With each passing day, we are moving one step closer to the GST regime. The GST Bill has been approved by the President, and the GST Council is in the process of forming the rules. As businesses begin their preparation towards the new taxation system, obtaining your GST registration is the first step in GST transition process.
Liability for Registration in GST
|North East India + Sikkim, J&K, Himachal Pradesh and Uttarakhand||Rs 10 Lakhs|
|Rest of India||Rs 20 Lakhs|
This ensures that on the day a dealer crosses Rs 20 Lakhs turnover, he is already registered, need to start charging GST, and is eligible to claim input tax credit. All existing dealers registered with any of the current laws (VAT/Excise/Service Tax) will also need to register under GST by default.
Important Note: The turnover considered here is the aggregate pan-India turnover (including value of taxable
non-taxable, exempt and export supplies) of a business entity, and not state-wise.
Let us take an example to illustrate the liability of a business to register under GST.
Super Cars Ltd. is a car manufacturing unit in Karnataka. They also have service units located in Karnataka and Delhi. Additional details are furnished in the table below:
|Business Unit||Location||PAN Number||Turnover (Rs)|
|Super Cars Ltd.||Karnataka||AEHCS3476M||125 Lakhs|
|Super Cars Service Ltd.||Karnataka||AEHCS3476M||20 Lakhs|
|Super Cars Service Ltd.||Delhi||AEHCS3476M||10 Lakhs|
As per the example,
- All 3 units are registered under the same PAN AEHCS3476M
- To arrive at the aggregate turnover, the turnover of all the 3 units (Super Cars Ltd. and Super Cars Service Ltd. located in Karnataka and Delhi) will be considered.
- Therefore, the aggregate turnover will be Rs 155 Lakhs (Super Cars Ltd. Rs 125 Lakhs + Super Cars Service Ltd. of Karnataka Rs 20 Lakhs + Super Cars Services Ltd. of Delhi Rs 10 Lakhs) and are required to register under GST.
For Whom is Registration Mandatory?
The following categories of suppliers need to mandatorily register irrespective of turnover:
- Taxable person carrying on interstate supply
- Casual and non-resident taxable persons
- Businesses liable to pay tax under reverse charge
- Agents supplying on behalf of a taxable person
- Input service distributor
- Sellers on e-commerce platforms
- All e-commerce operators
- Person supplying online information and database access or retrieval services from outside India to an unregistered person in India
Aggregator supplying services under his brand name
- Persons responsible to deduct TDS
Registration Forms for Dealers Registered under Existing Central and State Tax
- All dealers registered with central or state tax authorities and having a valid PAN will be auto-migrated and allotted with a provisional certificate of registration in Form GST REG-21.
- Within 6 months, dealers are required to submit Form GST REG-20 in the GST Portal along with information and documents as prescribed.
- If the information provided is complete and satisfactory, final registration certificate will be issued in Form GST REG-06.
- If the details submitted are not satisfactory, a show cause notice will be issued in Form GST REG-23, and there will be a hearing before cancelling the provisional registration. If the show cause hearing is not successful, or if the details are not provided within the stipulated period, the provisional registration allotted in Form GST REG-21 will be cancelled by issuing an order in Form GST REG-22.
During transition, if a taxable person is not required to register under GST, but was previously registered (Central and State law), he has an option to cancel the provisional registration issued by submitting the Form GST REG-24.