REGISTERING UNDER GST

REGISTERING UNDER GST

Now that we know the basics of GST calculation, the process Important Points to Remember when of ITC claims and filing of returns, let us look at how a taxpayer can register for GST.
If you meet any of the conditions listed below, you should obtain your GST registration when the enrollment reopens again [GST is expected to apply from 1st July 2017]:

• Your aggregate turnover in a financial year exceeds INR 20 lakhs (INR 10 lakhs for Special category states)\
•  If your turnover includes supply of only those goods/services which are exempt under GST, this clause does not apply

To calculate this threshold, your turnover should include the aggregate value of all taxable supplies, exempt supplies, export of goods and/or services and inter-state supplies of a person having the same PAN.

Important Points to Remember when

• Every person who is registered under an earlier law will take registration under GST too.
• Where a business which is registered has been transferred to someone, the transferee shall take registration with effect from the date of transfer.
• Registration is mandatory for anyone who makes inter-state supply of goods and/or services.
• Registration is mandatory for:

1. Casual Taxable Person
2. Non-Resident Taxable Person
3. Agents of a supplier
4. Taxpayers paying tax under reverse charge mechanism
5. Input Service Distributors
6. E-commerce operator or aggregator and their suppliers
7. Person supplying online information and database access
8. or retrieval services from a place outside India to a person
9. in India, other than a registered taxable person

Other Notable Points Regarding Registration

• A person with multiple business verticals in a state will need to obtain a separate registration for each business vertical.
• PAN is mandatory to apply for GST registration (except for non-resident person who can get GST registration on the basis of other documents).
• A registration which has been rejected under CGST Act/SGST Act shall also stand rejected for the purpose of SGST/CGST Act.

Who is a ‘Casual Taxable Person?

If you occasionally make supply of goods/services as a principal or agent or any other capacity, in a taxable territory, where GST applies but where you don’t have a fixed place of business. As per GST, you will be treated as a casual taxable person.

Who is a Non- Resident Taxable Person

When you occasionally make supply of goods/services as a principal or agent or any other capacity, in a taxable territory, where GST applies but you don’t have a fixed place of business in India. As per GST, you will be treated as a non-resident taxable person. 

Here are the rules for registration for these persons:

• Registration shall be valid for 90 days.
• It can be further extended by 90 days.
• An advance deposit of tax liability for the period of regis
• tration must be made. Additional tax must be deposited if
• extension of registration is sought.
• This tax deposited shall be used like ‘input credit’

Exemption from GST Registration

The following shall not be required to obtain registration and will be allotted a UIN (Unique Identification Number) instead. They can receive refund of taxes on notified supplies

of goods/services received by them:

• Any specialised agency of UNO (United Nations Organisation) or any multilateral financial institution and organisation notified under the United Nations Act, 1947
• Consulate or Embassy of foreign countries
• Any other person notified by the Board/Commissioner The central government or state government may be based on the recommendation of the GST council, notify exemption from registration to specific persons.

Should You Opt for Voluntary Registration?

A person may opt for voluntary registration under GST even if he is not liable to be registered. All the provisions of GST applicable to a registered taxable person will similarly apply to such a voluntarily registered person also, i.e. he will be treated as a normal taxable person.

For example, assume there is a small grocery dealer with a limited turnover of Rs. 12-15 lakh. Such a dealer may not be required to register under GST. However, he may be supplying inputs to a nearby restaurant which has a turnover exceeding Rs. 20 lakh, is registered as a normal taxpayer, and is thus eligible for input credit. In such a scenario, a small dealer may register voluntarily to pass on the benefit of input credit to his buyer.

Check the Positive and the Negative aspects of Voluntary Reigstration

Postive

• In spite of composition levy, many small organisations are 
  planning to voluntarily register themselves under GST. This is 
  because composition levy has certain drawbacks. Voluntary 
  registration will mitigate such drawbacks and give the following advantages:
• Provide input tax credit to customers: Since your business is 
  legally recognised, you can issue taxable invoices. Buyers, in 
  turn, can take input credit on their purchases. This will help 
  expand the customer base and make it more competitive.
• Take input credit: Voluntarily registered persons can take input credit on their own purchases and input services like legal fees, consultation fees etc. This will eventually increase their business margin and profitability.
• Make inter-state sales without many restrictions: Businesses registered under GST can make inter-state sales without many restrictions. Thus, it widens the potential market for SMEs. These SMEs can also opt for selling their goods online through the e-commerce platform.
• Be compliant and have good rating: Registration for GST will ensure that the business is compliant and scalable without any barrier of future registration. Also under GST, compliance rating will be maintained and if this is done correctly, it can attract additional business.

Negative

• We discussed the benefit of getting registered under the Goods and Services Tax, however, there is a flip-side to it. Businesses registering voluntarily under GST may have to face extra compliance and working capital liquidity. Some of these consequences are:
• Multiple return filing: Businesses registered under Goods and Services Taxes are required to file three returns every month. These returns are GSTR-1, GSTR-2, GSTR-3 and include the details of all purchases, sales, and final tax liability after setting off Input Tax Credit. Failure to file these returns will not only deny the input credit to our buyer but also attract penalty. Further Compliance rating will get affected negatively.
• Payment of tax liability: Once registered under GST, the supplier will have the additional responsibility of collecting and depositing taxes with the authorities. This will not only inflate the cost for the buyer but also leverage similar sellers who are not registered under GST.
• Registration in every state of business activity: Further under the new law, obtain registration in each state of business activity. Return needs to be filed in the jurisdiction of the state where goods are supplied for consumption. In other words, if a small dealer is supplying in five states, he needs to register in all five states to fully take benefit of input tax credit. This can increase the cost of compliance to business.