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Model GST Law – GST Registration

Model GST Law – GST Registration

The Ministry of Finance (MoF) implemented Model GST Law for the applicability of GST registration in June 2006. The law describes the requirements and regulations for registering GST in India. This article reviews the regulations concerning GST registration in India.

Model GST Law

  • Individuals liable to register under Schedule III of this Act shall apply for registration in every such State. The individual should apply for registration within thirty days from the date of commencing the business. If the individual registered for the trade involved before the implementation of this Act, the individual shall not register again. The individual shall continue to use the certificate along with the updated rules. However, it does not apply to the Input Service Distributor.
  • Entities shall obtain separate registration for each business if operating in different states. It applies for entities if registered as per sub-section (1).
    Entrepreneurs shall register voluntarily under Schedule III even if not liable as per the Act. The Act provides provision for such Entrepreneurs.

Unique Identity Number

  • All registered taxpayers must obtain Permanent Account Number issued under the Income Tax Act, 1961 (43 of 1961). Any grant available for the individual shall then become eligible only if the taxpayer has PAN. The regulation applies as per subsection (1), (2) or (3).
    • If applicable under sub-section (4), a non-resident taxable person shall register under sub-section (1). To register, the individual shall provide all the necessary documents as prescribed.
  • The proper officer shall take necessary actions if the taxpayer liable to register, fails to obtain registration. The proper officer may, without prejudice take action to make the taxpayer register under the Act.
  • Individuals falling under the following category shall obtain Unique Identity Number (UIN):
    • Any specialised agency of the United Nations Organization,
    • Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act 1947,
    • Consulate or Embassy of foreign countries or
    • Any other person or class of persons as notified by the Board/Commissioner.
  • The GST registration or the UIN shall include verification. The verification process shall state, approved or rejected. The verification shall get verified within the stipulated time as prescribed.
  • Upon rejection, the proper officer should provide show-cause notice to the applicant. The officer should provide an opportunity to hear from the applicant.
    • If approved, the certificate of registration shall be provided in the prescribed form along with the effective date.
  • The applicant can treat the registration or UIN process as approved, upon delayed communication by the officer.
  • As per the SGST/CGST Act, the application shall get approved or rejected
  • The Central or a State Government may, on the recommendation of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

For an easier guide, refer to the article on GST registration requirement.

Special provisions relating to Casual Taxable Person and Non-Resident Taxable person as per Model GST Law

  • The certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for a period of ninety days from the effective date of registration. Provided that the proper officer may, at the request of the said taxable person, extend the aforesaid period of ninety days by a further period not exceeding ninety days.
  • A casual taxable person or a non-resident taxable person shall provide an advance deposit as per sub-section (1) of section 19. The advance amount should equal the estimated tax liability. The individual shall pay before the stipulated time.
    • Any extension of time under sub-section (1) shall include additional payment along with the advance amount.
  • As per sub-section (2), the electronic cash ledger shall acquire the advance amount paid by the individual. The deposited amount shall be utilised in the manner as provided under section 35.

Schedule III-Liability for Registering under GST

  • If the aggregate turnover in a financial year exceeds Rs.9 lakh
    • Aggregate turnover in a financial year exceeds Rs.4 lakh. (It applies if the taxpayer operates the business from the NE States including Sikkim).
    • Provided that the supplier shall not be liable to registration if his aggregate turnover consists of only goods and/or services which are not liable to tax under this Act.
    • Explanation 1: The taxable threshold shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.
    • Explanation 2.- 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 43A, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.
  • As per paragraph 1, every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall register under this Act.
  • 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.
  • In the 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, where required, 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.

For Taxpayers not falling under Para 1 and 2

Notwithstanding anything contained in paragraph 1 and 2 above, the following categories of persons shall be required to be registered under this Act:

    • Persons making any inter-State taxable supply, irrespective of the threshold specified under paragraph 1;
    • Casual taxable persons, irrespective of the threshold specified under paragraph 1;
    • Persons required to pay tax under reverse charge, irrespective of the threshold specified under paragraph 1;
    • Non-resident taxable persons, irrespective of the threshold specified under paragraph 1;
    • Persons  required to deduct tax under section 37;
    • Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold specified under paragraph 1;
    • Input service distributor;
    • Persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold specified in paragraph 1;
    • Every electronic commerce operator, irrespective of the threshold specified in paragraph 1;
    • An aggregator who supplies services under his brand name or his trade name, irrespective of the threshold specified in paragraph 1; and
    • Other person or class of persons as notified by the Central Government or a State Government on the recommendations of the Council.

For GST registration, click here.

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