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GST Update No. 03/2017/KMS

Provisions under Sec : 25 of CGST Act 2017

Provisions under Sec : 22 of CGST Act 2017

Flow charts on registration procedure stated in Draft Registration Rules (New registration,

Amendment, Cancellation, Revocation, Summary of various Forms under draft GST Rules)

Practical issues

GST THIS WEEK 8th – 14th April, 2017

IN THIS UPDATE

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Section: 25 of CGST Act, 2017 on Registration

Provisions contained in Act

Every person who is liable to be registered under Section 22 or 24, shall apply for registration in every such State or union Territory in which he is so liable within 30 days from the date on which he becomes liable to registered.

However, casual taxable person or a non-resident taxable person shall have to apply for registration at least five days prior to the commencement of business.

Person having multiple business verticals in a State may obtain a separate registration for each business vertical.

A person may get himself registered voluntarily and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person.

Every person shall have a Permanent Account Number (PAN) or a person required to deduct tax under section 51 (Government Departments / Local Authorities / Government Agencies) shall have Tax Deduction and Collection Account Number (TAN) in order to be eligible for grant of registration. (Except Non-resident taxable person)

Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may proceed to register such person own his own.

Any other person or class of persons, as may be notified by the Commissioner, shall obtain a Unique Identity Number (UIN).

Any rejection of application for registration or the UIN under the CGST Act / SGST Act shall be deemed to be a rejection of application for registration under the SGST Act / CGST Act.

Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate base line is located.

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Provisions of Section 22 of CGST Act, 2017

Turnover criteria for persons liable to be registered

Other than Special Category States Special Category States

Every supplier shall be liable to be registered under this Act

In the state or Union Territory from where he makes taxable supply of goods and/or services

If his aggregate turnover in a financial year exceeds Rupees Twenty Lakhs

Every supplier shall be liable to be registered under this Act

In the state from where he makes taxable supply of goods and/or services

If his aggregate turnover in a financial year exceeds Rupees Ten Lakhs

Special Category States: Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya,

Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand

Special Category States

Special Category States

Other States

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Definition of Aggregate Turnover

“Aggregate turnover” means the aggregate value of all taxable supplies, exempt supplies, exports of goods and/or services and inter-State supplies of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be;

Explanation. - Aggregate turnover does not include the value of inward supplies on which tax is payable by a person on reverse charge basis under sub-section (3) of Section 8 and the value of inward supplies.

For Section 22, aggregate turnover shall also include all supplies made by the taxable person, including supplies made on behalf of all his principals.

The supply of goods, after completion of job-work, by a registered job-worker shall be treated as the supply of goods by the “principal”, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.

Persons not liable to be registered (Section 23)

Any person engaged exclusively in the business of supplying goods and/or services that are not liable to tax or are wholly exempt from tax under this Act;

An agriculturist, to the extent of supply of produce out of cultivation of land.

The government may, on the recommendation of the council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

Persons mandatorily required to be registered (Irrespective of threshold limit) (Section 24)

Persons making any inter-state taxable supply;

Casual Taxable Person;

Persons who are require to pay tax under reverse charge;

Persons who are required to pay tax under sub-section (5) of Section 9 (Where services specified by government, if provided through E-commerce operator then e-commerce operator will be liable to pay tax);

Non resident taxable person;

Persons who are required to deduct tax under section 51;

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Persons who supply goods and/or services on behalf of other taxable person whether as an agent or otherwise;

Input Service Distributor;

Person who supplies goods and/or services (other than supplies specified in Section 9(5)) through e-commerce operator who is required to collect TCS under section 52.

Every e-commerce operator;

Every person supplying online information and database access or retrieval services from a place outside India to a person (other than registered taxable person) in India;

Such other person or class of persons as may be notified

Other Provisions (Section 22)

Where a business carried on by taxable person registered under this Act is transferred to other person as a going concern, the transferee shall be liable to be registered with effect from the date of such transfer. (Including the incidence of succession)

In a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or de-merger of two or more companies by an order of a High Court, the transferee shall be liable to be registered, where required, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court.

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Flow charts on Goods and Services Tax Registration Draft Rules

1. Flow chart showing procedure for Application by new assessee

Note:

In case if the proper officer does not take any action within 3 days or 7 days, as the case

may be, the application shall be deemed to be approved.

If a person has units in SEZ as well as outside SEZ, he shall make separate application for

registration of all units as distinct business verticals.

In case of following persons, application for registration shall be made in the given Forms:

Person required to deduct / collect tax at source FORM GST REG 07

Non-resident taxable person FORM GST REG 09

OIDAR service provider FORM GST REG 09A

Special Entities (Person required to obtain UIN) FORM GST REG 12

Particulars and

details found

proper

Registration Certificate

in FORM REG–06

Serving additional information in FORM REG – 04

Order of rejection of Application in FORM REG 5

Discrepancies

in additional

submission

YES NO

YES

NO

Application for Registration in FORM REG - 01

Acknowledgement in FORM REG – 02

Notice for additional

information in REG – 03

Within 3 days

Within 7 days

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2. Flow chart showing procedure for Application of Amendment in Registration

Note:

In case if the proper officer does not take any action within 15 days or 7 days, as the case

may be, the certificate shall stand amended automatically.

Where the change relates to the Name of Business, Principal Place of Business, and

details of Partners or Directors, Karta, Managing Committee, Board of Trustees, Chief

Executive Officer or equivalent, responsible for day to day affairs of the business which

does not warrant cancellation of registration under section 21, the proper officer shall

approve the amendment within fifteen common working days from the date of receipt of

application. Where the change relates to any particulars other than specified above, the

certificate of registration shall stand amended upon submission of the application in

FORM GST REG-11.

Particulars and

details found

proper

Order for Amendment in

FORM REG–14

Serving additional information FORM REG – 04

Order of Rejection of Application in FORM REG - 05

Discrepancies

in additional

submission

YES NO

YES

NO

Application for Amendment in FORM GST REG - 13

Notice for seeking Additional

information in REG – 03

Within 15 days

Within 7 days

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3. Flow chart showing procedure for Cancellation of Registration

Note:

No application for cancellation of registration shall be considered in case of a taxable

person, who has registered voluntarily, before the expiry of a period of one year from

the effective date of registration.

Every taxable person, other than a person paying tax under composition scheme, seeking

cancellation of registration shall furnish a Final return under Form GSTR-10.

*In draft revised registration rules, instead of Form - 15; it is stated Form - 14. However, the Form-

14 has been mentioned in both the places i.e. for amendment order and cancellation application

Order for cancellation in FORM REG–18

Cancellation of Registration

Application for cancellation in

FORM GST REG-15*

Department issue SCN for

cancellation for registration in

FORM GST REG-16

Filling of submission and hearing

against cancellation notice FORM

REG-17

Submission

found proper

YES

No cancellation of registration FORM

REG-19

NO

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4. Flow chart showing procedure for Revocation of Cancellation of Registration

Particulars and

details found

proper

Order for revocation in the

FORM REG–21

Serving additional information in FORM REG – 04

Order of rejection of application in FORM REG-05

Discrepancies

in additional

submission

YES NO

YES

NO

Application for revocation of cancellation in FORM GST REG-20

Notice for seeking additional

information in REG – 03

Issue of SCN in FORM REG - 22 before passing

cancellation of registration order

Discrepancies

in filling of

letter

YES

NO

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5. Summary of various Registration Forms given under Draft Registration Rules

Form Issued by Particulars

REG-01 Applicant Submission of application with specified documents for new registration

REG-02 Department Acknowledgement issued against REG-01

REG-03 Department Notice for seeking additional information

REG-04 Applicant Submission of additional information against REG-03

REG-05 Department Order of rejection of application

REG-06 Department Grant of Registration Certificate

REG-07 Tax Deductor or Tax Collector

Application for registration to be made by tax deductor and collector

REG-08 Department Order of cancellation of registration

REG-09 Non resident taxable person

Application for registration by a non-resident taxable person

REG-09A OIDAR service provider

Application for registration by a OIDAR service provider

REG-10 Casual Taxable person / Non-resident taxable

Extension in period of registration

REG-11 Department Suo-Moto registration

REG-12 Person required to obtain UIN

Application for registration by a person required to obtain UIN

REG-13 Applicant Application for amendment of registration certificate

REG-14 Department Order for amendment of registration certificate

REG-15 Applicant Application for cancellation of registration

REG-16 Department Show Cause Notice for cancellation of registration

REG-17 Applicant Reply to Show Cause notice for cancellation of registration

REG-18 Department Order for cancellation of registration

REG-19 Department Order for non-cancellation of registration

REG-20 Applicant Application for revocation of cancellation of registration

REG-21 Department Order for revocation of cancelled registration

REG-22 Department Issue of SCN

REG-23 Department Order against SCN

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Practical issues

If a person is operating in different states, with the same PAN number, can he opt for a single

Registration?

No. Every person who is liable to take a registration will have to get registered separately for each of

the States where he is having a business operation and is liable to pay GST in terms of sub-section (1)

of Section 22 of CGST Act, 2017.

Whether a person having multiple business verticals in a state can obtain different registrations for

each of such vertical?

Yes. In terms of sub-section (2) of Section 25 of CGST Act, 2017, a person having multiple business

verticals in a State may opt for separate registrations for each such business vertical, subject to such

conditions as may be prescribed.

Is there a provision for a person to get himself voluntarily registered; though he may not be liable to

pay GST?

Yes. In terms of sub-section (3) of Section 25, a person, though not liable to be registered, may get

himself registered voluntarily and all provisions of this Act as are applicable to a registered taxable

person shall apply to such person.

Is Permanent Account Number (PAN) mandatory for obtaining a Registration?

Yes. Every person should have a Permanent Account Number (PAN) issued under the Income Tax Act,

1961 (43 of 1961) in order to be eligible for grant of registration under Section 25 of the Model GST

Law.

However, PAN is not mandatory for a non-resident taxable person who may be granted registration on

the basis of any other document as may be prescribed.

Whether the Registration granted to any person is permanent?

Yes, except for non-resident and casual taxable person; the registration certificate once granted is

permanent unless surrendered, cancelled, suspended or revoked.

Is it necessary for the foreign embassy’s to get registration under Model GST Law?

All UN bodies, Consulate or Embassy of foreign countries and any other class of persons so notified

would be required to obtain a unique identification number (UIN) from the GST portal. This UIN will be

needed for claiming refund of taxes paid by them and for any other purpose as may be prescribed in

the GST Rules.

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What is the responsibility of the taxable person supplying to UN bodies?

The taxable supplier supplying to these organizations is expected to mention the UIN on the invoices

and treat such supplies as supplies to another registered person (B2B) and the supplier will upload the

invoices of the same.

Is it necessary for the Govt. organization to get registration?

Yes, in case the Government Organizations are required to deduct tax at source, shall mandatorily

obtain registration under the Act. Otherwise, they shall be allotted a UIN.

What is the validity period of the registration certificate issued to a Casual Taxable Person and non-

resident taxable person?

The certificate of registration issued to a “casual taxable person”, a “non-resident taxable person” shall

be valid for a period specified in the application for registration, or for a period of 90 days from the

effective date of registration, whichever is earlier.

However, the proper officer, at the request of the said taxable person, may extend the validity of the

said period by a further period not exceeding ninety days.

Whether cancellation of registration under CGST Act means cancellation under SGST Act also?

Yes. The cancellation of registration under one Act (say CGST Act) shall be deemed to be a cancellation

of registration under the other Act (i.e. SGST Act).

What happens when the registration is obtained by means of willful mis-statement, fraud or

suppression of facts?

In such cases, the registration may be cancelled with retrospective effect by the proper officer.

Will ISD be required to be separately registered other than the existing taxpayer registration?

Yes. The ISD registration is for the office of a taxpayer, which will be different from the normal

registration irrespective of the threshold.

Can a taxpayer have multiple ISDs?

Yes. Different offices of a taxpayer can apply for ISD registration.

What could be the liabilities (in so far as registration is concerned) on transfer of a business?

The transferee or the successor shall be liable to be registered with effect from such transfer or

succession and he will have to obtain a fresh registration with effect from such date.

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At the time of registration, will the assessee have to declare all his places of business?

Yes. The principal place of business and place of business have been separately defined under section

2(85) & 2(89) respectively of CGST Act, 2017. The taxpayer will have to declare the principal place of

business as well as the details of additional places of business in the registration form.

Is it possible to cancel voluntary registration taken u/s 23 of CGST Act, 2017?

The proper officer may cancel such registration u/s 29(2)(d) if the person who has voluntarily

registered, doesn’t commence the business within 6 months for the date of registration. The registered

person himself may apply for cancellation of registration only after the expiry of 1 year from the grant

of registration.

Can any one of the business verticals, which are required to be registered under the Act, of a taxable

person take registration as a person paying tax u/s 10 of Revised MGL?

No. If any one-business vertical of a taxable person becomes ineligible for paying tax u/s 10, then all

other business verticals of the said taxable person shall become ineligible for paying tax u/s 10 of The

Revised MGL.

When will a non-resident become liable for registration?

A non-resident taxable person shall apply for registration at-least 5 days prior to commencement of

business. Such person shall be allotted a temporary identification number for making the payment of

estimated tax liability.

Should a casual taxable person or non-resident taxable person apply for registration in every state

from which that person is operating or is the registration common for all the states?

In terms of Sec: 22 read with Sec: 25 of CGST Act, 2017 such persons need to obtain a separate

registration in every such States.

If the job-worker subsequently registers, should the principal amend his registration by cancelling

the job-workers premises as his additional place of business?

Yes, principal has to amend his registration by cancelling the job-workers premises as his additional

place of business.

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How will the computation of Aggregate turnover be done under Revised MGL for registration?

The calculation of aggregate turnover can be understood with the help of following illustration:

Sr. No.

Name Gujarat (Turnover)

Maharashtra (Turnover)

Assam (Turnover)

1 Mr. X Taxable supply-15 lacs Exempt supply-6 lacs -

2 Mr. Y Zero rated supply-5 lacs Taxable supply-25 lacs -

3 Mr. Z Taxable supply-10 lacs - Taxable supply-5 lacs

4 Mr. P Taxable supply-10 lacs - Exempt supply-5 lacs

5 Mr. Q Supply of goods belonging to principal-25 lacs

Labour Job work value to Reg. Job worker-15 lacs

-

6 Mr. R Supply as an agent-15 lacs Non-taxable supply-13 lacs -

7 Mr. M Taxable supply-18 lacs Casual dealer-5 lacs -

8 Mr. N Exempt supply-50 lacs - -

Therefore, Aggregate turnover for each of the person will be as below:

Sr. No.

Name Aggregate Turnover Registration required in state

1 Mr. X Rs. 15 lacs + Rs. 6 lacs = Rs. 21 lacs Gujarat

2 Mr. Y Rs. 5 lacs + Rs. 25 lacs = Rs. 30 lacs Maharashtra

3 Mr. Z Rs. 10 lacs + Rs. 5 lacs = Rs. 15 lacs Assam

4 Mr. P Rs. 10 lacs + Rs. 5 lacs = Rs. 15 lacs Not required to take registration

5 Mr. Q Rs. 25 lacs + 0 = Rs. 25 lacs Gujarat

6 Mr. R Rs. 15 lacs + Rs. 13 lacs = Rs. 28 lacs Gujarat

7 Mr. M Rs. 18 lacs + Rs. 5 lacs = Rs. 23 lacs Gujarat & Maharashtra

8 Mr. N Rs. 50 lacs = Rs. 50 lacs Not required to take registration

Disclaimer: KMS Updates is meant for information purpose only and does not purport to be advice or opinion, legal or otherwise, whatsoever. KMS updates are prepared based on the understanding of the provisions as stood applicable as on date. KMS is not responsible for any error or omission in this update or for any action taken based on its contents.