When do I need to get registration under GST in India 1


Every supplier shall be liable to be registered under GST in the State from where he makes a taxable supply of goods and/or services, if:

  1. his aggregate turnover in a financial year exceeds 20 Lakh rupees, (if supplier is situated in the state other than Special Category States specified in sub-clause (g) of clause (4) of Article 279A of the Constitution except the state of Jammu & Kashmir, *{state of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Utrakhand}) or

  2. his aggregate turnover in a financial year exceeds 10 Lakh rupees, if supplier is situated in the state listed as Special Category States specified in sub-clause (g) of clause (4) of Article 279A of the Constitution) except the state of Jammu & Kashmir, *{state of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Utrakhand}. (list of such states provided below)

  3. Supplier has registration under State VAT laws and/or under Service Tax/Excise Laws or under other Indirect tax laws existing just before GST.

  4. Any person acquiring business from another person where such another person was a Taxable person registered under GST.

  5. Where Amalgamation or Demerger of a company because of the order of High Court, Tribunal or otherwise (Turnover is not a decisive tool in this case)

*inserted w.e.f. 01.02.2019 through CGST Amendment Act 2018.


Example 

Mr. A has business in two different states i.e. one in Punjab and another in Haryana. In Punjab, he is engaged exclusively in goods which are exempt from GST and his turnover in this state is Rs 18 lakh. In Haryana, he is supplying goods liable to GST and his turnover in this state is Rs 12 lakh

Whether Mr. A is required to get himself register in GST laws; if yes, where he is required to register himself under State GST?

Ans : Yes, Mr. A is required to get registered in GST laws, because his aggregated turnover exceeds Rs 20 lakh. As he is supplying taxable goods in the state of Haryana, so he is liable to register in this state.


Aggregate Turnover means: Sum total of

  • All Taxable supplies,
  • Exempt supplies,
  • Exports of goods and/or services and
  • Inter-State supplies of a person having the same PAN

And this will be computed on all India basis of a person having the same PAN.

Aggregate turnover will not include inward supplies on which tax is to be paid under reverse charge by recipient of such supplies.


Every person falls under the following listed categories required registration before making any business transaction without checking threshold limit:

  1. Persons making any inter-State taxable supply;


  2. Casual taxable persons making taxable supply;


  3. Persons who are required to pay tax under reverse charge;
  4. Person who are required to pay tax under sub-section (5) of section 9;
  5. Non-resident taxable persons making taxable supply;
  6. Persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
  7. Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
  8. Input Service Distributor, whether or not separately registered under this Act;
  9. Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; 
  10. Every electronic commerce operator who is required to collect tax at source under section 52;
  11. Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person.

In following cases, registration is not required under GST:

1. any person engaged exclusively in the business of supplying goods and/or services that are not liable to tax or are wholly exempt from tax under this Act.

2. an agriculturist (to the extent of supply of produce out of cultivation of Land)

3. As per N/N CGST-5/2017, any person only supplying those goods or services, tax on which is liable to be paid under reverse charge basis by the recipient of such goods or services under section 9(3) of CGST Act, 2017.

4. As per N/N CGST-10/2019, any person supplying only goods in the course of intra-state trade where aggregate supply of goods does not exceed Rs 40 lakh subject to terms and conditions as prescribed in such notification. {Refer our other article for more details: Threshold for registration under gst enhanced to Rs 40 Lakh w.e.f. 01.04.2019 }


Exemption provided for persons supplying services in Inter-state trade:

From 13th October 2017 onwards, government through its notification IGST-10/2017  has exempted from registration to those persons who are making inter-state supply of Taxable SERVICES and having turnover (on all India Basis):-

  • less than Rs 20 lakh in a financial year; or
  • less than Rs 10 lakh in a finacial year in case of “special category states” as specified in Article 279A(4)(g), other than the State of Jammu and Kashmir *{state of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttrakhand}

*inserted w.e.f. 01.02.2019 through CGST Amendment Act 2018.

Related Article : What are various transactions which are considered as inter-state trade?


List of States as specified in Article 279A(4)(g) of the Constitution :

  1. Arunachal Pradesh
  2. Assam
  3. Jammu and Kashmir
  4. Manipur
  5. Meghalaya
  6. Mizoram
  7. Nagaland
  8. Sikkim
  9. Tripura
  10. Himachal Pradesh
  11. Uttarakhand

w.e.f. 01.02.2019, out of above, only following states have threshold limit of Rs 10 lakh for GST registration :-

  1. Manipur
  2. Mizoram
  3. Nagaland
  4. Tripura

In other states, threshold limit shall be Rs 20 lakh for registration purposes.


Other Relevant Points:

  • A person can apply for more than one registration in one state where a person is having multiple business verticals in a State or Union territory.
  • A person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.

Earlier, the ‘Business Vertical’ was there instead of ‘Places’. As the expression ‘Business vertical’ was leading to vast ambiguity due to its definition, government has replaced the word from vertical to place, and, also remove the definition from law; simplified the provision to grant multiple registrations in same state for each business place as per convenience of a businessman. – Amended w.e.f. 01.02.2019 through CGST Amendment Act 2018

  • A person, who has obtained more than one registration, shall, in respect of each such registration, be treated as distinct persons. It means, if one business vertical place is supplying goods to another business vertical place, this transaction will be liable to GST. One will pay GST and another will record Input Tax Credit for the same.
  • PAN is mandatory to get registration under GST (except for non- resident).
  • Where a person is required to get registration because of TDS and TCS provisions, they must possess Tax Deduction and Collection Account number from Income Tax Department of India.
  • GST has a Major impact on service sector. If a service provider provides services to a person of other State / UT, he is compulsorily have to get registration under GST. Earlier, such obligation was not there in service tax provisions. However, w.e.f. 13th October 2017, government has provided a relief to service providers by providing threshold exemption limit on all India basis in the course of Inter-state supply also.

 


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