When is GST Registration Compulsory?

Author
By Sakshi Shah on March 26, 2019

GST Registration means the allotment of a unique GST Number or GSTIN to a taxpayer who is liable to collect and pay tax to the government after claiming the credit of the taxes paid on purchases.

Generally, the GST registration is compulsory only if the aggregate turnover of a business exceeds the threshold of Rs.40 lacs for goods (Rs.20 lacs for special category states) or Rs.20 lacs for services (Rs.10 lacs for special category states) during the financial year. However, in certain cases, mandatory registration is required even if the turnover is less than the prescribed threshold limit.

What is Voluntary Registration under GST?

Who is required to Register for GST?

1. Inter-state suppliers of Taxable Goods

Inter-state supply means sales of goods outside the state of registration.

DescriptionWhether registration required ?
Inter-state sale of taxable goodsCompulsory registration irrespective of turnover
Inter-state sale of taxable services, exempt goods or services, nil-rated goods or services etcCompulsory registration only if the turnover exceeds:
In case of Goods: Rs.40 lacs (Rs.20 lacs for special category states)
In case of Services: Rs.20 lacs (Rs.10 lacs for special category states)
[notification no. 10/2017 dated 13.10.17]

2. E-Commerce Operators or TCS Collectors

An e-commerce operator is a person who owns and manages a digital platform for an e-commerce business i.e. buy and sell of goods or services over a digital network. The e-commerce operator is also called a TCS collector since he is liable to collect TCS (tax collected at source) before making payments to the e-commerce suppliers. Such persons should take a compulsory GST registration irrespective of the turnover.

What is the impact of GST on an E-Commerce Operator?

3. E-Commerce Supplier of Goods

An e-commerce supplier is a person who sells goods or services online through an e-commerce platform managed by an e-commerce operator.

DescriptionWhether GST registration required?
E-commerce supplier of goodsCompulsory registration irrespective of turnover
E-commerce supplier of servicesCompulsory registration only if the turnover exceeds:
In case of Goods: Rs.40 lacs (Rs.20 lacs for special category states)
In case of Services: Rs.20 lacs (Rs.10 lacs for special category states)
[notification no. 65/2017 dated 15.11.17]
What is the impact of GST on an E-Commerce Supplier?

4. Non-Resident Taxable Person (NRTP)

An NRTP must take a compulsory registration. It means a person:

  • who is a non-resident in India
  • he has no fixed place of business in India
  • he sells goods or services in India as a principal or an agent

5. Casual Taxable Person (CTP)

A CTP must take a compulsory registration. It means a person:

  • who sells goods or services in India as a principal or an agent
  • he has no fixed place of business in the state from which he sells goods or services

6. Input Service Distributor (ISD)

An ISD must take a compulsory registration. It means the head office:

  • which receives tax invoices for input services used by all its branches
  • which issues tax invoices to its branches to distribute credit of tax paid on the input services

7. Agent

An agent is a person who sells goods or services on behalf of another person i.e. principal. It includes a commission agent, factor, broker etc. As per the GST Act, an agent must take compulsory registration under GST.

What is the impact of GST on a commission agent? The value of service provided by a commission agent is taxable and not the amount of reimbursement claimed from principal. Know more about provisions of registration, returns, invoicing, rate etc applicable to a commission agent

8. OIDAR Service Provider

OIDAR stands for Online Information Database Access and Retrieval Services. When services are supplied online over the internet without a physical interface between the seller and buyer, compulsory registration must be taken by the seller.

9. TDS Deductor

TDS Deductor must take a compulsory registration under GST. A certain category of persons such as government department, local authority, government agency etc is required to deduct tax:

  • At the rate of 2%
  • On making payment to the supplier of goods or services
  • If the invoice value exceeds Rs.2.5 lacs

10. RCM (Reverse Charge Mechanism)

The buyer of goods or services who required to pay tax under provisions of the reverse charge mechanism.

What is Reverse Charge Mechanism (RCM) under GST?