To register under the Goods and Service Tax, a business needs to have a certain minimum turnover. If you are operating a business, you must be wondering whether you need to get GST registration to comply with the tax laws or not. This is not compulsory for all businesses but only if your annual turnover for the last financial year which is calculated from April to March surpasses the minimum turnover requirement then only you need to register and get a GST Registration Certificate for your business. Let’s dive deeper into the Goods and Service Tax Laws and understand the requirement of GST registration for businesses according to their total annual turnover.
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What is a GST Registration Certificate?
An evidence of registration and compliance with the GST requirements is a GST Certificate. It includes vital characteristics about the company, such as the name of the company, its address, its GSTIN (Goods and Services Tax Identification Number), industry type, the approving authority's contact information, and the certificate's validity. Two annexures, Annexure A and Annexure B, are attached to the certificate. Annexure A includes information on other business locations, while Annexure number two includes the proprietor's details, including name, designation, and residence status. The GST Registration Certificate assures the entrepreneur that tax authorities won’t punish the business for non-compliance under GST laws for non-registration.
Minimum Turnover for GST and Compliance under GST Regime
Section 22 of the Central Goods and Service Tax Act (CGST Act) provides the liability to get a GST registration for the businesses. This section provides various conditions which, if a business fulfils, it becomes necessary for it to obtain a Goods and Service Tax Registration.
The minimum turnover for GST is 40 lakh rupees for goods and 20 lakh rupees for services category. If an entrepreneur makes a taxable supply of goods and services or both and the aggregate turnover in a financial year exceeds forty or twenty lakh rupees as applicable then he should get the GST registration for his business. Apart from these, many conditions affect the liability of businesses to obtain the GST Registration certificate. These conditions are as follows-
- If the entrepreneur makes taxable income from the supply of goods and services in a special category state then he needs to get the registration even for lower total annual turnover. In this case, the entrepreneur needs to get GST registration if the annual turnover exceeds twenty lakh rupees for goods and ten lakh rupees in case of services.
- If a person holds a licence already under any existing law, he needs to register under the CGST Act immediately.
- If a business carried on by a taxable person is transferred to another person or the other person obtained the business through succession, in such a case, the successor or transferee needs to get the GST registration under the CGST Act. Such registration shall be effective from the date of such transfer or succession.
Read Our Blog: GST Registration - Procedure Guide
Who is not liable for the GST Registration?
There can be some businesses that have an annual turnover of more than the requisite minimum turnover for GST Registration but still do not need to obtain the GST Registration Certificate. This may happen in two cases mentioned in section 23 of the Central Goods and Service Tax. If the income of a business does not lie under the criteria of taxable income then such income is excluded from the aggregate annual turnover to assess the liability of the business to get a GST registration. Apart from this, an agriculturist does not need the Goods and Service Tax to the extent of his income derived from the supply of produce out of cultivation land.
Read Our Blog: How to Get a GST Certificate?
What is the Minimum Turnover GST Registration Limit?
GST Registration Limit is 40 lakh rupees for goods and 20 lakh rupees for services. There are also some states given special status. If your business involves these states then for that respective annual turnover of your business, the gst registration limit will be twenty lakh rupees for goods and ten lakh rupees for services. If the aggregate annual turnover of your business exceeds these given amounts then it is mandatory for your business to get GST registration while the businesses below these gst registration limit can also get registered on voluntary basis.
Aggregate Turnover refers to all supplies that a taxable person makes, regardless of whether they are acting on their own behalf or the behalf of their principals. A registered job worker who completes job work and supplies the items is handled as though the principal made the supply. The total turnover of the registered job worker does not include the value of these commodities. Furthermore, special category states are the states mentioned in sub-paragraph (g) of clause (4) of article 279A of the Constitution except the states of Jammu and Kashmir, Arunachal Pradesh, Himachal Pradesh, Assam, Meghalaya, Sikkim and Uttarakhand.
The Next Steps under the GST Regime
Once you have concluded whether you fall under the category of businesses requiring GST registration, you should proceed to get one from the GST portal which can be accessed through this link (gst.gov.in). After logging into this portal you can access various GST services including the application for the GST registration. After successful GST registration application submission, the application is processed by the officials and if the data is found to be correct and complying with the regulations, the same is approved. After successful approval of your application, you can download the GST Registration Certificate from the same portal by logging in using the same credentials. Under the CGST Act, you need to download this certificate and show it at your business premises in a prominent location. If operating at multiple locations then the same needs to be displayed at all locations.
Read Our Blog: How to Download GST Certificate?
To sum it up, we can say that the businesses earning more than twenty lakh rupees need to obtain the GST registration. Although it does not apply to all businesses directly, more conditions need to be taken into consideration before making a decision about the liability of GST registration for an entrepreneur. These additional conditions include the special status of the state where the goods and services are supplied, the type of income and its taxability etc. After considering these factors one can decide whether they need to get the GST registration certificate or not. If you are still doubtful about the necessary compliance for your business, you can connect with corpseed and our experts will provide the necessary consultation to you regarding your business compliances.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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