Who is Liable to get Registered under GST?

GST was introduced in 2017 with a view to imply easy tax compliance by eliminating different reporting structure. GST has brought different taxes under one ceiling. Today we are going to understand the need and requirement for GST Registration.

The normal understanding of the business class is that we are required to get GST Registration only if our turnover in a particular financial year goes beyond Rs.20 Lakhs (Rs.10 Lakhs in special category of states). However there are many other conditions under which compulsory registration is required under the GST Act under section 24. By the end of this article you will come to know whether you are required to get registered under GST.

Now lets see who is required to get GST registration:

1. Inter State Supply of goods

According to section 24, any person who is supplying goods or services inter state (outside the state in which he is registered) is required to get GST number without any Turnover Limit.

(As per notification no.10/2017 dated 28th June, 2017, the government has made supply of services exempt for registration if service provider’s turnover is below Rs.20 Lakhs)

Let us understand by below table:

2. Casual taxable person making taxable supply

As per section 24, every casual taxable person is liable to get GST registration. A casual taxable person is a person who supplies goods and/or services or both occasionally in a state where he does not have a fixed place of business.

For example – Mr. Rajesh have his registered place of business at Mumbai, Maharashtra. Now if Mr. Rajesh wants to sell some of his products in an exhibition at Bengaluru, Karnataka, he will have to register himself as a casual taxable person for the state of Karnataka.

Note – Here there is no turnover limit in case of casual taxable person, so even if the turnover is below Rs. 20 Lakhs, still he will have to register himself as a casual taxable person.

3. Persons who are required to pay tax under Reverse Charge

As mentioned in section 24, every person who is required to pay tax under reverse charge has to compulsorily register himself under GST.

However, any person who is engaged in a business of supplying of goods or/and services which are not liable to tax or exempt then he is not required to get compulsory registration.

4. E-commerce operators under section 9(5) of CGST Act

Specified categories of services through e-commerce operators as mentioned in section 9(5) of CGST Act. These e-commerce operators are required to get compulsory registration under GST.

5. Non Resident Taxable Persons making taxable supply

Any Non Resident Person who is making any taxable supply of goods or/and services is required to compulsorily register himself under GST.

According to section 277(1) of CGST Act, ‘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.

6. Persons who are required to deduct tax under sub section 51, whether or not separately registered under this Act.

According to Section 51 of CGST Act, Following persons are required to deduct TDS. A department or establishment of Central or State Government or local authority or Government Agencies or other specified person. Hence, the above person are required to compulsorily register under GST.

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

According to section 24, any person who make taxable supply of goods or services or both on behalf of other taxable person is required to register himself under GST.

Let us understand with an example –

Suppose “A” is registered under GST and “B” works as an agent of “A” for a commission of 5%. Now if “B” sells goods worth Rs.20 lakhs on behalf of “A”. B’s commission will be 5% of Rs.20 Lakhs i.e. 1 lakh, but still “B” will have to get himself registered under GST. It doesn’t matter how much commission “B” is earning, if “B” is working on behalf of “A” whether as an agent or otherwise, “B” is required to get registration under GST.

8. Input Service Distributor, whether or not separately registered under this Act

Input Service Distributor (ISD) has to compulsorily get registered under GST. According to section 2(61) of CGST Act 2007, “Input Service Distributor (ISD)” means an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said services to a supplier of taxable goods or services or both having same PAN as that of the ISD.

9. Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52

If a person supplies goods or services or both through e-commerce operators other than specified under section 9(5), then that person is required to compulsorily register under GST Act.

10. Every electronic commerce operator

All e-commerce operator are compulsorily required to get registered under GST Act. As per Section 2(44) of the CGST Act, 2017, “Electronic Commerce” means the supply of goods or services or both, including digital products over digital or electronic network. As per Section 2(45) of the CGST Act, 2017, “Electronic Commerce Operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.

11. Every person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person.

For example – Amazon and Netflix, as they are providing services from outside India to Indian customers, then they are required to get themselves registered under GST Act in India.

12. Such other person or class of persons as may be notified by the Government on the recommendations of the Council

About an author:

CA Rehman Bhamani is a practicing chartered accountant having experience of more than 9 years. He is actively writing blogs and informative articles on various platforms and is very well experienced in GST and Income Tax.