As suppliers begin their preparation to adopt the new taxation system under GST regime, the first step towards being affiliated with this system is to understand the four bills recently passed by the Rajya Sabha – CGST, UTGST, IGST and Compensation bill. Once a supplier has a fair knowledge of these aforesaid Bills, the road map towards getting registered under GST will be less challenging. For a supplier who is already registered with VAT/Excise/Service Tax, he/she will have to start afresh and register under GST law by default. Mentioned below are some conditions and methods to consider for the supplier to clear this transition process:
What is the Liability for Registration in GST?
For special category states – Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand., the threshold of GST Registration is ₹10 Lakh.
- For the rest of India it is ₹20 Lakh, with approximately 7 – 8 million businesses likely to be registered under GST. For small suppliers with turnover below Rs 50 Lakh, there is an option of adopting the Composition scheme and pay flat ~1 to 4% tax on turnover.*
- It is mandatory for a supplier with business units in different locations (within the state or in a different state) to have all units registered under the same PAN number.
- To arrive at the turnover, the aggregate turnover of all business units will be considered.
Here’s an example to illustrate the liability of a business to register under GST – Apoorva Apparel Pvt Ltd. is an apparel manufacturing unit in Mumbai, Maharashtra , with their other business units in Delhi and Bangalore, Karnataka. Their annual turnover will be combined from all three units.
Which Suppliers need to be registered under GST
- All e-commerce operators
- Casual taxable persons
- Non-resident taxable persons
- Persons liable to pay tax under reverse charge
- Agents supplying on behalf of a taxable person
- Input service distributor
- Sellers on e-commerce platforms
- Taxable person carrying on interstate supply
- Persons responsible to deduct TDS
- Person supplying online information and database access or retrieval services from outside India to an unregistered person in India
Forms Required for transition from Existing Central and State Tax to GST
- For Existing Registered Supplier, a provisional certificate of registration will be allotted to the supplier upon enrollment in Form GST REG-25. (Incase a supplier has obtained multiple registration on the basis of single PAN under existing law, such a supplier will be granted only one provisional Registration. Incase of centralized registration under Service Tax, a supplier will be granted with single provisional registration in the state or union territory in which he was registered earlier.)
- Within 3 months, suppliers are required to submit PAN, mobile number and e-mail ID to register under the existing law in Form GST REG-24.
- If the details submitted are satisfactory, final registration certificate will be issued in Form GST REG-06.
- If the details submitted are not satisfactory, a show cause notice will be issued in Form GST REG-27, and there will be a hearing on the same before a cancellation order of provisional registration is issued.
If the show cause notice hearing is also not successful, or the supplier fails to provide the necessary details within the preconditioned time period, the provisional registration allotted in Form GST REG-25 will be cancelled by issuing an order in Form GST REG-26. Incase the show cause notice hearing is complete and satisfactory, final registration certificate will be issued in Form.
If a taxable person is not required to register under GST, but was previously registered (Central and State law) – in the transition process, he has an option to cancel the provisional registration issued by submitting the Form GST REG-28.