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Registration Under GST – A Comprehensive Guide

  1. Persons required to register compulsorily
  2. Voluntarily Registration
  3. Time Limit for Registration
  4. Effective Date of Registration
  5. Requirements for registration
  6. Separate registration for multiple business verticals within a State or a Union territory
  7. Unregistered persons are not allowed to
  8. Casual taxable person and non-resident taxable person
  9. Amendment of Registration
  10. Cancellation of Registration
  11. Revocation of Cancellation of Registration
  12. Input Service Distributor
  13. UN Bodies and Government Organisations
  14. Process of Registration

Persons required to register compulsorily

  1. Persons in states of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand with aggregate Turnover of more than Rs. 10 lakhs.
  2. Persons in any other state with aggregate Turnover of more than Rs. 20 lakhs.
  3. Persons who are registered under VAT, CST, Excise, Service Tax or custom on 30th June 2017.
  4. Persons making any inter-State taxable supply.
  5. Casual taxable persons
  6. Persons who are required to pay tax under reverse charges
  7. Non-resident taxable persons
  8. Persons who are required to deduct tax under section 51
  9. Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise
  10. Input service distributor
  11. Persons who supply goods and/or services, other than branded services, through electronic commerce operator
  12. Every electronic commerce operator
  13. 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
  14. An aggregator who supplies services under his brand name or his trade name
  15. Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.
  16. Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee, or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
  17. In a case of amalgamation or demerger of two or more companies by order of High Court or Tribunal, the transferee shall be liable to be registered, where required, with effect from the date on which the Registrar of Companies issues a certificate of incorporation.

Other Points:-

  • A farmer shall not be considered as a taxable person and shall not be liable to take registration.
  • The supplier shall not be liable to registration if his aggregate turnover consists of only goods and services which are not liable to tax or wholly exempt under this Act even if the turnover exceeds the threshold limit of Rs. 10 or Rs. 20 lakhs.
  • Persons who are supplying only goods or services on which tax is payable on reverse charge are exempted from taking registration. For eg: In case of Ola, Uber drivers the tax is collectible and payable by Ola or Uber and not by taxi drivers. Notification No. 5/2017
  • Provided that if the person, other than an Input Service Distributor, is registered under an earlier law, it shall not be necessary for him to apply for new registration under this section and he shall follow the procedure as may be prescribed in this behalf.
  • A person doing more than one business in a state may obtain a separate registration for each business. However, he is not compulsorily required to do so. If he makes separate registration, then all his firms are taken as separate firms for all purpose. And they have to pay tax and issue invoice for the supply of goods/service between themselves.
  • If a person operates in more than one states, then such person is required to register separately in every such state. Every such establishment will be treated as distinct person.
  • There is no option for centralized registration; registration needs to be done state wise.
  • where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may proceed to register such person in the manner as may be prescribed.

Aggregate Turnover is the total value of following amounts of a person having the same PAN on all India basis

(i) all taxable and non-taxable supplies,
(ii) exempt supplies, and
(iii) exports of goods and service
(iv) supplies made on behalf of a principal (in case of agent)

but it doesn’t include

(i) the value of supplies on which tax is levied on reverse charge basis
(ii) supply of goods by job worker to the principal
(iii) the value of inward supplies
(iv) IGST, CGST, SGST

Therefore if an individual does two different businesses and its total turnover exceeds the threshold limit, then he is compulsorily required to register. Also, a person who is working in two states and his total turnover exceed the threshold limit also required to register in both such States.

The supply of goods, after completion of job-work, by a registered job-worker shall be treated as the supply of goods by the principal and the value of such goods shall not be included in the aggregate turnover of the registered job worker.

The liability to pay tax, however, will start only when the registered person reaches a threshold limit of turnover (Excluding cases where the threshold is not applicable).

Also Read – Composition Scheme under GST

Voluntary Registration

A person who is not liable to be registered may get himself registered voluntarily. The person who gets himself registered voluntarily shall be liable for payment of tax, and all provisions of the Act will apply to him in the same manner as applicable to registered persons.

Time Limit for Registration

A person has to apply for registration within 30 days from the date on which he becomes liable to registration. A casual taxable person or a non-resident taxable person shall apply for registration at least five days before the commencement of business.

Effective Date of Registration

Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be the date on which he becomes liable for registration.

Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration.In the case of Suo Moto registration, i.e. taking registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of the order of registration.

Requirements for Registration

A person needs to have PAN (Permanent Account Number) to register under Goods and Service Tax. The GST number is linked to the PAN of the taxable person.

Non-Taxable Person may be granted registration on any other document prescribed in this behalf. No separate registration is required under CGST, SGST/UTGST and IGST. Only single registration is made under all the three taxes.

TAN number is sufficient for persons who are required to deduct TDS under Section 51; they are not required compulsorily to have PAN.

A valid passport is required for registration by non-resident persons.

Separate registration for multiple business verticals within a State or a Union territory

Any person having multiple business verticals within a State or a Union territory, requiring a separate registration for any of its business verticals shall be granted separate registration in respect of each of the verticals subject to the following conditions:-

  • Such person has more than one business vertical.
  • Either all firms of a single taxable person must pay tax under composition scheme, or all firms must pay tax under the normal scheme.
  • Such separate entities should issue tax invoice and pay tax in respect of supplies made to each other.

Business vertical is defined as

“business vertical” means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which are subject to risks and returns that are different from those of the other business verticals.

Explanation.––For the purposes of this clause, factors that should be considered in determining whether goods or services are related include–

(a) the nature of the goods or services.
(b) the nature of the production processes.
(c) the type or class of customers for the goods or services.
(d) the methods used to distribute the goods or supply of services.
(e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities.

Things that an unregistered person is not allowed to

A person who is not registered under GST is not allowed to collect GST and is not allowed to take Input Tax Credit (ITC) of GST paid by him. Therefore if an unregistered person purchases goods from a registered dealer and pays GST, then he cannot claim GST as well as can not pass on the GST to another dealer to which he sells goods/services.

Casual taxable person and non-resident taxable person

Casual taxable person refers to a person who occasionally undertakes transactions in a state or union territory where he has no fixed place of business. For example, A person who has his business in Delhi wants to attend an exhibition in Gujarat, so he can register as a casual taxable person in the state of Gujarat.

Non-Resident Taxable person is a person residing outside India and coming to India to occasionally undertake the transaction in the country but has no fixed place of business in India.

Casual taxable person and Non-Resident Person must file an application at least five days before the commencement of the business. Such persons shall make taxable supplies only after the issuance of the certificate of
registration.

The certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for a period of ninety days or period specified in the application whichever is earlier, from the effective date of registration. Provided that the proper officer may, at the request of the said taxable person, extend the aforesaid period of ninety days by a further period not exceeding ninety days.

Casual taxable person and non-resident taxable person has to make an advance deposit of tax at the time of submitting an application for registration of an amount equivalent to estimated tax liability. If extension of time is sought then additional amount of estimated tax for such extended time is to be deposited.

Casual Taxable Person shall be given a temporary identification number by the Common Portal for making advance deposit of tax and acknowledgement in Form GST REG-02 shall be issued electronically thereafter.

Amendment of Registration

Every registered taxable person shall inform the proper officer of any changes in the information previously furnished by him. The proper officer may accept or reject the amendments. The proper officer shall not reject the request for amendment in the registration particulars without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.No separate information is required to be furnished for the SGST or CGST or IGST as there is only single registration for all three.

Cancellation of Registration

Registration can be cancelled by

  • registered taxable person himself
  • by his legal heirs, in case of death of such person
  • proper officer in its own motion

Registration can be cancelled in following circumstances

  • the business has been discontinued
  • transferred fully
  • death of proprietor
  • amalgamation with other entity
  • demerged
  • there is change in constitution of business
  • the person is no longer liable to be registered compulsorily

Registration can be cancelled by proper officer in its own motion from any date including a past date where

  • a person under composition scheme has not furnished returns for three continuous quarters
  • a person not under composition scheme has not furnished returns for six continuous months
  • any person who has taken voluntary registration and not commenced business within six months from the date of registration
  • a person who has contravened such provisions of the Act or the rules made thereunder as may be prescribed
  • registration has been obtained by means of fraud, wilful misstatement or suppression of facts

The proper officer shall not cancel the registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.

A person whose registration is cancelled shall pay an amount equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed.

Provided that in case of capital goods, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf or the tax on the transaction value of such capital goods under sub-section (1) of section 15, whichever is higher.

Revocation of Cancellation of Registration

(1) Subject to such conditions and in such circumstances as may be prescribed, any registered taxable person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.

(2) The proper officer may, in the manner and within such period as may be prescribed in this behalf, by way of an order, either revoke cancellation of the registration or reject the application for revocation for good and sufficient reasons.

(3) The proper officer shall not reject the application for revocation of cancellation of registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.

(4) Revocation of cancellation of registration under the CGST Act / SGST Act shall be deemed to be a revocation of cancellation of registration under the SGST Act / CGST Act.

Input Service Distributor (ISD)

Input Service Distributor is basically an office meant to receive tax invoices towards receipt of input services and further distribute the credit to supplier units proportionately.There is no threshold limit for ISD, therefore registration under GST is mandatory for ISD. Also ISD registered under earlier law are also required to register under GST. They will not auto move on to GSTN.The ISD registration is for one office of the taxpayer which will be different from the normal registration. Different offices of a taxpayer can apply for ISD registration.

UN bodies and Government Organisations

UN Bodies – All UN bodies Consulate or Embassy of foreign countries and any other class of persons so notified would be required to obtain a unique identification number (UIN) from the GST portal. The structure of the said ID would be uniform across the States in conformity with GSTIN structure and the same will be common for the Centre and the States. This UIN will be needed for claiming refund of taxes paid by them and for any other purpose as may be prescribed in the GST Rules.The taxable supplier supplying to these organizations is expected to mention the UIN on the invoices and treat such supplies as supplies to another registered person (B2B) and the invoices of the same will be uploaded by the supplier.

Government Organisations – A unique identification number (ID) would be given by the respective state tax authorities through GST portal to Government authorities / PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST registration) but are making inter-state purchases.

Source:
Model Draft GST Law
Draft Registration Rules

2 comments

  1. sir
    The farmer is exempted from registration from registration under GST. But those persons who are engaged in purchase and sale Vegitable goods if their turn over exceeds he prescribed limit of Rs 10 Lakh they are to be registered ? please clarify

    • Prateek Agarwal

      If you are engaged in trading of raw vegetables and fruits then you are not required to get registered even if turnover exceeds the specified limits. The law says that “The supplier shall not be liable to registration if his aggregate turnover consists of only goods and services which are not liable to tax or wholly exempt under this Act.”

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