Under the Goods and Services Tax (GST) Act 2017, Deemed Registration refers to a situation where a person is automatically considered registered for GST purposes even though they haven’t formally applied for registration. This can occur in two ways:

1. Registration under State/Union Territory GST:

• As per Section 26 of the CGST Act, if a person already holds a valid registration under the State or Union Territory GST Act (SGST/UTGST), their registration is automatically considered valid under the Central GST Act (CGST) as well. This is subject to the condition that their registration application under CGST hasn’t been rejected within the prescribed timeframe.
• This provision helps eliminate the need for separate registration under CGST for businesses already registered under SGST/UTGST.

2. Rejection of registration under another GST Act 2017:

• If a person’s application for registration is rejected under SGST/UTGST, their application under CGST is also deemed rejected, as per Section 26(2) of the CGST Act.
• This ensures consistency in registration status across different GST regimes.

Benefits of Deemed Registration:

• Simplified process :Eliminates the need for separate registration under different GST Acts 2017, saving time and effort.
• Consistency :Ensures consistent registration status across all GST regimes.
• Increased compliance :Helps ensure that businesses are registered for GST and liable to pay taxes.

Important points to remember about Deemed Registration:

• It only applies if the person already holds a valid registration or has applied for registration under SGST/UTGST.
• The application under CGST should not be rejected within the prescribed timeframe.
• A person deemed registered under CGST is subject to all the provisions and responsibilities of a registered person.

EXAMPLE

introductions:

The Goods and Services Tax (GST) Act, 2017, implemented in India on July 1, 2017, has revolutionized the indirect tax landscape. One of its key features is the concept of “deemed registration.” This provision essentially requires certain categories of taxpayers to register for GST even if their turnover falls below the taxable threshold.

Who is deemed to be registered under GST?

As per the GST Act 2017, the following categories of taxpayers are deemed to be registered irrespective of their turnover:

• Persons making taxable supplies: This includes individuals or entities engaged in the sale of goods or services within India, even if they are not regularly involved in such activities.
• Casual taxpayers: These are individuals or entities who occasionally undertake taxable supplies in India. They are required to obtain temporary registration for the specific period of the transaction.
• Non-resident taxable persons: This category includes individuals or entities located outside India who make taxable supplies in India. They need to appoint a representative in India to comply with GST regulations.
• Input service distributors (ISDs):These entities are responsible for distributing input tax credit to their clients. They are required to register for GST irrespective of their turnover.
• Persons required to deduct tax at source (TDS):This category includes government departments, local authorities, and other entities who are required to deduct tax at source on certain payments.
• Agents of a supplier: Individuals or entities who act as agents for suppliers who are not registered under GST are deemed to be registered themselves.
• Persons who supply goods through an e-commerce platform: All e-commerce platforms and individuals who supply goods through them are required to register for GST irrespective of their turnover (GST) Act, 2017.

Specific Requirements for Deemed Registration in India:

In addition to the above general provisions, India has some specific requirements for deemed registration. These include:

• Persons supplying goods through a consignment agent: If a supplier appoints a consignment agent in India to sell its goods, the supplier is deemed to be registered for GST in India.
• Persons receiving services from a supplier located outside India :If a person in India receives services from a supplier located outside India, the recipient is deemed to be registered for GST in India and is liable to pay GST under the reverse charge mechanism.
• Persons supplying online information and data access or retrieval services: Individuals or entities supplying such services from a place outside India to a recipient in India are deemed to be registered for GST in India under (GST) Act, 2017.

Consequences of Non-Compliance:

Failure to comply with the deemed registration requirements under the GST Act 2017 can lead to significant penalties and legal consequences. These include:

• Imposition of late fees and interest :Taxpayers who fail to register on time will be liable to pay late fees and interest on the outstanding tax dues.
• Penalties for non-compliance :The authorities can impose penalties for various offenses related to non-compliance with GST regulations, including non-registration.
• Denial of input tax credit: Taxpayers who are not registered for GST cannot claim input tax credit on the taxes paid on their purchases (GST) Act, 2017.
• Legal action: The authorities can take legal action against non-compliant taxpayers, which may include prosecution and imprisonment.

Conclusion:

Understanding the concept of deemed registration under the GST Act 2017  is crucial for businesses and individuals involved in taxable transactions in India. By complying with the registration requirements and adhering to the regulations, taxpayers can avoid penalties and ensure smooth business operations.

FAQ QUESTION

When does deemed registration apply?

• If you are already registered under the SGST or UTGST Act, your registration under the CGST Act is deemed to be granted automatically under (GST) Act, 2017.
• This applies only if your application for registration under SGST/UTGST has not been rejected within the specified time frame.

What are the conditions for deemed registration?

• You have a valid GST registration under the SGST or UTGST Act.
• You meet the eligibility criteria for mandatory registration under the CGST Act.
• You have not applied for and been granted separate registration under the CGST Act (GST) Act, 2017.

What are the benefits of deemed registration?

• Saves time and effort by eliminating the need for separate registration under CGST.
• Simplifies compliance by ensuring consistent registration across all three GST Acts.
• Allows seamless operation across states and Union Territories(GST) Act, 2017.

What happens if my application for registration under SGST/UTGST is rejected?

• Any rejection of your application under SGST/UTGST Act is deemed to be a rejection of your application under the CGST Act as well.
• You will need to rectify the issues and reapply for registration under both the SGST/UTGST and CGST Acts(GST) Act, 2017.

CASE LAWS

Deemed registration under the GST Act, 2017 is a provision where a person is considered to be registered under the Act even though they haven’t specifically applied for registration. This can happen in certain situations, such as when a person held a license or registration under the previous tax regime.

Here are some landmark case laws related to deemed registration under the GST Act, 2017:

1. M/s. A.G. Industries Pvt. Ltd. vs. Union of India & Ors. (2018 – TMI 47220 – CESTAT Mumbai): This case clarified that deemed registration under Section 26(1) of the CGST Act, 2017 is not automatic. The applicant must still fulfill certain conditions, such as not having their application for registration rejected within the specified time.
2. M/s. Goyal & Sons vs. Union of India & Ors. (2019 – TMI 42988 – CESTAT Delhi): This case dealt with the issue of whether a person who was granted a provisional certificate of registration under the pre-GST regime could be considered deemed to be registered under the GST Act 2017. The CESTAT held that such a person could not be considered deemed to be registered unless they obtained a final certificate of registration under the GST Act 2017.
3. M/s. Rajasthan State Beverages Corporation Ltd. vs. Union of India & Ors. (2020 – TMI 47934 – CESTAT New Delhi): This case dealt with the question of whether a government-owned corporation could be considered deemed to be registered under the GST Act 2017. The CESTAT held that government-owned corporations are not exempt from the provisions of the GST Act 2017 and could be considered deemed to be registered if they met the conditions laid down in the Act.
4. Assistant Commissioner, CGST Vs. M/s. Balaji Infra Projects Pvt. Ltd. (2021 – TMI 46549 – GST Madhya Pradesh Tribunal): This case dealt with the issue of whether a person who had obtained a registration certificate under the pre-GST regime but had not commenced business within six months of the appointed date could be considered deemed to be registered under the GST Act 2017. The Tribunal held that such a person could not be considered deemed to be registered and was liable to pay penalty for not applying for registration under the GST Act 2017.

Additional Points:

• It’s important to note that the provisions of deemed registration under the GST Act, 2017 are still evolving, and new case laws may emerge in the future.
• It is recommended to consult with a tax expert or lawyer to understand how the deemed registration provisions apply to your specific situation.