Chapter 3: Registration Under GST

GST Registration

Who is liable to collect and pay GST: 

Under GST the following persons are required to pay and collect GST:

* Businesses with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 20 Lakhs for Special Category States)

* Casual taxable persons / Non-Resident taxable persons

* Agents of a supplier & Input service distributor

* Those paying tax under the reverse charge mechanism

* Person who supplies via e-commerce aggregators

* Every e-commerce aggregator

* Person supplying online information and database access or retrieval services from a place outside India to a person in India

Let’s now take a look at the Limits for GST Registration: 

Every supplier making taxable supplies must get registered under GST. However, a small business with a turnover not exceeding Rs 40 lakhs (Rs 20 lakhs in Special Category States) aren’t required to register under GST.

Let’s now take a look at the different types of persons that can register under GST:

a.       Casual taxable persons: A Casual taxable person is one who occasionally supplies goods/services in a territory but does not have a fixed place of business. For instance, a person who sets up a fireworks shop during Diwali, selling fireworks temporarily is a casual taxable person.

b.       Non-resident taxable person: A Non-resident taxable person is a person who occasionally supplies goods/services to recipients within a territory where GST applies but doesn’t have a fixed place of business or residence within India. It's mandatory for a non-resident taxable person to obtain GST registration, irrespective of its aggregate turnover.

c.       TDS Deductor: As per Section 51 of the Goods and Services Tax Act, the Government could mandate an establishment or department of the Central or the State Government or Governmental agencies or a local authority or a category of persons to deduct 2% as tax from the amount credited to a supplier, where total consideration under a contract, is more than INR.2.5 lakhs. Such a person needs to mandatorily obtain the GST registration and is known as “deductor”.

d.       Composite Dealer: Under the composition scheme, small businesses with an aggregate turnover not exceeding INR 1.5 crores (INR 75 lakhs for North Eastern states and hilly states) have the option to pay GST at a fixed rate on their turnover, and have fewer compliances to deal with compared to regular taxpayers. Taxpayers who opt for this scheme are called Composition Dealers.

e.   Input service distributor: An Input service distributor (ISD) is a business which receives invoices for services used by its branches. It distributes the tax paid, to such branches on a proportional basis by issuing an ISD invoice.

Next, let us understand the GST Registration Process: 

Here is the process flow for GST Registration

•       First, the applicant needs to log on to the GST Portal -

•       Then, click on the ‘Services’ tab at the top of the webpage.

•       In the ‘Services” option, four options - ‘Registration’, ‘Payments, ‘User Services’ and ‘Refunds’ will be displayed.

•       The applicant needs to click on the ‘Registration’ and then select ‘New Registration’.

•       The applicant would then get redirected to a new page wherein he needs to select whether he’s a GST practitioner or a taxpayer before entering further details like the legal name of the business, Permanent Account Number, district and the state in which such entity is located, email address and mobile number. This is Part-A of the registration form.

•       The details entered by the applicant needs to be verified by the GST portal, so a one-time password/ email for confirmation would be sent to the applicant.

•       Depending on the business type, the applicant needs to upload a few documents as requested.

•       Then, the Part-B of the form needs to be filled-in after which the applicant would receive the ARN (Application Reference Number) via email or SMS. Part B has several sections such as details of promoters partners, details of authorized signatory, details of places of business, bank accounts, etc.

•       The application would then be verified by the GST officer and the same could either be approved or the applicant will be required to furnish more details/documents to the satisfaction of the authority to approve the application.


Cancellation of GST Registration:

After obtaining registration under GST, sometimes the registration might require cancellation. Cancellation of GST registration simply means that the taxpayer will not be a GST registered person any more. He will not have to pay or collect GST. 

The most common reasons for cancellation include - 

* No requirement to collect and pay GST

* Closure/Discontinuance of business

* Change in the constitution of business

* Transfer of business

* No business activity. 

Surrendering the GST registration would reduce compliance requirements for the taxpayers, as there would be no requirement to file GST returns.

For cancelling a GST registration, one needs to submit an application on the GST Common Portal in the FORM GST REG-16, with the requested information. After submitting the application for cancellation of registration, a GST officer would verify such application and then issue an order in the FORM GST REG-19, within a period of 30 days from the date of such application.

Suspension of GST Registration: Recently, the Indian government came up with a new concept of Suspension of GST registration. With this, the taxpayers who have applied for their GST registration cancellation would now be free from the requirements of GST return filing provisions during such suspension period, thus reducing the cost of compliance for the taxpayer. This newly inserted provision has been in effect since 1st February 2019.

Lastly, let us talk about the usefulness of Voluntary Registration-

A small business having a turnover lower than the threshold limit for GST registration could voluntarily opt to register for GST, pay and collect taxes, file returns and comply like a normal GST registered supplier. In doing so, the business would be eligible to take input credit of the taxes already paid, on all the purchases made, and would also be able to pass on the credit of taxes paid on its outward supplies to their customers.

With this, we come to the end of our video. We hope it has been informative to you. 

Stay tuned for the next chapter.