Under this act, the liability to pay tax has been placed on the supplier. But every supplier is not liable to pay tax. If he is not liable to pay tax then there is no need for registration under this act. As other existing Acts, there is also a registration limit in this act. The persons who crossed this limit, are liable for registration. The limit is also called exemption limit. In this article, I have explained the GST registration limit, persons liable for registration compulsorily, persons not liable for registration.
The council decided that the GST registration limit is Rs. 10 lakh (north east sates) and Rs. 20 lakh (other states). This means if the annual turnover/sales of a business does not exceeds Limit (Rs. 10 lakh for north east states or Rs. 20 lakh for other states), then there will be no GST Tax levied on it.
Even if your turnover is less than the GST Registration limit, you can register voluntarily under GST. It has the following advantages:-
- It provides legal recognition to your business.
- It will lead to proper accounting of your taxes paid on input services/goods which you can utilize for payment of output GST on supply of goods/services.
- You can legally collect tax from your purchasers and pass on the credit. A person without GST registration cannot claim input tax credit and collect tax.
Who is required to register under GST Act ?
- Every supplier is liable to get himself registered under this act who carries on any business at any place in India and whose total turnover/sales exceeds the limit (Rs. 10 lakh for north east states or Rs. 20 lakh for other states).
- Every person who is already registered in the existing law before the appointed day, is liable to be registered in this act from the appointed day.
- If a person is registered under this act and transferred his business to other person on succession as a going concern then the transferee shall be liable for registration under this act.
- Where business is transferred on account of amalgamation, demerger then the transferee shall be liable to register under this act.
If a supplier has more than one business verticals in a state then he is liable for separate registration for each business verticals provided turnover for each vertical cross the prescribed limit.
If a supplier has units in different states then he is liable to registration for each unit in each state separately.
The total turnover includes the following contents:
- All taxable
- exempt supplies and
- exports of goods and/or service of a person having same PAN
It excludes taxes charged under CGST, SGST and IGST. It also excludes valued of supplies on which tax is levied on reverse charge basis.
Compulsory GST Registration
As per section 22 of the CGST Act, the GST registration is compulsory for the following persons, even if their turnover does not exceeds the exemption limit.
- Any person making any inter-State taxable supply.
- casual taxable persons : It means a person who occasionally undertakes transactions in a taxable territory where he has no fixed place of business.
- persons who are required to pay tax under reverse charge
- persons who are required to pay tax under section 9(5) (electronic commerce operator)
- non-resident taxable persons : a person residing outside India
- persons who are required to deduct tax under section 51
- persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise
- input service distributor
- persons who supply goods and/or services, other than supplies specified u/s 9(5), through such electronic commerce operator who is required to collect tax at source u/s 52.
- every electronic commerce operator
- 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 and
- 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.
Who is not liable for registration under this act?
The following persons shall not be liable for registration-
- If the total turnover of the only includes goods and/or supply which are not liable for GST, then even if the turnover exceeds the exemption limit, there will be no need for registration.
- An agriculturist is also exempted from GST and its registration provided the supply of produce out of cultivation of land.
- The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.
Agriculturist means an Individual or HUF who undertakes cultivates of land:
- By own labour
- By the labour of family
- By servants on wages payable in cash or kind or by hired labour under personal supervision or the member of famil
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