Registration under GST and its Advantages

Registration under GST

Registration is the most fundamental requirement for identification of taxpayers ensuring tax compliance in the economy. Without registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him.

Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail input tax credit for the taxes on his inward supplies.

Advantages of registration:     

The following are advantages to a taxpayer who obtain registration under GST:

(i) He is legally recognized as supplier of goods or services or both.

(ii) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(iii) He can claim Input Tax Credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services.

(iv) Seamless flow of Input Tax Credit from suppliers to recipients at the national level.

(v) Registered person is eligible to apply for Government bids or contracts or assignments.

(vi) Registered person under GST can easily gain trust from customers.

Registration effective w.e.f. 1st July 2017 under GST

Sec. 22(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.

Registration under GST in case of transfer of going concern

Sec. 22(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 may be, shall be liable to be registered w.e.f. The date of such transfer or succession.

Registration under GST in case of amalgamation or demerger

Sec. 22(4): in 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 High Court, Tribunal or otherwise, the transferee should be liable to be registered, w.e.f the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

PERSONS NOT LIABLE FOR REGISTRATION

(i) Sec 23(1)(a): Any person engaged exclusively in the business of supplying of goods or services or both they

are not liable to tax or wholly exempt from tax under CGST or IGST.

(ii) Sec 23(1)(b): An agriculturist, to the extent of supply of produce out of cultivation of land.

(iii) Sec. 23(2): The Government may, on the recommendation of the GST Council.

Ref:

1. Balachandran V - Indirect Taxes

2. ICAI - Indirect Taxes

3. ICSI - Indirect Taxes

4. ICMAI - Indirect Taxes

5. LPU - Indirect Taxes