Entities Liable Under Section 22 CGST Act, 2017
The ‘Registrations under the CGST Act, 2017′ is the subject of this article’s discussion.
When a person registers for GST, he or she receives a GST identification number known as a GSTIN. It allows the registered person to perform taxable inbound and outward supply operations and to claim and use the tax paid on such inward supplies, known as Input Tax Credit.
As a result, no registration Means no ITC usage.
Additional advantages of acquiring GST registration include:
- An increased reputation as a GST registration provider within the business.
- Maintaining accurate records of ITC information.
- Legal right to collect inward tax and issue a tax invoice in order to advance the credit of GST on taxable supplies made.
Registration under GST is addressed under Chapter VI of the CGST Act, 2017. The method used here is to refer to one part at a time. Today’s topic is Section 22 of the CGST Act of 2017.
Now, the most common and fundamental question posed by any layperson who is unfamiliar with the legal jargon and complexities of GST legislation is, “Who are the individuals accountable for registration???”
Section 22 of the CGST Act, 2017 provides the following solution to the question: Individuals who are required to register. According to the section,
- If a supplier’s aggregate turnover in a fiscal year exceeds twenty lakh rupees, he must register under this Act in the state or union territory, other than special category states, from which he makes a taxable supply of goods or services or both: (Section 22(1))
- Granted, however, that if such person makes a taxable supply of goods or services or both from any of the special category States, he is required to register if his total turnover in a fiscal year exceeds ten lakh rupees.
- Given further that, at the proposal of a special category State and on the Council’s referral, the Government may increase the aggregate profitability attributed to in the first provisions of the section from ten lakh rupees to such amount, not surpassing twenty lakh rupees, and subject to such conditions and limitations as may be notified.
- Proffered also that, at the plea of a State and on the Council’s suggestion, the Government may increase the accumulated turnover from twenty lakh rupees to an amount not exceeding forty lakh rupees in the case of a supplier who is engaged exclusively in the delivery of goods, pursuant to the provisions and constraints as may be notified.
Explanation For the purposes of this provision:
- For the purposes of this paragraph, a person is deemed to be solely involved in the provision of goods even if he is engaged in the exempt supply of services supplied by extending deposits, loans, or advances inasmuch as the consideration is represented by interest or discount.
- Every person who is registered or possesses a license under existing law on the day immediately preceding the designated day will be liable to be registered under this Act with effect from the scheduled day. (Section 22 (2))
(The provision became effective with the changeover to GST law from the previous Sales Tax and VAT regime.)
- In the case of commercial successor transference, the transferee is required to be registered as of the date of the business succession. (Section 22(3))
- In the context of a merger or demerger, the transferee is required to register as of the date of the new incorporation under the RoC of the DE-merged / amalgamated company (Section 22(4)).
Explanation For the purposes of this provision:
- The term “aggregate turnover” refers to all supplies made by the taxpayer, either on his own behalf or on behalf of all his principals.
- The supply of goods by a registered job worker after completion of job work is considered as the supply of goods by the principal specified in section 143, and the valuation of such goods was not included registration job worker’s cumulative turnover.
- The term “special category States” refers to the states mentioned in subparagraph (g) of clause (4) of article 279A of the Constitution [excluding Jammu and Kashmir] 47 [as well as the states of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, and Uttarakhand.]
Section 2(6) of the CGST Act, 2017 provides an absolute meaning of aggregate turnover.
“Aggregate turnover” refers to the total value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on a reverse charge basis), exempt supplies, exports of goods or services or both, and inter-State supplies of persons with the same Permanent Account Number, computed on an all-India basis but excluding the central tax, state tax, union territory tax, and international tax.
Table simplifying the taxable supply threshold limitations for the purposes of Section 22 (1)
| Threshold Limits | For States |
|---|---|
| 10 lakh rupees for service (first amendment to Section 22(1)) | Manipur, Mizoram, Nagaland and Tripura |
| 20 lakh rupees for both products and services (second amendment to Section 22(1)) | Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry, and Telangana |
| Rs. 20 Lakhs for Amenities and Rs. 40 Lakhs for Good and services (third addendum to Sec 22(1)) (by virtue of CBIC Regulation 10/2019, CT dated 07.03.2019) | Jammu & Kashmir, Ladakh, Assam, Himachal Pradesh & all other States |
The aggregate T/o would not include,
- The value of any type of inward supply, whether taxed or not, and
- The monetary worth of the items on which job workers labour. (However, the value of services given as a job worker that are paid for by the job worker is included.
Conclusion
When a supplier’s aggregate turnover in a fiscal year exceeds twenty lakh rupees, he must register under this Act in the state or union territory, other than special category states, from which he makes a taxable supply of goods or services or both. A person is deemed to be solely involved in the supply of goods even if he is engaged in the exempt supply of services supplied by providing deposits, loans, or advances in as much as the consideration is represented by interest or discount.