Goods Registration Limit

In Case of Normal Taxpayer

The GST turnover limit for supplier of goods only was Rs. 20 lakhs under the original GST structure rolled out by the government in July 2017. This was except the special category states .

In other words, supplier of goods having an aggregate annual turnover of up to Rs 20 Lakhs in the preceding financial year were not required to register under the GST Law.

Thus, supplier of goods with aggregate annual turnover in the preceding financial year of Rs 20 Lakhs and above need to compulsorily register under GST.

This exemption limit, however, has been doubled by the GST Council from Rs. 20 lakhs to 40 lakhs in the 32nd GST Council meeting.

Furthermore, this exemption limit of up to Rs 40 Lakhs is not applicable for persons who are:

• Required to take compulsory registration under Section 24 of the CGST Act
• Involved in making supply of goods such as:
  • Ice cream and other edible ice whether or not containing cocoa
  • Pan masala
  • Tobacco and tobacco manufactured substitutes

In Case of Special Category States

GST registration limit for north eastern and hilly states was Rs. 10 lakhs in the initial GST regime.

The Special Category States include:

• Arunachal Pradesh
• Assam
• Jammu and Kashmir
• Manipur
• Meghalaya
• Mizoram
• Nagaland
• Sikkim
• Tripura
• Himachal Pradesh
• Uttarakhand

This too has been raised from Rs. 10 lakhs to Rs. 20 lakhs for supply of goods as per the 32nd GST Council meeting.

However, the hilly and north eastern states were given an option . They could either choose  Rs. 20 lakhs or Rs. 40 lakhs as the turnover limit for GST exemption in case of supplier of goods.

Services Registration Limit

In Case of Normal Taxpayer

The GST turnover limit for supplier of services was Rs. 20 lakhs except the special category states under the original GST structure rolled out by the government in July 2017.

However, this exemption limit for service providers remains unchanged i.e. Rs. 20 lakhs as announced in the 32nd GST Council Meeting.

In Case of Special Category States

GST registration limit for service providers in North eastern and hilly states was Rs. 10 lakhs in the initial GST regime.

This exemption limit remains unchanged i.e. Rs 10 lakhs as per the 32nd GST Council Meeting.

Composition Scheme Registration Limit

The GST Registration Limit for taxpayers registered under Composition Scheme varied according to the category of taxpayers. These were as follows:

In Case of Traders and Manufacturers

All the traders and manufacturers having an aggregate annual turnover of up to Rs 1 Crore in the preceding financial year could register as composition dealers under the GST law. The rate of GST applicable on such traders and manufacturers was 1%.

However, as per the 32nd GST Council Meeting, the GST Registration Limit for manufacturers and traders registered as composition dealers has increased.

Accordingly, traders and manufacturers having an aggregate annual turnover of up to Rs 1.5 Crores in the preceding financial year can now register as composition dealers under GST.

But, the GST rate applicable on such traders and manufacturers remains unchanged, that is, 1%.

In Case of Restaurant Service Only

Service providers offering restaurant services only with an aggregate annual turnover of up to Rs 1 Crore in the preceding financial year could register as composition dealers under the GST law. Furthermore, the rate of GST applicable on such service providers was 5%.

However, as per the 32nd GST Council Meeting, the GST Registration Limit for Restaurant service providers registered as composition dealers has also been increased.

Accordingly, Restaurant service providers having an aggregate annual turnover of up to Rs 1.5 Crores in the preceding financial year can now register as composition dealers under GST.

But, the GST rate applicable on such restaurant service providers remains unchanged, that is, 5%.

In Case of Other Service Providers

Service providers, other than restaurant related services, could not opt for Composition Scheme under the original GST framework.

However, a new Composition Scheme shall now be available for Suppliers of Services or Mixed Suppliers with a Tax Rate of 6% (3% CGST +3% SGST) as per 32nd GST Council Meeting.

And the threshold annual turnover for these service providers in the preceding Financial Year must be up to Rs 50 lakhs.

Compulsory Registration

There are certain category of persons who are required to register under GST compulsorily. Section 24 of the CGST Act, 2017 lists those categories. Accordingly:

• Persons making inter-state taxable supply
• Casual taxable persons
• Persons required to pay tax under reverse charge
• Individuals required to pay tax under sub-section (5) of section 9
• Non-resident taxable persons
• Persons who are required to pay Tax Deducted at Source (TDS) under section 51. This is immaterial of the fact that whether they are separately registered under the Act or not.
• Input Service Distributor, whether separately registered under the Act or not.
• Persons supplying goods or services other than supplies specified under sub-section (5) of section 9. Such supplies are made through an electronic commerce operator who is required to collect tax at source under section 52.
• Every electronic commerce operator
• Persons making taxable supply of goods or services on behalf of other taxable persons as an agent or otherwise.
• Any other person notified by the government on the recommendations of the Council.
• Persons supplying online information and database access or retrieval services from a place outside India. Such services are supplied to a person other than a registered person in India.

States Accepting New Limit

As mentioned above, the GST Council in its 32nd meeting gave an option to the hilly and north eastern states to choose either Rs. 20 lakhs or Rs. 40 lakhs as the turnover limit for GST exemption in case of supplier of goods.

Thus, following is the status of the States adopting the various thresholds for GST registration in case of supply of goods.

Now, Delhi and Puducherry are considered normal states and not special category states for the purposes of GST. Accordingly, there would be 31 States where SGST + CGST would be levied and 5 Union Territories where UTGST + CGST would be levied.

Secondly, registration of a taxpayer is mandatory as per section 24 of the CGST Act, 2017. However, the exemption from registration is granted to a person making inter-state supplies of handicraft goods up to an aggregate turnover of Rs 20 Lakhs (Rs 10 Lakhs in case of Manipur, Mizoram, Nagaland and Tripura).

This exemption would be applicable if the taxpayer supplying goods from any of the above mentioned states has a PAN. Moreover, the goods supplied by such a taxpayer must move under the cover of e-way bill, irrespective of the value of the consignment.