As per Article 366 (12A) of the Constitution of India, The Goods and Services Tax means a tax that is applicable on the supply of goods or services or both except taxes in the supply of alcoholic liquor for human consumption.
Be aware that all the small taxpayers having total turnover less than Rs. 20 Lakhs are not required to register under GST and Rs. 10 Lakhs in some cases. And for all the small and medium sized taxable persons, a simple composition scheme is available.
Interestingly, one must not forget that if once you have entered into the GST regime then there is no going back as once applicable, will remain applicable. No matter even if your turnover limit gets reduced, you shall be liable to pay GST. Also, if there are NIL returns to be filed, the taxpayers shall be liable to pay GST tax.
Applicability of GST
As per section 22 (1) of CGST Act, every supplier shall be liable to be registered in the State or Union Territory (other than special category states) from where he makes supply of goods or services or both, if his aggregate turnover in a financial year exceeds Rs. 20 Lakhs.
Moreover, in some additional states, registration is required if the aggregate turnover in a financial year exceeds Rs. 10 lakhs. And the names of some of the special states are:-
- State of Arunachal Pradesh
- Jammu and Kashmir
- Himachal Pradesh
However, the States like Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand have been excluded as they want the exemption limit of Rs. 20 Lakhs. Note that the limit for Jammu and Kashmir was Rs. 20 lakhs and continues to be the same even after 1-2-2019.
Requirements under GST Registration
Whosoever is made liable under section 22 or 24 shall apply for registration in every such State in which he is so liable within thirty days from the date on which he becomes liable to registration in such manner and subject to conditions as may be prescribed.
As per the law, a casual taxable person or a non resident taxable person shall apply for registration at least five days prior to the commencement of business. Also, the person must have a valid income tax PAN.
For the persons who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate base line is located.
How to Apply for registration under GST?
For getting registered under GST, the prior requirement is to declare his or her Permanent Account Number, mobile number, e-mail address, and State or Union territory in Part A of FORM GST REG-01 on the common portal.
This provision is applicable to all persons liable to be registered and also to those who intends to obtain voluntary registration. However, below mentioned persons are not required to apply under GST registration, namely:-
- A person required to deduct tax at source under section 51
- A person required to collect tax at source
- A person supplying OIDAR services from a place outside India to a non taxable online recipient.
A thing to be noted:
SEZ Unit or SEZ Developer are required to register separately under. Where a person is having a unit, as defined in the Special Economic Zones Act in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union Territory
Similarly, Input Service Distributor shall make a separate application for registration as such Input Service Distributor.
Do agriculturists require GST Registration?
Agriculturists to the extent of supply of produce out of cultivation of land do not require registration. The term “Agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land.
- by own labour, or
- by the labour of family or
- by servants on wages payable in case or kind or by hired labour under personal supervision or the personal supervision of any member of the family.
Thus, the definition of ‘agriculturist’ is restrictive. Only those who are directly engaged in the cultivation of land are eligible for the exemption.
Who need not to register under GST?
Persons who are making supplies of taxable goods or services or both, where total tax is payable on the recipient of goods or services are exempt from registration under GST Act.
Persons engaged in the supply of handicraft goods making inter-state supply are exempt from registration if the aggregate value of all their supplies on all Indian basis is less than Rs. 20 Lakhs/10 Lakhs per annum.
A job worker having the turnover less than 20/10 lakhs is exempt from registration, even if he makes inter-State supplies to the registered person. This exemption is not available to Jewellery, goldsmiths’ wares and other articles manufactured on job work basis.
Persons who are suppliers of service and supplying services through e-commerce operator are not required to register under GST if their aggregate turnover is less than Rs. 20 lakhs per annum. This relaxation is allowed only in case of supply of goods and in case of supply of services.
Verification Process of the GST application
The GST application is forwarded to the proper officer who shall examine the application and the accompanying documents. Is everything found to be in order then, approval for grant of registration to the application shall be made within the time period of three working days from the date of submission of application.
In case the application filed is deficient or where the proper officer requires any clarification with regard to any information provided in the application or documents, he may issue a notice to the applicant electronically in form GST REG-03 within three working days from the date of submission of application. The applicant shall furnish such clarification in form GST REG-04 within seven working days from the date of receipt of such notice.
When the officer is satisfied with the documents submitted by the applicant, he may approve the grant of registration to the applicant within seven working days. Where no reply is furnished by the applicant or where the proper officer is not satisfied with the documents, he shall for reasons to e recorded in writing, reject application for registration under GST and inform the applicant electronically in form GST REG-05.
When the registration shall be considered as deemed GST Registration?
The application for grant of registration shall be deemed to have been approved if the proper officer fails to take any action:-
- within three working days from the date of submission of application or
- within seven working days from the date of receipt of clarification, information or documents furnished by the applicant
Grant of GST Registration
Where the application for GST has been approved under rule 9, a certificate of registration in form GST REG-06 showing the principal place of business and additional place of business shall be made available to the applicant on the Common Portal.
Every certificate of registration shall be duly signed or verified through electronic verification code (EVC) by the proper officer under the Act.
In case of Deemed Registration, the applicant shall be communicated the registration number. The certificate of registration, duly signed or verified shall be made available to him on the common portal within three days after expiry of the period.