GST or Goods or Services Tax is a consumption-based tax, it is an indirect tax which is levied on sale, manufacturing, consumption, import, and export of Goods or Services. The Act was made effective with the view to remove the cascading of taxes. There were a number of taxes that were imposed on the goods or services and the credit of different taxes paid by the taxpayer was not available to him in different stages which led to an increase in the price of the goods as well service for the consumer. In order to provide the benefit of the input at various stages and in order to avoid the cascading effect of the tax, the GST Act was introduced. After the implementation of the GST Act, all the taxes like VAT, CST, Entry tax, entertainment tax, and different other tax as well as duties were subsumed and only one tax i.e. GST was introduced. One nation One Tax was the mantra.
In this regard, the Constitution (101st Amendment) Act, 2016 was introduced in 2016 where article 366(12A) was inserted to define the term GST. GST means 'any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption'.
Further, as we know that in order to recognize a liable taxpayer a system of registration should be in place, this is for compliance purposes, anyone who is not registered under the Act cannot collect the tax as well as claim the benefit of input. The GST Act contains the provisions with regard to the registration of taxpayers. Here Section 22 and Section 24 are very important. Under Section 22, the limits have been prescribed crossing the same, will attract registration requirement. Apart from this, individuals who are mandatorily required to take registration under GST are defined in section 24 of the GST Act.
Section 22 of the GST Act- Persons Liable for Registration
(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds forty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a license under existing law, shall be liable to be registered under this Act with effect from the appointed day.
(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
(4) Notwithstanding anything contained in sub-section (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, the demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Explanation. - For the purposes of this section, -
(i) the expression 'aggregate turnover' shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;
(iii) the expression 'special category States' shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.
In simple words, one can say that any supplier who is having aggregating turnover in a financial year exceeding 40 Lakhs, except in the case of special category states. In the case of special category states a person is liable for registration if his aggregating turnover in a financial year exceeding 10 Lakhs.
Further, if any person is already registered or hold a license in any existing Act, then he shall be liable for registration under the Act.
Here special categories states include Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.
Section 23 of GST Act- Persons Not Liable for Registration
A person shall not be liable to take registration under the Act if he is
a. Engaged in any business of supplying goods or services which are not liable to tax or wholly exempt from tax under Act or under the IGST Act.
b. an agriculturist, to the extent of supply of produce out of cultivation of land.
Further, the government can also exempt any person from taking registration through a notification in the official gazette.
Section 24 of the GST Act: Compulsory Registration
Here is the list of the person who is compulsorily required to get themselves registered under the Act
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) a person who is required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.
Documents required for GST Registration
1. PAN card
2. Valid Phone no. and Email id for OTP.
3. Passport size photograph of the Applicant.
4. Proof of principle place of business (any one)
• Electricity bill
• Legal ownership document
• Municipal khata copy
• Property tax receipt
5. Proof of details of Bank Account
• The first page of the passbook
• Bank statement
• Cancelled cheque
6. Other details
• List of Goods and Services
• Proof of appointment of Authorized Signatory (Letter of Authorization or copy of board resolution)
• Authorized Signatories photo
• Incorporation certificate (for Company and LLP)
• DSC
How to file an application for GST Registration?
The application for registration has to be made within 30 days through online mode from the date of person becomes liable to register, or his turnover exceeds the specified limit defined under GST. The GST certificate shall be issued within 3 days from the date of application submission if no discrepancy is found by the authority. However, due to COVID 19, it is taking more than the time as prescribed.
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