GST REGISTRATION – THRESHOLD LIMIT and APPLICABILITY
In this digital era, even a common man knows about the GST( Goods and Services Tax) by its name. Any person thinks of any idea for doing business, the first thing which strikes in his/her mind is that he/she must get the business registered under the GST Act.
But is it true that every business person needs to get registered for GST? Actually not.
Under the GST Act, the threshold limit is a very important term, which is the basis of registration requirement. Here, we will discuss the threshold limit applicable according to the provisions and rules. Threshold limit is decided based on the turnover as specified in the GST Law for the same.
Other than the business falling under the limit specified, there are a few other activities for which GST Registration is bound to be taken.
A person who is running a business or planning to start a business, must ensure whether he/she falls into the threshold limit to avoid the GST Registration till the limit meets or he/she is mandatorily required to get registered under GST laws as discussed below.
Threshold Limits are as specified under the Laws
Any person engaged in providing the services, where the aggregate turnover* exceeds Rs. 20 Lacs must get GSTN to do the business.
For special category states**, the above mentioned limit of Rs 20 Lacs to be considered as Rs 10 Lacs for checking the applicability.
Now, for the sale of goods within the same state, the threshold limit for states other than special category states, is Rs. 40 Lacs for intra state transactions. (Special category states** will be considered Rs. 20 Lacs)
* Aggregate Turnover means
The Aggregate Value of
- all taxable supplies (excluding inwards transactions chargeable on Reverse Charge Mechanism basis),
- Exempt supplies
- Exports of goods or services or both
- Interstate supplies of persons with same PAN on all India basis, but, excluding the CGST, SGST, IGST, and cess.
** Special Category states mean the states of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
The States/UTs had the option to choose the threshold limit to be considered for GST Registration. Accordingly, below mentioned states/UTs chose the limit for themselves.
States/UTs who considers the limit of Rs. 40 Lacs, are as mentioned below:
Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands, Chandigarh, Jammu and Kashmir, Ladakh and Assam.
Telangana, being a normal and the only state, falls for the limit of Rs. 20/10 Lacs, as the case may.
States/UTs who considers the limit of Rs. 20 Lacs, are here mentioned:
Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand.
Now, other than the business entities that fall under the threshold limit specified above, a few business entities are mandatorily required to get registered under the GST Laws, which are as follows:
- Interstate Suppliers
- Casual taxable Persons
- Chargeable under Reverse Charge Mechanism
- Non Resident Taxable Person
- Persons required to deduct TDS under law
- Persons required to collect TCS under law
- Input Service Distributors
- E-Commerce Operator
- Persons making a sale on behalf of someone else whether as an Agent or Principal
- Providing OIDAR Services
- Suppliers who supply goods through e-commerce operators who are liable to collect tax at source.
It is also to be noted that any business entity does not fall under the threshold limit specified here, can also get registered under the GST voluntarily. But once the registration is done, all provisions and rules will be applicable on those who opted the same.
Leave a Reply