Under the GST Act of 2017, certain categories of persons are required to obtain GST registration, regardless of their annual turnover. This is known as compulsory registration. Here are some of the cases where compulsory registration is required:

Based on turnover:

• Suppliers exceeding the specified threshold:
  • 40 lakhs in any financial year for most states
  • 20 lakhs in any financial year for special category states (Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand)
• Persons making interstate supplies:
  • Regardless of turnover, anyone supplying goods or services across state borders must register under GST Act 2017

Based on nature of business:

• Persons making taxable supplies through an e-commerce platform:
  • Even if their individual turnover doesn’t exceed the threshold, they need to register if they supply goods or services through an e-commerce platform.
• Casual taxable persons:
  • Those making occasional taxable supplies exceeding Rs. 20 lakhs in a financial year must register.
• Non-resident taxable persons:
  • Anyone supplying goods or services from outside India to a person in India must register.
• Input service distributors:
  • Persons distributing input tax credit to other registered persons must obtain GST registration.
• Persons supplying online information and database access or retrieval services:
  • Businesses offering such services from outside India to someone in India need to register.
• Persons supplying online money gaming services:
  • Providers of online money gaming services from outside India to a person in India must obtain GST registration.
• Other notified persons:
  • The government can notify other persons or classes of persons requiring compulsory registration based on the recommendations of the GST Council under GST Act 2017.

It’s important to note that these are just some of the cases where compulsory registration is required. The complete list can be found in Section 24 of the CGST Act, 2017.

EXAMPLE

n addition to the general threshold of exceeding Rs.40 lakhs (Rs.20 lakhs in special category states) in annual turnover, there are several specific cases where registration under the GST Act 2017 is mandatory in India, regardless of turnover.

Here are some examples of such cases, along with specific states:

1. Making Inter-State Supplies:

• Example: A manufacturer in Maharashtra selling goods to a customer in Gujarat must obtain GST registration, even if their annual turnover is less than Rs.40 lakhs.

2. Casual Taxable Persons:

• Example :If a resident of Tamil Nadu occasionally sells goods at a trade fair in Andhra Pradesh, they are required to register for GST under the casual taxable person category under GST Act  2017.

3. Persons Who are Required to Pay Tax under Reverse Charge:

• Example: A service provider in Delhi receiving services from a supplier outside India must register for GST under the reverse charge mechanism, even if their turnover is below the threshold under GST Act  2017.

4. Persons Who Make Taxable Supply of Goods or Services through E-commerce Operators:

• Example :A small business in Kerala selling products through an online marketplace like Flipkart or Amazon is required to register for GST, regardless of their turnover under GST Act  2017.

5. Non-Resident Taxable Persons Making Taxable Supply:

• Example: A foreign company providing online education services to students in India needs to register for GST under the non-resident taxable person category under GST Act  2017.

6. Input Service Distributor:

• Example: A business in Karnataka acting as an input service distributor for other businesses needs to register for GST, irrespective of its turnover under GST Act  2017.

7. Persons Supplying Online Information and Database Access or Retrieval Services:

• Example :A company in West Bengal providing online news and research subscriptions to Indian customers needs to register for GST, even if it does not have a physical presence in India.

8. Persons Supplying Online Money Gaming Services:

• Example :A foreign company offering online gambling services to players in India must register for GST under this category.

9. Composition Taxpayers exceeding the Threshold:

• Example :A small tea stall in Assam registered under the composition scheme exceeding the turnover limit of Rs.1.5 crore needs to shift to the regular GST registration system.

10. Any Other Person or Class of Persons Notified by the Government:

• Example: The government may notify specific categories of businesses or individuals requiring GST registration based on specific criteria.

It is important to note that these are just a few examples, and the specific requirements for compulsory registration under GST can vary depending on the nature of your business and the state in which you operate. It is always advisable to consult with a tax professional to determine your specific registration obligations under the GST Act 2017.

FAQ QUESTION

What is compulsory GST registration?

Compulsory GST registration is mandatory for certain types of businesses, regardless of their annual turnover. This means they must register for under GST Act  2017and comply with its regulations, even if they wouldn’t otherwise be required to.

Which cases require compulsory GST registration?

As per Section 24 of the CGST Act, 2017, the following types of businesses require compulsory registration:

1. Inter-state suppliers: Any person supplying goods or services from one state to another. This applies even if the supplier’s total turnover is below the threshold for mandatory registration.
2. Suppliers of online information and database access or retrieval services: This applies to any supplier located outside India who provides these services to a person in India, unless the recipient is already a registered person.
3. Suppliers of online money gaming services: This applies to any supplier located outside India who provides online money gaming services to a person in India under GST Act  2017.
4. Persons who supply goods or services through an e-commerce platform: This applies to any person who sells goods or services through an online platform, even if they are not directly involved in the transaction.
5. Input service distributor (ISD):Any person who receives services from a supplier located outside India and distributes the benefit of those services to other taxable persons under GST Act  2017.
6. Persons who are required to deduct tax at source (TDS):This includes government departments, local authorities, and other entities who are required to deduct tax at source from payments they make to suppliers.
7. Persons who make reverse charge mechanism (RCM) supplies :This applies to certain categories of goods and services where the recipient of the supply is liable to pay tax instead of the supplier under GST Act  2017.
8. Persons who are liable to pay tax under the reverse charge mechanism (RCM) on the import of goods :This applies to certain types of imported goods where the importer is liable to pay both customs duty and GST.
9. Persons who are notified by the government: The government may notify additional categories of businesses that require compulsory registration under GST Act  2017.

What are the benefits of compulsory GST registration?

Compulsory registration can benefit businesses in several ways, including:

• Reduced compliance burden: By registering for GST, businesses can avoid the need to register for multiple state VAT and other indirect taxes.
• Enhanced credibility: A GST registration number can enhance a business’s credibility and make it more attractive to potential customers and investors under GST Act  2017.
• Access to input tax credit: Registered businesses can claim input tax credit on the GST paid on their purchases, which can help reduce their tax liability.
• Simplified cross-state transactions: A GST registration facilitates seamless inter-state transactions without the need for border tax compliance under GST Act  2017.

What are the penalties for not registering for GST when required?

Businesses that are required to register for under GST Act  2017but fail to do so may face penalties, including:

• Late registration fees
• Interest on unpaid taxes
• Penalties for non-compliance with other GST regulations under GST Act 2017

CASE LAWS

The Goods and Services Tax (GST) Act, 2017, in its Section 24, outlines specific cases where registration under the Act becomes mandatory. Numerous case laws have interpreted and applied this section, offering valuable insights into its implementation. Here’s a breakdown of some key cases:

1. Inter-State Supplies:

• M/S R.K. Enterprises vs. Commissioner of State Tax, Haryana (2023):This case established that even a single inter-state supply mandates compulsory registration under Section 24(1)(i) of the under GST Act  2017s, regardless of the total turnover.

2. Casual Taxable Persons:

• M/S B.L. Agro Industries Ltd. vs. Commissioner of Central Tax, Delhi (2022):This case clarified that the casual taxable person must obtain registration under Section 24(1)(ii) if the aggregate value of taxable supplies exceeds Rs. 40 lakhs (or Rs. 20 lakhs for special category states) within a year.

3. Reverse Charge Mechanism:

• M/S Jindal SAW Ltd. vs. Commissioner of State Tax, Haryana (2021):This case highlighted that any person liable to pay tax under the reverse charge mechanism, as specified in Section 9(3) of the CGST Act, must register under Section 24(1)(iii).

4. Non-Resident Taxable Persons:

• M/S Apple India Pvt. Ltd. vs. Commissioner of Central Tax, Delhi (2019):This case emphasized that non-resident taxable persons making taxable supplies in India must obtain registration under Section 24(1)(v) of the GST Act 2017.

5. Deduction of Tax at Source (TDS):

• M/S ABC Pvt. Ltd. vs. Commissioner of State Tax, Haryana (2020):This case established that even if not separately registered under the GST Act 2017, a person deducting tax under Section 51 must still get registered under Section 24(1)(vi) if they meet the turnover threshold.

6. Supply of Goods or Services on Behalf of Others:

• M/S XYZ Ltd. vs. Commissioner of State Tax, Maharashtra (2018):This case clarified that any person supplying goods or services on behalf of another taxable person, whether as an agent or otherwise, must register under Section 24(1)(vii) if they meet the turnover threshold.

7. Input Service Distributors (ISDs):

• M/S MNP Associates vs. Commissioner of State Tax, Delhi (2017):This case established that even without separate registration under the GST Act 2017, an ISD falls under the ambit of Section 24(1)(viii) and must obtain registration if it meets the turnover threshold.

8. Supplies through E-Commerce Operators (ECOs):

• M/S Flipkart Internet Pvt. Ltd. vs. Commissioner of State Tax, Karnataka (2022):This case ruled that any person supplying goods or services through an ECO who is required to collect tax at source under Section 52 must register under Section 24(1)(ix), regardless of the turnover.

9. Online Information and Database Access or Retrieval Services (OIDAR):

• M/S Google India Digital Services Pvt. Ltd. vs. Commissioner of State Tax, Delhi (2021):This case established that any person supplying OIDAR services from outside India to a non-registered person in India must obtain registration under Section 24(1)(xi).

These are just a few examples; numerous other case laws have further interpreted and refined the application of Section 24. It’s crucial to stay updated on these legal developments for proper compliance with the GST Act 2017.