Understanding GST Registration Essentials
Dive into the intricacies of GST registration with a focus on different types of registration, eligibility criteria, exemptions, and aggregate turnover calculations. Gain insights from expert CA Indranil Das on key topics and practical issues related to GST registration. Unravel examples, explore persons liable for registration, and understand nuances of registration requirements in a comprehensive seminar setting.
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GST KEY TOPICS GST SEMINAR EIRC 3RDAPRIL 2024 DAS DAS & CO Chartered Accountants Govind Bhaban, 2 Brabourne Road, Kolkata 700001 ca.indranildas@gmail.com/9831171826 DAS DAS & Co Chartered Accountants
ABOUTTHESPEAKERS CA Indranil Das, FCA, DISA. Certificate in GST Pleading and Practice ( ICAI) CA Indranil Das is a practicing Chartered Accountant in practice for the past 12 years. He attained fellowship in the year 2016 from ICAI. He is extensively practicing in Direct and Indirect Taxation. A member of Direct Tax Professional Association Kolkata and Accountants Library Kolkata. He has attained Diploma in Information Systems Audit from ICAI. Specializes in GST Pleading and Practice and represents clients before Advance Ruling Authority, Adjudicating Authority. Has provided corporate trainings to large corporates like BSNL, HPCL,SBI to name a few. . DAS DAS & Co Chartered Accountants
TOPICS FOR DISCUSSION REGISTRATION & PRACTICAL ISSUES
TYPESOFREGISTRATION It has Four Types Compulsory Registration Suo Moto Registration Voluntary Registration Turnover Basis
PERSONSLIABLE FORREGISTRATION SEC 22 Person making Taxable Supply of Goods or Services or Both if the AT- Special Cat States- Mizoram, Manipur, Nagaland, Tripura Special Category States if Exceeds Rs 20 lakhs( 1.1.2020) Exceeds 20 Lakhs in case of Supply of Services Exceeds 40 Lakhs in case of Supply of Goods Explanation to 22(1)- Person will be considered to be engaged in exclusively in supply of goods even if is engaged in exempt supply of service provided by way to extending Deposits, Loans and Advances. EXCEPTIONS ARE: 1.Compulsory Requirement of Registration 2. Supply of Ice Cream and other Edible Ice, PAN Masala and Tobacco 3. Voluntary Reg Dealers 4. Intra State Supplies in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand
EXAMPLE Fixed Deposit Interest earned in Rs 3 Lakhs Whether Registration is Required? Ans: Yes. Refer Exp to Sec 22(1) Exempt Service D of Delhi (Seller of Pens) Goods Turnover is 38 lakhs Goods
AGGREGRATETURNOVER It means - Inward Supplies liable to RCM, CGST, SGST, UTGST,IGST, Cess + Taxable supplies, Exempt Supplies, Export Supplies, Inter-State Supplies of Same PAN
PERSONSNOTLIABLEFORREGISTRATION SEC 23 No requirement for Registration Person engaged exclusively in the business of Supplying Goods or Services-a) that are not liable to tax, b) Wholly Exempt from Tax An Agriculturist to the extent of supply of produce out of Cultivation of Land. Government may Exempt Special Category by a Notification
GOVERNMENTMAYEXEMPT SPECIAL CATEGORYBYA NOTIFICATION Only deals with Supplies which Attracts RCM CTP making Inter State Supplies of Specific Handicraft Goods, persons making Inter State supplies of certain Specified Products when made by Craftsmen predominantly by hand. Category of Supplies if the AT does not exceed the threshold limit in the respective state, other than Supplies attracting 9(5)the tax on supplies of which shall be paid through ECO Persons in exclusive Supply of Goods when AT is less than equal to 40 lakhs. Job Workers making Inter State Supplies to RP Persons making Inter State Supplies of Taxable Services and having AT less than equal to 20 lakhs for Normal States and 10 lakhs for Special Category States in a Financial Year.
COMPULSORY REGISTRATION SEC 24 This is an Overriding Section to Sec 22(1) Persons who are required to pay tax under RCM Person making a INTER STATE Taxable Supply Special Category of Services the tax on INTRA STATE supplies of which shall be paid through ECO CTP Making Taxable Supply Non Resident Taxable Person- Taxable Supply
COMPULSORY REGISTRATION SEC 24 This is an Overriding Section to Sec 22(1) Person required to DEDUCT TAX u/s 51 INPUT Service Distributer whether or not separately reg. Making Taxable supply of Goods or services on behalf of other Taxable Person as an AGENT or Otherwise. CTP Making Taxable Supply PERSONS who supply Goods/Services through ECO who is collecting tax u/s 52 Person providing OIDAR from a Place outside India to a Person in India Every ECO who is required to collect tax u/s 52
CASESTUDIES 1. Turnover of Rs 12 lakhs from Sale of Stationery Goods, but availed the service of a GTA he has to pay RCM, hence taken Compulsory Registration. Whether he has to pay Tax on Sale of Goods also? Answer: When he has to take Registration, he has to comply with all the provisions of the act and hence he has to charge GST on Sale of Goods also.
CASESTUDIES 2. An Advocate is having Professional Income of Rs 18 lakhs and Bank Interest of Rs 3 lakhs. Is Reg Required? Answer: Advocates are exempt from Reg vide Notification No 5/2017 dated 19.07.2017 whereby Persons who are engaged in supplies which attracts Reverse Charge are exempted. Further Bank Interest is considered Exempt Supply. Thus No Liability of Registration.
CASESTUDIES 3. TVS is providing Exempt Services of Rs 24 lakhs. It has sold a Capital good worth Rs 7 lakhs. Whether Reg Required? Answer: Yes. AT Definition says Exempt Supplies + taxable Supplies.
CASESTUDIES 4. Medical Association is conducting conference in Maharashtra for 2 days with delegates from all over the country. Do the Association needs Registration there? Answer: The Association has to take Reg as CTP as it has no fixed place of Business in the State.
CASESTUDIES 5. Mr Akash appoints Mr Bikash to procure Goods from the market. Mr Bikash identifies Suppliers and asks them to send goods and issue the invoice directly. Does he Needs Registration since he is acting as an Agent? Answer: No. Here Bikash is only acting as a Procurement agent and is not involved in the supply of the goods. In this scenario, he is not an agent as per Sch I for the supply of Goods.
CASESTUDIES 6. Nihar Designs is selling garments through Amazon and Flipkart. Does it need Registration? Answer: No. Though he is being suppliers who supply through ECO and falls under Compulsory Registration category, the Govt vide Notification 65/2017 dated 15.11.2017 has exempted such suppliers if the AT on all India Basis does not exceed the prescribed Limit
CASESTUDIES 7. Mr Sahay crossed Threshold limit on 15.09.2023. He made application for Reg on 30.09.2023? What is the effective date? Answer: Since applied within 30 days of his becoming liable, his effective date will be 15.09.2023
CANCELLATION OF REGISTRATION-DEATH OF SUCH PERSON- SEC 29( 1) INITIATION OF CANCELLATION OF REGISTRATION APPLICATION FILED BY REG PERSON APPLICATION BY LEGAL HEIRS DUE TO DEATH OF RP ON HIS OWN MOTION
CANCELLATION OF REGISTRATION-DEATH OF SUCH PERSON- WHEN? CIRCUMSTANCES Business Discontinued, Transferred Fully for any reason including Death of the Prop, Amalgamated, demerged or Disposed of No longer Liable to be Registered u/s 22,24 or Intends to opt out Voluntarily Change in the Constitution of the Business
CANCELLATION OF REGISTRATION-BYPROPER OFFICER INCLUDINGANYRETROSPECTIVEDATE-SEC 29(2) CIRCUMSTANCES Reg obtained by means of Fraud, Wilful Mst, Supp of Facts Contravention of the Acts and Rules Others- Not filed Returns for a continuous Six months Person taking Voluntary Reg has not commenced business within 6 months from the date of Reg Compositio n Dealers not filing Returns for 3 Consecutiv e Tax Period
RULESFORCANCELLATIONOFREGISTRATION SPECIFIC RULES FRAMED FOR CANCELLATION PROCEDURE Rule 22- Cancellation of Registration Rule 20- Application for Cancellation of Registration- 29(1) Rule 21- Reg to be cancelled under certain circumstances Rule 21A- Suspension of Registration Apply in Form GST REG 16 Provide details of Inputs held in Stock, Semi Stock, FG, CG- 30 days from the date of Event
RULESFORCANCELLATIONOFREGISTRATION RULE 21- Specific Cases (e)- Avails ITC in Violation of Sec 16 and Rules (d)- Violates Rule 10A- No Bank Details (b)- Issues Invoice/Bill without supply of Goods or Services (a)- Does not conduct any Business from the Declared Place (c ) Violates Sec 171- Anti Profiteerin g (f)- (g)- Declares Outward Supplies in R1 greater than 3B Violates the provisions of Rule 86B
RULESFORCANCELLATIONOFREGISTRATION RULE 21A- Suspension of Registration (1)- If applied for cancellation under Rule 20, Reg is Deemed to be SUSPENDED from the Date of Submission of the Application/Date Sought For- [Whichever is later] Pending Completion of Proceedings under Rule 22 (2)- Sec 29(2) or Rule 21- PO has reasons to believe- Reg is SUSPENDED from the Date to be determined by him Pending Completion of Proceedings under Rule 22
RULESFORCANCELLATIONOFREGISTRATION RULE 21A- [2A]- PO on Comparison of Returns- R1 AND 2B/Such Other Analysis Reg shall be SUSPENDED and intimated in Form REG 31, informing the said Differences Shows Significant Differences or Anomalies leading to cancellation of Reg, Asking him[SCN] to explain within 30 days- For Not Cancellation
RULESFORCANCELLATIONOFREGISTRATION RULE 21A- Other Points on Suspension Sub Rule 3 If SUSPENDED via Sub Rule 1,2, 2A- No Taxable Supply during the period of Suspension and No requirement of Return u/s 39 Sub Rule 4 Sub Rule 3A If SUSPENDED via Sub Rule 2, 2A- No Refund u/s 54 during the period of Suspension If SUSPENDED via Sub Rule 1,2, 2A- Deemed to be Revoked- Upon Completion of Proceedings under Rule 22- Effective from Date of Suspension.[PO may revoke anytime during Pendency of Rule 22]
RULESFORCANCELLATIONOFREGISTRATION RULE 21A[5]- Other Points on Suspension Sub Rule 5 When the Suspension Order has been withdrawn/revoked, the conditions for Revised Invoice[during the period of Suspension] and Incorporation of supplies in the specific Returns is mandated as usual.
RULESFORCANCELLATIONOFREGISTRATION RULE 22- Cancellation of Registration (3)PO shall issue Order in Form REG 19 within a period of 30 days from the 1.Date of Application Rule 20, Date of Reply under Sub Rule (1) of this Rule, or Date of Reply under 2A of Rule 21A- CANCEL THE REG From the date determined by PO (1)- PO has reasons to believe, he shall issue SCN in REG 17, within a period of 7 days from the date of Service of such SCN, Dealer needs to reply. (2)- Reply in REG 18
RULESFORCANCELLATIONOFREGISTRATION RULE 22- Cancellation of Registration Proviso (4)- When the Reply furnished under Sub Rule 2 of this Rule, Sub Rule 2A of Rule 21A, Is found to be satisfactory PO will Drop Proceedings and Pass Order in REG 20. RP do not reply under Sub Rule 1, and Furnishes all the pending Returns with Tax Interest Late Fees, PO will Drop Proceedings and Pass Order in REG 20. (5)- Sub Rule 3,Applies to Legal Heirs of a Deceased Proprietor.
SANT RAM VS DELHI STATE GST & OTRS- DELHI HIGH COURT ISSUE- Whether Revenue Department authorized to cancel GST registration based on Letter received from another authority? VERDICT- No, the Honorable Delhi High Court allowed the writ petition and set aside the order of GST Registration cancellation thereby holding that it is important for the Proper Officer to independently arrive at the satisfaction set out in subsection (1) or (2) of Section 29 of the Central Goods and Services Tax Act, 2017 ( the CGST Act ) for the purpose of GST Registration cancellation. The Honorable Court relying upon the judgment of Union of India & Ors. v. Bharat Forge Ltd. &Anr. [(1970) 1 SCC 795] and Kritika Agarwal v. Union of India & Ors., [W.P. (C) 9424/2023 dated July 18, 2023] further noted that the Proper Officer has to act independently and cannot act mechanically on the instructions of another authority and opined that the Impugned SCN was issued solely based on letter received from another authority. The Letter neither was attached to the Impugned SCN nor does the Impugned SCN refer to the contents stated in the Letter. Further, opined that the Impugned Order does not state that the Proper Officer was satisfied with any of the conditions laid out under sub-section (1) or (2) of Section 29 of the CGST Act.
VAB APPAREL LLP VS COMM DELHI HIGH COURT ISSUE- Whether the GST registration be cancelled, without specifying the reason and explanation in the SCN? VERDICT- hat without specifying any particular reason and explanation for the cancellation of GST Registration by means of fraud, wilful misstatement or suppression, also there is no explanation as to why the buyers and suppliers have been found to be suspicious. Merely because the Petitioner s shop was found closed, absent anything more, is not a ground for cancellation of the Petitioner s GST registration The Honorable Delhi High Court observed that the Impugned Order neither refers to any fraud that was found to have been committed by the petitioner nor mentions any misstatement allegedly made by the Petitioner and opined that there is no explanation as to why the buyers and suppliers have been found to be suspicious.
SARDAMETALWORKSVSCOMMOFCGST-DELHIHC- JAN 4 2024 ISSUE- Whether registration should be cancelled retrospectively for period when taxpayer has fulfilled compliance requirements? VERDICT- No, the Honorable Delhi High Court allowed the writ petition and thereby setting aside the Show Cause Notice and Order of cancellation of GST Registration as the aforesaid Notice and Order is bereft of any proper reasoning. The Honorable Court further stated that the registration should not be cancelled retrospectively for the period when the returns have been filed and the taxpayer was compliant. The Honorable Court noted that no particulars or details have been mentioned in the Impugned SCN and there is no reference to any invoice or bill pertaining to which it has been alleged that no supply of goods or services has been made. Also, it is stated that, the Respondent is using the standard template for issuance of Notices as there is no clarity as to whether the Petitioner has issued invoices or bills without supply or action of the Petitioner which led to wrongful availment or utilization of ITC or refund of tax.
SARDAMETALWORKSVSCOMMOFCGST-DELHIHC- JAN 4 2024 The Honorable Court noted that the Registration can be cancelled only if the Proper Officer deems fit to do so. The satisfaction should be based on objective criteria and the registration should not be cancelled retrospectively for the period when the returns have been filed and taxpayer was compliant. The Honorable Court opined that the Impugned Order and Impugned SCN are bereft of any proper reasoning, thereby disposed the writ petition.
M/S SRI BALAJI AGRO INDUSTRIES-PUNJABAND HRHIGHCOURT-26.03.2024 ISSUE- What happens if an SCN is not decided within 30 days of the Response? VERDICT- The respondents, while issuing the said show cause notice, had suspended the registration of petitioner w.e.f. 21.11.2023, and in terms of the reply filed by the petitioner, the respondents were required to decide the show cause notice and objections raised by the petitioner within a period of 30 days in terms of the Rule 22 (3) of the Rules which empowers the respondents to either cancel the registration w.e.f. the date or decide the same otherwise within 30 days. NO decision has been taken by the respondents on the show cause notice, while the petitioner suffers suspension of Registration for almost four months, we find that as per the provisions of Rule 21-A Sub-clause (4) of the Rules, the suspension of registration of the petitioner would be deemed to be revoked upon completion of the proceedings under Rule 22 of the Rules, but the proceedings were not completed within 30 days.
M/S ATT SYS INDIA PVT LTD/ESTEX TELE PVT LTD VS COMM OF GST(NOV 2023)-DELHI HIGH COURT ISSUE: Whether GST Registration canceled without granting any hearing and proper reasoning sustainable? RELEVANT SECTIONS: Sec 22 to 24 of the CGST Act 2017 VERDICT: a) The Honorable Delhi High Court Allowed the Writ Petition and directed the Rev to restore the GST Registration cancelled without granting any hearing and proper reasoning is not sustainable. b) The Honorable Delhi High Court noted that nowhere the date and time of the personal hearing was mentioned in the copy of the Show Cause Notice Therefore, the Petitioner was not afforded an opportunity of hearing to contest the SCN. Further Noted that the Impugned Order is not informed by reason and does not set any ground for cancellation of the Petitioner GST The order was void and was against the principles of Natural Justice.
REVOCATIONOFCANCELLATIONOFREGISTRATION (SEC- 30) SEC-30- Any RP whose Reg is cancelled by PO on Own Motion Proviso (a) On Sufficient Cause, - Extension not exceeding 30 days by AC/JC Can apply for revocation within 30 days from the date of SERVICE of Cancellation Order . Proviso (b) Further period not exceeding 30 days by the Commissioner. Accept or Reject after Giving Opportunity of Being Heard
REVOCATIONOFCANCELLATIONOFREGISTRATION (RULE-23) Sub Rule 1- Reg Cancelled by PO on Own Motion Proviso (b) All Pending Returns between Date of Cancellation and Date of Revocation to be filed within 30 days from Date of Revocation. Proviso (c) If Cancelled with Retrospective Effect, Pending Returns between Effective Date of Cancellation and Date of Revocation to be filed within 30 days from Date of Revocation. Proviso (a) If cancelled due to failure to File Returns, FIRST file the pending Returns along with Tax Interest and Late Fee (1)- REG 21- Make Application
REVOCATIONOFCANCELLATIONOFREGISTRATION (RULE-23) Sub Rule 2- PO will Take Action (b)- (a)- The PO for other circumstances, reasons to be recorded in writing, REJECT revocation in REG 05 (Order) If Sufficient Grounds exist, reasons to be recorded in writing, REVOKE cancellation in REG 22 within 30 days Applicant within 7 days needs to reply in REG 24, the PO will again proceed with Sub Rule (a) Issue SCN in REG 23 for non Rejection
PLACEOFBUSINESS [2(85)] It Includes A place where the business in ordinarily carried on, includes Warehouse, Godown or any place where he stores goods. A place where he maintains Books of Accounts A Place where the Taxable person is engaged in business through an agent Principal Place of Business As declared in the Certificate of Registration
REGISTRATION MISC VITAL POINTS- 1 In Rule 11 , for separate Registration of Multiple place of business within a State/UT, there are Three Conditions: Condition 1 : Such Person has more than One place of Business Condition 2 : No Composition Scheme applicable for one place if you are a regular taxpayer for another place. Condition 3: Issue Tax Invoice/Bill of Supply on Supply of Goods/Services or both between two registered places under same person. Rule 41A Inserted to Transfer ITC from One Unit to Another. [Proviso: If one person becomes ineligible for Composition Scheme, all other registered place of business becomes ineligible.]
REGISTRATION MISC VITAL POINTS- 2 In Rule 16, Suo moto Registration- Where due to Survey, Inspection, Enquiry, Search or any other proceedings under the Act, PO finds a person liable for Registration, the officer may issue a Temporary Registration in REG 12 Within a period of 90 days, the above shall submit an application for normal registration. If Appeal is preferred then, time limit is 30 days from the date of Issuance of order of the Appellate Authority In Rule 18, Every RP shall DISPLAY his certificate of registration in a prominent location at his principal place and at every place of business DISPLAY his GSTIN on the name board exhibited at the entry of the Principal Place of Business and at every place of business. Penalty for Failure to Obtain Registration- Minimum amount of Rs 10,000. Amount equal to Tax Evaded, ITC Availed of or passed on or distributed irregularly or claimed refund fraudulently
