GST Registration of any Business entity under the GST Law implies obtaining a unique number from the concerned Tax Authorities for the purpose of collecting Tax on behalf of the Government and to avail Input Tax Credit (ITC) for the Taxes on his Inward Supplies (Purchase).
1. Advantages of taking GST Registration
Registration under Goods and Service Tax (GST) regime will confer following advantages to the taxable person after registration:
- He is legally recognized as supplier of goods or services.
- He can claim input tax credit of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
- He is legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
- He is eligible to avail various other benefits and privileges under the GST laws.
2. GST Registration of PAN based and State/UT specific
The registration in GST is PAN based and State/UT specific. Supplier has to register in each of such State or Union territory from where he effects taxable supply. There is no centralized registration under GST.
A business entity having its branches in multiple States will have to take separate State wise registration for the branches in different States.
Single GST Registration within the State even if an entity has multiple branches
If an entity has multiple branches within a State, it would have single registration wherein it can declare one place as principal place of business (PPoB) and other branches as additional place(s) of business (APoB).
Separate GST Registration can be taken for separate business verticals even within a State
However, a business entity having separate business verticals in a State may obtain separate registration for each of its business verticals othei-wise a given PAN based legal entity would have one registration number – Goods and Services Tax Identification Number (GSTIN) per State.
Meaning of “Business Vertical” [Section 2(18) of the CGST Act, 2017]:
“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 is 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; and
(e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities.
Goods and Services Tax Identification Number (GSTIN):
In GST registration, the supplier is allotted a 15- digit GST identification number called “GSTIN”, and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTN (i.e. goods and service tax network) common portal.
- The first 2 digits of the GSTIN is the State Code,
- next 10 digits are the PAN of the legal entity,
- the next Two digits are for entity code, and
- the last digit is check sum number.
Single GST Registration for CGST, SGST, UTGST and IGST :
Registration under GST is not tax specific, which means that there is single registration for all the taxes i.e. CGST, SGST / UTGST, IGST and cesses.
3. Persons liable for GST Registration [Section 22 of the CGST Act, 2017]
When is a Person is liable for GST Registration [Section 22(1)] :
Every supplier shall be liable to be registered under the GST Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds Rs. 40,00,000 (Rs. 40 Lakh).
However, where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds Rs. 20,00,000 (Rs. 20 Lakh).
Meaning of Aggregate Turnover’:
“Aggregate Turnover” means the aggregate value of all—
(i) taxable supplies,
(ii) exempt supplies,
(iii) exports of goods or services or both, and
(iv) inter-State supplies
of persons having the same Permanent Account Number computed on all India basis
but excludes ..
(i) central tax,
(ii) State tax/Union territory tax,
(iii) integrated tax, and
Further, it will also exclude the value of inward supplies on which tax is payable by a person (i.e. the recipient) on reverse charge basis.
The expression aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.
Special Categories States:
As per the Constitution of’ India, the following are the special categories States:
States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur. Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
In other words, a supplier shall be liable to obtain registration in the State or Union territory from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds the following limits:
|Rs. 20 Lakh||In case of Supply from any of the Special Category States specified above|
|Rs. 40 Lakh||In case of Supply from other than Special Category States|
If a person has more than one branch whether in the same State / Union Territory or in more than one State or Union Territory, he shall be liable to registration if the turnover of all the branches exceeds Rs. 40.00.000 (Rs. 40 Lakh).
R is located in Delhi. He provides the following information :
|Value of taxable supply of goods in Delhi||24,00,000|
|Value of supply of Renting of Immovable Property Services in Delhi||18,00,000|
Does R require any registration ?
In this case, R requires registration under the CGST Act / SGST Act since the ‘aggregate turnover’ shall exceed the threshold limit of Rs. 40,00.000 (Rs. 40 Lakh) by including the value of taxable supply of goods and value of services.
R is located in Delhi and Haryana. He provides the following information :
|Value of supply of goods in Delhi||14,00,000|
|Value of exempt supply||12,00,000|
|Value of supply of Renting of Immovable Property Services in Delhi||18,00,000|
Does R require any registration ?
In this case. R requires registration under the CGST Act / SGST Act of both States, since the ‘Aggregate Turnover’ including exempt supply shall exceed the threshold limit of Rs. 40,00.000 (Rs. 40 Lakh) .
4. Persons Registered Under any pre-GST Law Liable for GST Registration [Section 22(2)]
Every person who, on the date immediately preceding the appointed day was registered or held a license under pre GST regime, was liable to be registered under the CGST Act / SGST Act with effect from the appointed day.
The appointed day was 22.06.2017
5. Liability of GST Registration in case of Transfer of Business [Section 22(3) & (4)]
|Situation||Date from which the transferee is liable to be registered|
|(1) Where a business carried on by a taxable person registered under the GST Act is transferred, whether on account of succession or otherwise, to another person as a going concern [Section 22(3)]||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.|
|(2) Where there is a transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, dc-merger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise. [Section 22(4)]||The transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.|
A business carried on by a taxable person R who is registered under the CGST Act / SGST Act is transferred to G as a going concern by way of a gift. In this case, the transferee i.e. G shall be liable to take registration under the CGST Act / SGST Act with effect from the date of such transfer.
6. Person Not liable for GST Registration [Section 23 of CGST Act]
As per section 23(1), the following persons shall Not be liable to GST Registration:
|(a) any person engaged exclusively in the business of supplying goods or services or both that|
— arc not liable to tax
— wholly exempt from tax
under this Act or under the Integrated Goods and Services Tax Act;
|(b) an agriculturist, to the extent of supply of produce out of cultivation of land.|
Further, as per section 23(2), the Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining GST Registration under this Act.
Any person who is engaged in making taxable supplies of goods or services or both, on which tax is liable to be paid by recipient under reverse charge mechanism in accordance with provisions of Section 9(3) of the Act is not required to obtain registration. [Notification No. 5/2017-Central Tax, dated 19.06.2017]
Meaning of Agriculturist [Section 2(7) of the CGST Act, 2017] :
“Agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land—
- by own labour, or
- by the labour of family, or
- by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family
An agriculturist shall be required to be registered if he supplies other goods or services, provided his aggregate turnover exceeds the threshold limit.
7. Compulsory GST Registration by Certain Persons irrespective of threshold Registration Limit [Section 24]
The following categories of persons shall be required to be registered under the CGST / SGST Act irrespective of the threshold registration limit—
|(i)||Persons making any Inter-State Taxable Supply. (However, the person who is engaged in the supply of services will be required to be registered only if his aggregate turnover computed on all India basis exceeds Rs. 20,00,000 even though he is making inter-State supply of taxable services) [Notification No. 10/2017 of Integrated Tax, dated 13.10.2017].|
|(ii)||Causal taxable persons making taxable supply. Meaning of Causal Taxable Person [Section 2(20)]: “Casual Taxable Person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity. in a State or a Union territory where he has no fixed place of business.|
|(iii)||Persons who are required to pay tax under reverse charge.|
|(iv)||Persons who are required to pay tax under section 9(5) namely Electronic Commerce Operator [ECO] in respect of intra-State supplies of specified categories of services supplied through it|
|(v)||Non-resident taxable persons making taxable supply. Meaning of Non-Resident Taxable Person [Section 2(77)): “Non-resident Taxable Person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.|
|(vi)||Persons who are required to deduct tax under section 51. whether or not separately registered under the CGST Act/SGST Act.|
|(vii)||Persons who make taxable supply of goods or services or both on behalf of other taxable person, whether as an agent or otherwise.|
|(viii)||Input Service Distributor, whether or not separately registered under the CGST Act / SGST Act|
|(ix)||Persons who supply goods or services or both, other than supplies specified under section 9(5), through such electronic commerce operator who is required to collect tax at source under Section 52. (However, the person who is engaged in the supply of services will be required to be registered only if his aggregate turnover computed on all India basis exceeds Rs. 20,00,000 even though he is making inter-State supply of taxable services through an electronic commerce operator) [Notification No. 65/2017of Central Tax, dated 15.11.2017]|
|(x)||Every electronic commerce operator. Meaning of Ecteronic Commerce Operator [Section 2(45)): “Electronic Commerce Operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce|
|(xi)||Every person supplying online information and data base access or retrieval services LOIDAR Services] from a place outside India to a person in India, other than a registered person.|
|(xii)||Such other person or class of persons as may be notified by the Government.|