REGISTRATION PROCEDURE – MODEL GST LAW

[Mr. M. GOVINDARAJAN]

Chapter VI of the model GST law describes the procedure of registration.  This Chapter provides procedure for registration, obtaining Unique identity number, registration for casual tax payer, amendment of registration, cancellation of registration and revocation of cancellation of registration.

Registration

Section 19(1) provides that every person who is liable to be registered under Schedule III of this Act shall apply for registration in every such State in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed.  If the person, other than an Input Service Distributor, is registered under an earlier law, it shall not be necessary for him to apply for fresh registration under this section and he shall follow the procedure as may be prescribed in this behalf.

Schedule III

Schedule III gives the list of persons who are liable to get registration under this Act.

Threshold limit

• Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds Rs.Nine lakh;
• The above threshold of Rs. Nine lakh will be Rs. Four lakhs if the taxable person conducts his business in any of the NE States including Sikkim.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.

The following categories of persons shall be required to be registered under this Act irrespective of threshold limit as discussed above:

• persons making any inter-State taxable supply, irrespective of the threshold specified
• casual taxable persons, irrespective of the threshold specified;
• persons who are required to pay tax under reverse charge, irrespective of the threshold specified;
• non-resident taxable persons, irrespective of the threshold specified;
•  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
• persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold specified;
• every electronic commerce operator, irrespective of the threshold specified;
• an aggregator who supplies services under his brand name or his trade name, irrespective of the threshold specified.

Supplier

• 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.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.
• every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day;
• 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 a 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.

Transfer of business

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 a 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.

Holder of earlier licence

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day, which is subject to the threshold limit.

Schedule III further provides that such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

Voluntary registration

A person, though not liable to be registered under Schedule III, may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person.

Multiple business

A person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.

Unique Identity number

Any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries and any other person or class of persons as may be notified by the Board / Commissioner, shall obtain a Unique Identity Number, in the manner prescribed, for the purpose(s) notified, including refund of taxes on the notified supplies of goods and/or services received by them.

The registration or the Unique Identity Number, shall be granted or, as the case may be, rejected after due verification in the manner and within such period as may be prescribed.  The proper officer shall not reject the application for registration or the Unique Identity Number without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.  A registration or a Unique Identity Number shall be deemed to have been granted after the period prescribed if no deficiency has been communicated to the applicant by the proper officer within that period.

Deemed registration

The grant of registration or the Unique Identity Number under the CGST Act / SGST Act shall be deemed to be a grant of registration or the Unique Identity Number under the SGST/CGST Act provided that the application for registration or the Unique Identity Number has not been rejected under SGST/CGST Act within the time specified.

Requirement of PAN           

 Every person shall have a Permanent Account Number issued under the Income Tax Act, 1961 in order to be eligible for grant of registration.  A non-resident taxable person may be granted registration on the basis of any other document as may be prescribed.

Failure to register

Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action that is, or may be taken under this Act, or under any other law for the time being in force, proceed to register such person in the manner as may be prescribed.

Exemption

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.

Registration for casual taxable person and nonresident person

Section 19A provides for registration for casual taxable person and nonresident taxable person.  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.  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.

Notwithstanding anything to the contrary contained in this Act, a casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought.   Where any extension of time is sought such taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought.  The amount deposited shall be credited to the electronic cash ledger of such person and shall be utilized in the manner provided under section 35.

Amendment of Registration

Section 20 provides for the amendment of registration.  Every registered taxable person shall inform the proper officer of any changes in the information furnished at the time of registration, or that furnished subsequently, in the manner and within such period as may be prescribed.   The proper officer may, on the basis of information furnished or as ascertained by him, approve or reject amendments in the registration particulars in the manner and within such period as may be prescribed.   Approval of the proper officer shall not be required in respect of amendment of such particulars as may be prescribed.  The proper officer shall not reject the request for amendment in the registration particulars without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.   Any rejection or, as the case may be, approval of amendments under the CGST Act/SGST Act shall be deemed to be a rejection or approval of amendments under the SGST Act/CGST Act.

Cancellation of registration

Section 21 (1) provides that the proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where, -

• the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
• there is any change in the constitution of the business; or
• the taxable person, other than the person registered under sub-section (3) of section 19, is no longer liable to be registered under Schedule III.

Section 21(2) provides that The proper officer may, in the manner as may be prescribed, cancel the registration of taxable person from such date, including any anterior date, as he may deem fit, where, -

•  the registered taxable person has contravened such provisions of the Act or the rules made there under as may be prescribed; or
• a person paying tax under section 8 has not furnished returns for three consecutive tax periods; or
• any taxable person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
•  any person who has taken voluntary registration under sub-section (3) of section 19 has not commenced business within six months from the date of registration.

Section 21 (3) provides that Where any registration has been obtained by means of fraud, willful misstatement or suppression of facts, the proper officer may cancel the registration with retrospective effect, subject to the provisions of section 29.

The proper officer shall not cancel the registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.  The cancellation of registration under this section shall not affect the liability of the taxable person to pay tax and other dues under the Act for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

Deemed cancellation

The cancellation of registration under the CGST Act/SGST Act shall be deemed to be a cancellation of registration under the SGST Act/CGST Act.

Liability of tax payer

Section 21 (7) provides that every registered taxable person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit or cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed.  In case of capital goods, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf or the tax on the transaction value of such capital goods under sub-section (1) of section 15, whichever is higher.  The amount payable shall be calculated in accordance with generally accepted accounting principles in such manner as may be prescribed.

Revocation of cancellation of registration

Section 22 provides that subject to such conditions and in such circumstances as may be prescribed, any registered taxable person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.

The proper officer may, in the manner and within such period as may be prescribed in this behalf, by way of an order, either revoke cancellation of the registration or reject the application for revocation for good and sufficient reasons.   The proper officer shall not reject the application for revocation of cancellation of registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.  Revocation of cancellation of registration under the CGST Act / SGST Act shall be deemed to be a revocation of cancellation of registration under the SGST Act / CGST Act..