Provisions of Compulsory registration diluted under GST

As per Section 22, every supplier shall be liable to be registered under 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 twenty lakh rupees. However, where such person makes taxable supplies of goods or services or both from any of the special category States (i.e. Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.), he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

However, Section 24 enlists following types of persons who shall compulsorily obtain the registration even though these persons do not achieve the threshold as provided under the provisions prescribed under Section 22. Thus Section 24 is an overriding section that makes it mandatory to obtain registration by certain prescribed persons even though the conditions prescribed under section 22 are not met.

Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act. The provision of compulsory registration has been diluted in the wake of various relaxation granted in the GST councils meeting held recently. Accordingly, the person who was required to get compulsory registration here in below for S.L. no. (1) to (3) are either not required to get registration or required to get registration from later date.

(1) persons making any inter-State taxable supply;

Previously the person who are making any inter-state supply need to get their registration done irrespective of its annual turnover.

As per CBEC notification 10 of 2017 of IGST, the persons making inter-State supplies of taxable services and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year as the category of persons exempted from obtaining registration under the said Act:
Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of ten lakh rupees in case of “special category States” as specified in sub-clause (g) of clause (4) of article 279A of the Constitution, other than the State of Jammu and Kashmir.

Before this notification, the Government vide notification No. 7/2017 of Integrated Tax dated 14th September 2017 has exempted the Job workers making inter-state supply of services to a registered person from registration if their turnover is below 20lakhs (10 lakhs for Special states)

Here it is pertinent to mention that such exemption has been provided to service providers only and not to the person who are dealing in goods.

(2) persons who supply goods and/or services, other than supplies specified under subsection (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52,
As per notification no 65/2017 of Central Tax under GST, such type of person having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year, as the category of persons exempted from obtaining registration under the said Act

Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of ten lakh rupees in case of “special category States” as specified in sub-clause (g) of clause (4) of article 279A of the Constitution, other than the State of Jammu and Kashmir.

(3) persons who are required to deduct tax under section 51 (Tax Deduction at Source);

Since the Tax Deduction at Source (TDS) provision has been kept in abeyance by the Central Government till 31st March, 2018, hence the person who are not providing taxable services but are simply the recipient of supplies on which the tax need to be deducted at source (TDS) by them can keep their registration postponed till 31st March, 2018.

There are no changes have been made for the following person as mentioned here in below. Or to say the person mentioned in S.L. no. (4) to (11) required to get themselves compulsorily registered.

(4) persons who are required to pay tax under sub-section (5) of section 9 (electronic commerce operator)

If an e-commerce operator supplies services that has been designated as such by the central Government, then reverse charge will apply on the e-commerce operator. For example, present rent-a-cab operators like OLA are liable to pay tax on services rendered by their taxi/cab operation to end users.

(5) casual taxable persons making taxable supply;

(6) persons who are required to pay tax under reverse charge;
Under GST, for most goods and/or services, the liability for payment of tax rests with the supplier (forward charge). However, in some cases, the liability to pay tax (GST) would rests with the recipient of the goods or services, instead of supplier, such transactions fall under reverse charge. Hence, any person (recipient of goods or service) who is required to pay tax under reverse charge must mandatorily obtain GST registration. The Central Government has already supplied the list of services & goods that are covered under reverse charge.
Apart from that certain other provision has also been inserted under GST laws that prescribes that in case of Unregistered dealer selling to a registered dealer under GST, the registered dealer has to pay GST on the supply on behalf of unregistered dealers.

However, a major relief has been extended by the Government by its decision taken in 22nd Council meeting held on 06.10.2018 whereas the Reverse Charge in case of purchases by registered dealer from unregistered dealers has been suspended till 31.03.2018.

(7) non-resident taxable persons making taxable supply;

(8) persons who supply goods or services or both on behalf of other registered taxable persons whether as an agent or otherwise;

(9) input service distributor;

(10) every electronic commerce operator;

(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 taxable person;

Further, the Government on the recommendations of the council may notify such other person or class of persons who are required to compulsorily obtain the registration.

Undoubtedly the registration is the first process that starts the journey of compliances under the GST laws, hence it is of utmost importance to ascertain whether the person is liable for registration or not. If one is liable for registration one should with the help of service provider or professional can easily get the registration done under GST. Thereafter, it is suggestable to registered person that he should choose a GST billing software for invoicing, accounting and various return filing thereafter. The small business accounting software also facilitate capturing of various data like GST registration no, PAN, registered office address etc. that would need to be provided by the business entity on various documents like invoicing etc required to be issued to various stakeholders.

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