Goods and Services Tax (GST) - Registration

 

Indirect Taxation

Goods and Services Tax

Registration

 

 

GST Number

In any tax system registration is the most fundamental requirement for identification of tax payers ensuring tax compliance in the economy. Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail input tax credit for the taxes paid on his inward supplies. Without registration a person can neither collect tax from his customers nor claim any input tax credit at the time of payment of output tax by him.

 

The registration in GST is PAN based and State / UT specific. Supplier has to register in each State or Union Territory from where he affects supply. In GST registration, the supplier is allotted a 15-digit GST Identification Number called “GSTIN” and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTIN common portal.

 

The GSTIN assigned to registered businesses / individuals follow a specific structure. Key facts about the GSTIN Format are as follows:

1.   The GSTIN consists of 15 digits.

2.   The first 2 digits of the GSTIN is the State Code.

3.   The next 10 digits are the PAN of the GST registered entity.

4.   The 13th digit of the GSTIN is the entity code. It refers to the order in which registrations was made by a legal entity that has multiple registrations within the same state. In case a single legal entity has 2 business verticals registered within the same state, the first registration will have 1 as the 13th digit while the second registration will have 2 as the 13th digit.

5.   The 14th digit for current registrations is “Z” by default according to the current GSTIN format. However, this digit is essentially being retained for future use.

6.   The last digit (15th) of the GSTIN is currently used as a check code and may be a number or alphabet that has been assigned randomly.

 

For getting a GST Number having PAN Card is essential. For every State there must be one separate GST Number for a dealer having branches in different States. For different branches within the State having one single GST Number is sufficient. Therefore, inter-state stock transfer within the same business will attract IGST, whereas intra-state stock transfer within the same business will not be liable for GST.

 

Exemption from obtaining GST Registration for small taxable persons

As per Section 22(1) of the CGST Act, 2017 and Notification No. 10/2019, suppliers of goods and services exempted from obtaining registration w.e.f. 1^st April, 2019 are:

Sl. No.	States or UTs from where the supply of goods or services or both are made	Aggregate turnover not exceeding (Rs)
	For suppliers engaged exclusively in “supply of goods” :
1	Manipur, Mizoram, Nagaland, Tripura	10 Lakh
2	Uttarakhand, Meghalaya, Sikkim, Arunachal Pradesh, Puducherry, Telangana	20 Lakh
3	All the States and UTs of India other than those mentioned under serial numbers 1 and 2 above	40 Lakh
	For suppliers engaged exclusively in “supply of services” :
4	Manipur, Mizoram, Nagaland, Tripura	10 Lakh
5	All the States and UTs of India other than those mentioned under serial number 4 above	20 Lakh

 

Important notes:

1.   A supplier may obtain voluntary registration, even though his turnover does not exceed applicable threshold limit. In this case, he is required to pay tax without considering the aforesaid limits.

2.   In case of supplier of

a)   Ice-cream and other edible ice, whether or not containing cocoa;

b)   Pan Masala;

c)   Tobacco and manufactured tobacco substitutes;

d)   Fly ash bricks, fly ash aggregate with 90% or more fly ash content;

e)   Fly ash blocks;

f)    Bricks of fossil meals or similar siliceous earth;

g)   Building bricks; or

h)   Earthen or roofing tiles

The threshold limit applicable is Rs 20 Lakh (Rs 10 Lakh in case of Manipur, Mizoram, Nagaland and Tripura).

3.   For the purpose of registration under GST four states Manipur, Mizoram, Nagaland and Tripura are considered as “Special Category States”.

Persons not liable for

registration

[Section 23 of the CGST Act, 2017]

 

 

The following persons shall not be liable to registration, namely:–

(a)     Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;

(b)     An agriculturist, to the extent of supply of produce out of cultivation of land.

 

The Government, however, may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

Compulsory

registration in certain

cases

[Section 24 of the CGST Act, 2017]

 

The following categories of persons shall be required to be registered under the CGST Act, 2017, irrespective of their aggregate turnover:

1)             Persons making any inter-State taxable supply;

2)             Casual taxable persons making taxable supply;

3)             Persons who are required to pay tax under reverse charge u/s 9(3);

4)             Persons who are required to pay tax u/s 9 (5) [i.e. the e-commerce operators];

5)             Non-resident taxable persons making taxable supply;

6)             Persons who are required to deduct tax u/s 51, whether or not separately registered under this Act [i.e. Govt. Departments and Agencies];

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

8)             Input Service Distributor, whether or not separately registered under this Act;

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

10)        Every electronic commerce operator;

11)        Every person supplying Online Information and Database Access or Retrieval (OIDAR) services from a place outside India to a person in India, other than a registered person; and

12)        Such other person or class of persons as may be notified by the Government on the recommendations of the Council.

Procedure for Registration

[Section 25 of the CGST Act, 2017]

 

(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that a casual taxable person or a non-resident taxable person shall apply for registration, at least five days prior to the commencement of business.

 

Explanation: Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

 

(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory: Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each of the business verticals subject to such conditions as may be prescribed.

 

(3) A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person.

 

(4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.

 

(5) 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 for the purposes of this Act.

 

(6) Every person shall have a Permanent Account Number issued under the Income tax Act, 1961 in order to be eligible for grant of registration: Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.

 

(7) Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed.

 

(8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed.

 

(9) Notwithstanding anything contained in sub-section (1) –

(a)  Any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and

(b)     Any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed.

 

(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed.

 

(11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed.

 

(12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period.

CGST Rule 10 –

Issue of registration

certificate

 

(1) Subject to the provisions of sub-section (12) of section 25, where the application for grant of registration has been approved under rule 9, a certificate of registration in FORM GST REG-06 showing the principal place of business and additional place or places of business shall be made available to the applicant on the common portal and a Goods and Services Tax Identification Number shall be assigned subject to the following characters, namely:-

(a)     Two characters for the State code;

(b)     Ten characters for the Permanent Account Number or the Tax Deduction and Collection Account Number;

(c)      Two characters for the entity code; and

(d)     One checksum character.

 

(2) The registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within a period of thirty days from such date.

 

(3) Where an application for registration has been submitted by the applicant after the expiry of thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of the grant of registration under sub-rule (1) or sub-rule (3) or sub-rule (5) of rule 9.

 

(4) Every certificate of registration shall be duly signed or verified through electronic verification code by the proper officer under the Act.

 

(5) Where the registration has been granted under sub-rule (5) of rule 9, the applicant shall be communicated the registration number, and the certificate of registration under sub-rule (1), duly signed or verified through electronic verification code, shall be made available to him on the common portal, within a period of three days after the expiry of the period specified in sub-rule (5) of rule 9.