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Liability for registration

Liability for registration

GSTR may be simplified further.GST registration

Every business which sells either goods and/or services, having an annual turnover exceeding Rs. 20 Lakhs must be registered under the GST Act to do business. In this article, lets understand the various persons who are liable for registration irrespective of their aggregate turnover and important cases where registration is mandatory.

General Scenario: 

Under Chapter VI Section 22(1) every supplier shall be liable to be registered under the GST Law in the State / Union    Territory from where his aggregate turnover in a financial year exceeds Rs.20 lakh. However, for special category States, the threshold limit is Rs.10 lakh.

Now let’s see the aggregate turnover includes and excludes for calculation:

  • Includes:
    • All taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis),
    • Exempt supplies,
    • Exports of goods or services or both and
    • Inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis.
  • Excludes:
    • Transactions termed neither as supply of goods nor supply of services,
    • Central tax, State tax, Union territory tax , Integrated tax, and GST composition Cess, mentioned in the invoice, and
    • Supplies fall under ‘out of GST’ category.

The Special Category states as specified in sub-clause (g) of clause (4) of article 279A of the Constitution:

  • Arunachal Pradesh
  • Assam
  • Jammu & Kashmir
  • Manipur
  • Meghalaya
  • Mizoram
  • Nagaland
  • Sikkim
  • Tripura
  • Himachal Pradesh
  • Uttarakhand

 

  • Mandatory:  Under Chapter VI Section 24 The following persons are liable for registration irrespective of their aggregate turnover –
    • Persons making any Inter-State taxable supply
    • Casual Taxable Persons
    • Persons liable to pay GST under reverse charge
    • Non-Resident Taxable Persons
    • Persons who are required to deduct tax at source
    • Persons who are required to collect tax at source
    • Persons who supply goods and/or services on behalf of other taxable persons whether as an agent or otherwise.
    • E-commerce operators, who provide platform to the suppliers to supply through (Online portals such as Flipkart, Amazon, etc.)
    • Suppliers who supply through an e-commerce operator
    • Input Service Distributor

Important cases where registration is required

  • Person having same PAN, and operating business in different states.
  • Person having multiple business verticals in a state.
  • If a registered business by a taxable person is transferred to another person, then that  person who is either a successor or a transferee, shall be liable to be registered under the Act.
  • A transfer due to sanction of a scheme or an arrangement for amalgamation or a demerger takes place of two or more companies in accordance with the order of the High Court or Tribunal, the transferee shall be liable to be registered.
  • The persons who are already registered under existing Central Excise or Service Tax or VAT laws will have to migrate with GSTIN network by submitting all the required documents & information required for registration.

Not Liable to Registration:

Under Chapter VI Section 23

  • Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act.
  • An agriculturist, to the extent of supply of produce out of cultivation of land.
  • The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

Time limit for registration
Every person who is liable for registration must apply within 30 days from the date on which he becomes liable for registration, subject to such conditions, as may be prescribed.
Date of Liability of Registration while filing registration form

  • Voluntary Registration: No need to mention the date of liability arises.
  • Registration due to exceeding threshold limit: The date on which your turnover crossed the threshold exemption limit.
  • Compulsory Registration: The date on which compulsory requirement commences, hence you need to get the registration done. Examples are:
    • The date on which you started making the Inter-State supply.
    • The date on which you started making taxable supply (applicable only if you are a casual taxable person or non-resident taxable person).
    • The date on which you started purchases under Reverse Charge Mechanism (RCM).
    • The date on which you started making taxable supply of goods or services or both on behalf of other taxable persons as an agent or otherwise.

Benefits of registration

  • Creditability of the business will increase, as completion of registration, legally recognized a taxpayer, as supplier of goods or services.
  • Can get input tax credit on the GST paid at purchases.
  • Can be legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to his customers.
  • Can make Interstate Sales.
  • Can register on e-commerce websites.
  • Limited compliance and less tax liability for composition dealers results in high working capital.

Effective date of registration

  • If the application for registration is submitted within 30 days of date of liability of registration, the effective date of registration shall be the date of liability of registration.
  • If the application for registration is submitted after 30 days of date of liability of registration, the effective date of registration shall be the date of grant of registration.
  • In case of voluntary registration, the effective date of registration shall be the date of grant of registration.

Type of Dealers:

  • Regular
  • Deductor
  • SEZ
  • Input Service Distributor
  • Compounding dealer
  • Others

Illustrative Example: In a scenario where government is liable to deduct the TDS for contract value exceeding Rs. 2,50,000 and government also have outward supplies and inward supplies. In such a situation the organization should register one as a regular and other as deductor. No same GSTIN exists for two different businesses.

Format of GSTIN

  • Normal, Compounding and ISD [0-9]{2}[a-zA-Z]{5}[0-9]{4}[a-zA-Z]{1}[1-9A-Za-z]{1}[Z]{1}[0-9a-zA-Z]{1}    Example : 07CQZCD1111I4Z7
  • UIN [0-9]{4}[A-Z]{3}[0-9]{5}[UO]{1}[N][A-Z0-9]{1}  Example: 3418FIN00001UNY
  • Government[0-9]{2}[a-zA-Z]{4}[0-9]{5}[a-zA-Z]{1}[0-9]{1}[Z]{1}[0-9]{1}  Example: 34ACXP00001E0Z0
  • TDS[0-9]{2}[a-zA-Z]{4}[a-zA-Z0-9]{1}[0-9]{4}[a-zA-Z]{1}[1-9A-Za-z]{1}[D]{1}[0-9a-zA-Z]{1}  Example: 29ACXPK3463AND0
  • TCS[0-9]{2}[a-zA-Z]{5}[0-9]{4}[a-zA-Z]{1}[1-9A-Za-z]{1}[C]{1}[0-9a-zA-Z]{1}  Example: 08AJIPA1572E2CV
  • NRI [0-9]{4}[a-zA-Z]{3}[0-9]{5}[N][R][0-9a-zA-Z]{1}  Example: 0817GBR00037NRP
  • OIDAR(Online Information Database Access & Retrieval) [9][9][0-9]{2}[a-zA-Z]{3}[0-9]{5}[O][S][0-9a-zA-Z]{1}  Example: 9918IND29061OSS

 

Registration process for GST

 

GST registration has to be done online only through the official website maintained by Central Government of India. The website link is https://reg.gst.gov.in/registration/. Registration Process is explained below:

  • Filling of Part A of Form GST REG-01:
    • Log on to https://reg.gst.gov.in/registration/.
    • Select whether you are a taxpayer or a GST practitioner before providing details such as the Legal Name of the Business, State & District in which the entity is located, Permanent Account Number, e-mail address and mobile number.
    • The details you furnished shall be verified by the portal, and you will receive a one-time password or an email for confirmation. Based on the kind of business you are running, you will be required to upload  few documents as requested.
    • Once the verification is complete, the applicant will receive an Application Reference Number (ARN) on the registered mobile number and E-mail. An electronic acknowledgement will be issued to the applicant in FORM GST REG-02.
  • Filling of Part B of Form GST REG-01: Part-B of the form will have to be filled in with a few details after specifying the Application Reference Number and uploading the required documents.
  • Submission of GST Application: The filled application form shall be submitted by the applicant through any of the following verification methods:
    • With valid DSC (mandatory for companies and LLPs)
    • With E-signature
    • With EVC
  • Verifying by GST Officer: Your application will be verified by a GST officer and it could either be approved or you will be requested to provide further details or documents until the authorities have all the required information to approve your application.
  • If additional information is required, Form GST REG-03 will be issued. Applicant needs to respond in Form GST REG-04 with required information within 7 working days from the date of receipt of Form GST REG-03.
  • Once all the required information via Form GST REG-01 or Form GST REG-04 is provided, the registration certificate in Form GST REG-06 will be issued to the applicant.

Documents required for GST Registration

The following documents are required (scanned copies) at the time of filling GST registration application:

  • PAN card
    • In case of sole proprietary – PAN card of proprietor
    • In any other case – PAN card of legal entity
  • Proof of constitution / incorporation of business
    • In case of a Partnership Firm – Deed of Partnership
    • For Others- Registration Certificate of the business entity
  • Proof of primary location of business
  • Photo of promoter / Authorized Signatory
  • Proof of appointment of Authorized Signatory
  • Photo of Authorized Signatory
  • First page of the Bank Passbook or statement having the Bank Account number, IFSC code, branch address, address of account holder and latest transaction details.
  • Digital Signature (mandatory for companies and LLPs)

The following can be used as ID proof:

  • Aadhaar Card
  • PAN Card
  • Driving License
  • Passport
  • Voter Identity Card

Any of the following can be used as Address proof :

  • Aadhar Card
  • PAN Card
  • Driving License
  • Passport
  • Voter Identity Card
  • Ration Card

Promoter/Authorized Signatory means –

  • For Proprietary Concern – Proprietor
  • For Partnership Firm / LLP – Managing/Authorized/Designated Partners (personal details of all partners are to be submitted but photos of only ten partners including that of Managing Partner are to be submitted)
  • For Hindu Undivided Family – Karta
  • For Company – Managing Director, whole time Directors and the Authorized Person
  • For Trust – Managing Trustee, Trustees and Authorized Person
  • For Association of Persons or Body of Individuals –Members of Managing Committee (personal details of all members to be submitted but photos of only ten members including that of Chairman are to be submitted)
  • For Local Authority – CEO or his equivalent
  • For Statutory Body – CEO or his equivalent
  • For Others – Person(s) in Charge

Amendments of Registration Certificate
Under Chapter VI Section 28

  • The fields (other than core-fields) in the registration certificate can be amended by registrant himself.
  • On the basis of information furnished by the registrant, the proper officer may approve or reject amendments of core-fields in the registration particulars.

Cancellation of Registration Certificate
Under Chapter VI Section 29

  • The proper officer can cancel the registration, either on his own motion or on the application from registrant (or by his legal heirs, in case of death of registrant).

Penalty for Non-registration:

  • If any supplier who is required to be registered as per the GST provisions, fails to do registration, he shall be liable for the Penalty of 100% of tax due or Rs.10,000 or  whichever is higher.

For further queries please contact us on our toll free number 1800-121-6223 or write to us on sales@udyogsoftware.com. Udyog software (I) Ltd. is a leading GST Compliance and Automation solution provider in India.