Registration under the GST regime (S.22-30 CGST Act) is the gateway to the formal tax system. It confers legal recognition as a supplier, enables collection of tax, claiming of ITC, and making inter-state supplies. Registration is PAN-based and State-specific: a person operating in multiple States requires separate registration in each State.
Legal Framework
| Provision | Content |
|---|---|
| S.22 | Persons liable for registration (threshold-based) |
| S.23 | Persons not liable for registration (exempted categories) |
| S.24 | Compulsory registration irrespective of threshold |
| S.25 | Procedure for registration |
| S.26 | Deemed registration (within 3/7 working days) |
| S.27 | Registration of casual taxable person and non-resident |
| S.28 | Amendment of registration |
| S.29 | Cancellation/suspension of registration |
| S.30 | Revocation of cancellation |
Threshold for Registration (S.22)
| Category | Threshold (Aggregate Turnover) |
|---|---|
| Supplier of goods (normal states) | Rs.40 lakh |
| Supplier of goods (special category states) | Rs.20 lakh |
| Supplier of services (all states) | Rs.20 lakh |
| Supplier of services (special category states) | Rs.10 lakh |
| Special category states | Manipur, Mizoram, Nagaland, Tripura, Meghalaya, Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Jammu & Kashmir |
Compulsory Registration (S.24)
Persons required to register regardless of turnover:
| Category | Sub-section |
|---|---|
| Inter-state taxable supply (any amount) | S.24(i) |
| Casual taxable persons | S.24(ii) |
| Persons liable under reverse charge | S.24(iii) |
| E-commerce operators | S.24(ix) |
| Persons supplying through e-commerce operators | S.24(x) |
| Non-resident taxable persons | S.24(v) |
| Input Service Distributors | S.24(viii) |
| TDS deductors (government departments) | S.24(vi) |
| Agents of a supplier | S.24(vii) |
Persons NOT Liable for Registration (S.23)
| Category | Explanation |
|---|---|
| Person engaged exclusively in exempt supply | Not liable |
| Agriculturist (to extent of supply of agriculture produce) | Not liable |
| Person making only non-taxable supplies | Not liable |
| Person below threshold | Not liable unless S.24 applies |
Procedure for Registration (S.25)
| Step | Detail |
|---|---|
| Application | Part A: PAN, mobile, email → OTP verification. Part B: Business details, documents |
| Form | GST REG-01 |
| Time limit | Within 30 days of becoming liable |
| Deemed approval | If no response from officer within 3 working days (7 for CGST/SGST both) |
| Effective date | Date of application if within 30 days; date of liability if applied late |
| GSTIN | 15-digit PAN-based number (2 digits State code + 10 PAN + 2 entity + 1 check) |
| Multiple registrations | Separate registration required for each State; optional for multiple business verticals in same State |
Why: PAN-based, State-specific registration prevents tax leakage. The online process with deemed approval within 3 days ensures ease of business while maintaining a database for cross-verification.
Worked Example: Who Must Register?
Scenario 1: Ravi runs a grocery shop in Hyderabad. Annual turnover: Rs.35 lakh (only goods, intra-state).
- Threshold for goods (Telangana, normal state): Rs.40 lakh
- Rs.35 lakh < Rs.40 lakh → Not required to register. Can operate without GST registration.
Scenario 2: Priya is a freelance graphic designer in Bangalore. Annual turnover: Rs.22 lakh (services only, intra-state).
- Threshold for services: Rs.20 lakh
- Rs.22 lakh > Rs.20 lakh → Must register within 30 days of crossing Rs.20 lakh.
Scenario 3: Tech Corp (Hyderabad) sells software to a client in Mumbai. First sale: Rs.5,000.
- This is inter-state supply (Telangana → Maharashtra)
- S.24(i): Inter-state supply → Compulsory registration regardless of turnover
- Even Rs.5,000 triggers mandatory registration. No threshold applies.
Scenario 4: A farmer sells wheat from his farm directly to consumers.
- S.23: Agriculturist supplying produce out of cultivation → Not liable for registration
- Even if turnover exceeds Rs.40 lakh, an agriculturist selling own produce is exempt.
The decision tree for exams:
- Is there inter-state supply / e-commerce / reverse charge? → S.24 compulsory, register.
- Is the person an agriculturist selling own produce? → S.23, not liable.
- Otherwise: Check turnover against threshold (Rs.40L goods / Rs.20L services).
Cancellation (S.29)
| Situation | Who can cancel |
|---|---|
| Business discontinued, transferred, amalgamated | Taxpayer (voluntary) |
| Change in constitution of business | Taxpayer |
| Non-filing of returns for continuous period | Officer (suo motu) |
| Obtained by fraud, misrepresentation | Officer |
| Composition dealer contravenes provisions | Officer |
| Threshold no longer exceeded (voluntary) | Taxpayer |
Consequence of Cancellation
| Effect | Detail |
|---|---|
| ITC reversal | Must reverse ITC on inputs in stock + capital goods on date of cancellation (S.29(5)) |
| Final return | GSTR-10 within 3 months of cancellation order |
| Cannot collect GST | From date of cancellation |
| Cannot claim ITC | From date of cancellation |
Recall Check
- What is the threshold for GST registration for a goods supplier in normal states?
- Which persons must register regardless of turnover under S.24?
- What is the consequence of cancellation on existing ITC?
Key Cases
Tvl. Vardhan v. State Tax Officer (2022) Tvl-Vardhan-v-State-Tax-Officer-2022 Issue: Whether registration can be cancelled without providing reasonable opportunity of being heard. Rule: S.29(2) read with Rule 22: before cancellation, a Show Cause Notice must be issued and the taxpayer must be given opportunity to respond. Held: Cancellation of GST registration without issuing SCN and without providing opportunity of being heard violates principles of natural justice. The cancellation order was set aside with direction to restore registration and follow due procedure.
Distinctions
| Feature | Normal Registration | Composition Registration | Casual Taxable Person |
|---|---|---|---|
| Threshold | Rs.40L/20L | Rs.1.5 crore (goods) / Rs.50 lakh (services) | No threshold (compulsory) |
| ITC | Available | NOT available | Available |
| Inter-state supply | Allowed | NOT allowed | Allowed |
| Tax invoice | Issues tax invoice | Issues bill of supply | Issues tax invoice |
| Validity | Perpetual (until cancelled) | Perpetual | 90 days (extendable) |
| Advance tax deposit | Not required | Not required | Required (estimated tax liability) |
Flashcards
Q: What is the aggregate turnover threshold for GST registration (goods, normal states)? A: Rs.40 lakh.
Q: Under which section must inter-state suppliers compulsorily register? A: Section 24(i): persons making inter-state taxable supply must register regardless of turnover.
Q: What is the structure of GSTIN? A: 15-digit: 2 (State code) + 10 (PAN) + 2 (entity number) + 1 (check digit).
Q: Within how many days must a person apply for registration after becoming liable? A: 30 days from the date on which they become liable for registration.
Q: What must be done with ITC upon cancellation? A: ITC on inputs in stock and capital goods (proportionate) must be reversed on the date of cancellation (S.29(5)).
Q: Can GST registration be cancelled without SCN? A: No. Per Tvl. Vardhan, principles of natural justice require SCN and opportunity of hearing before cancellation.
Exam Scenario
Mr. Ashok starts a food delivery business in Hyderabad with monthly turnover of Rs.2 lakh. He also makes a single inter-state sale worth Rs.5,000 to a customer in Bangalore. He argues he need not register as his annual turnover (Rs.24 lakh) is below the Rs.40 lakh threshold. Advise.
Approach: Under S.24(i), any person making inter-state taxable supply must register compulsorily regardless of aggregate turnover. Even one inter-state transaction triggers mandatory registration. Mr. Ashok's argument that his turnover is below threshold is irrelevant because S.24 overrides S.22 thresholds. He must obtain GST registration within 30 days of the inter-state supply. Alternatively, if all future supplies are intra-state only, he can continue without registration until turnover reaches Rs.40 lakh.