Person Liable for Compulsory Registration Under GST

The most significant aspect of any tax law is defining the registration to identify a company or individual for tax purposes and monitor the compliance requirements thereon. In this article, we are going to learn about the general registration criteria and persons liable for compulsory registration under the CGST Act 2017. 

GST REGISTRATIONS 

1] Composition Scheme

Small taxpayers can opt for this to get rid of the complex GST compliances and pay GST at a fixed turnover rate. Any taxpayer whose turnover is not more than Rs 1.5 Cr can opt for this scheme to avail of the benefit of lesser compliance, limited liability of tax, and higher liquidity.

2] Normal Scheme

The standard GST turnover threshold for registration is Rs 40 lacs for goods and Rs 20 lacs for services provided across the normal category states in India. However, this threshold criteria does not apply to individuals mandated to compulsory registration under section 24. 

The threshold limit for GST registration is Rs 20 lacs for goods and Rs 10 lacs for services across the special category states namely Jammu and Kashmir, Manipur, Assam, Arunachal Pradesh, Meghalaya, Sikkim, Tripura, Nagaland, Uttarakhand and Himachal Pradesh. Nevertheless, this limit is also not applicable to persons liable for compulsory registration under section 24.

PERSON LIABLE FOR COMPULSORY REGISTRATION - SECTION 24 OF CGST ACT 2017

1. Inter-state supplier
   A person making an interstate taxable supply of goods or services is required to take compulsory registration despite the turnover limit. 
   Provided that persons making inter-state supply of services are not required to take any registration of the aggregate turnover is less than Rs 20 lacs Normal states) or Rs 10 lacs (special category states) as the case may be.
   Provided further that person engaged in interstate supply of specified products like handicraft goods are not required to register if their aggregate turnover is less than Rs 20 lacs or Rs 10 lacs.

2. Casual Taxable Persons
   Casual taxable persons making a taxable supply where they do not have a fixed or principal place of business are required to take compulsory registration. 
   Provided that if the goods are specified products or handicraft goods, the supplier will get the benefit of the turnover threshold and further, the registration is not required if the goods are moved on an approval basis and the invoice is issued at the time of delivery of goods. 

3. Non-Resident Taxable Person
   A non-resident person engaging in the taxable supply of goods or services in India must get a compulsory registration regardless of the turnover threshold limit. 

4. E-Commerce Operator supplier
   If a supplier provides certain services through an ECO, they must get registered and the ECO will pay the tax on their behalf. The services that are covered here are the same as Sec 9(5) namely:

   1. Housekeeping services such as carpeting and plumbing 

   2. Passenger transport by radio taxi, maxi can, motorcycle, or cab

   3. Accommodation in the guest house, hostels, campsite, etc 
      
      The ECO is liable to take compulsory registration and pay tax only if the service providers have a turnover of less than Rs 20/10 lacs as they won't be required to take any registration under section 22 of this act. Those liable to pay tax under 9(5) have to take compulsory registration. 

5. RCM supplies
   A person who is liable to pay tax under RCM (Reverse Charge Mechanism) on inward supplies of goods or services is required to take compulsory registration regardless of the turnover threshold. 
   Provided that the person making only outward supply and tax on which is liable to be paid on RCM by the recipient under 9(3) are exempt from registration. 

6. OIDAR 
   OIDAR service providers providing services from a place outside India to an individual in India, except for a registered person are liable for compulsory registration. 

7. TDS Deductor liable to deduct tax under section 51 need a specific and separate registration as a Tax deductor even if they are already registered under this act. 
8. Agents who store and sell goods on behalf of the principal need to register under the act even if their turnover threshold is not breached. Other agents who provide goods and/or services for other taxable persons, whether in the capacity of an agent or not, do not need compulsory registration and can avail of the benefit of threshold limits.
9. ISD - Input Service Distributors need a separate compulsory registration in the capacity of an ISD
10. Except those specified under 9(5), Individuals supplying goods or services through ECO must undergo mandatory registration under the CGST Act. This is important when ECOs are tasked with the TCS as per section 52. 
11. An individual or category of individuals as may be specified by the government based on the recommendation of the GST council.

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