Any tax law begins with the registration of a taxable person. This is the most basic requirement to identify a company for tax purposes and monitor compliance requirements. This article describes persons liable for registration under GST.
Have you reached the threshold limit? Let’s go over whether you are liable to register for GST or not.
What are types of registration under GST?
Different types of GST registration:
Normal Taxpayer
Registration is required when the threshold of 20 lac for special category states and 40 lac for normal category states is exceeded. Taxpayers are related to service industries other than the restaurant sector. Taxpayers registered under the regular regime are required to file monthly returns. A regular taxpayer can claim an input tax credit equal to GST for purchasing goods and/or services.
Composition scheme
Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed turnover rate. Any taxpayer whose turnover is less than Rs 1.5 crore can opt for this scheme.
The following are the benefits of registering under the composition scheme:
- Lesser compliance (returns, maintaining books of record, issuance of invoices)
- Limited tax liability
- High liquidity
Compulsory Registration
Dealers are required to make compulsory registration regardless of turnover. For example Interstate sales of taxable goods, e-commerce operators, e-commerce sellers, etc.
Voluntary Registration
Companies that are not required to apply for compulsory registration may apply for registration voluntarily.
Casual Taxable Person
A person who occasionally provides goods or services in a GST area but does not have a fixed place of business. Such persons must be treated as Casual taxpayers.
For example, a person carrying on business in Maharashtra and providing taxable consulting services in Delhi where he does not carry on business would be considered a casual taxpayer in Delhi.
Input Service Distributor
Input Service Distributor means a Goods/Services that receive a Tax Invoice upon receipt of an Input Service, issues a Tax Invoice and distributes credits of CGST/SGST/IGST paid for such services to Branch Offices. (Must be a supplier of taxable goods/services with the same PAN as the above entity). Credits can only be allocated to input services and not to input or capital goods.
Non-Resident Taxable Person
Where the non-resident provides goods or services in areas where GST applies but does not have a fixed place of business in India. He is treated as a non-resident taxpayer under his GST. Same as above except non-residents do not have a place of business in India.
Non-Resident Online Service Distributor
Online content offerings of digital content (movies, television shows, music, data storage, games, etc.) refer to services made available by information technology over the Internet or other electronic networks ie. Cloud Services, eBooks, Movie Downloads, Software, and Online Advertising.
Any person other than the registrant who provides online information and database access or retrieval services from outside India to persons in India must be registered with her GST as a provider of OIDAR services. This person is called a non-resident online service provider. All persons providing OIDAR services must be registered for GST, except registrants (non-resident online service providers).
Tax Deductor at Source (TDS) /Tax Collector at Source (TCS)
All departments or branches of the Central/State Government, local governments, government agencies, and individuals or groups of individuals notified by the Central/State Government to make their contractual payments exceeding INR 2,500,000 to the Supplier. must be registered as TDS under GST. The government must deduct 1% CGST and 1% SGST. For inter-state transactions, 2% IGST Act.
No Registration
The following groups of people do not require GST registration.
- Companies with gross turnover not exceeding Rs. 40 in goods (Rs. 20 in special category states) or Rs. 20 in services (Rs. 10 in special category states) during the financial year.
- Business that do not require compulsory registration.
- Persons who sell goods or services that are exempt from GST or are not subject to GST.
- Agriculturists for the supply of crops from the cultivation of land.
Who is a registered person?
A taxable person is anyone who conducts business in India, supplies goods and/or services, and is a registered person under the GST Act.
Individuals, HUFs, corporations, corporations, LLPs, government corporations, foreign corporations, cooperatives, municipalities, governments, trusts, etc. are taxable persons under the GST regime.
Who is an unregistered person?
Persons not registered under GST are unregistered persons. An unregistered taxable person cannot collect any amount by way of tax under the CGST/SGST Act for any supply of goods and/or services.
Who must register for GST?
According to the Goods and Services Tax Act, 2017, businesses with a turnover of Rs. 40 lakh and above and Rs. 20 lakhs for the supply of goods and services must register for GST. For north-eastern and hill states, the turnover for GST registration is Rs. 10 lakh.
Which person is liable for registration?
Section 22 of the Central Goods and Service Tax (CGST) Act, 2017 lists the persons liable for obtaining GST registration –
1. Supplier engaged in the supply of goods whose aggregate turnover in the financial year exceeds forty lakh rupees.
2. Suppliers engaged in providing a taxable supply of goods are required to obtain GST registration in case the aggregate turnover exceeds INR 20/10 Lakhs in a financial year. ( Some special category states ie Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, and Uttarakhand opted for a turnover limit of Rs 20 Lakhs whilst Kerala and Telangana limit of Rs 10 Lakhs ).
3. Suppliers provide a taxable supply of services in case the aggregate turnover exceeds 20 Lakhs in a financial year.
4. For special category state: supplier engaged in providing a taxable supply of services in case the aggregate turnover exceeds 10 Lakhs in a financial year.
5. Persons registered under the erstwhile law, on the day immediately preceding the appointment date.
6. The registered taxable person transfers the business to another person on a going concern basis, whether on account of succession or otherwise, in such case the transferee or the successor
7. Transfer of the company in the event of an amalgamation or demerger under a high court, tribunal, or other order.
Which of the following persons are not liable for registration?
Section 23 of CGST Act 2017 lists the persons not liable for registration
The following persons are exempt from registration:
- Engaged exclusively in the supply of goods/ services/ both which are not liable to tax
- Engaged exclusively in the supply of the goods/ services/ both which are wholly exempt from tax
- Agriculturalists to the extent of supply of produce from land cultivation
- Specific categories as determined by the government
Following are notified:
- Persons making only reverse charge supplies: persons engaged in making supplies of taxable goods and 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 under section 9(3)
- Persons making interstate supplies of taxable services in a financial year ( except in cases of special category states of Mizoram, Manipur, Tripura, and Nagaland the limit is Rs. 10 lakhs)
- For persons making interstate taxable supplies of notified handicraft goods up to Rs.20 lakhs in a financial year ( except in cases of special category states of Mizoram, Manipur, Tripura, and Nagaland the limit is Rs. 10 lakhs)
- For casual taxable persons making interstate supplies of notifies handicraft goods up to Rs.20 lakhs in a financial year ( except in cases of special category states of Mizoram, Manipur, Tripura, and Nagaland the limit is Rs. 10 lakhs)
Who is the person liable to pay GST?
The person providing the goods or services is typically responsible for paying the GST.
However, in certain cases, such as imported goods and other notified shipments, liability may be transferred to the recipient under a reverse charge mechanism.
In the case of intra-state service provision, the liability falls on the e-commerce operators who provide such services.
Taxes (TDS) are also required to be deducted by government agencies making payments to merchants over INR 2.5 lakh under contracts and e-commerce operators are required to collect Government Taxes (TCS) on the net value of shipments. must be submitted.
What is Section 63 of the GST Act?
Section 63 of the CGST Act, 2017 addresses the assessment of unregistered individuals or those whose registration has been cancelled but who are still required to pay GST.
According to Section 63 of the CGST Act, 2017, a proper official may assess the tax liability of a taxable person who did not seek registration under the GST Act, even if he was responsible for it.
This section replaces Sections 73 and 74 of the CGST Act of 2017.
The sequence of Events and Orders under Section 63 of CGST Act, 2017:
| Sequence | Event | Time |
| 1 | Proper officer to issue notice to a taxable person | On noticing the defaulter |
| 2 | Summary of notice electronically uploaded | At the time of issuance of notice |
| 3 | Reply by taxpayer/opportunity of being heard | Within 15 days of notice |
| 4 | Assessment order | Within 5 years from the due date of the relevant annual return |
| 5 | Summary of the order electronically uploaded | At the time of issuance of the assessment order |
The time limit for issuing an assessment order is five years from the date of filing the annual return for the year in which no tax is paid.
As per Rule 100 of the CGST Rules, 2017, sub-rule (2), the following forms are issued by the proper officer:
| S.NO | Form no | Purpose |
| 1 | GST ASMT – 14 | Notice to the taxable person |
| 2 | GST DRC – 01 | Summary of notice to be uploaded electronically |
| 3 | GST ASMT – 15 | Assessment order |
| 4 | GST DRC – 07 | Summary of order to be uploaded electronically |
What is the new rule for GST registration?
The aggregate turnover limits are increased for GST registration.
Threshold limit for registration for service providers would continue to be Rs. 20 lakhs and in case of special category states Rs. 10 lakhs.
Threshold limit for registration for suppliers of goods:
| Rs. 20 lakhs | Rs. 40 lakhs |
| Arunachal Pradesh | Remaining 21 states and 5 union territories |
| Meghalaya | |
| Puducherry | |
| Sikkim | |
| Telangana | |
| Uttarakhand | |
| Manipur | |
| Mizoram | |
| Nagaland | |
| Tripura |
Threshold limit for registration for suppliers of services:
| Rs. 10 lakhs | Rs. 20 lakhs |
| Manipur | Remaining 27 states and 5 union territories |
| Mizoram | |
| Nagaland | |
| Tripura |
Threshold limit for registration for suppliers of ice cream and other edible ice, whether or not containing cocoa; pan masala; tobacco, and manufactured tobacco substitutes:
| Rs. 10 lakhs | Rs. 20 lakhs |
| Manipur | Remaining 27 states and 5 union territories |
| Mizoram | |
| Nagaland | |
| Tripura |
Who are the persons compulsorily required to be registered under GST law?
The following categories of persons are required to obtain compulsory registration:
- A supplier who makes inter-state supplies
- Casual taxable person
- Non-resident taxable person
- E-commerce operators
- Persons discharging liabilities under reverse charge mechanism
- Persons who require to pay tax under sub-section (5) of section 9
- Persons required to deduct tax, whether or not separately registered under this act
- Persons who make 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
- Persons 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 persons cannot register under composition scheme?
The following persons cannot opt for GST composition scheme:
- Service providers (excluding those engaged in the supply of food and beverages, such as restaurant services)
- Pan Masala or Tobacco and Ice Cream Manufacturers
- Non-resident taxable persons,
- Casual taxable person
- The person supplying goods through an e-commerce operator
- Taxpayers supplying exempt supplies
How much is GSTR 4 turnover limit?
GSTR 4 is an annual return form that details a composition dealer’s inward and outward supplies. A taxpayer can opt for Composition Scheme and file a GSTR 4 if turnover is less than Rs. 1.5 crores. In northeastern states and Himachal Pradesh, this limit is Rs. 75 lakhs.
Frequently Asked Questions (FAQ)
What are the 4 types of GST?
The four types of GST are
Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), Integrated Goods and Service Tax (IGST), and Union Territory Goods and Service Tax (UTGST).
Can an unregistered person collect GST?
No, an unregistered person cannot collect GST.
How can a GST bill be paid for an unregistered person?
The GST law requires any registered person who purchases goods or services from an unregistered person to issue both a payment voucher and a tax invoice.
Can an unregistered person issue a tax invoice?
No, an unregistered person cannot issue a tax invoice.
Wrapping Up
If you are liable, register under GST. Register when total turnover exceeds the threshold limit. If you’re still unsure about whether you are liable or not, contact the GST experts at InstaFiling.