undefined | unit 2 registration under gst

GST

UNIT II

Registrations under GST

Q1) Who are the persons liable to get registered under GST?

A1)

1. Every supplier liable to be registered if aggregate turnover in financial year exceeds Rs.40 lakhs / 20 lakhs in Special Category States [SEC 22(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 goods and services both, if his aggregate turnover in a financial year exceeds Rs. 40 lakhs.

Where such person’s 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 Rs. 20 lakhs.

Meaning of Aggregate turnover [SEC 2(6)]: “Aggregate turnover” means the aggregate value of:

All taxable supplies. (Excluding the value of inward supplies on which tax is payable by a person on reverse charge basis.)

Exempt supplies.

Exports of goods or services or both.

Inter – state supplies.

of persons having the same PAN number, to be computed on all India basis, but excludes :

a) Central tax.

b) State tax.

c) Union territory tax.

d) Integrated tax and

e) Cess.

2. Every supplier liable for registration will have to take a separate registration in every state even though such supplier may be supplying goods or services or both from more than one state as a single entity.

3. Registrants under existing law required to obtain registration under GST [SEC 22(2)]:

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

Appointed day [sec 2(10)]

“Appointed day” means the date on which the provision of this act shall come into force i.e. 1.7.2017.

4. Transfer of Business – Transferee to obtain fresh registration [sec 22(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.

5. Transfer pursuant to scheme for amalgamation/demerger – transferee liable to be registered from date of incorporation [sec 22(4)]:

Notwithstanding anything contained in sub-section (1)&(3), in a case of transfer pursuant to sanction of a sanction of a scheme or an arrangement for amalgamation or, as the case may be, 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.

6. Supply of goods by Job- worker to be included in supplies of principal

The supply of goods, after completion of Job-worker by a registered job-worker shall be treated as the supply of goods by the principal referred to in sec 143 and the value of such goods shall not be included in the aggregate turnover of the registered job-worker.

7. Special category States

“Special category States” shall mean the states as specified in article 279 A (4)(g) of the Constitution. They are states which opted for new limit of Rs.20lakhs for sale of goods.

Arunachal Pradesh.

Meghalaya.

Manipur.

Mizoram.

Puducherry.

Telangana (10 lakhs).

Nagaland.

Sikkim.

Tripura.

Uttarakhand.

Q2) Write a note on compulsory registration under GST.

A2) Compulsory registration in certain cases [sec 24] : Notwithstanding anything contained in section 22(1), the following categories of persons shall be required to be registered under this Act –

Persons making any inter-state taxable supply

Casual taxable persons making taxable supply

Persons who are required to pay tax under reverse charge

Persons who are required to pay tax under sec 9(5) i.e. E- commerce operator who is required to pay tax on specified services

Non- resident taxable persons making taxable supply

Persons who are required to deduct tax under sec 51, whether or not separately registered under this Act.

Input Services Distributor, whether or not separately registered under this act

Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise

Persons who supply goods or services or both, other than supplies specified under section 9(5) through such electronic commerce operator who is required to collect tax at source under section 52

Every electronic commerce operator

Every person supplying online information and database access or interval services from a place outside India, other than a registered person

Such other person or class of person as may be notified by the government on the recommendation of the council.

Q3) What is the procedure for registration under GST?

A3) Procedure for registration is governed by section 25 of the CGST Act read with relevant CGST Rules, 2017. Relevant provisions of CGST Rules, 2017 have been incorporated at the relevant places. Further, special provisions have been provided for registration of casual taxable person and non-resident taxable person under section 27. Concept of deemed registration has been elaborated under section 26.

Under GST, the application for registration has to be submitted electronically at the GST Common Portal –www.gst.gov.in, duly signed or verified through Electronic Verification Code (EVC)

Around 30 forms/formats have been prescribed in the CGST Rules, 2017. For every process in the registration chain such as application for registration, acknowledgment, query, rejection, registration certificate, show cause notice for cancellation, reply, cancellation, amendment, field visit report etc., there are standard formats10. This makes the process uniform all over the country. The decision-making process has also been expedited. Strict time lines have been stipulated for completion of different stages of registration process.

Where and by when to apply for registration? [Section25(1)]

PARTICULARS	WHERE	WHEN
Person who is liable to be registered under section 22 or section 24.	in every such State/UT in which he is so liable.	within 30 days from the date on which he becomes liable to registration.
A casual taxable person or a non-resident taxable person.	in every such State/UT in which he is so liable.	at least 5 days prior to commencement of business.

2. State-wise registration [Section 25(2) read with rule11]

One registration per State

Registration needs to be taken State-wise, i.e. there are no centralized registrations under GST. A business entity having its branches in multiple States will have to take separate State-wise registration for the branches in different States.
Further, within a State, an entity with different branches shall be granted single registration wherein it can declare one place as principal place of business (PPoB) and other branches as additional place of business(APoB).

b. Separate registration for different places of business within a State/UT may begranted

Although a taxpayer having multiple places of business in one State is not mandatorily required to obtain separate registration for each such place of business in the State, he has an option to obtain independent registrations with respect to each such separate place of business.

However, separate registration for each place of business shall be granted provided all separately registered places of business of such person pay tax on supply of goods/services/both made to another registered place of business, of such person and issue a tax invoice/bill of supply for such supply. Separate registration application needs to be filed for each place of business

A registered person opting to obtain separate registration for a place of business shall submit separate application in form GSTREG01.

The provisions of rules 9 and 10 [Discussed in subsequent paras] relating to verification and grant of registration shall mutatis mutandis apply to an application submitted under this rule.

c. Composition levy in case of separate registration for multiple places of business within a state/UT

If a person is paying tax for one of his places of business under normal scheme, he shall not pay tax under composition levy for any other place ofbusiness.

If one of the places of business [separately registered] of a registered person becomes ineligible to pay tax under composition levy, all other registered places of business of said person would also become ineligible to pay tax under composition levy.

The provisions of rules 9 and 10 [Discussed in subsequent paras] relating to verification and grant of registration shall mutatis mutandis apply to an application submitted under this rule.

Voluntary registration [Section25(3)]

A person who is not liable to be registered under section 22 or section 24 may get himself registered voluntarily. In case of voluntary registration, all provisions of this Act, as are applicable to a registered person, shall apply to voluntarily registered person. However, once a person obtains voluntary registration, he has to pay tax even though his aggregate turnover does not exceed 20 lakhs/10 lakhs.

Voluntary registration is usually obtained by the business for ensuring seamless flow of credit to their customers.

4. Distinct Persons/ establishments of distinct persons [Section 25(4) & (5)]

A person who has obtained/ is required to obtain more than one registration, whether in one State/ Union territory or more than one State/Union territory shall, in respect of each such registration, be treated as distinct persons.

Further, where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons.

5. PAN must for obtaining registration [Section 25(6) &(7)]

Permanent Account Number is mandatory to be eligible for grant of registration.

6. Unique Identity Number(UIN)[Section25(9)&(10)readwithrule17]

Any specialized agency of the United Nations Organization or any Multilateral Financial institution and organization as notified under the United Nations (Privileges and Immunities)

Act,1947,consulate or embassy of foreign countries and another person notified by the Commissioner, is required to obtain a UIN from the GSTN portal.

This UIN is needed for claiming refund of taxes paid on notified supplies of goods and/or services received by them, and for such other purpose as may be notified. UIN granted is a centralized UIN i.e. it shall be applicable to the territory of India. A person having UIN is not registered person and thus, is not a taxable person.

The proper officer may, upon submission of an application in prescribed form or after filling up the said form or after receiving a recommendation from the Ministry of External Affairs, Government of India, assign a UIN to the said person and issue registration certificate within 3 working days from the date of submission of application.

7. Suo-motu registration by the proper officer [Section 25(8) read with rule16]

Where, pursuant to any survey, enquiry, inspection, search or any other proceedings under the Act, the proper officer finds that a person liable to registration under the Act** has failed to apply for such registration, such officer may register the said person on a temporary basis and issue an order in prescribed form.

**Such person shall either:

submit an application for registration in prescribed form within 90 days from the date of grant of temporary registration, or

file an appeal against such temporary registration.

In case (ii), if the Appellate Authority upholds the liability to registration, application for registration shall be submitted within 30 days from the date of issuance of such order of the Appellate Tribunal.

Provisions relating to verification and issue of registration certificate [as contained in rules 9 and 10] [discussed in subsequent paras] shall, mutatis mutandis, apply to such application submitted by the person granted temporary registration. GSTIN thereafter granted shall be effective from the date of order of proper officer granting temporary registration.

8. Procedure for registration [Section 25 read with rules 8, 9 &10]

Provisions relating to procedure for application for registration, verification of the application and approval &issue of registration certificate are contained in the rules 8, 9 and 10 of the CGST Rules, 2017 respectively. The same have to be read in conjunction with section 25 provisions. However, procedure so laid down will not applyto:

a) Non-resident taxable person.

b) Apersonrequiredtodeducttaxatsourceundersection51.

c) Apersonrequiredtocollecttaxatsourceundersection52.

d) A person supplying OIDAR services from a place outside India to a non-taxableonlinerecipientreferredtoinsection14ofIGSTAct.

Thus, procedure for registration prescribed under rules 8, 9 and 10 are also applicable to a person paying tax under composition levy, every person seeking voluntary registration as well as a casual taxable person.

Such persons shall apply for registration in Form GST REG 01. The application for registration in GST Form REG 01 is divided into two parts – Part A and Part B.

In order to cater to the needs of tax payers who are not IT savvy, Facilitation centres have been established which help the taxpayer in submitting the application for registration, amending the registration certificate, submitting application for cancellation of registration, revocation of cancellation of registration, etc. Facilitation Centre shall be responsible for the digitization and/or uploading of the forms and documents.

Application for registration by Special Economic Zone (SEZ) [Secondproviso to section 25(1):A person having unit in SEZ/an SEZ developer will have to make a separate application for registration as distinct from his place of business located outside SEZ in the same State/UT. Thus,there may be a case where two units of a tax payer are located in same State/UT - one in SEZ and another outside SEZ. In that case, separate registrations have to be obtained for each of the two units as separate places of business.

9. Effective date of registration [Rule10]

Where an applicant submits application for registration-	effective date of registration is-
within 30 days from the date he becomes liable to registration	the date on which he becomes liable to registration
after 30 days from the date he becomes liable to registration	date of grant of registration

Q4) What are the Documents required for registration of Sole Proprietorship / Individual?

A4) Documents required for registration of Sole Proprietorship / Individual

a) PAN card,

b) Aadhaar Card,

c) Passport size photo of the sole proprietor.

d) Registered Office Address proof:-

e) Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt

f) Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

g) Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement.

Q5) Documents required for registration of Partnership deed/LLP Agreement

A5) Documents required for registration of Partnership deed/LLP Agreement

Documents of Partners:-

a) PAN Card, Passport size photograph and Address Proof of Partners,

b) Partnership Deed,

c) PAN card of Firm,

d) Registered Office Address proof:-

e) Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt

f) Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

g) Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement.

Additional documents in case of LLP–

a) Copy of Board Resolution, Registration Certificate of the LLP.

b) Proof of appointment of authorized signatory (Digital Signature Certificate of any one of the designated partner).

Q6) What are the Documents required for registration of Private Limited / Public Limited / One Person Company (Indian or Foreign)?

A6) Documents required for Private Limited / Public Limited / One Person Company (Indian or Foreign)

a) PAN Card of the company.

b) Registration Certificate of the Company (Certification of incorporation) given by MCA.

c) Memorandum of Association (MOA) /Articles of Association (AOA).

d) PAN card, Passport size Photograph and Aadhaar card of all Directors.

e) PAN card and Aadhaar card of the authorized signatory.

f) Board Resolution or any other proof of appointing authorized signatory.

g) Registered Office Address proof:-

h) Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.

i) Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

j) Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement.

Q7) What are the Documents required for registration of HUF?

A7) Documents required for HUF

a) PAN card of HUF.

b) PAN Card and Aadhaar card of Karta.

c) Passport size Photograph of Owner.

d) Registered Office Address proof:-

e) Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.

f) Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

g) Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement.

Q8) What are the Documents required for registration of Society or Trust or Club?

A8) Documents required for Society or Trust or Club

a) Pan Card of society/Trust/Club.

b) Registration Certificate of society or club.

c) Passport size Photograph and PAN Card of Promoter/ Partners.

d) PAN card and Aadhaar card of the authorized signatory.

e) Board Resolution or any other proof of appointing authorized signatory

f) Registered Office Address proof:-

g) Self-owned property – Copy of electricity bill, landline bill, water bill, municipal khata copy, property tax receipt.

h) Rented property – Rent agreement and No objection certificate (NOC) from the owner of the rented property.

i) Bank account details- a copy of the cancelled cheque, the front page of passbook or bank statement.

Q9) Write a note on Reverse Charge Mechanism.

A9) Reverse charge mechanism is typically, the taxable person supplying goods and services is liable to pay GST. But, there are certain cases such as imports and other types of supplies where the recipient of goods and services is liable to pay GST instead of the supplier. In other words, the liability to pay GST shifts from the supplier to the recipient of goods and services. Further, the recipient must be a registered person as per section 2(94) of the CGST Act, 2017.

According to section 2(94) of the CGST Act, a registered person means a person who is registered under section 25 of the Act. This does not include the person having a unique identity number.

What is Reverse Charge Mechanism Under GST?

Reverse charge means the liability to pay GST is on the recipient instead of the supplier of goods and services. This is unlike the usual regulation under GST where the supplier of goods and services is obligated to pay GST for the supplies made.

Further, this means all the provisions of the Act would be applicable to such a recipient as if he is the person responsible for paying the tax with regards to supply of goods or services. In other words, in case the recipient is unable to pay the tax under reverse charge mechanism, the supplier holds no liability to pay such a tax.

Compulsory Registration For Persons Subject To Reverse Charge

There are certain categories of persons required to register under GST compulsorily. Section 24 of the CGST Act, 2017 provides the list of such category of persons. As per this list, persons required to pay tax under reverse charge are also required to compulsorily register under GST.

In other words, the threshold limit for GST registration of Rs 40 Lakhs in case of goods and Rs 20 Lakhs in case of services shall not apply to such persons.

Q10) What is composition scheme?

A10) Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore.

Q11) Who can opt for Composition Scheme?

A11) A taxpayer whose turnover is below Rs 1.5 crore can opt for Composition Scheme. In case of Sikkim, Arunachal Pradesh, Manipur, Mizoram, Meghalaya, Assam, Nagaland, Tripura, Uttarakhand and Himachal Pradesh, the limit is now Rs 75 lakh.

As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher.

Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

Q12) Who cannot opt for Composition Scheme?

A12) The following people cannot opt for the scheme-

a) Manufacturer of ice cream, pan masala, or tobacco.

b) A person making inter-state supplies.

c) A casual taxable person or a non-resident taxable person.

d) Businesses which supply goods through an e-commerce operator.

Q13) What are the conditions for availing Composition Scheme?

A13) The following conditions must be satisfied in order to opt for composition scheme:

a) No Input Tax Credit can be claimed by a dealer opting for composition scheme.

b) The dealer cannot supply GST exempted goods.

c) The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism.

d) If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.

e) The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.

f) The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.

g) As per the CGST (Amendment) Act, 2018, a manufacturer or trader can now also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher.

Q14) How can a taxpayer opt for composition scheme?

A14) To opt for composition scheme a taxpayer has to file GST CMP-02 with the government. This can be done online by logging into the GST Portal.

This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for Composition Scheme.

Q15) How Should a Composition Dealer raise bill?

A15) A composition dealer cannot issue a tax invoice. This is because a composition dealer cannot charge tax from their customers. They need to pay tax out of their own pocket. Hence, the dealer has to issue a Bill of Supply. The dealer should also mention “composition taxable person, not eligible to collect tax on supplies” at the top of the Bill of Supply.

Q16) What are the GST rates for a composition dealer?

A16) Following chart explains the rate of tax on turnover applicable for composition dealers :

TYPE OF BUSINESS	CGST	SGST	TOTAL
Manufacturers & Traders(GOODS)	0.5%	0.5%	1%
Restaurants not serving alcohol	2.5%	2.5%	5%
Other Service Providers	3%	3%	6%

Value of Supply in case of Composition Scheme

In case of Manufacturer Composition levy (i.e.: 1%) will be applicable on Total Turnover

In case of Traders  Composition levy (i.e.: 1%) will be applicable on Taxable Turnover.

Q17) How should GST payment be made by a composition dealer?

A17) GST Payment has to be made out of pocket for the supplies made.

The GST payment to be made by a composition dealer comprises of the following:

a) GST on supplies made.

b) Tax on reverse charge.

c) Tax on purchase from an unregistered dealer.

Q18) What are the returns to be filed by a composition dealer?

A18) A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next financial year. Also, note that a dealer registered under composition scheme is not required to maintain detailed records.

Q19) What are the advantages of Composition Scheme?

A19) The following are the advantages of registering under composition scheme:

a) Lesser compliance (returns, maintaining books of record, issuance of invoices).

b) Limited tax liability.

c) High liquidity as taxes are at a lower rate.

Q20) What are the disadvantages of Composition Scheme?

A20) The disadvantages of registering under GST composition scheme are:

a) A limited territory of business. The dealer is barred from carrying out inter-state transactions.

b) No Input Tax Credit available to composition dealers.

c) The taxpayer will not be eligible to supply exempt goods or goods through an e-commerce portal.

Q21) What is Zero Rated Supply?

A21) GST is not applicable in India for exports. Hence, all export supplies of a taxpayer registered under GST would be classified as a zero-rated supply. According to Section 16 of the IGST Act, zero-rated supply means any of the following supplies of goods or services:

a) Export of goods or services or both;

b) Supply of goods or services or both to a Special Economic Zone developer.

c) Supply of goods or services or both to a Special Economic Zone unit.

GST Refund for Zero Rated Supply

As per GST rules, the supplier can claim the input tax credit in respect of goods or services used for the supplies as exports act as zero-rated supply, even though termed as non-taxable or even exempt supplies.

To claim GST refund for exports, the taxpayer can export under bond or LUT and claim refund or export on payment of IGST and claim a refund.

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