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Who is Not Required to Register under GST
As per the provision of sec 22 of CGST Act, 2017 every supplier who supplies taxable goods or services or both whose aggregate turnover exceeds Rs. 20,00,000 and 10,00,000 (in special category states) in F.Y shall be liable to be registered under the GST ACT. However, certain persons as per sec 23 of CGST Act, are not liable to register under GST, irrespective of their turnover. This implies that even if their turnover crosses Rs. 10 Lakhs/20 Lakhs, as applicable, these persons are not required to obtain registration under GST. In this blog, let us learn about these persons who are not required to register under GST.
Note: At 32nd GST council meeting it is proposed that the threshold limit to obtain registration has increased to Rs.40,00,000 for goods and it remains the same for services at Rs. 20,00,000 (2000000 & 1000000) as applicable for special category states) the above change will be effective from April, 2019. And also the states have an option either to opt for the limit of Rs.4000000 or to remain at Rs.2000000.
As per sec 2(7) of cgst Act, an agriculturist is an individual or Hindu Undivided Family (HUF), who undertakes cultivation of land either:
By his own labour
By the labour of his family or
By servants on wages paid in cash or kind, or by hired members under the person’s supervision or the personal supervision of any member of the family
Agriculturists supplying produce generated by the cultivation of land are exempted from registering under GST. Even if their turnover crosses the threshold limit, they are not liable to register under GST.
For example: An agriculturist supplying fruits and vegetables cultivated by him is not liable to register under GST.
- Persons exclusively supplying exempt goods or services
Exempt goods or services include nil-rated goods and services, non-taxable goods and services and supplies notified as exempt by the Government.
Persons who exclusively supply exempt goods or services are among the persons who are not required to register under GST.
For example: Supply of alcohol for human consumption is a non-taxable supply under GST. Persons who exclusively supply alcohol are not liable to register under GST.
3.Persons exclusively making reverse charge supplies
Persons exclusively making supplies on which the recipient is liable to pay tax on reverse charge, are not liable to register under GST.
For example: A Goods Transport Agency (GTA) exclusively providing transport service to notified persons, who are liable to pay tax on reverse charge, is not required to register under GST.
- Specified category of persons notified by the government
Following notifications was clarified by CBIC categories of persons not liable GST registration which is as follows:
- Notification No. 32/2017 38/2017 – Central Tax dated 15.09.2017 (amended by Notification No. Central Tax dated 13.10.2017) regarding exemption from registration to a casual taxable person making taxable supplies of handicraft goods.
- Notification No. 65/2017 Central Tax dated 15.11.2017 regarding exemption from compulsory registration to suppliers of services through an e-commerce platform.
- Notification No.7/2017@IT dated 14.11.2017 regarding exemption for job worker engaged in making interstate supply of job work services except jewellers business.
- Notification No.8/2017@IT dated 14.09.2017 regarding exemption from registration to a person making interstate taxable supplies of handicraft goods.
- Notification No.10/2017 Integrated Tax dated 13.10.2017 regarding exemption from to persons making interstate supplies of taxable services not exceeding 20 lakhs is exempt from obtaining registration.
Such persons mentioned in the preceding paragraph shall obtain a Permanent Account Number and generate an e-way bill in accordance with the provisions of rule 138 of the Central Goods and Services Tax Rules, 2017.
Note: Above notifications has applicable only provided their aggregate turnover does not exceed threshold limit which was prescribed in sec22(1) of CGST Act.
Hence, we have discussed about the persons who are not liable to register under GST. These persons (from points 1 to 3) can make note that they are not required to register under GST, irrespective of their turnover.