supply of services ( Rs. 10 lakhs for goods) in a financial year then registration under GST is compulsory.
For special category states, this limit is Rs.10 lakhs. These limits apply to intra-state traders and suppliers.
Which of the persons is compulsorily required to obtain registration?
The following categories of persons require compulsory registration under GST:
- A supplier who makes inter-state supplies
- Casual taxable person
- Non-resident taxable person
- E-commerce operators
- Persons discharging liabilities under reverse charge mechanism
- An Individual who is required to pay tax under sub-section (5) of section 9
- Persons required to deduct tax, whether or not separately registered under this act
- An Individual who makes a taxable supply of goods and services or both on behalf of other taxable persons whether as agent or otherwise
- Input Service Distributor
- Persons who supply goods or services or both, other than supplies under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52
- An Individual providing online information and database access or retrieval services from a place outside India to a person in India, other than a registered person.
- Any other person notified by the government on the recommendation of the council.
All service providers, whether supplying inter-state, intrastate, or through e-commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover doesn’t exceed Rs. 20 lakhs (Rs. 10 lakhs for Mizoram, Manipur, Nagaland, and Tripura)
Which person is not liable for compulsory registration?
- A person making the interstate supply of service and having an aggregate turnover not exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs for Mizoram, Nagaland, Manipur, and Tripura)
- An Individual engaged in the supply of taxable goods or services or both, the total tax on which is liable to be paid on a reverse charge basis by the recipient of such goods or services or both as per Section 9(3) of the CGST Act, 2017.
- Persons who make interstate supplies of notified handicraft goods and have an annual turnover of less than Rs. 20 lakhs on an all-India basis (Rs. 10 lakhs for Mizoram, Nagaland, Manipur, and Tripura).
- An Individual who supplies notified handicrafts interstate and whose turnover does not exceed Rs. 20 lakhs on all India basis (Rs. 10 lakhs for Mizoram, Nagaland, Manipur, and Tripura).
- Casual taxable persons who supply notified handicrafts interstate and whose turnover does not exceed Rs. 20 lakhs on all India basis (Rs. 10 lakhs for Mizoram, Nagaland, Manipur, and Tripura).
- Job workers engaged in providing interstate services to registrants other than those eligible for registration under Section 22 of the CGST Act 2017, i.e. he is liable for registration after the threshold limit exceeds
- A person who sells goods through an e-commerce operator and whose aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs for Mizoram, Tripura, Manipur, and Nagaland).
- Any person who exclusively supplies goods and whose aggregate turnover in the previous financial year exceeds Rs. Excludes 40 million or less:
Additional:-
➤ An Individual who is required to get compulsory registration under the law as per section 24
➤ A person exclusively engaged in the supply of goods:
- Ice cream and other edible ice, whether or not containing cocoa
- Pan masala
- Tobacco and tobacco substitutes manufactured
➤ An Individual engaged in intra-state supply in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.
➤ A person registered under previous laws, such as the Service Tax Act, VAT, CST, etc.
Frequently Asked Questions (FAQ):-
What if the GST return is not filed for 6 months?
The concerned GST officer may cancel the taxpayer’s GST registration.
Is the GST registration limit 20 lakhs or 40 lakhs?
The GST registration limit for the supply of services is Rs. 20 lakhs and for goods is Rs. 40 lakhs.
What is the penalty for not registering for GST?
The penalty for not registering for GST is:
Tax evaded amount or Rs. 10,000 whichever is higher.
Can a person without GST registration collect GST?
No, a person who has not registered for GST cannot collect GST from his customers or claim any input tax credit for GST paid.
Is GST registration compulsory for the export of services?
Since the export of goods or services is treated as zero-rated, It is not compulsory to register for the export of services.
Is GST registration mandatory for inter-state supply of goods?
If a person makes an inter-state taxable supply of goods or services, he is liable for compulsory registration under GST irrespective of turnover.
Why Is GST compulsory for import?
Imports are deemed interstate supplies and are subject to compulsory GST registration.
Is it compulsory to file a GST return after registration?
Yes, you must file GST returns after receiving your GST Registration number. If your company has no transactions, simply file nil returns.
In which states GST is not applicable?
GST is applicable in all states except Jammu and Kashmir.
Wrapping Up
For certain businesses like casual taxable persons, e-commerce operators, etc registration under GST is compulsory irrespective of their turnover during the financial year.
If you are any of the GST entities that need to undergo GST registration, get in touch with the experts InstaFiling.