Perfect 👍 Let’s build a detailed answer for:
“Who is liable for registration under GST? Explain the criteria for mandatory
registration.”
This will be written in human-style, detailed explanation (with references as in V.K. Sareen &
Ajay Sharma) so that it easily covers 5–6 handwritten pages.
Answer
Introduction
The implementation of the Goods and Services Tax (GST) on 1st July 2017 brought about a
uniform tax structure across India. Under this system, certain businesses and individuals are
legally required to obtain GST registration if they meet specific criteria. GST registration
ensures that the business can collect taxes from its customers, avail input tax credit, and
operate smoothly in compliance with the law.
If a business that is liable for registration does not register under GST, it is treated as a violation
of law and attracts heavy penalties and interest.
Who is Liable for Registration under GST?
As per the GST Act, 2017, the following categories of persons are liable to obtain GST
registration:
1. Businesses crossing the prescribed turnover limit
○ Any business whose aggregate annual turnover exceeds the prescribed
threshold must register under GST.
○ The turnover limits are:
■ ₹40 lakhs for suppliers of goods (normal category states).
■ ₹20 lakhs for suppliers of services (normal category states).
■ ₹20 lakhs for goods and ₹10 lakhs for services in special category
states like Arunachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim,
Tripura, etc.
2. Inter-State Suppliers
○ Any person making supply of goods from one state to another must obtain GST
registration irrespective of turnover.
○ Example: A trader from Delhi supplying goods to Haryana needs registration
even if turnover is just ₹5 lakh.
3. Casual Taxable Person
○ A person who occasionally undertakes supply of goods or services in a state
where he has no fixed place of business.
○ Example: A person setting up a stall in a trade fair in another state.
4. Non-Resident Taxable Person (NRTP)
○ A person residing outside India but supplying goods or services in India.
○ Example: A foreign company participating in an Indian exhibition.
5. Agents and Distributors
○ Agents or persons who supply goods/services on behalf of another registered
taxable person.
6. E-Commerce Operators
○ Any business engaged in e-commerce (like Amazon, Flipkart, Zomato, Swiggy)
must register under GST regardless of turnover.
○ Suppliers selling goods through e-commerce platforms also require registration.
7. Persons liable under Reverse Charge Mechanism (RCM)
○ If a person is required to pay tax under reverse charge (instead of the supplier),
they must obtain registration.
8. Input Service Distributor (ISD)
○ Offices of companies that distribute input tax credit (ITC) to other branches.
9. TDS/TCS Deductors under GST
○ Certain government departments and e-commerce operators who are required to
deduct or collect tax at source must register under GST.
10.Voluntary Registration
● Even if a business is not mandatorily required, it can voluntarily register to avail input tax
credit and expand its credibility.
Criteria for Mandatory Registration
The law specifies clear conditions under which GST registration becomes compulsory. These
include:
1. Turnover Thresholds
○ Goods suppliers: Above ₹40 lakhs (₹20 lakhs in special category states).
○ Service providers: Above ₹20 lakhs (₹10 lakhs in special category states).
○ These limits are calculated on aggregate turnover (including exempt, taxable,
export, and interstate supplies).
2. Nature of Supply
○ Inter-state supply of goods requires compulsory registration, regardless of
turnover.
○ For services, exemption up to ₹20 lakhs is available unless specified otherwise.
3. Special Categories of Persons
○ Casual and non-resident taxable persons.
○ Agents and intermediaries.
○ E-commerce operators and suppliers through e-commerce.
○ ISDs and TDS/TCS deductors.
Importance of Mandatory Registration
● Legal Recognition: A registered business is recognized as a legitimate supplier under
GST law.
● Tax Collection Authority: It can collect GST from customers and remit it to the
government.
● Input Tax Credit: Only registered persons can claim ITC on taxes paid.
● Nationwide Operations: Registration allows businesses to operate across state borders
without barriers.
● Avoidance of Penalties: Non-registration when liable attracts penalties up to 100% of
tax due or ₹10,000, whichever is higher.
Conclusion
GST registration is the backbone of the new tax system in India. The law clearly specifies who
is required to register and the turnover limits applicable. Businesses engaged in inter-state
trade, e-commerce, and other specified activities must compulsorily register, even if their
turnover is below the threshold.
Mandatory registration ensures that the government is able to widen its tax base, prevent tax
evasion, and create a transparent system where every taxable transaction is accounted for. For
businesses, it not only fulfills a legal obligation but also opens opportunities for growth in India’s
unified tax regime of “One Nation, One Tax, One Market.”
👉 This structured explanation with examples, categories, and penalties will cover 5–6
handwritten pages if you expand with headings and diagrams (like a flowchart of "Who Needs
to Register?").
Would you like me to also make a table/flowchart summarizing “Persons Liable for
Registration under GST” so that your answer looks more scoring and neat?
