There are caps on exemptions from Goods and Services Tax (GST) registration in India. If an individual’s annual turnover exceeds the exemption limit, he/she must register for the Goods and Services Tax. This is additionally referred to as a GST registration limit or GST threshold. Let’s understand GST registration limit for services in FY 2021-22.
What is the GST limit?
There is a registration exemption limit under the Goods and Services Tax (GST). If an individual’s annual turnover exceeds the exemption limit, they must self-register for Goods and Services Tax.
GST registration is compulsory for all persons who are the sole supplier of goods with an aggregate turnover exceeding Rs.40 lakhs in a financial year. For service providers, the registration limit is Rs. 20 lakhs. For the person conducting business in Special Category States, the registration limit is Rs 10 lakhs.
Special Category States include Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.
But according to section 22, only Mizoram, Tripura, Manipur, and Nagaland are special category states for the purpose of registration under GST.
What is the limit for GST audit for FY 21 22?
Every year, a registered taxpayer who has an annual turnover of more than Rs. 2 crores must have his accounts audited by a Chartered Accountant or Cost Accountant.
Who needs no GST registration?
Following Individuals need no GST registration:
- Exclusively engaged in the supply of non-taxable goods/services/both.
- Engaged solely in the supply of goods/services/both that are completely tax-free.
- Agriculturalist to the extent of supply of goods of produce from land cultivation.
- Specified categories notified by the government.
How many businesses can one GST register?
Multiple businesses can register under one GST.
Business Vertical means a distinct component of a business that provides an individual product or service, or group of related goods or services, that is subject to risks and returns that differ from those of other industries.
Factors to consider in determining whether goods or services are relevant include the nature of the goods or services.
- The characteristics of the goods or services
- The nature of the manufacturing processes
- The type or class of customers who will purchase the goods or services
- The methods used to distribute goods or provide services
- The regulatory environment such as banking, insurance, or public utility
Supplies between business verticals are taxable.
The composition scheme option is PAN-based. The taxpayer cannot select a composition for a specific business vertical but must select for all business verticals.
Who is exempted from GST registration?
Some of the GST-exempted goods are listed below.
| S.No | Details |
| 1 | Fresh and dried vegetables such as potatoes, onions, sweet potatoes, and various legumes |
| 2 | Live fish, fresh fish, poultry eggs, raw milk, etc. |
| 3 | Ginger, garlic, grapes, melons, unroasted coffee beans, and unprocessed such as green tea leaves |
| 4 | Human blood and its various components. |
| 5 | Raw silk, silkworm, coir, jute fiber (unspun), cardi yarn, cardi fabric, etc. |
| 6 | Slate, slate sticks, chalk sticks, hearing aid parts, handlooms, etc |
| Some of the GST exempted services are listed below. | |
| 1 | Services related to plant cultivation and animal husbandry (except horse breeding). |
| 2 | Farm Labor Supply. |
| 3 | Agricultural services such as grooming, pruning, pruning, sun-drying, threshing, and sorting, do not alter the essential characteristics of the product |
| 4 | Vacant lot for rental/leasing of agricultural machinery/agricultural activities. |
| 5 | Loading, unloading, packing, warehousing, storage of produce, and warehouse fumigation. |
| 6 | Preconditioning/Precooling, Aging, Waxing, and Retail Packaging Services. |
| 7 | Passenger Transport Public Transport/Metered Taxi/Auto Rickshaw/Metro/Tram etc. |
| 8 | Services related to the transport of goods out of India, transport of agricultural products, milk, salt, rice, etc. |
| 9 | Veterinary clinic services related to animal/bird health care. |
Can one shop have 2 GST numbers?
If an individual conducts business in multiple States/UTs, a separate GTIN is a must for each entity and all such GSTINs must have registration under the same Pan. Businesses located in different States/UTs are therefore responsible for having different GSTINs for each of those States/UTs.
Example:
A person has business in Mumbai and Pune. Therefore, a concerned person must obtain separate GSTINs for Mumbai and Pune entities and both registrations must be made under one pan.
What is the limit for not paying GST?
A registered taxable person providing goods or services for which tax is not paid is liable to pay a penalty of Rs.10,000 or 10% of the tax short paid, whichever is higher.
Frequently Asked Questions(FAQ):-
Can a proprietor have 2 GST numbers?
For sole proprietorships in the same state, only one GST registration can be made for one Permanent Account Number (PAN).
Can I run 2 businesses under 1 company?
It is possible to run two or more separate businesses under one company.
Can one person have 2 businesses?
Yes, a sole proprietorship can have multiple businesses.
Is GST registration mandatory for the export of services below 20 lakhs?
Yes, GST registration is mandatory for exports of services below 20 lakhs. GST registration is also mandatory for the export of services in India, regardless of turnover.
Is GST applicable if turnover is less than 20 lakhs?
Traders with a turnover of less than Rs 20 lakhs and engaging in interstate supplies must register for GST in India.
Wrapping Up
It should be noted that GST registration is pan-based and offered for specific states/UTs. However, an individual may apply for more than one of her GSTINs in one State/UT if the individual has different businesses or locations in the same State/UT.
The parent company may also transfer its unused ITC amount to a newly incorporated entity within the same state.