Are you doing business? Know, when GST registration is required?

The GST Act provides that every supplier of goods or services or both who has an aggregate turnover of more than Rs. 20 lakhs in a year (Rs.10 lakhs in Special Category States) have to obtain GST registration.

However if the supplier is supplying goods only, then threshold limit will be Rs. 40 lakhs in a year (Rs.20 lakhs in Special Category States) subject to the condition that State has opted for this higher threshold limit.

However, there are certain categories of suppliers who are required to obtain mandatory registration irrespective of their turnover limit.

Who Should Register for GST?

Mandatory GST Registration basis on Turnover -

Every supplier exclusively engaged in supply of goods with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 20 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)

Every supplier making a taxable supply of goods or services or both with turnover above the threshold limit of Rs. 20 Lakhs* (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)

Mandatory GST Registration irrespective of Turnover -

Any persons making any inter-State taxable supply [Section 24]

Casual taxable persons making taxable supply [Section 24]

Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.

Those paying tax under the reverse charge mechanism

Person who supplies via e-commerce seller /aggregator, however e-commerce sellers / aggregators need not required registration if total sales is less than Rs. 20 lakh. Notification No. 65/2017 – Central Tax dated 15.11.2017 [Section 24]

Non-resident taxable persons making taxable supply. [Section 24]

Persons who are required to deduct tax under section 51, whether or not separately registered under this Act. [Section 24]

Every electronic commerce operator. [Section 24]

Input Service Distributor, whether or not separately registered under this Act. [Section 24]

Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.

Every person who is registered under an earlier law (i.e., Excise, VAT, Service Tax etc.)  needs to register under GST also.

When a business which is registered has been transferred to someone/demerged, the transferee shall take registration with effect from the date of transfer.

Calculation of Aggregate Turnover:

For the purpose of GST registration, where turnover limit applies, one has to calculate the aggregate turnover during the year.

The Aggregate Turnover of the year shall be sum of following:

1. Value of all taxable supplies

2. Value of all exempt supplies

3. Value of export supplies

4. Value of inter-state supplies

5. Turnover of all entities of a person under same PAN (aggregated on an All India Basis).

However, aggregate Turnover shall not include value of any inward supply on which tax is liable to be paid by a person on reverse charge basis. Turnover shall also not include GST paid on any supply.

List of Persons Exempted From Obtaining GST Registration -

Following categories of person are exempted from obtaining Goods and Service Tax (GST) registration –

1. The person engaged exclusively in providing business of supplying goods or services or both that are not liable to tax or are wholly exempted from tax under Central Goods and Service Tax Act, 2017 or under Integrated Goods and Services Tax Act, 2017.

2. An agriculturist. However, the exemption is only to the extent of supply of produce out of cultivation of land.

3. Individual advocates, including senior advocates.

4. Individual sponsorship service providers, including players.

5. The person engaged in making inter-state supplies of taxable services and having an aggregate turnover of less than INR 20 Lakhs, INR 10 Lakhs in case of special category states, in a financial year (as per notification no. 10/2017).

6. The person engaged in the supply of services and having an aggregate turnover of less than INR 20 Lakhs, INR 10 Lakhs in case of special category states, in a financial year (as per notification no. 65/2017).

However above exemption is not available to the person who is engaged in supplies, specified under sub-section (5) of section 9 of the Act, through an e-commerce operator who is required to collect tax at source (TCS) under section 52 of the Act.

7. The person engaged in supplying taxable goods or services or both and the total tax on such supplies is required to be paid by the recipient of goods or services or both under reverse charge mechanism (as per notification no. 5/2017).