Sec 22 – Persons liable for registration

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Sec 22 – Persons liable for registration 2017-04-14T13:32:23+00:00

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  • Ashish BadalaCA Ashish Badala
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    (1) 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 or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
    Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
    (2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.
    (3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
    (4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
    Explanation.–For the purposes of this section,–
    (i) the expression “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;
    (ii) 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 referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;
    (iii) the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.

    Priya MadrechaPriya Madrecha
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    22.1 Introduction
    Section 22 provides for registration of every supplier effecting the taxable supplies. Registration of a business with the tax authorities implies obtaining a unique identification code from the concerned tax authorities so that all the operations of, and data relating to the business can be agglomerated and correlated. In any tax system, this is the most fundamental requirement for identification of the business for tax purposes and for having any compliance verification mechanism. A registration from the concerned tax authorities will confer among others the following advantages to the registrant.
    —     Legally recognised as a supplier of Goods and/or Services;
    —     Proper accounting of taxes paid on the input goods and / or services;
    —  Utilisation of input taxes for payment of GST due on supply of goods and / or services or both;
    —  Pass on the credit of the taxes paid on the goods and / or services supplied to purchasers or recipients.
    22.2 Analysis
    —  Every supplier shall be liable to be registered under the Act in the State from which he makes a taxable supply of Goods or Services or both. Registration is required if his aggregate turnover in a financial year exceeds Rupees Twenty Lakhs. This threshold limit will be Rupees Ten Lakhs if a taxable person conducts his business in any of the special category states as specified in sub-clause (g) of clause (4) of Article 279A of the Constitution i.e. Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
    —  It means that for each State, the supplier liable for registration will have to take a separate registration even though such supplier may be supplying goods or services or both from more than one State as a single entity. The application for registration shall be made within 30 days from the date when he becomes liable for registration.
    —  It is necessary to admit the distinction between ‘person and taxable person’. Person is defined in the most familiar manner in section 2(84) and a taxable person is defined in section 2(107). A proper reading of section 22 helps us understand that a State is the smallest registrable unit in GST – except where multiple business verticals are registered separately under section 25. A taxable person is therefore the presence of the person in a State from where taxable supplies are made in the name of such person. When a person becomes liable to be registered in a State at any place from where taxable supplies are made therein such person shall be a taxable person.
    —  Casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
    —  A person having multiple business verticals [as defined in Section 2(18)] in one State may obtain separate registrations for each of the business vertical, subject to prescribed conditions.
    —      A supplier shall not be liable for registration:
    (a)    if his aggregate turnover consists of only such Goods and/or Service which are not liable to Tax or wholly exempt from tax under this Act.
    (b)    an agriculturist, to the extent of supply of produce out of cultivation of land
    —  For calculating the Threshold limit, the turnover shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals. Further, supply of goods by a registered Job-worker, after completion of job work, shall be treated as the supply of goods by the “principal” referred to in section 143 (i.e. Job work procedure) of this Act. The value of such goods shall not be included in the aggregate turnover of the registered job worker.
    —  Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day.
    —  Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer can proceed to register such person in the manner as may be prescribed.
    Categories of persons who shall be required to be registered under this Act irrespective of the threshold
    Notwithstanding anything discussed in the paragraph above, the following categories of persons shall get registered compulsorily under this Act: —      persons making any inter-State taxable supply;
    —      casual taxable persons making taxable supply;
    —      persons who are required to pay tax under reverse charge;
    —  persons who are required to pay tax under sub-section (5) of section 9 (electronic commerce operator)
    —      non-resident taxable persons making taxable supply;
    —      persons who are required to deduct tax under section 51 (Tax Deduction at Source);
    —  persons who supply goods or services or both on behalf of other registered taxable persons whether as an agent or otherwise;
    —      input service distributor;
    —  persons who supply goods and/or services, other than supplies specified under sub- section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52,
    —      every electronic commerce operator;
    —  every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person; and
    —  such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.
    Registration on own Volition
    A person, though not liable to be registered under Section 22, may get himself registered voluntarily, and once registered all provisions of this Act, shall apply to such person. Transfer of Business and Registration
    If registered taxable person transfers business on account of succession or otherwise, to another person as a going concern, the transferee, or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession. This means that the Registration Certificate issued under Section 22 of the Act is not transferable to any other person. In a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies by an order of a High Court, the transferee shall be liable to be registered with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court.

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