The process of GST registration in India, as per the Central Goods and Service Tax
(CGST) Act, offers several advantages and is structured with specific criteria for
eligibility and responsibilities. Here’s a breakdown of the key elements, including
registration requirements, types, and procedural steps.
1. Purpose and Benefits of GST Registration
• Legal Recognition: Registering as a GST taxpayer legally recognizes the
individual or business as a supplier of goods and services in India.
• Tax Collection and Input Tax Credit: Registered individuals are
authorized to collect GST from customers and can claim input tax credits on
purchases. This allows for a seamless flow of funds and efficient tax accounting.
• Seamless Funds Flow: Registered businesses benefit from a smooth flow
of funds across states due to cross-utilization of IGST credit.
• Electronic Ledger Maintenance: GST Network (GSTN) maintains real-time
electronic ledgers, ensuring accurate records for cash, credit, and liabilities.
2. Definition of a Taxable Person (Section 2(107))
• A taxable person is anyone liable or voluntarily registered under GST,
including both registered and those legally obligated to register.
3. Eligibility for GST Registration (Sections 22-30 of CGST Act)
Persons Liable for Registration (Section 22):
• Threshold Limits:
• Standard limit: Registration is mandatory if aggregate turnover exceeds
INR 20 lakhs annually.
• Special category states (e.g., Manipur, Mizoram, Nagaland, Tripura):
INR 10 lakhs.
• Exclusive suppliers of goods: No registration needed if turnover does
not exceed INR 40 lakhs.
• Exceptions:
• Certain suppliers of products like ice cream, pan masala, and tobacco
require mandatory registration regardless of turnover.
• Interstate suppliers, voluntary registrants, and specific states
require different threshold limits (e.g., INR 20 lakhs in most states).
• Special Cases:
• Transfer of Business: New owner must register from the date of
transfer.
• Amalgamation or De-merger: The transferee is required to register once
an incorporation certificate is issued.
Persons Not Liable for Registration (Section 23):
• Exclusively tax-exempt businesses, such as agriculture and certain
government-notified services, are not required to register.
Compulsory Registration (Section 24):
• Certain individuals must register regardless of turnover, including
interstate suppliers, agents, non-resident suppliers, e-commerce operators, and
those under reverse charge.
4. Types of Registration and Deadlines (Section 25)
• Standard Registration: Those required by Sections 22 or 24 must
register within 30 days.
• Casual or Non-Resident Taxable Persons: Must apply 5 days before
commencing business.
• Voluntary Registration: No time constraints.
• Location-Based Registration:
• Registration is state-based, so businesses in multiple states need
separate registrations in each.
• A business with multiple branches in one state can consolidate
registration, designating one principal place of business.
• PAN-Based Registration: Single PAN enables single GST registration per
state.
5. Registration Procedure (Section 25; Rules 8-10 of CGST Rules, 2017)
1. Initial Application (Form GST REG-01 Part A): Enter PAN, mobile number,
and email for verification.
2. Temporary Reference Number (TRN): After verification, TRN is generated.
3. Detailed Application (Form GST REG-01 Part B): Submitted with TRN,
includes additional documents.
4. Acknowledgement and Verification: An acknowledgement (Form GST REG-02)
is sent. The application is examined and, if satisfactory, registration is granted
within 7 working days.
5. Address Verification: Physical verification may occur if documents are
inadequate.
6. Deficient Applications: If information is missing, Form GST REG-03
notice is issued. Applicants have 7 working days to respond.
• Non-Applicability of Rules: This process applies to most categories but
excludes certain entities like non-resident taxable persons, online information and
database access providers, and those required to deduct tax at source (TDS).
6. Suo Motu Registration (Section 25(8); Rule 16)
• Temporary Registration: Issued by a tax officer if a business fails to
apply when required.
• Response Options: Businesses can either accept and proceed with regular
registration or appeal the order within 30 days.
7. Deemed Registration (Section 26)
• If registration is granted under one GST Act, it applies across all
related Acts, including the Integrated Goods and Services Tax (IGST) Act.
GST registration offers businesses various advantages, including input tax credit
and seamless fund flow, enabling efficient tax compliance across India. Detailed
eligibility and procedures ensure the system accommodates various business types
and sizes.
