GST registration is mandatory for businesses involved in the supply of goods or services with an annual turnover exceeding INR 20 lakhs. In some cases, registration becomes necessary, even if the turnover is below the threshold limit. In this article, we will discuss who is liable and not liable for GST registration in India.
As per the GST Act, businesses with an annual turnover of over INR 20 lakhs are required to register for GST. For businesses operating in states with special category status like Jammu and Kashmir, Himachal Pradesh, and Uttarakhand, the threshold limit is INR 10 lakhs.
Businesses involved in inter-state trade are required to register for GST regardless of their turnover.
A casual taxable person is one who occasionally undertakes transactions involving the supply of goods and services in a GST taxable territory. For example, individuals who set up a temporary stall during a festival or trade fair.
Non-resident taxable persons are those who supply goods or services in India but do not have a fixed place of business in the country.
E-commerce operators who offer their platform to other sellers are also liable to register for GST. They are required to collect tax at the source from the sellers and submit it to the government.
Businesses with an annual turnover below INR 20 lakhs are not required to register for GST. However, businesses operating in states with special category status like Jammu and Kashmir, Himachal Pradesh, and Uttarakhand, the threshold limit is INR 10 lakhs.
Businesses engaged in the supply of exempt goods and services are not liable to register for GST. Some examples of exempt goods and services include milk, fresh fruits and vegetables, education, and healthcare services.
Input Service Distributors (ISD) are not required to register for GST. ISDs are entities that receive invoices for input services and distribute the credit of tax paid on such services to their branches having the same PAN.
Under the reverse charge mechanism, the liability to pay tax is on the recipient of goods or services instead of the supplier. Businesses that are only recipients of goods or services under the reverse charge mechanism are not required to register for GST.
Agents of taxable persons are those who act on behalf of another person for buying or selling of goods or services. They are not required to register for GST if they supply goods or services on behalf of a registered person.
In conclusion, GST registration is mandatory for businesses with an annual turnover exceeding INR 20 lakhs. However, there are exceptions to this rule, and certain businesses are not required to register for GST. It is essential for business owners to understand the GST registration requirements to avoid any penalties or legal complications.
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