GST Registration Thresholds, Exceptions, Examples

This document covers

1. Threshold limit for GST Registration
2. Exceptions for above threshold for GST registration
3. Persons who are required to take compulsory GST registration
4. Persons not liable for Registration
5. When to apply GST Registration?

1. Threshold limit for GST Registration

Every supplier of goods or services or both is required to obtain registration in the state or union territory from where he makes the taxable supply if his aggregate turnover exceeds specified threshold limit in a financial year.

In a fiscal year, the threshold limit for GST registration is Rs 20 lakhs / 40 lakhs. However, in certain states, the registration fee is reduced to Rs 10 lakhs.

Aggregate Turnover

Aggregate turnover is a crucial parameter to avail the benefit of threshold exemption for registration. The word Aggregate turnover

INCLUDES the following

1. Value of all outward taxable supplies of persons having same PAN on India basis
2. Value of all outward Exempt supplies of persons having same PAN on India basis
3. Value of Exports of persons having same PAN on India basis
4. Value of Interstate supplies of persons having same PAN on India basis

EXCLUDES the following

1. CGST/SGST/UTGST/IGST/compensation cess
2. Value of inward supplies on which tax is payable under reverse charge

2. Exceptions for above threshold for GST registration

The above threshold of Rs 40 lakhs is not applicable to the following cases

1. Persons required to take compulsory registration u/s 24.
2. Persons engaged in making supplies of ice cream and other edible rice, whether or not containing cocoa, Pan masala, Tobacco and manufactured tobacco substitutes
3. Persons who has opted for voluntary registration or such registered persons who wants to continue with existing registration
4. Persons engaged in making intra state supplies in the states of Arunachal Pradesh, Uttarakhand, Meghalaya, Sikkim, Telangana, Puducherry and special category states(Nagaland, Mizoram, Manipur, Tripura).

Note: A person is required to take GST registration from the place where he is making the taxable supply. He is not required to take registration in a state or union territory from where he makes a exempt or non-taxable supply

3. Persons who are required to take compulsory GST registration

1. Persons making any interstate taxable supply (however the threshold of Rs 20 lakhs/10 lakhs is available in case of inter state supply of taxable services, notified handicraft goods and handmade goods)
2. Casual taxable persons making taxable supply
3. Persons who are required to pay tax under reverse charge on inward supplies received
4. Non resident taxable persons making taxable supply
5. E-Commerce (every e commerce operator and persons who supply goods and/or services)
6. Persons who are required to deduct tax u/s 51
7. Input service distributor
8. OIDAR Services
9. Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise
10. Persons who are required to pay tax u/s 9(5)
11. Such other persons or class of persons as may be notified by government

4. Persons not liable for Registration

1. Persons engaged exclusively in the business of supplying goods and/or services not liable to tax/wholly exempt from tax
   Example

   ---

   Tarakam Foundation, a charitable trust registered under income tax act which is exclusively engaged in providing charitable services. As the charitable activities are exempt from GST, Tarakam foundation is not required to get registered under GST

2. An agriculturist, to the extent of supply of produce out of cultivation of land.
   Example

   ---

   Mr Ramaiah is an agriculturist engaged in cultivation of wheat in his field in Telangana. As Ramaiah is an agriculturist, he is not required to take GST registration But if Ramaiah wants to start trading rice apart from supplying the wheat produce, he will come under GST.

   The turnover from supply of wheat is 15 lakhs and Rs 7 lakhs from trading of rice.

   As the aggregate turnover is more than 20 lakhs (15+7=22), he is required to get registered under GST

3. Persons making only reverse charge supplies
4. Persons making inter-state taxable supplies of taxable services up to Rs 20 lakhs/10 lakhs
5. Persons making inter-state taxable supplies of notified handicraft goods and notified hand made goods up to Rs 20 lakhs/10 lakhs
6. Casual Taxable persons making inter-state taxable supplies of notified handicraft goods and notified handmade goods upto Rs 20 lakhs
7. Persons making supplies of services through an ECO with aggregate turnover upto Rs 20 lakhs

5. When to apply GST Registration?

1. Every person who is liable to get registered under GST should register within 30 days from the date on which he becomes liable to registration
2. A Casual taxable person or Non-resident taxable person should register at least 5 days prior to the commencement of business

State wise Registration

1. One registration per state: Registration needs to be taken state wise. There is no centralized registration under GST. Any business having branches in various states needs to take separate registration for each state.
2. Within Same State: Any business having different branches in same state can have single registration. It needs to declare 1 place as principal place of business and others as additional place of business.

Note 1: If the taxpayer wants to have separate registrations for various branches in same state, he can apply for the same.

Note 2: If the taxpayer is paying tax for one of his place of business under normal scheme, he is not eligible to pay tax under composition scheme for other place of business