GST Registration: Types of GST Registration, Who is liable for registration and Exceptions to registration

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Quick Snapshot:

The first thing to check is whether you fall under compulsory registration under Section 24. This covers businesses making inter-state supplies, e-commerce sellers, RCM payers, agents of registered persons, and a few other specific categories. If you fall here, you must register regardless of your turnover.

If Section 24 doesn’t apply to you, check your turnover. Registration kicks in once you cross ₹40 Lakhs (goods), ₹20 Lakhs (services), or ₹10 Lakhs if you’re in a special category state like Tripura, Manipur, Mizoram or Nagaland.

But even then, Section 23 gives you a way out. If your supplies are fully exempt, non-taxable, or you’re an agriculturist selling your own produce, you don’t need to register.

So the order is simple: compulsory check first, turnover second, exceptions last. Once that’s clear, you pick the right type of registration: Regular, Composition, CTP, NRTP, and so on.

Types of GST Registration

1. Regular or Normal Tax Payer (Regular GST Registration): Regular Tax Payer is a default framework of GST. It gets triggered by voluntary registration and because of exceeding the turnover limit of ₹40 Lakhs or ₹20 Lakhs as the case may be.

2. Casual Taxable Person (CTP): It means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business [defined u/s 2(20) of CGST Act, 2017] [Know more about CTP in detail]

3. Non-Resident Taxable Person (NRTP): It means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India [defined u/s 2(77) of CGST Act, 2017] [Know more about NRTP in detail]

4. Composition Scheme: Composition Levy is a scheme designed for small business to reduce the burden of GST compliance. The turnover limit is ₹1.5 Crores or ₹75 Lakhs (for special category states) in case of manufacturing or trading of goods and ₹50 Lakhs for business of rendering services. [Know more about Composition Scheme in detail]

5. E-Commerce Operators (ECO): The Government has notified u/s 9(5) of the CGST Act, 2017, specific category of services, which, if they are supplied through ECO, GST on such supplies shall be paid by ECO as if ECO is the supplier. [Know more about ECO in detail]

6. Input Service Distributors (ISD): It is a specialized form of tax registration which enables the parent company or corporate branch to get invoices under “common services” category and properly share the available Input Tax Credit (ITC) among their various branches or divisions. [Know more about ISD in detail]

7. Unique Identity Number (UIN): UIN is a type of registration granted to specialized agencies of the UNO or any MFI and organization as notified under the UN(Privileges and Immunities) Act, 1947, consulate or embassy of foreign countries and any other person or class of persons, as may be notified by the Commissioner.

8. OIDAR Services: The IGST Act defines OIDAR to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services. [Know more about OIDAR in detail]

9. TDS Deductors (u/s 51 of CGST Act): Tax deducted at source (TDS) under GST is a system whereby a certain amount of tax is withheld by specific entities who pay money to suppliers for goods or services. [Know more about TDS u/s 51 in detail]

10. TCS (u/s 52 of CGST Act): The TCS in GST is collection of a certain small percentage of tax by an ECO from the payment ECO makes to the vendor for the sale made through ECO provided the payment firstly collected by the ECO. [Know more about ECO in detail]

Who is Liable for Registration?

To know whether a person is liable for registration, we have to check whether the person is covered u/s 24 of CGST Act or liable for registration u/s 22 of the CGST Act.

Compulsory Registration in certain cases u/s 24 of CGST Act:

Inspite of anything contained u/s 22 of CGST Act, the below listed categories of persons are mandatorily required to get registered under the GST:

i. Persons making any inter-State taxable supply

Exemption 1: If the aggregate turnover (calculated on all-India basis) of inter-state supplies of taxable services does not exceed ₹20 Lakhs (or ₹10 Lakhs for Tripura, Manipur, Mizoram & Nagaland) (construe these threshold limit as per sec. 22)

Exemption 2: If the aggregate turnover (calculated on all-India basis) of inter-state supplies of notified handicraft goods when predominantly made by hands by craftsmen does not exceed ₹20 Lakhs (or ₹10 Lakhs for Tripura, Manipur, Mizoram & Nagaland) (construe these threshold limit as per sec. 22)

ii. CTP making taxable supply

Exemption 2: If the aggregate turnover (calculated on an all-India basis) of inter-state supplies of notified handicraft goods when predominantly made by hands by craftsmen does not exceed ₹20 Lakhs (or ₹10 Lakhs for Tripura, Manipur, Mizoram & Nagaland) (construe these threshold limit as per sec. 22)

iii. Persons who are required to pay tax under reverse charge mechanism (RCM)

iv. ECO for notified supply of services u/s 9(5) of CGST Act

v. NRTP making taxable supply

vi. Persons who are required to deduct tax under section 51

vii. Person supplying as an agent or otherwise on behalf of a registered person

viii. ISD

ix. Persons who supplies through an ECO who is required collect TCS u/s 52 for the supplies made through ECO by such person

Exemption 1: If aggregate turnover of services supplied through an ECO is upto ₹20 lakhs (or ₹10 Lakhs for Tripura, Manipur, Mizoram & Nagaland) (construe these threshold limit as per sec. 22)

Exemption 2: If aggregate turnover of goods supplied through an ECO is upto ₹20 Lakhs (or ₹10 Lakhs for Tripura, Manipur, Mizoram & Nagaland) (construe these threshold limit as per sec. 22). But the below listed conditions should be complied with by such person:

Not make any inter-state supply of goods
Not make supply of goods through ECO in more than one state or UT
Have PAN
Before making supply, declare PAN, address of their place of business and the state or UT in which such person seeks to make supply (subjected to validation on portal)
Have enrolment number after validation
Does not have more than one enrolment number
No supply without enrolment number
If granted registration u/s 25, then enrolment number shall be invalid from date of registration

x. ECO who is required to collect tax at source under section 52

xi. Person supplying OIDAR from a place outside India to a person in India, other than a registered person

xii. such other person or class of persons as may be notified by the Government on the recommendations of the Council

Threshold limit for registration u/s 22 of CGST Act:

What is Aggregate Turnover?

The aggregate turnover is the aggregate value of all outward supplies of all branches on the same PAN, i.e., sales. It means:

Taxable supplies (that is supplies leviable to GST including both intra and inter supplies)
Exempt supplies (includes supplies non-leviable to GST)
Exports

But it excludes any CGST, SGST/UTGST, IGST, Cess and value of any inward RCM supplies.

Note: Below are the common issues which arises to the clients:

Supplies between distinct persons: to be included in aggregate turnover.
Supplies directly made by the principal from registered job worker’s premises: to be included in aggregate turnover of the principal
Supplies made on behalf of principals or on his own by the taxable person: to be included in the aggregate turnover
Outward Supplies taxable under RCM: to be included in the aggregate turnover

When does liability for registration arise?

Special Category states: Tripura, Manipur, Mizoram and Nagaland

Below is the limit:

If aggregate turnover exceed ₹20 Lakhs in a financial year for states other than special category states (if none of his place of business is in Special Category states)
If aggregate turnover exceeds ₹10 Lakhs for special category states (even if one place of business is in Special Category States)

Exceptions to registration u/s 23 of CGST Act:

In the below listed cases, persons are not required to get registered if they are supplying goods or services or both which are:

Not liable to tax
Wholly exempted from tax
Supply of produce out of cultivation (If the person is agriculturist)

Below are the notified category of persons who are not required to get registered u/s 23(2):

i. Person is engaged outward supply which chargeable to RCM (except for supply for metal scrap)

ii. Person exclusively supplying goods only and aggregate turnover does not exceed ₹40 Lakhs. But the person should not be covered in below conditions:

• Required for compulsory registration u/s 24

• Engaged in supply of Ice cream and other edible ice, pan masala, tobacco, fly ash bricks & aggregates, bricks of fossil meals or similar siliceous earths, building bricks, earthen or roofing tiles.

• Engaged in intra state supplies in special category states, Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand

• Opted for voluntary registration

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