Who Needs to Register for GST? A Clear Guide
Understanding who needs to register
for Goods and Services Tax (GST) is essential for every supplier in India.
Here’s a simplified guide to help you determine if and when you need to
register under GST based on Section 22 of the GST Act.
1. General Suppliers
- Location:
Any State or Union Territory (except special category States).
- Threshold:
Register if your aggregate turnover exceeds ₹20 lakhs in a financial year.
2. Suppliers in Special Category States
- Location:
Special category States (excluding some States, see below).
- Threshold:
Register if your aggregate turnover exceeds ₹10 lakhs in a financial year.
3. Enhanced Thresholds for Certain Suppliers
A. For Special Category States:
- The Government can increase the registration threshold
from ₹10 lakhs to a maximum of ₹20 lakhs, upon request and recommendation
of the Council.
B. For Suppliers Exclusively Dealing
in Goods:
- The threshold can be increased from ₹20 lakhs to a
maximum of ₹40 lakhs, upon request and recommendation of the Council.
Explanation: Suppliers exclusively dealing in goods can include those
providing exempt services via deposits, loans, or advances where the
consideration is interest or discount.
4. Pre-existing Registrations
- If Already Registered:
If you were registered or held a license under an existing law before GST
came into effect, you must register under the GST Act from the appointed
day.
5. Business Transfers and Amalgamations
A. Business Transfer:
- When:
If your business is transferred due to succession or other reasons.
- Requirement:
The new owner must register from the date of the transfer.
B. Amalgamation or Demerger:
- When:
If there is an amalgamation or demerger of companies sanctioned by a High
Court or Tribunal.
- Requirement:
The new entity must register from the date the Registrar of Companies
issues a certificate of incorporation.
Key Definitions
- Aggregate Turnover:
Includes all supplies made by the taxable person, whether on their own
account or on behalf of principals.
- Job Work Supplies:
Supplies made after job work are treated as supplies by the principal and
not included in the job worker's turnover.
- Special Category States: The special category States do not include Jammu and
Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim,
and Uttarakhand.
Summary Chart
|
Category
|
Location
|
Threshold for Registration
|
|
General Suppliers
|
Any State/UT (excluding special
category)
|
> ₹20 lakhs
|
|
Suppliers in Special Category
States
|
Special category States
|
> ₹10 lakhs
|
|
Enhanced Threshold - Special
Category States
|
Special category States
|
Up to ₹20 lakhs (with Govt.
approval)
|
|
Enhanced Threshold - Goods
Suppliers
|
Any State/UT
|
Up to ₹40 lakhs (with Govt.
approval)
|
|
Pre-existing Registrations
|
Pre-GST registered entities
|
Mandatory registration from the
appointed day
|
|
Business Transfer
|
Any State/UT
|
Registration from the date of
transfer
|
|
Amalgamation or Demerger
|
Any State/UT
|
Registration from the date of
incorporation
|
Conclusion
Understanding these thresholds and
categories ensures you comply with GST regulations. If you fall into any of
these categories, make sure to register accordingly to avoid any legal issues.
