Basics of GST Registration
- Every supplier whose annual aggregate turnover in the current financial year exceeds the threshold limits (as amended from time to time) will have to get registered under GST Law.
- Please note that threshold limit is checked for Current Financial year.
- You have to apply for GST registration within 30 days from the date the turnover exceeds the given threshold limit.
- If GST Registration applied through Aadhaar then it takes only seven working days to get the registration else it may take upto 30 days.
- If your turnover exceed the threshold limit for registration in mid of the Financial year, then you are not required to pay tax on turnover upto the date of registration if you applied for registration within the required time frame.
- If in the next year, your turnover falls below the threshold limit then you may decide to surrender/cancel GST registration or you may decide to continue to pay GST on such lower turnover.
- A person can voluntary choose to get GST registration even if his turnover is less than threshold limit for gst registration.
- If your turnover crossed the threshold limit then you may decide to opt registration under composition scheme if your turnover is below the specified limit for opting for composition dealer. (The threshold of annual turnover for composition scheme was increased to Rs.1.5 crore from 1st April 2019. The taxpayers registered under the scheme have to pay tax quarterly and file returns annually from 1st April 2019)
- Apart from threshold limit, there are certain category of persons who are required to compulsorily get registered under GST.
What is Threshold Limit for GST Registration?
1. Threshold limit for GST registration Upto 31st March 2019
Threshold limit for GST registration upto 31-03-2019 is given below:-
|Special Category states||Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand||Rs. 20 Lakh||Upto 31.03.2019|
|Normal Category States||Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh||Rs. 10 Lakh||Upto 31.03.2019|
2. Threshold limit for GST registration w.e.f. 1st April 2019
Threshold limit for GST registration w.e.f. 1st April 2019 is given below:-
|Special Category states||Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand||Rs. 40 Lakh||W.e.f. 01.04.2019|
|Normal Category States||Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh||Rs. 20 Lakh||W.e.f. 01.04.2019|
Compulsory Registration under GST
As we know that Every supplier whose annual aggregate turnover in the current financial year exceeds the threshold limits, have to get registered under GST.
Section 24 – Compulsory registration in certain cases.
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) 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;
(x) every electronic commerce operator who is required to collect tax at source under section 52;
(xi) 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
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.
What is Annual Aggregate Turnover?
- Annual Aggregate Turnover is calculated for the entire financial year. For financial year 2022-23, it is from 1st April 2022 to 31st march 2023.
- Annual Aggregate Turnover is whole turnover taking all units of concern under same PAN.
- Annual Aggregate Turnover includes following-
- Sales value of all taxable supplies/services
- Sales on which tax paid under other person under RCM
- Sales value of exempt Supplies/services
- Export value of goods/services
- Inter-state supplies between units operating under same PAN
- Inter-state stock transfers.
- Annual Aggregate Turnover does not include following-
- Value of inward supplies (Purchases) on which tax is payable under RCM
- Aggregate Turnover is used at many places in GST such as-
- For checking GST registration requirement
- GST Registration under Composition Scheme
- For checking applicability of E-invoicing
- GST audit requirement
- Eligibility of Quarterly Return filing requirement under QRMP Scheme.
- HSN code requirement
Reverse Charge Mechanism (RCM) liability on purchase from unregistered person.
With implementation of GST w.e.f. 1.7.2017, A registered person was made liable to pay tax on RCM (Reverse Charge Mechanism) on each purchase of goods or service from unregistered person. But this provision goes through various changes which can be explained as follows:-
1. W.e.f. 1st July 2017 to 12th October 2017
During the period 01.07.2017 to 12.10.2017, A registered person was liable to pay tax on RCM (Reverse Charge Mechanism) on purchases of goods or service from unregistered person. But if total value of such purchases (aggregate from all unregistered persons) in a day is Rs. 5000 or less, then there is no requirement for payment of GST on RCM basis. But if a registered person purchases goods/services from unregistered person for Rs. 6000/- then RCM was applicable on whole value of Rs. 6000/-
2. W.e.f. 13th October 2017 to 31st January 2019
The Central Government vide Notification No. 38/2017 – Central Tax (Rate) dated 13th October, 2017, has amended Notification No. 8/2017 – Central Tax (Rate) dated 28th June, 2017 by omitting proviso under Paragraph 1 which deals with the exemption limit of Rs. 5000 per day available to the registered person on intra-State procurement of goods or services from any or all unregistered suppliers. Now, exemption shall be available to all the registered persons without any limit in case of supply procured from unregistered supplier. Inter-State supplies received from unregistered supplier is also exempt under corresponding notification issued under IGST Act. Therefore, any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay CGST under reverse charge mechanism. This exemption was first brought in only upto 31.3.2018 but later extended upto 30.09.2019 vide notification numbers 10/2018 dt. 23.03.2018 , 12/2018 dt. 29.06.2018 & 22/2018 dt. 06.08.2018.
3. W.e.f. 1st February 2019 till date(April -2023)
W.e.f. 01.02.2019, CGST (Amendment) Act,2018, amended RCM Provisions on purchases from unregistered persons to specify that RCM provisions on purchase from unregistered persons are now applicable only on the class of persons to be notified in the future. Hence temporary exemption provided by notification 38/2017, from RCM Provisions on such purchases was made permanent through the amendment.
Vide notification no. 07/2019 dt. 29.03.2019, Promoters purchasing cement and capital goods from unregistered persons in Real Estate Project are brought under RCM.