Liability to Register under GST: Turnover, Category and Voluntary Registration
This article explains when a person must obtain registration under Sections 22 to 25 of the CGST Act, 2017 and the CGST Rules, 2017, and what follows once registered.
It matters because turnover is only one of the tests. GST began on 1 July 2017 and subsumed several indirect taxes, and practitioners still meet clients who assume that low turnover removes the need to register. Liability depends on turnover, the nature and place of supply, exemptions and the specific provisions together.
Registration by reference to turnover: Section 22
A supplier becomes liable to register when aggregate turnover in a financial year exceeds the prescribed threshold. The threshold varies with the State or Union Territory concerned and with whether the supplier deals in goods or services. Verify the current limit, and any State-specific or category-specific relaxation, against the notifications in force at the time of advising; this article does not fix amounts.
A small supplier below the applicable threshold is generally not required to register, subject to the exceptions discussed below.
Computing aggregate turnover
Aggregate turnover is computed on an all-India basis for persons holding the same PAN. It takes in:
- taxable supplies;
- exempt supplies;
- exports; and
- inter-State supplies.