Saturday, 15 July 2017

GST Registration

Under any taxation law, registration is the most fundamental requirement.  All the taxpayers are identified from the unique number allotted to them by the concerned tax authorities at the time of obtaining registration. A registered taxpayer is entitled to collect taxes from his customer and pass on the credit of such taxes to the purchaser/recipient on goods/services supplied to them.  

Format of GST Registration Number:

The supplier of taxable supply has to register in each of the state or Union Territory from where the supply has been effected i.e. the registration in GST is PAN based and state specific. Upon registration, the supplier is allotted a 15-digit GST identification number called “GSTIN”. The format of GSTIN is:

Registration Requirements under the GST:

The provisions relating to registration have been incorporated u/s 22 to 30 of the Central Goods & Services Tax Act, 2017 (hereinafter referred to as “CGST Act”).

Physical Verification of Registration:

Physical verification is to be resorted only where it is found necessary in the subjective satisfaction of the proper officer.

Time Limit For Obtaining Registration:

Every person who is liable for registration has to apply within 30 days from the date on which he becomes liable for registration, in such manner and subject to such conditions, as may be prescribed.

From a commercial point of view, registration can be classified in the following broad categories:

Category 1 - Mandatory Registration If Threshold Limit Is Crossed.

Section 22 of the CGST Act requires a supplier to obtain registration in the State/UT from where he makes a taxable supply of goods and/or services if his “aggregate turnover” in a financial year exceeds the following amounts:

Rs 10 lakhs in case of eleven special category states (ie, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, J&K, Himachal Pradesh and Uttarakhand)

Rs 20 lakhs in case of any other state.  

The term “aggregate turnover” has been defined to include all supplies made by a taxable person, whether on his own account or made on behalf of his principals.  To under this meaning better, an illustration has been given below:

Section 23 of CGST Act permits the following two persons to operate their business without taking registration.  In other words, in the following two cases, registration is not required:
A person exclusively engaged in the business of supplying goods/services that are not liable to tax or are wholly exempt from tax; and
An agriculturist, to the extent of supply of product out of cultivation of land. 

Category 2 - Mandatory Registration Even If Threshold Limit Is Not Crossed.
In the following cases, compulsory registration is required irrespective of the level of turnover:

Person making inter-state taxable supplies; 

A person receiving supplies on which tax is payable by recipient on reverse charge basis;

A person who supplies goods/services on behalf of some other taxable person (ie an agent of some principal);

E-commerce operators, who provide platform to the suppliers to supply through it (ie online portals such as Flipkart, Snapdeal, Amazon, etc);

Suppliers who supply through an e-commerce operator;

Those ecommerce operators who are notified as liable for GST payment u/s 9(5) (ie aggregators such as Uber, Ola, etc);

TDS Deductor;

Those supplying online information and data base access or retrieval services from outside India to a non-registered person in India;

Casual taxable person who is not having a fixed place of business in State/UT from where he wants to make supply; and

Non-resident taxable persons who are not having a fixed place of business in India.

Category 3 - Mandatory Migration Of Persons Already Registered In The Present Law:

Every person who holds a valid registration under the existing indirect taxes needs to get himself migrated to GST law as per the requirements of the CGST Act.

Category 4 - Voluntary Registration:

A person who is not compulsorily require to obtain registration u/s 22 to 24 of the CGST Act may get himself registered voluntarily and all the provisions of the GST law shall apply to such person as if he is a registered taxable person.  

Category 5 - Establishment Of Distinct Person:

Where a person has obtained/required to obtain registration in any State/UT in respect of an establishment and such person has another establishment in any other State/UT, such establishments shall be treated as establishments of two distinct persons for the purposes of GST law and both the establishments shall be required to be registered separately.  

Category 6 - Registration For Business Vertical:

Generally, only a single registration is required for one State/UT.  However, Section 25 of the CGST Act provides a dealer an option to obtain separate registrations for each “business vertical” of a person in a State/UT.  Business vertical has been defined to mean a distinguishable component of an enterprise that is engaged in supplying an individual product/service or a group of related products/services and that is subject to risk and returns that are different from those of other business verticals.  

To ensure the seamless flow of Input Tax Credit from suppliers to recipient and utilizing the same for the payment of taxes due on supply of goods or services, the registration under GST is required. Without registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him.

Written by:

Priyanka Jain
ACA, ACS, B.Com (H)

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