In any tax system registration is the most fundamental requirement for identification of tax payers ensuring tax compliance in the economy. Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail Input tax credit for the taxes on his inward supplies. Without registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him.
Need and advantages of registration
Registration will confer the following advantages to a taxpayer:He is legally recognized as supplier of goods or services.He is legally authorized to collect tax from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/ recipients.He can claim input tax credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services.Liability to register
GST being a tax on the event of “supply”, every supplier needs to get registered. However, small businesses having all India aggregate turnover below prescribed limit are exempt from taking registration. The small businesses, having turnover below the threshold limit can, however, voluntarily opt to register.
Every individual who engages in the sole supply of products and has an annual aggregate turnover of more than Rs 40 lakh is required to register for GST. Previously, the limit for a provider of products was 20 lakhs. By notification No. 10/2019-Central Tax, dated 07.03.2019, the amount was raised to 40 lakhs.
The increased exemption amount of 40 lakhs does not apply to the following:
- Businesses who are service providers.
- Persons engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa [2105 00 00], Pan masala [2106 90 20] and all goods of Chapter 24, i.e. Tobacco and manufactured tobacco substitutes.
- Businesses who mandatorily need business registration regardless of their turnover
- Businesses who voluntarily apply for GST Registration
- Persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand and the Special Category States as per section 22.
In India, there is a Rs. 20 lakh registration turnover threshold for service providers. Thus, The barrier for service providers hasn’t changed at all since the GST was launched. If the total value of the services they provide in a financial year exceeds Rs. 20 lakhs, they must register under the GST online and do GST Return Filing. For special category states the GST Registration limit is set at Rs. 10 Lakhs.
How is aggregate turnover determined for the GST threshold?
One thing is now abundantly clear: the primary factor in determining whether a person qualifies for GST exemption or not is their total annual turnover. Section 2(6) of the CGST Act defines “aggregate turnover.”
In simple words, you can define turnover as inclusive of:
- Taxable supplies
- Exempted supplies
- Non-GST supplies
- Interstate supplies
- Zero-rated supplies
- Goods sent for job work
The turnover excludes:
- Goods or services received on which tax payable under reverse charge mechanism
- GST paid
- Goods received for job work
Nature of Registration
The registration in GST is PAN based and State specific. Supplier has to register in each of such State or Union territory from where he effects supply. Area upto 12 nautical miles in the sea is considered part of the nearest coastal State where the nearestpoint of appropriate base line is located. Area beyond 12 nautical miles and upto 200 nautical miles, which is not covered under any Union Territory is considered as a separate Union territory for the GST law. A person registered in one State is considered ‘unregistered person’ outside the State. If a person has unit in SEZ or is a SEZ developer and also unit in domestic tariff Area (i.e. outside the SEZ) in the same State, then he has to take separate registration for his SEZ unit / as a SEZ developer as a separate place of business of him. If a supplier also wants to distribute credit to his same-PAN entities, then he will take separate registration as ‘input service distributor’ in addition to his
registration as ‘supplier’. Unlike service tax regime, the GST law does not have the facility of centralized registration for units across multiple states.
In GST registration, the supplier is allotted a 15-digit GST identification number called “GSTIN” and a certificate of registration in corporating there in this GSTIN is made available to the applicant on the GSTN common portal. The first 2 digits of the GSTIN is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code, and the last digit is check sum number. Registration under GST is not tax specific which means that there is a single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses
Documents required for GST Registration
Check the Basic documents required for GST Registration by clicking here – https://www.gst.gov.in/docadvisor/
For Assisted GST Registration Application Services Get in Touch
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