Every business carrying out a Taxable Supply of goods or services, or both under GST regime and whose turnover exceeds the threshold limit of ` 20,00,000 or ` 10,00,000 as applicable will be required to register as a normal taxable person. This process of registration is referred as GST Registration.
Who should register and what are the rules around it?
If you meet any of the following conditions linked below, you should obtain GST Registration within 30 days. (GST is applicable from 1st July 2017).
- Your turnover in a financial year exceeds ` 20,00,000 (Limit is ` 10,00,000 for the North Eastern States)*1. [earlier the limit was ` 10,00,000 and ` 5,00,000 for North Eastern States]
[If your turnover includes supply of only those goods or services, or both which are exempt under GST, this clause does not apply].
- Every person who is registered on earlier law will take registration under GST too.
- Where a business which is registered has been transferred to someone, the transferee shall take registration with effect from the date of transfer.
- Anyone who make Inter-State supply of goods or services, or both.
|*1- North Eastern States are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.|
- Casual taxable persons*2.
- Non-resident taxable person*3.
- Agent of a supplier.
- Those paying tax under Reverse Charge Mechanism*4.
- Input Service Distributor.
- E-commerce operator or aggregator.
- Person who supplies via E-commerce aggregator.
- Person supplying online information and database access or retrieval services from a place outside India to a person in India,, other than registered taxable person.
Other notable points regarding Registration
- A person with multiple business verticals in a state may obtain separate registration for each business verticals.
- PAN is mandatory to apply for GST registration (except for non-resident person who can get GST registration on the basis of other documents).
- A registration which has been rejected under CGST Act/SGST Act shall also stand rejected for the purpose of CGST/SGST act.
|*2- Casual Taxable Person : As per the law, a ‘Casual Taxable Person’ is a person who occasionally undertakes transactions involving supply of goods or services, or both, in the course or furtherance of business, whether as principal, agent or in any other capacity, in a state or Union Territory where he has no fixed place of business.
*3- Non-Resident Taxable Person : As per the law, a ‘Non-Resident Taxable Person’ is a person who occasionally undertakes transactions involving supply of goods or services, or both, in the course or furtherance of business, whether as principal, agent or in any other capacity, in a state or Union Territory where he has no fixed place of business or residence in India.
*4- Reverse Charge Mechanism : Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. Reverse charge may be applicable for both services as well as goods.
Situations where reverse charge will apply
1. Unregistered dealer selling to a registered dealer
This is an option available to;
- Small businesses and taxpayers
- Who deals only in goods
- Having turnover less than ` 75,00,000.
They can opt for Composition Scheme where they will tax at nominal rate of 1% or 2.50% (for manufacturers) CGST and SGST each.
- Restaurant sector taxpayers may also opt for this scheme.
Additional points to be noted
- A Composite Dealer is not allowed to avail Input Tax Credit.
- Such a dealer cannot issue a Tax Invoice as well.
- A buyer from composition dealer will not be able to claim Input Tax Credit on such goods.
- Any tax payable under Reverse Charge Mechanism will not be covered under the scheme. These taxpayers will be liable to be paid as normal tax payers.
- Composition Scheme is available only for Intra-State Supplies.
- If a dealer is involved in Inter-State supplies, then he cannot opt for the scheme.
Filing of Returns by Composition Dealers
Composition dealers will be required to maintain much less detailed records and file one quarterly return instead of three monthly returns.
- FORM GSTR-4 will be filed by the supplier who has opted this scheme
- On or before 18th of month succeeding quarter and;
- FORM GSTR-9A to be filed as an annual return.
Tax Rate Applicable on a Composite Dealers
A registered tax payer, who is registered under the composite scheme will pay tax at a rate not more than 1% for manufacturer, 2.5% for restaurant sector and 0.5% for other supplier of turnover.
|Sl. No||Category of Registered Person||Rate of tax CGST||Rate of tax CGST||TOTAL RATE OF TAX|
|1||Manufacturers (other than manufacturers of notified goods)||1%||1%||2%|
|2||Suppliers (food or any other article for human consumption or any drink other than alcoholic liquor for human consumption)||2.5%||2.5%||5%
PENALTIES FOR NOT REGISTERING UNDER GST
An offender not paying tax or making short payments has to pay a penalty of 10% of the tax amount due subject to a minimum of ` 10,000.
The penalty will be high at 100% of the tax amount when offender has evaded i.e., where there is deliberate fraud. However, for genuine errors, the penalty is 10% of the tax due.