Understanding GST Registration Requirements

Any person who carries on any business or engages in any kind of economic activity at any place in India is treated as a ‘taxable person’ under GST. Furthermore, the word ‘Person’ here refers to individuals, companies, firms, HUF, an AOP/ BOI, any Government-owned organization, any corporation, a body incorporated under laws of a foreign country, local authority, cooperative society, government, trust, or artificial juridical person.

Under section 22 of the Central Goods and Service Tax (CGST) Act, 2017, the categories of persons liable to obtain online GST Registration are listed below:

1. Any business unit involved in the supply of goods with a turnover of more than Rs. 40 lakhs in a financial year needs to register as a normal taxable person. The threshold limit is Rs. 20 lakhs if the business is operational in J&K, Himachal Pradesh, Uttarakhand, and the northeastern states.
2. Any business involved in the supply of services with turnover exceeding Rs. 20 lakhs in a financial year for Normal Category states. In the case of Special Category states, this limit is set to Rs.10 lakhs.
3. A person who is registered under an earlier law, that is, Excise, VAT, Service Tax, etc. is liable to register under GST, too.
4. When a registered business is transferred to someone or demerged, the transferee is liable to obtain the registration with effect from the date of transfer.

Also, the provisions of mandatory GST new registration of certain businesses, irrespective of their turnover, are contained under section 24 of the Central Goods and Service Tax (CGST) Act, 2017.

Compulsory GST Registration in Certain Cases

Under section 24, the following categories of persons are required to undergo GST registration:

• A person engaged in inter-State taxable supply.
• A casual taxable person is involved in any taxable supply. (Explained below)
• Any person who is liable to pay tax under reverse charge.
• Anyone who is required to pay tax under sub-section (5) of section 9.
• A non-resident taxable person who is making taxable supply. (Explained below)
• Anyone who is required to deduct tax under section 51.
• A person who makes a taxable supply of goods/services or both on behalf of any other taxable person.

Input Service Distributor, who may or may not be separately registered under this Act. (Explained below)

• E-commerce operator.
• A Person who supplies goods/services via an e-commerce aggregator. (Explained below)
• A person who supplies online information and database access or retrieval (OIDAR) services from places outside India to a person within the country other than a registered taxable person. (Explained below)

Casual Taxable Person

A person who does not have a fixed place of business and occasionally supplies goods/services in a territory where GST is applicable.

Non-resident Taxable Person

A person who has no place of business in India and occasionally supplies goods/services in a territory where GST is applicable.

Persons Exempted from Registration

Listed below are the persons exempted from GST registration, as per Section 23 of the CGST Act 2017:

• A person involved exclusively in supplying goods/services or both that are not liable to tax.
• A person exclusively supplying goods or services or both is exempt from tax.
• Agriculturists are involved in the supply of produce out of the cultivation of land.
• Any person as notified by the government.

Furthermore, discussed below are the goods and services that are exempted under GST.

Exempted goods under GST

• Fresh and dry vegetables like onions, potatoes, etc.
• Non-GST goods like eggs, fish, milk, etc.
• Ginger, garlic, grapes, melons, unroasted coffee beans, unprocessed green tea leaves, and others.
• Unbranded food items like rice, hulled cereal grains, wheat, corn, etc.
• Components like human blood.
• Raw silk, unspun jute fibers, khadi fiber, etc.
• Things like chalks, slates, handloom, etc.
• Manufacturing parts of hearing aid.

Exempted services under GST

• Various agricultural services, like packaging, warehouse, cultivation, supply, etc.
• Public transportation services
• Transportation of agricultural goods outside of India.
• Labor supply for farms.
• Goods transportation that charges less than Rs.1500.
• Services like retail packing, pre-conditioning, etc.
• Foreign diplomatic, government, healthcare, and educational services.
• Various banking services.

Penalty for not obtaining GST Registration

Failure or delay in obtaining the GST registration may lead to strict penalties under the GST regime. Hence, every person liable to get registered should abide by the same.

Penalty for Non-registration

The penalty for non-registration under GST is equivalent to Rs. 10,000/- or ten percent (10%) of the tax due from the person, whichever is higher.

Penalty for delay in GST registration

There is no special provision for penalizing a person for late GST registration. However, if the person/supplier is caught applying late for the same, the levied penalty is Rs. 10,000/- or the total amount of tax evaded by the taxable person, whichever amount is higher.

How is a business penalized when not registered for GST on time?

• Goods and vehicles are detained or confiscated.
• The person/supplier who failed to obtain the online GST registration will not be allowed to claim or transfer input tax credit.
• The penalty of INR 10,000/- or total tax applicable, whichever is higher.

Penalty if a person fails to display GST number at the declared business place

As per Rule 18 of the CGST Rules 2017; every person/business registered under GST is obligated to

1. Display the registration certificate at the principal place of business and the additional place of business.
2. Display the Goods & Services Tax identification number on the name board at the principal business place and the additional business location.

There is no specific penalty if a person fails to do the same. However, the general penalty under the GST Act is INR 25,000 in both the cases mentioned above.