RAKESH GARG LLB, FCA Executive Director: S.S. Kothari Mehta & Co., C.A.

1. Registration & Cancellation RAKESHGARG LLB, FCA Executive Director: S.S. Kothari Mehta & Co., C.A.

2. Registration

3. Incidence & Levy of GST 3

4. Incidence & Levy of GST • Taxable person • As per sec 2(107) of the GST Act, “taxable person” means a person who is registered or liable to be registered under the Act. • Liability for registration has been specified in sec 22 and sec 24 of the GST Act • Concept of GST is not to allow basic exemption; but to allow threshold limit for registration

5. Registration under GST

6. Registration - Section 22 6 Section 22 of the CGST/UTGST Act - (Threshold Limit) Every supplier shall be liable to be registered under the CGST Act in the State/UT …. from where he makes a taxable supply of goods or services or both …. if his aggregate turnover in a financial year exceeds the threshold limit of INR 20 Lakhs (10 lakhs in Special Category States). Section 22 of the SGST/UTGST Act - (Threshold Limit) Every supplier making a taxable supply of goods or services or both in the ……..State/UT shall be liable to be registered under this ……. SGST/ UTGST Act if his aggregate turnover in a financial year exceeds INR 20 / 10 Lakhs.

7. Registration - Section 22 –Threshold Limit 7 Special Category States – Article 279(4)(g) Arunachal Pradesh, [To be excluded from 1.2.2019] Assam, [To be excluded from 1.2.2019] Manipur, Meghalaya, [To be excluded from 1.2.2019] Mizoram, Nagaland, Sikkim, [To be excluded from 1.2.2019] Jammu & Kashmir, [excluded from 8.7.2017] Tripura, Himachal Pradesh, [To be excluded from 1.2.2019] Uttarakhand [To be excluded from 1.2.2019]

8. Registration - Section 22 –Threshold Limit 8 To be inserted from 1.2.2019 Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from Rs. 10 Lacs to such amount, not exceeding Rs. 20 Lacs and subject to such conditions and limitations, as may be so notified. Thus the threshold limit will be increased when all three agree with the increase : The State, The Council and the Centre

9. Registration - Section 22 –Threshold Limit 9 Decisions on 10.01.2019 by the GST Council [To be inserted from 1.4.2019] Higher exemption threshold limit for supplier of goods: There would be two threshold limits for exemption from registration and payment of GST for the suppliers of goods i.e. Rs 40 lakhs and Rs 20 lakhs. States would have an option to decide about one of the limits within a weeks’ time. The threshold for registration for service providers would continue to be Rs 20 lakhs and in case of Special category States Rs 10 lakhs. Delhi, Chattisgarh, Bihar, Jharkhand, Jammu & Kashmir & Assam have so far consented Persons supplying goods as well as services ?????

10. Registration - Section 25(1) Every person who is liable to be registered under this Act shall apply for registration in every such State in which he is so liable within 30 days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed Case Study: Turnover on 29.1.18 ….. 18 Lacs Bills issued on 30.1.18…………..1009…1 lacs, 1010…3 lacs Q. Whether liable to pay tax on 1010; if yes at what value Q. Whether liable to pay tax on 1009 10

11. Registration - Section 22(3) & 22(4) 11

12. Mandatory Registration u/s 24 12 Calculation of Aggregate Turnover – No Threshold Limit For a person having same PAN, to be computed on all India basis, is aggregate value of: (i) All taxable supplies by him (i.e. Forward charge); (ii) Exempt supplies including non-taxable supplies; (iii) Exports of goods and/or service; (iv) Inter-state supplies; (iv) All supplies whether on own account or made on behalf of all the principals (by an agent); (v) Supply of goods, after completion of job-work, by a registered job-worker u/s 143 Exclusion - Value of inward supplies on which tax is levied on RCM basis.

13. Mandatory Registration u/s 24 - Issues 13 Calculation of Aggregate Turnover – No Threshold Limit • Aggregate of taxable and exempt supplies Persons supplying mainly exempted supplies; but supplying incidental taxable supplies Such as .. • Doctor selling old fixed assets or having nominal rental income • Educational institution supplies scrap material (e.g. Raddi) • Pulses Trader supplies old gunny bags

14. Mandatory Registration u/s 24 14 Section 24 - (Irrespective of Threshold Limit) • Person making Inter-State Supply With effect from 13 Oct 2017, the Government has exempted all service providers from obtaining registration even if the service provider is providing inter-state supply of services, provided that his aggregate turnover on all India basis is less than INR 20 / 10 Lakhs • Casual Taxable Person • who occasionally undertakes transactions involving supply in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business. • Exemption has been given to casual taxable persons making inter-State taxable supplies of specified handicraft goods

15. Mandatory Registration u/s 24 15 Section 24 - (Irrespective of Threshold Limit) • Person liable pay tax under reverse charge Persons providing exempted supplies – But liable for payment under RCM u/s 9(3)/CGST or 5(3)/IGST ??? • Notified e-commerce operators u/s 9(5) e.g. Radio Taxi, Motor cabs, Hotels, Housekeeping • Non-Resident Taxable Person A taxable person who occasionally undertakes transactions involving supply whether as principal or agent or in any other capacity but who has no fixed place of business in India. • Person required to deduct TDS u/s 51 – Whether or not separately registered

16. Mandatory Registration u/s 24 16 Section 24 - (Irrespective of Threshold Limit) • Person who supplies goods/services on behalf of another registered taxable person whether as agent or otherwise Where the invoice for further supply is being issued by the agent in his name then, any provision of goods from the principal to the agent would fall within the fold of the entry 3/Sch 1. However, it may be noted that in cases where the invoice is issued by the agent to the customer in the name of the principal, such agent shall not fall within the ambit of Schedule I of the CGST. [Circular 57 dt. 4.9.2018] • Input service distributor – Whether or not separately registered

17. Mandatory Registration u/s 24 17 Section 24 - (Irrespective of Threshold Limit) • Person supplying goods/services through an Electronic Commerce Operator, who is required to collect TCS, other than supplies specified under sec 9(5) With effect from 15 Nov 2017, the Government has exempted all service providers from obtaining registration even if the service provider is providing supply of service through an ECO, who is required to collect tax at source under sec 52, provided his aggregate turnover does not exceed threshold limit . • Every person supplying online information and data base access or retrieval services (OIDAR) from a place outside India to a person in India, other than a registered person.

18. Mandatory Registration u/s 24 18 Section 24 - (Irrespective of Threshold Limit) • Every Electronic Commerce Operators, who is required to collect tax at source u/s 52 [To be inserted w.e.f. 1.2.2019] • ECO Activities : Comprises Inventory model & Market Place Model • ECO doing business in inventory model are now excluded in sec 24 • Sec 52: Every ECO, not being an agent  1% of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator • Such ECO will take two registrations: Normal & TCS • Such other persons as the Central/State Govt. may notify on recommendations from the Council.

19. Registration – Business Verticals 21 Proviso to sec 25(2) Up to 31.1.2019 A person having multiple business verticals in a State or UT may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed From 1.2.2019 A person having multiple places of business in a State or UT may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed. Thus concept of business vertical becomes history Q. Existing registrations - A person has 2 vertical registrations at same premises : Will he have to surrender one registration? Yes

20. Registration – Multiple Registration in a State 22 Rule 11 read with Proviso to sec 25(2) w.e.f 1.2.2019 (1) Any person requiring a separate registration for any such place of business u/s 25(2), shall be granted separate, subject to following conditions, namely:- - such person has more than one place of business as defined in section 2(85); - all separately registered places of business shall pay tax under the Act on supply of goods/services made to another regd. place of business of such person and issue a tax invoice / bill of supply for such supply.

21. Registration – Multiple Registration in a State 23 Rule 11 read with Proviso to sec 25(2) w.e.f 1.2.2019 … contd. -Such person shall not pay tax u/s 10 for any places of business if he pays tax u/s 9 for any other place of business; Explanation. - Where any place of business becomes ineligible to pay tax u/s 10, all other regd. places of business of the said person shall become ineligible to pay tax under said section. - A registered person opting to obtain separate registration for a place of business shall submit a separate application in FORM GST REG-01 in respect of such place of business.

22. Registration – Multiple Registration in a State 24 Rule 41A – Transfer of Creditw.e.f 1.2.2019 • A registered person who has obtained separate registration for multiple places of business in accordance with rule 11 and who intends to transfer, either wholly or partly, the unutilisedITC lying in his electronic credit ledger to any or all of the newly registered place of business, shall furnish within a period of 30 days from obtaining such separate registrations, the details in FORM GST ITC-02A Provided that the ITC shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration.

23. Registration – Multiple Registration in a State 25 Rule 41A – Transfer of Credit w.e.f 1.2.2019 …. Contd. Explanation.- For the purposes of this sub-rule, the ‘value of assets’ means the value of the entire assets of the business whether or not ITC has been availed thereon. The newly registered person (transferee) shall, on the common portal, accept the details so furnished by the registered person (transferor) and, upon such acceptance, the unutilisedITC specified in FORM GST ITC-02A shall be credited to his electronic credit ledger.

24. Registration - Issues 26 • Registration to be obtained in every state from where taxable supply is made …..FAQ….. • CA providing services in other states • Person receiving rent from immovable property located in other state • Works contractor supplying services in other states • Composite supplies (AMC) in the neighboring states • A person wants to merge 2 business verticals (OR) wants to close one of the registration in the name of other place of business ……. How to transfer the liabilities or input tax credit …….. ???? Whether Rule 41 read with Form GST-ITC-02 to be used ???

25. Registration – SEZ 27 Proviso to sec 25(1)(a) … Proviso inserted w.e.f. 1.2.2019 A person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a SEZ developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or UT. Separate registration in SEZ is presently governed by First Proviso to Rule 8(1)

26. Registration – Distinct Persons Sec. 25(4) & (5) of CGST • A person who has obtained or is required to obtain more than one registration, whether in one State or UT or more than one State or UT shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. • Where a person who has obtained or is required to obtain registration in a State or UT in respect of an establishment, has an establishment in another State or UT, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

27. Registration – Distinct Persons Explanation to Sec 8 of IGST • For the purposes of this Act, where a person has,–– (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State; or (iii) an establishment in a State or UT and any other establishment being a business vertical registered within that State or UT, then such establishments shall be treated as establishments of distinct persons. • A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.

28. Registration – Effective Date

29. Cancellation/Suspension

30. Cancellation of Registration - Application Sec. 29(1) – Based upon application by him or his heirs (in case of death), 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 (b) there is any change in the constitution of the business; or (c) the taxable person is no longer liable to be registered under sec 22/24.

31. Cancellation of Registration by P.O. Sec. 29(2) – Cancellation by the P.O., from such date, including any anterior date, as he may deem fit, where (a) the registered person has contravened such provisions of the Act or the rules made thereunder; or (b) a person paying tax under sec 8 has not furnished returns for 3 consecutive tax periods; or (c) any taxable person, other than a person specified in clause (b), has not furnished returns for a continuous period of 6 months; or (d) Person who has taken voluntary registration, has not commenced business within 6 months from the date of registration.

32. Cancellation of Registration by P.O. Sec. 29(2) – contd.. (e) Where any registration has been obtained by means of fraud, wilful misstatement or suppression of facts, RC may be cancelled with retrospective effect (f) The person does not conduct any business from the declared place of business; or • The person issues invoice or bill without supply of goods or services in violation of the GST provisions Sec. 29(6) – Cancellation of registration under the CGST Act/SGST Act shall be deemed to be cancellation of registration under SGSTAct/CGST Act

33. Cancellation of Registration Sec. 29(3) Cancellation of registration u/s 29 shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder 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. FAQ • If RC is cancelled due to death of Prop., whether legal heir is required to pay taxes and/or file annual return for the period upto the date of death? • In case of merger or amalgamation, say on 1.1.2018, whether amalgamated company will file its annual return upto that date?

34. Suspension of Registration by P.O. Proviso to Sec 29(2) inserted w.e.f. 1 Feb. 2019 During pendency of the proceedings relating to cancellation of registration, the registration may be suspended for such period and in such manner as may be prescribed. Rule 21 A : • Where a registered person has applied for cancellation of registration under rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration under rule 22.

35. Suspension of Registration by P.O. Rule 21 A : (2) Where the P.O. has reasons to believe that the registration of a person is liable to be cancelled u/s 29 or u/r 21, he may, after affording a reasonable opportunity of being heard, suspend the registration of such person w.e.f.a date to be determined by him, pending completion of proceedings for cancellation of registration under rule 22 (i.e. by PO or upon application). (3) Such regd. person shall not make any taxable supply during the period of suspension and shall not be required to furnish any return u/s 39. (4) Suspension of RC shall be deemed to be revoked upon completion of the proceedings by the P.O. u/r 22 and such revocation shall be effective from the date on which the suspension had come into effect

36. Cancellation of Registration – Stock held Section 29(5) – ITC on stock at the time of cancellation • Such person shall pay an amount equivalent to ITC of - o 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, w.e.i higher. o In case of capital goods or plant & machinery - an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points (5% per quarter) (OR) the tax on the transaction value of such capital goods or plant & machinery under sec 15, w.e.i. higher. Pl note payment is not required in relation to input services

37. THANK YOU RAKESH GARG, LLB, FCA Phone: 98102 16270 Mail: rakesh.garg@sskmin.com