Registration | Taxation for CA Intermediate PDF Download

Why is Registration Necessary

• The supplier of goods and services will be recognized as a taxpayer. 
• After taking registration under this law, the taxpayers are authorized to collect tax from the person to whom he has supplied the goods or services, and the recipient is authorized to collect credit of the taxes paid on the goods or services or both. 
• The claim of input tax credit of the taxes paid can be made by the taxpayer and taxpayer can utilize the same for payment of taxes due on supply or goods or services or both. 
• The flow of credit from suppliers to recipients will be smooth after registration at the national level.

Nature of Registration

• The registration in GST is State/Union Territory wise and is Permanent Account Number based. From where the supplier affects supply, the registration has to make in each State or Union territory by the Supplier. 
• The supplier is allotted a 15-digit Goods and Services Tax Identification Number (GSTIN) also known as Unique Identification Number (UIN) in GST. 
• There is a single registration for all taxes i.e. CGST, SGST/UTGST, IGST, and cesses which means that registration under GST is not tax specific. 
• A business entity having its branches in multiple States will have to take separate State wise registration for the branches in different States, it means it is a PAN-based legal entity that would have ONEGSTIN per state. 
• In the case of single registration wherein it is declared by the business that it has one place as the Principal place of business and other branches as an additional place of business so an entity with different branches within a State will have single registration.
• An entity with separate business verticals in a state may obtain separate registration for each of its business verticals. Section 2(18) of the CGST Act states that distinguishable components of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of other business verticals are known as business verticals. 
• Factors that should be considered in determining whether goods or services are related include-
  • the nature of the goods or services 
  • the nature of the production processes 
  • the type or class of customers for the goods or services 
  • the methods used to distribute the goods or supply of services and 
  • the nature of the regulatory environment including banking, insurance, or public utilities.

Examples of the Business Verticals:

• A company with two different units, Unit A is doing business in Food Products and Unit B is doing business of Computer Software. Both the nature deal in different types of goods. 
• In case of different production process, a company garment is first made on machines and another set of garments is made by hand. 
• In case of different type of customers, one unit makes cars for the rich and elite and other unit for the ordinary public. 
• In case of different channel of distribution, one unit is purely online and other unit sells products from the counter of retail shop.

Goods and Services Tax Identification Number (GSTIN)

Once taxpayer is registered themselves on the common portal then the taxpayer will receive the Goods and Service Tax Identification Number which is also known as Unique Identification Number. The State code and Permanent Account Number (PAN) of the taxpayer is the basis of a 15 digit unique code.

• According to the Census of 2011 first two digits denote the Unique state code Eg: State Code of Delhi- 07, Karnataka- 29. 
• The PAN No. of the Taxpayer is the next 10 characters. 
• The registration no. of the entity consists the government with his corresponding PAN No. is the 13th digit. 
• To verify the earlier digits with the system the 14th digit is Z by default. 
• To detect error, there is a 15th digit which can be a number or alphabet.

Person not Liable for Registration [Section 23]

As per the Section 23 of CGST Act 2017, (1) the persons not liable to registration are as follows- (a) any person who is wholly exempt under this Act or under the Integrated Goods and Services Act are the person who engaged exclusively in the business of supplying of goods and services or both (b) an agriculturist who supplies of produce out of cultivation of land. (2) Under this Act the government on the recommendations of the council, by notification, specify the category of persons who may exempted from obtaining registration.
Under section 23(2), the persons may be exempted from registration on the recommendations of the council, specify the category of persons by the government. [Notification No. 5/2017-Central Tax dated 19th June 2017, Effective from 22nd June 2017. States that any person who is engaged in making taxable supplies of goods or services or both, on which tax is to be paid by the recipient under Reverse Charge basis with respect to provisions of Section 9(3) of the CGST Act is not required to obtain registration.] Under section 2(7) of the CGST Act 2017, an individual or a Hindu Undivided Family who undertakes cultivation of land is considered as an “Agriculturist” - 

• By own labour, or 
• By the labour of family, or 
• By any members of the family who hired labour under personal supervision or the personal supervision or servants on wages payable in cash or kind.

Compulsory Registration in Certain Cases [Section 24]

Notwithstanding anything contained in sub-section (1) of section 22, the categories of persons is required to be registered as per the section 24 of the CGST Act 2017: 

• Persons making inter-state taxable supply, 
• Casual taxable persons making taxable supply, 
• Persons who pay tax under reverse charge, 
• Person who pay tax under sub-section (5) of section 9, 
• Non-resident taxable persons making taxable supply, 
• Persons who deduct tax under section 51, whether or not registered under this Act, 
• Whether as an agent or otherwise, a person makes supply of goods or services or both on behalf of other taxable person, 
• Whether input service provider separately registered or not, 
• Supplies specifies under sub section (5) of section 9 goods or services or both supplied by a person, through such electronic commerce operator who is required to collect tax at source under section 52, 
• Every electronic commerce operator, 
• Other than registered person, every person who is supplying online information and database access or retrieval services from outside India to a person in India, and 
• On recommendations of the council, such other person or class of persons as notified by the government.

As per the section 24 of the CGST Act 2017, irrespective of the threshold limit mentioned under section 22(1) of the CGST Act 2017, the personas shall be required to registered under CGST or SGST Act are as follows:

• Persons making any inter-state taxable supply It is compulsory for a person to get registered if he makes an inter-state supply; However Notification No. 10/2017 of Integrated Tax date 13th October 2017 states that a person is required to be registered if he is engaged in the supply of services and his aggregate turnover computed on all India basis exceeds Rs. 20,00,000 even though he is making inter-state taxable supply of taxable services and if his aggregate turnover exceeds Rs. 10,00,000 on all India basis except the state of Jammu and Kashmir is required to registered in case of special category. 
• Casual Taxable Person Making Taxable Supply Section 2(20) of the CGST Act states that a person who as principal, agent or in any other capacity occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business in a State  or Union territory where he has not fixed place of business is known as casual taxable person.
• Persons Who Are Required To Pay Tax Under Reverse Charge 
• Person Who Are Required To Pay Tax Under Section 9(5) Section 9(5) states that in respect of inter-state supplies of specified categories of services supplied by the persons through Electronic Commerce Operator. 
• Non Resident Taxable Persons Making Taxable Supply Section2 (77) states that supply of goods or services or both, whether as principal or agent or in any other capacity by any person who occasionally undertakes transactions and has no fixed place of business or residence in India is known as non-resident taxable person. 
• Persons Who Are Required To Deduct Tax Under Section 51 Section 51 states that if the total value of supply exceeds Rs. 2,50,000 then the department of Central government or Local Authority or any person notified by the government on the recommendation of the council to deduct tax deducted at source (TDS) @1% from the payment made to the supplier of goods; if the location of the supplier and the place is in State or Union Territory which is different from the State or the case may be, Union territory of registration of the recipient then no deduction will be made. 
• Persons Who Make Taxable Supply Of Goods Or Services Or Both On Behalf Of Other Taxable Persons Whether As An Agent Or Otherwise 
• Input Service Distributor, Whether Or Not Separately Registered Under This Act Section 2(61) states that an on the receipt of input services and issues a prescribed document received at the office of supplier of goods or services or both which received tax under invoices issued under section 31 for the purposes of distributing the credit of central tax, state tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the siaid office. 
• Persons Who Supply Goods Or Services Or Both, Other Than Supplies Specified Under Section 9(5) Through Such Electronic Commerce Operator Who Is Required To Collect Tax At Source Under Section 52 Notification No. 65/2017- Central Tax: Date: 15th November 2017, states that such person who supply goods or services or both, other than supplies specified under section 9(5), through an electronic commerce operator who is required to collect tax at source under section 52, and having an aggregate turnover, to be computed on all India basis, not exceeding amount of Rs. 20,00,000 in a financial year, as the category of persons exempted from obtaining registration under the said Act: provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of Rs. 10,00,000 in case of special category states as specified in sub clause (g) of clause 4 of article 279A of the Constitution, other than the state of Jammu and Kashmir. 
• Every Electronic Commerce Operator Section 2(45) states that the electric commerce is own, operate or manage digital or electronic facility or platform by any person is known as electronic commerce operator. 
• Other than a registered person, every person supplying online Information and database access or retrieval services from a place outside India to a person in India.
• Notified by the government on the recommendations of the council such other persons or class of persons.