Cases in which registration is compulsory
In the fourth article of our series on GST, we will explain the situations under which registration under GST is mandatory. As you will recall from the previous articles, under GST as a general rule, a person whose turnover exceeds Rs.20 Lakhs (10 Lakhs in special category states) need to take registration under GST. However, the following categories of persons, irrespective of turnover, are required to take compulsory registration under GST.
- A Person making Inter-state taxable supply
- A person receiving supplies on which tax is payable by recipient on reverse charge basis
- A Casual taxable person who is not having fixed place of business in the State or Union Territory from where he wants to make supply
- A Non-resident taxable person who is not having fixed place of business in India
- A person who supplies on behalf of some other taxable person (i.e. an Agent of some Principal)
- E-commerce operator, who provides platform to the suppliers to make supply through it
- A Supplier who supply through an e-commerce operator
- Those ecommerce operators who are notified as liable for GST payment under Section 9(5)
- TDS Deductor
- Those supplying online information and data base access or retrieval services from outside India to a non-registered person in India.
The threshold limits of Rs.20 Lakhs (10 Lakhs in special category states) is applicable for suppliers who supply with in a State. Any supplier who supplies to another State shall have to compulsorily register under GST, irrespective of turnover.
A casual taxable person is one who has a registered business in some State in India, but wants to provide supplies from some other State in which he is not having any fixed place of business. Such person needs to register in the State from where he seeks to supply as a casual taxable person. A non-resident taxable person is one who is a foreigner and occasionally wants to provide taxable supplies from any State in India, and for that he needs GST registration. The GST law prescribes a special simplified procedure for registration, as also for extension of the operation period of such casual or non-resident taxable persons. They have to apply for registration at least five days in advance before making any supply.
Both the E-commerce Operator as well as all the suppliers who supply through the electronic platform provided by the operator need also to register in GST. Though liability to pay tax remains on the supplier, the operator is required to collect a small percentage of tax from the supplier (Tax Collection at Source) and remit the same to government. The supplier gets the credit of the tax so collected in his cash ledger and can use the same for paying his tax.
In case of purchases of goods and services exceeding Rs.2,50,000/-, made by government departments/agencies, local authority and other such persons as may be notified, the buyers have to deduct 1% of tax while making payment to the supplier and remit the same to government. The supplier will get the credit of such deducted amount in their cash ledger and use the same for paying their taxes. This tax deduction at source (TDS) will help create audit trail and boost compliance. The TDS deductor is also required to take GST Registration.
Since the TDS and TCS requirements have been deferred for two months in the interest of smooth transition into GST regime, the registration requirements of these category also stands deferred accordingly.
In respect of purchase of OIDAR services like internet downloading of songs, software, movies, books etc by non-registered buyers from the international websites located outside the country, the supplier located outside the country is made responsible to pay tax, by way of either registering in India or appointing some agent.
In respect of supplies to some notified agencies of United Nations organisation, multinational financial institutions and other organisations, a unique identification number (UIN) is issued.
We hope this article was useful to you in undertanding the registration requirements under GST. If you have any queries, please write in to us here.
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