Taxable Person - Model GST Law

The Model GST Law unveiled by the Finance Ministry in June 2016 has defined the applicability of GST in India with definition for taxable person. In this article, we review the definition for taxable person under

GST law.

Taxable Person means a person who carries on any business at any place in India /State of ____ and who is registered or required to be registered under Schedule III of this Act: Provided that an agriculturist shall not be considered as a taxable person. Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs ten lakh] Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs five lakh] [This threshold of 5 lacs will apply only if a taxable person conducts his business in any of the NE States including Sikkim.]
The Central Government, a State Government or any local authority shall be regarded as a taxable person in respect of activities or transactions in which they are engaged as public authorities other than the activities or transactions as specified in Schedule IV to this Act.
The following persons shall not be considered as taxable persons for the purposes of this Act:
- any person who provides services as an employee to his employer in the course of, or in relation to his employment, or by any other legal ties creating the relationship of employer and employee as regards working conditions, remunerations and employer’s liability;
- any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under this Act;
- any person, liable to pay tax under sub-section (3) of section 7, receiving services of value not exceeding ______ rupees in a year for personal use, other than for use in the course or furtherance of his business.

Frequently Asked Questions

Common questions about Taxable Person Definition Under GST Law in India.

According to the Model GST Law, a taxable person is defined as a person who carries on any business at any place in India or a particular state and is registered or required to be registered under Schedule III of the Act. However, an agriculturist is not considered a taxable person.

Yes, there are two thresholds mentioned in the law. A person who is required to be registered under paragraph 1 of Schedule III shall not be considered a taxable person until their aggregate turnover in a financial year exceeds Rs. 10 lakh. However, for a person conducting business in the North-Eastern states, including Sikkim, this threshold is lowered to Rs. 5 lakh.

Yes, the Central Government, a State Government, or any local authority shall be regarded as a taxable person concerning activities or transactions in which they are engaged as public authorities, except for the activities or transactions specified in Schedule IV of the Act.

No, any person who provides services as an employee to their employer in the course of, or in relation to their employment, or by any other legal ties creating the relationship of employer and employee, shall not be considered a taxable person for the purposes of the GST Act.

No, any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under the GST Act shall not be considered a taxable person.

Yes, any person liable to pay tax under sub-section (3) of section 7, receiving services of value not exceeding a specified amount in a year for personal use, other than for use in the course or furtherance of their business, shall not be considered a taxable person.

No, the requirement for GST registration is based on the aggregate turnover threshold specified in the law. Businesses with an aggregate turnover below the threshold are not required to register and are not considered taxable persons under the GST Act.

No, the Model GST Law explicitly states that an agriculturist shall not be considered a taxable person.

No, the threshold for aggregate turnover to be considered a taxable person varies for the North-Eastern states, including Sikkim. The threshold is Rs. 10 lakh for other states, while it is lowered to Rs. 5 lakh for the North-Eastern states and Sikkim.

Yes, individuals liable to pay tax under sub-section (3) of section 7 and receiving services of value exceeding the specified amount in a year for personal use, other than for use in the course or furtherance of their business, may need to register for GST and be considered taxable persons.