The GST council in its second day reached the consensus on GST Registration Limit. The council decided that the exemption limit for GST registration is Rs. 10 Lac (north east sates) and Rs. 20 Lac(other states). This means if the annual turnover/sales of a business does not exceeds Limit (Rs. 10 lac for north east states or Rs. 20 lac for other states), then there will be no GST Tax levied on it.
The above limit is exemption limit of GST, however the limit for registration is different.
Even if your turnover is less then the exemption 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 can not claim input tax credit and collect tax.
Who is required to register under GST Act ?
The model law of GST provides under the Schedule III for liability for registration under GST Act, which states that any supplier who carries on any business at any place in India and whose total turnover/sales exceeds the limit (Rs. 9 lac for north east states or Rs. 19 lac for other states) is liable to get himself registered under GST.
The limit is reduced to Rs. 19 Lac / Rs. 9 Lac from Rs. 20 Lac/Rs. 10 Lac since you get registered in advance before you become become liable for GST and cross the exemption limit.
If the total turnover of the only includes goods 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 form GST and its registration. (Section 9(1)).
The total turnover includes the following contents:
- All taxable and non-taxable supplies
- exempt supplies and
- exports of goods/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 schedule III of GST 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 undretakes transcaiotns in a taxable territory where he has no fixed place of buiness.
- persons who are required to pay tax under reverse charge
- non-resident taxable persons : a person residing outside India
- persons who are required to deduct tax under section 37;
- 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 branded services, through electronic commerce operator;
- every electronic commerce operator;
- an aggregator who supplies services under his brand name or his trade name; 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.
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