The supply of goods or services, or both, is a taxable event under GST. Unless otherwise exempted, GST will be levied on each and every supply of goods, services, or both.
Compulsory Registration Under GST
For every business with an annual revenue over ₹40 lakhs in a fiscal year, registration under GST is required. For states falling under the special category—Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand—this barrier is set at ₹20 lakhs.
Compulsory GST registration is done on the official website. It is an online portal that enables companies to sign up and submit their tax returns. Businesses can trace their GST payments and verify their refunds through the portal. As per Section 24 of the CGST Act 2017 those who pay taxes through the reverse charge method, casual taxable persons, and organisations that engage in interstate supply must opt for compulsory GST registration.
Following its GST registration, a business must abide by all GST laws and guidelines. This entails keeping track of every transaction, submitting timely returns, paying taxes, and filing GST returns. Penalties and interest may be imposed on businesses that violate policies and procedures.
The Benefit of Compulsory GST Registration
GST registered taxpayers will benefit from registration in the following ways:
- They will be legally recognised as a supplier of products or services
- They will be legally permitted to collect taxes from their customers
- The taxpayers will also be permitted to credit the purchasers/recipients for taxes paid on the goods or services supplied
- Registered taxpayers under GST regime can also claim an input tax credit for taxes paid on their purchases/procurements and use the same to pay those taxes payable on the provision of goods or services.
- Compulsory registration also ensures that there is a consistent flow of ITC from suppliers to recipients on a national scale.
Registration Under GST: When Is it Compulsory?
| The GST threshold ceiling was raised to ₹40 lakhs for providers of goods on 1 April 2019. The threshold level for service providers, on the other hand, remains at ₹20 lakhs. |
In India, the following persons and organizations are mandatorily required to undergo GST New Registration Online:
- Businesses involved in inter-state supply of goods and services
- Non-resident taxable person
- Casual taxable person
- Taxpayers under the reverse charge mechanism
- Businesses registered under old tax services, such as VAT, excise, and service tax
- Any business engaged in the supply of goods whose turnover in a fiscal year exceeds ₹40 lakhs for states in the normal category who have opted for the new threshold (₹20 lakhs for special category states and those in states which have not opted for the new threshold, for example, the state of Telangana)
- Any business engaged in the rendering of services whose turnover in a fiscal year surpasses ₹20 lakhs in normal category states (₹10 lakhs for special category states)
- Agents of a supplier
- Input service distributors
- Businesses that supply online information, database access, and/or retrieval services from outside India to a person/business within the country
- E-commerce aggregators
- Businesses that supply through an e-commerce aggregator
- Other individuals and businesses as notified by the central/state govt, on recommendation by the GST Council.
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However, entities engaged only in the business of supplying goods or services or both that are not subject to tax or wholly exempt from tax or farmers, to the limit of sale and distribution of products born out of the cultivation of land, are not obliged to register under GST.
Also, if all the supplies being made by a provider are subject to tax under reverse charge, there is no necessity for such a supplier to register in light of Notification No. 5/2017-Central Tax dated 19.06.2017.
Get Help to Complete Compulsory Registration Under GST
If you are any of the aforementioned GST entities that are required to undergo GST registration: https://reg.gst.gov.in/registration/, get in touch with the experts right away to start the GST enrollment process. Moreover, if you are unsure about whether or not you are required to undergo mandatory registration. It is best to engage the services of professionals in the field.
Conclusion
Compulsory registration under GST is a critical compliance requirement for businesses meeting the prescribed turnover thresholds or engaged in specific types of transactions. This registration ensures that businesses operate within the legal framework, availing the benefits of input tax credit and avoiding penalties. Choose vakilsearch to start the GST enrollment process, get in contact with our team of professionals straight away.
Frequently Asked Question
What is compulsory registration in GST?
Any individual or group of individuals that the Central Government or a State Government may designate based on the suggestions of the GST Council must register compulsorily.
What is compulsory registration under GST SEC 24?
As per Section 24 of the CGST Act 2017 those who pay taxes through the reverse charge method, casual taxable persons, and organisations that engage in interstate supply must opt for compulsory GST registration.
What is the compulsory limit for GST registration?
Businesses that pay taxes via the reverse charge method, are casual taxable individuals, have an annual turnover of more than ₹40 lakhs for commodities and ₹20 lakhs for services, and are involved in interstate supply are required to register for GST.
Is it compulsory to pay GST after registration?
Post GST registration, a business must abide by all GST laws and guidelines. This involves keeping track of every transaction, submitting timely returns, paying taxes, and filing GST returns.
