Goods and Services Tax (GST) is an indirect tax that has been implemented in India to replace various taxes such as excise duty, service tax, and VAT. GST is levied on the supply of goods and services across India. There are certain individuals who are exempted from registering for GST. Section 23 of the GST Act specifies the persons not liable for registration under GST.
1. The following are the persons who are not liable for registration under GST:
2. Individuals who are engaged in the supply of goods or services that are not liable for GST. For example, healthcare services, educational services, and agricultural products.
3. Individuals who are engaged in the supply of goods or services that are exempted from GST. For example, basic food items, books, and newspapers.
4. Individuals who are engaged in the supply of goods or services that are below the threshold limit. The threshold limit for GST registration is different for different states. For most states, it is Rs. 20 lakh for goods and Rs. 10 lakh for services. However, for certain States, the threshold limit is Rs.10 lakh for goods and Rs. 5 lakh for services.
5. Individuals who are engaged in the supply of goods or services that are covered under the reverse charge mechanism.
6. Individuals who are engaged in the supply of goods or services through e-commerce operators who are required to collect tax at source (TCS).
While GST registration is mandatory for most businesses, there are several benefits to not registering for GST:
1. No need to levy GST on your products or services, which makes them cheaper for the customers.
2. Less compliance burden as there are fewer tax returns to file.
3. No need to maintain detailed records of purchases and sales.
4. No need to pay any penalty or interest for non-registration under GST.
5. No need to obtain GSTIN.
6. Less working capital requirement as there is no need to pay GST on purchases.
Section 23 of the GST Act specifies the persons who are not liable for registration under GST. While GST registration is mandatory for most businesses, there are certain exemptions that small businesses can benefit from. By not registering for GST, businesses can save on the costs associated with maintaining detailed records and compliance. However, it is important to note that businesses that are liable for GST registration should obtain GSTIN and comply with the various provisions of the GST Act to avoid any legal complications.
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