Table of Contents
Introduction:
Compulsory GST registration is the process of enrolling your business under the Goods and Services Tax system in the GST portal. Registration under gst is mandatory for businesses that meet certain criteria, mainly based on their turnover. Businesses with an annual turnover exceeding the prescribed threshold limit in both goods ( its around 40 lakhs )and service ( its around 20 lakhs ) must get register for GST. In this article we shall discuss about the provisions relating to the registration and when the registration under GST Act become compulsory.
Compulsory Registration under GST
- Supply of Goods
Every supplier of goods whose annual aggregate turnover exceeds Rs. 40 Lakhs in a financial year is compulsory required to get registration under GST. This threshold limit is Rs. 20 Lakhs for special category state.
- Supply of Service
Every supplier of Service whose annual aggregate turnover exceeds Rs. 20 Lakhs in a financial year is compulsory required to register under GST. This threshold limit is Rs. 10 Lakhs for special category states of Mizoram,Tripura, Manipur and Nagaland )
- Person making Inter-State taxable supply
Persons making any, inter-State taxable supply is require compulsory registration. However, threshold limit is Rs.20 Lakhs ( 10 lakh in case of special category states ) is available in case of inter-sate supply of taxable services and of notified handicraft goods.
- Casual taxable persons making taxable supply
Irrespective of the aggregate turnover in the previous year CTP is required to obtain compulsory registration. However, threshold limit is Rs.20 Lakhs ( 10 lakhs in case of special category states ) is available in case of CTP who is making inter-sate taxable supply of notified handicraft goods and availing the benefit of exemption from registration as mentioned in the above point.
- Persons who are required to pay tax under reverse charge on inward supplies received.
Under the reverse charge mechanism (RCM), the recipient of goods or services is liable to pay tax. It is compulsory to get registered under GST provisions for a person, who is liable to pay tax under the reverse charge mechanism (RCM).
- NON – Resident taxable persons (NRTP) making taxable supply.
- E – Commerce Operator who is required to collect Tax at source under section 52, ECO means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
- Persons who makes taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.
- Input Service Distributor, whether or not separately registered under this Act.
- Every person supplying online information and data base access or retrieval ( OIDAR ) services from a place outside inida to a person in india, other than a registered person.
- Such other person or class of persons as may be notified by the Government on the recommendations of the council.
Conclusion:
Compulsory registration under GST is an essential step towards a unified tax system in India. Once a business is registered under GST, it is required to comply with all the GST rules and regulations. This includes maintaining records of all the transactions, paying taxes, submitting return on time and filing of GST return through prescribed form. Businesses with an annual turnover exceeding the prescribed threshold limit in both goods and service and above mentioned category of people must get register for GST under compulsory registration.
Disclaimer: The content and views stated in this article is solely for informational purpose only.
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