Registration Under GST – Advanced Tax Laws and Practice Important Questions
Question 1.
Briefly explain whether the following persons are liable for registration as per the provisions of the CGST Act, 2017:
(a) Sachin, an exclusive supplier of Non-taxable goods only.
(b) Person making inter-State taxable supply aggregating ₹8,00,000 only.
(c) Where the tax on the goods dealt with are payable on reverse charge basis.
(d) Jagdish, an individual, who undertakes cultivation of land by the labour of family and his own labour for producing paddy, to the tune of ₹60 lakhs.
(e) Ranjan, a trader is coming to Mumbai from Bangalore for an exhibition. The exhibition is to continue for seven days in Mumbai. Ranjan expects supply of goods for ₹8,00,000.
Answer:
Necessity of registration under GST law
(a) As per Section 23(1)(a), any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act is not liable to take registration. In the present case, since Sachin is engaged exclusively in the business of supplying goods that are not liable to tax, he is covered under the aforesaid provision, thus not liable for registration.
(b) Section 24 of CGST Act provides for compulsory registration of persons making inter-state taxable supplies. However, Notification No. 10/2017-I.T., dated 13-10-2017 confers exemption to the supplier of services from obtaining registration where the aggregate turnover calculated on all India basis does not exceed ₹20 lakhs [₹10 lakhs in case of special category states] in a financial year. If he is supplying goods, then registration would be compulsory.
In the present case, since the aggregate turnover is ₹8,00,000 below the minimum threshold, there is no requirement to take registration assuming he is supplier of Services exclusively.
(c) As per Notification No.5/2017-Central Tax, dated 19-6-2017, the person who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods and services or both are exempted from obtaining registration under GST law. Thus, in the instant case, registration is not required.
(d) As per Section 23(1)(b) of the CGST Act, the agriculturist, to the extent of supply of produce out of cultivation of land, is exempt from registration. Therefore, Jagdish is not required to obtain registration.
(e) As per Section 24(ii) of the CGST Act, casual taxable person making taxable supply is mandatorily required to obtain registration regardless of the aggregate turnover effected by it. Here, Ranjan is casual [taxable person, thus required to obtain registration.
Question 2.
Jayant Pvt. Ltd. of Jaipur (Rajasthan) provides the following information of the supplies made for the year 2020-21:
|
Particulars |
Amount (₹) |
| (i) Sale of high-speed diesel on which Sales Tax (VAT) levied by Rajasthan Government | 8,00,000 |
| (ii) Supply of goods directly by principal from the place of Jayant Pvt. Ltd. after completion of job work done by Jayant Pvt. Ltd | 9,00,000 |
| (iii) Taxable outward supply within Rajasthan | 6,00,000 |
| (iv) Inward supply of services on which GST to be paid by Jayant Pvt. Ltd. under reverse charges | 5,00,000 |
| (v) Outward supply on which GST to be paid by recipient under reverse charges | 1,00,000 |
Calculate the aggregate turnover for the purpose of registration under CGST Act, 2017 and state whether Jayant Pvt.Ltd. is liable for registration or not. Also provide brief reasons for the treatment of various items given above in the context of provisions of CGST Act, 2017.
Note: All the above amounts are exclusive of taxes of any nature.
Answer:
Calculation of Aggregate Turnover
|
Particulars |
Amount (₹) |
| (i) Sale of high-speed diesel on which sales tax (VAT) levied by Rajasthan Government |
8,00,000 |
|
(ii) Taxable outward supply within Rajasthan |
6,00,000 |
| (iii) Outward supply within State on which GST to be paid by recipient under reverse charge (RCM) |
1,00,000 |
| Aggregate turnover |
15,00,000 |
(1) As per section 2(6) of the CGST Act, 2017, aggregate turnover includes the aggregate value of all exempt supplies. Thus, sale of high-speed diesel is an exempt supply and is, therefore, includible while calculating the aggregate turnover.
(2) The aggregate turnover excludes the value of inward supplies on which tax is payable under reverse charge but include outward supply on which GST to be paid by recipient under reverse charge.
(3) Supply of goods after completion of job work by registered job worker shall be treated as the supply of goods by the principal in terms of explanation (ii) to section 22 of the CGST Act, 2017.
As per section 22 of the CGST Act, 2017, a supplier is liable to be registered, if his aggregate turnover in a financial year exceeds ₹40 lakh when he is engaged exclusively in supply of goods (₹20,00,000 is limit in certain states). However, if supplier receives any inward supply on which GST to be paid by recipient under reverse charge then he is compulsory required for registration even if its aggregate turnover does not exceed ₹40 lakhs.
Hence, Jayant Pvt. Ltd. needs to be compulsory registered even though his turnover does not exceed the limit of ₹40 lakh.
Question 3.
Vinod, a supplier of goods in Vadodara furnishes the following particulars pertaining to supplies likely to be effected by him during the third and fourth quarters of the FY 2020-21:
| Value of supply of goods chargeable to GST | ₹38 lakhs |
| Goods to be supplied to World Health Organisation, Ahmedabad | ₹4 lakhs |
All supplies will be within the State only. He desires to know whether he should get himself registered for GST purposes. Advise him suitably.
Answer:
Computation of aggregate turnover of Vinod
|
Particulars |
₹ (in lakhs) |
| Value of supply of goods chargeable to GST | 38 |
| Goods to be supplied to World Health Organization, [Though this is an exempt supply it would be includible for ascertaining aggregate | 4 |
Aggregate Turnover
It is to be noted that aggregate turnover would include, Taxable Supplies, Exempt Supplies, Zero Rated Supplies and Inter State Supplies, but not supplies through the Reverse Charge Mechanism route. {Section 2(6) of CGST Act, 2017}.
Since the aggregate turnover during Financial Year 2020-21 of Mr. Vinod (Doing business in Gujarat, dealing exclusively in goods) exceeds ₹40 lakhs, he is advised to apply for registration under GST laws.
Question 4.
You are required to determine in the context of the provisions contained in the CGST Act, 2017 whether the company ABC Pvt. Ltd., incorporated in Karnataka is liable to be registered under the GST Act, when the company has effected following supplies within the state of Karnataka:
Answer:
As per section 22(1) of CGST Act, 2017 every supplier shall be liable to be registered under this Act in the State or Union Territory, other than special category States, from where he makes a taxable supply of goods exclusively, if his aggregate turnover in a financial year exceeds ₹40 lacs.
According to section 2(6) of CGST Act, 2017 “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
Computation of Aggregate Turnover of Abc Pvt. Ltd.
|
Particulars |
Amount (₹) |
| 1. Intra-state supply of goods chargeable with GST @ 18% |
29,60,000 |
| 2. Intra-state supply of goods which are wholly exempt from GST u/s 11 of the CGST Act, 2017 |
6,40,000 |
| 3. Intra-state supply of goods chargeable at nil rate |
4,25,000 |
| 4. Export of goods to Dubai |
3,75,000 |
| AGGREGATE TURNOVER |
44,00,000 |
Notes:
1. Intra-state supply of goods chargeable with GST @ 18%, supply of goods which are wholly exempt and supply of goods chargeable with Nil rate are included for determination of aggregate turnover.
2. Export of goods to Dubai is to be included in computation of aggregate turnover.
ABC Pvt. Ltd. (Supplier in Karnataka, dealing exclusively in goods) is therefore required to get itself registered under GST Act as the turnover during the year exceeds ₹40 lacs.
Question 5.
(a) Gopal Das & Co., Kolkata is a manufacturer and is a registered supplier (under regular scheme). It furnishes the following details for the tax period ended on 31st March, 2021:
- Intra-State supply of goods (includes GST @ 18%) ₹70,80,000
- Goods exported (GST Nil) ₹32,00,000
- Inward supplies liable for reverse charge ₹6,00,000
- Transfer of goods to Branch at Delhi (without GST) ₹50,00,000
Complete the ‘aggregate turnover’ under section 2(6) of the CGST Act, 2017.
Answer:
Section 2(6) of the CGST Act, 2017 defines the term “aggregate turn-I over” so as to mean the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
In the light of the above definition, the computation of aggregate turnover in the instant case is as below:
|
Particulars |
Turnover (₹) |
| Intra-State supply of goods ₹70,80,000 × 100/118 Excludes CGST, SGST, IGST |
60,00,000 |
| Export Supplies [to be included as per section 2(6)] |
32,00,000 |
| Inward supplies under reverse charge [not to be included] |
Nil |
| Transfer of goods to branch/distinct person is categorized as supply under section 7 of the CGST Act [No adjustment needed as GST is already excluded]Aggregate turnover |
50,00,000
|
|
1,42,0000 |
Question 6.
Tex Mark Inc. of USA, established a liaison office in Mumbai for the purpose of liaisoning with the suppliers for purchase of raw materials. The purchase orders or contracts were entered into with the suppliers directly by the head office.
Liaison office did not enter into any contract with any of the suppliers. Payments were also made by the head office directly to the suppliers. The expenses incurred by the liaison office are reimbursed by the HO. There is no amount excessively charged by the liaison office to the HO. Is the amount received by the liaison office liable for GST as supply of service? Is the liaison office required to get registered under GST law?
Answer:
Liaison office: Whether liable for registration
The liaison office does not undertake any activity of trading, commercial or industrial nature. It does not enter into any business contracts. It does not charge any commission, fee or remuneration for the liaison activities/services rendered by it either from the suppliers or from the head office.
The head office merely reimburses the expenses incurred by the liaison office on actual expenditure basis without any mark up. There is no source of income for the liaison office and it is solely dependent on the head office for all expenses incurred by it and therefore the head office and liaison office cannot be treated as separate persons.
The liaison office does not render any consultancy services directly or indirectly with or without consideration and does not have significant commitment powers. The amount received by liaison office hence cannot be treated as amount received towards supply of service.
Since it is not in furtherance of business of the liaison office, it is not required to get registered under GST.
Case law reference:
Habufo Meubelan B.V. 2018(14) G.S.T.L 596 (A.A.R-GST)
Question 7.
Explain the following terms in the context and with reference to the provisions contained under the CGST Act, 2017:
(i) “Aggregate Turnover” and how the same has to be computed.
Or;
Define “Aggregate Turnover”
(ii) Casual Taxable Person.
Answer:
Aggregate Turnover:
As per section 2(6) of the CGST Act, 2017, “Aggregate Turnover” mean to include the aggregate value or:-
(a) all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis);
(b) all exempt supplies;
(c) exports of goods and/or service; and
(d) all inter-state supplies of a person having same PAN, to be computed on all India basis.
The above supplies/goods and/or services shall be computed on all India basis and be exclusive of the taxes charged under the CGST Act, SGST Act, UTGST Act and the IGST Act.
For the purpose of computing Aggregate turnover particularly to ascertain threshold for obtaining registration under CGST Act, it shall include all supplies made by the taxable person whether on his own account or made on behalf of all his principals. However, the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal and the value of such goods shall not be included in the aggregate turnover of the registered job worker.
Casual Taxable Person
Casual Taxable Person is being defined in section 2(20) of the CGST Act, 2017. It means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, or agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
Note:
(a) Person includes individuals, Hindu Undivided Family, company including Government Company, firm, limited liability partnership, an association of persons, a body of individuals, co-operative society, local authority, and government including a corporation.
(b) Principal place of business means the place of business specified as the principal place of business in the certificate of registration.
Question 8.
Dharma Dutta has taken voluntary registration and has not opted for composition scheme of levy. He is aggrieved by the cancellation of his registration under GST, although he is filing nil returns, as he has not conducted any business for past 8 months. He wants to know the circum-stances under which the proper officer can cancel the registration on his own.
Answer:
GST registration may be cancelled suo motu by GST Officer if the registered person:
(a) Does not conduct any business from the place of business.
(b) violates the anti-profiteering provisions.
(c) issues invoice/bill without supply of goods/services.
(d) does not file his GST Returns for 6 months.
(e) does not file his GST Returns for 3 consecutive tax periods if he has opted for composition levy.
(f) has not commenced business within 6 months from date of registration.
(g) has obtained the registration by means of fraud, wilful misstatement or suppression of facts.
Question 9.
Is it necessary for the foreign embassy to get registration under CGST Act, 2017?
Answer:
All UN bodies, Consulate or Embassy of foreign countries and any other class of persons, so notified, would be required to obtain a Unique Identification Number (UIN) from the GST portal.
This UIN will be needed for claiming refund of taxes paid by them on the notified supply of goods or services or both received by them. It is apt to state here that, every person required to be granted a UIN in accordance with Section 25(9) of the CGST Act, 2017 may submit an application electronically in FORM GST REG-13, duly signed or verified through electronic verification code, in the manner specified in Rule 8.
The proper officer may, upon submission of an application in FORM GST REG-13 or after filling up the said form or after receiving a recommendation from the Ministry of External Affairs, Government of India, assign a UIN to the said person and issue a certificate in FORM GST REG-06 within a period of 3 working days from the date of the submission of the application. [Rule 17]
Section 25 of the CGST Act, 2017 inter a/iaprovides that UIN shall be granted or rejected after due verification and within the time prescribed. UIN so granted shall be applicable to the territory of India. UIN shall be deemed to have been granted after the period prescribed (under section 25(10) of the CGST Act, 2017) if no deficiency has been communicated to the applicant within that period.
Moreover, grant of UIN under the CGST Act/SGST Act shall be deemed to be a grant of UIN under the SGST/CGST Act provided that the application for UIN has not been rejected/no deficiency has been communicated to the applicant by the proper officer under SGST/CGST Act within the time specified.
Registration Under Gst Notes
- Sections involved in Registration under GST: 22 to 30 of CGST Act.
- Threshold limit for registration (Section 22(1) of CGST Act + Notification No.l0/2019-CT)
| States with a threshold limit of ₹10 lakhs for both goods and services (4 States) | States with a threshold limit of ₹20 lakhs for both goods and services (6 States) | States with a threshold limit of ₹20 lakhs for services and ₹40 lakhs for goods (i.e. persons engaged exclusively in the supply of goods) |
| Manipur | Arunachal Pradesh | All other states |
| Mizoram | Meghalaya | |
| Nagaland | Sikkim | |
| Tripura | Uttarakhand | |
| Puducherry | ||
| Telangana |
Note: The above threshold limits are of Aggregate Turnover#
- Definition of # “Aggregate Turnover” {Section 2(6) of CGST Act}
- Persons Exempt from Registration (Section 23 of CGST Act)
- Compulsory Registration in certain cases (Section 24 of CGST Act): 12 cases
- Procedure for Registration (Section 25 of CGST Act)
- Deemed Registration under CGST if registered under SGST/UTGST (section 26 of CGST Act). Similarly, there is deemed a rejection of registration application under CGST if the application is rejected under SGST/ UTGST, as the case may be.
- Special provisions for Casual Taxable Person (CTP) and Non-Resident Taxable Person (NRTP).
- Procedure for amendment of registration. (Section 28 of CGST Act)
- Procedure for cancellation/suspension of registration. (Section 29 of CGST Act)
- Procedure for revocation of cancellation of registration. (Section 30 of CGST Act)