Registration under GST

Registration

Any business in India that supplies goods or services with aggregate

turnover exceeding the threshold limit has to get registered under GST.
Why is registration under GST required?
Since GST is on the supply of goods/services, as per Section 22 of the
Act, supplier shall get registered under GST law.
When a person gets registered under GST, he will be allotted a Unique
Identification Number called Goods and Services Tax Identification
Number (GSTIN) by GST authorities.
It indicates that the person is legally recognized as a supplier of goods or
services or both.
The purpose of the registration is to facilitate the supplier to collect tax
from the recipient of goods/services on behalf of government and to avail
input tax credit paid by him on his inward supplies.

College of Agricultural Banking, RBI, PUNE

 Compulsory Registration
Who is liable to compulsorily register under GST irrespective of turnover?

1. Persons registered under the Pre-GST law (i.e., Excise, VAT, Service Tax
etc.)  

2. Transfer of registered business

The business which is registered has been transferred to someone, the
transferee shall take registration with effect from the date of transfer.
Example
Mr. Aakash of Mumbai has voluntarily registered his business under GST, despite his
aggregate turnover is Rs. 28 lakh. Subsequently, he sold his business to Mr. Sourabh as
a going concern. Is Mr. Sourabh required to register?
Mr. Sourabh shall get registered his business, despite aggregate turnover is less than
threshold exemption, as Mr. Sourabh is buying the business from a registered GST
dealer.
Who is liable to compulsorily register under GST irrespective of
turnover?

3. Inter-state taxable supply of goods

For all inter-state supply of goods, it is compulsory to get registered under GST. However, this clause is
not applicable to
• Those who makes inter-state supply of handicrafts goods
• Those who make inter-state supply of services
• Job worker (except jewelers, goldsmiths and silversmiths)
Example 1: Mr. Soni supplies goods in Bangalore where his aggregate turnover is Rs 39,00,000. Is he
required to register under GST and why?
He is not required to register under GST, as his aggregate turnover is only Rs 39,00,000 which is less
than threshold exemption.
Example 2: Mr. Santosh supplies goods in Bangalore for Rs. 10,00,000, Chennai for Rs.5,00,000 and
Kolkata for Rs. 8,00,000. Is he required to register under GST and why?
He is required to register under GST, as he is involved in interstate supply of goods, despite his
aggregate turnover (Rs.23,00,000) is less than threshold exemption.
Example 2: Mr. Bahadur, having business in Rajasthan supplies handicrafts to Bangalore and Chennai.
His aggregate turnover is Rs 25,00,000. Is he required to register under GST?
He is not required to register, as he is involved in the supply of handicrafts, even if he is making inter-
state supply of goods. He becomes liable to register only when his aggregate turnover crosses threshold
limit of Rs.40 lakh.
 Who is liable to compulsorily register under GST irrespective of
turnover?
4. Persons required to deduct Tax at Source
As per Government order, the following entities may need to deduct tax at source
(TDS) at rate of 2% on the payments to the suppliers of taxable goods/services,
where the total value of such supply, under an individual contract exceeds Rs.
2,50,000.
A department or establishment of the Central or State Government
Local authorities
Government agencies
An authority or board or any other body set up by an Act of Parliament or a state legislature
or established by any government with 50% or more equity or control
the society established by the central government or state government or any local authority
Public Sector Undertakings (PSUs)
 A person deducting at source should compulsorily register under GST without any threshold
limit. He can obtain registration without PAN.
Example
Mr. Raj, a chartered accountant entered into contract with a public sector
undertaking to provide income tax services with the contract value of Rs.
5,00,000. In this case, PSU has to deduct tax at source before making payment to
Mr. Raj and deposit the same with the government. Hence, PSU should
compulsorily get registered under GST.
 Who is liable to compulsorily register under GST irrespective of
turnover?

5. Casual taxable person making taxable supplies

“Casual taxable person” means a person who occasionally undertakes transactions involving
supply of goods or services or both in the course or furtherance of business, whether as principal,
agent or in any other capacity, in a State or a Union territory where he has no fixed place of
business.

Casual taxable person cannot opt for composition scheme and he must apply for registration at least 5
days prior to commencing his business.

The certificate of registration issued to a “casual taxable person” shall be valid for a period specified
in the application for registration or for a period of 90 days from the effective date of registration ,
whichever is earlier.

However, the proper officer, at the request of the said taxable person, may extend the validity of the
aforesaid period by a further period not exceeding 90 days.

Example
Mr. Agarwal of Rajastan participates in an exhibition held in Hyderabad in January and February of
every year where he has no fixed place of business and sells the taxable products of Rs. 8,00,000 in the
exhibition. He shall get registered as a casual taxable person in the state of Telangana, despite his
aggregate turnover does not exceed threshold limit.
Who is liable to compulsorily register under GST irrespective of
turnover?

8. Persons supplying online information from outside India

Persons supplying Online Information and Database Access or Retrieval
services (OIDAR) from a place outside India to a person in India is
required to get registered under GST irrespective of threshold limit. In
this context, OIDAR services are the services which are delivered
through the internet.

Examples of OIDAR services

Advertising on internet
Providing cloud services (Google Drive)
Provision of e-books, movie, music, software and other intangibles via
internet (Hotstar, Amazon Prime Video)
Providing data or information, retrievable or otherwise, to any person, in
electronic form through a computer network;
Online gaming (Steam)
Who is liable to compulsorily register under GST irrespective of
turnover?

6. Non-resident taxable person making taxable supplies

Non-resident taxable person is the one who occasionally supplies taxable
goods or services in a state/UT where GST applies but does not have any
fixed place of business in India.
Example
Mr. Gurung of Nepal participates in an exhibition held every year in Bhopal
where he has no fixed place of business and sells the taxable products of Rs. 12
lakh in the exhibition. He is required to be registered as a casual taxable person in
the state of Madhya Pradesh as non-resident taxable person, despite his aggregate
turnover does not exceed threshold limit.
7. Ecommerce Operator who is required to collect Tax at Source
Example
UrbanClap provides services of plumbers, electricians, teachers, beauticians
etc. UrbanClap collect GST from the customers and pays to the government.
Similarly, Ola, Uber etc.
Who is liable to compulsorily register under GST irrespective of
turnover?

Examples of Non-OIDAR services

Supplies of goods, where the order and processing is done

electronically
Supplies of physical books, newsletters, newspapers or journals
Services of lawyers and financial consultants who advise clients
through email
Booking services or tickets to entertainment events, hotel
accommodation or car hire
Educational or professional courses, where the content is delivered by
a teacher over the internet
Offline physical repair services of computer equipment
Advertising services in newspapers, on posters and on television
Who is liable to compulsorily register under GST irrespective of
turnover?

9. Persons paying tax on reverse charge mechanism

A. Supply from an Unregistered dealer to a Registered dealer
B. Services through an e-commerce operator
If an e-commerce operator supplies services then reverse charge will be
applicable to the e-commerce operator. He will be liable to pay GST.
C. Supply of certain goods and services specified by CBIC
Central Board of Indirect Taxes and Customs (CBIC) has issued a list of goods
and services on which reverse charge is applicable.
The registered dealer who has to pay GST under reverse charge has to do self-
invoicing for the purchases made.

10. Agents of a supplier

A person who makes taxable supply of goods/services on behalf of other taxable
persons as an agent or otherwise, is compulsorily get registered under GST
irrespective of threshold limit.
Example: Travel Agents
 Who is liable to compulsorily register under GST irrespective of
turnover?
11. Input Service Distributor

When a business with multiple branches incurs common expenses towards the
services used by all its branches and receives tax invoices from the service
provider, head office of the business is required to distribute input tax credit of
CGST and SGST/UTGST or IGST paid on the services to its branch offices.

For that purpose, it issues a document called ISD invoice to its branches in
proportion to the turnover. Hence, head office is an input service distributor
(ISD).

ISD is a facility provided to business with large common expenses where bill
payment is on centralized basis from head office. The branches can have
different GSTINs but must have the same PAN as that of ISD.

ISDs are required to compulsorily register under GST Act irrespective of

threshold limit. Further, registration as an ISD is to be done separately from its
registration as a normal tax payer under the Act.
Who is liable to compulsorily register under GST irrespective of
turnover?

Example
A business with head office located in Hyderabad has branch offices in
Chennai, Ahmadabad, Kolkata and Delhi.
The business incurs software maintenance expenses on behalf of all its
branches and receives invoice for the same from its software service
provider.
Head office issues ISD invoice to its branch offices so as to distribute input
tax credit to its branches in proportionate to their turnover.
Accordingly, head office in Hyderabad has to compulsorily register under
GST as an Input Service Distributor irrespective of its aggregate turnover.

However, ISD cannot distribute ITC paid

on inputs like raw materials and capital goods like Machinery
to outsourced manufacturers or service providers
Who is not liable to compulsorily register under GST irrespective of
turnover?

1. When a business is exclusively engaged in making exempted

supplies

Example
Mr Punia supplies Rs 50,00,000 worth of goods in Chennai which
are fully exempted under GST. Is he required to register under GST?
When a person makes all exempted supplies, he is not required to
register under GST despite aggregate turnover is more than Rs. 40,00,000.

Example
Mr Kulkarni makes exempted supplies of Rs 44,00,000 and taxable
supplies of Rs 4,00,000 in Bangalore. Is he required to register under
GST?
Yes. He is required to register, as his aggregate turnover is Rs 48,00,000,
despite his taxable supplies is only Rs 4,00,000.
 Who is not liable to compulsorily register under GST irrespective of
turnover?

2. When a business is exclusively engaged in making taxable supply

on which tax is payable under reverse charge mechanism
Example
Mr Surender, an advocate provides legal services to Infosys for which he
receives Rs 45,00,000 per annum. Is he required to register under GST?
He is not required to register, as he is providing legal services for which GST
is payable by Infosys under Reverse Charge Mechanism, despite legal services
are taxable supplies and he receives more than threshold exemption.

3. An agriculturist who is an individual or Hindu Undivided Family

(HUF) involved in the cultivation of land by own labour or by the labour of
family or by servants on wages payable in cash or kind or by hired labour
under personal supervision of his own or any member of his family.