Mandatory Registration (Section 22)

Threshold limits for supply of goods and services

As per Section 22 of the Central Goods and Services Tax (CGST) Act, 2017, registration is mandatory for every supplier making taxable supply of goods or services if their aggregate turnover exceeds the threshold limits prescribed below:

*Special Category States include Mizoram, Manipur, Nagaland, Tripura, Arunachal Pradesh, etc.

Persons required to register irrespective of turnover (Section 24)

• Persons making inter-State taxable supplies
• Casual taxable persons
• Non-resident taxable persons
• E-commerce operators
• Persons liable to pay tax under reverse charge
• Input Service Distributors (ISD)
• Persons required to deduct tax at source (TDS)/collect tax at source (TCS)

Example:

If Mr. Sharma runs a retail business in Uttar Pradesh and his turnover is ₹45 lakhs annually, he must obtain GST registration as it exceeds ₹40 lakhs limit for goods in a normal category state.

Voluntary Registration

Any person who is not liable to be registered under Section 22 or Section 24 may still apply for voluntary registration under Section 25(3) of the CGST Act. This is beneficial for those who want to avail Input Tax Credit (ITC) and grow their business with registered clients.

Key Features:

• Voluntarily registered persons are treated as regular taxable persons.
• All compliance requirements, including return filing and record maintenance, are applicable.
• They can collect GST and pass on ITC to buyers.

Example:

A freelance graphic designer in Kerala with annual turnover ₹8 lakhs can opt for voluntary registration to claim input tax credit on his software and equipment purchases.

Deemed Registration

Deemed registration is an automatic approval mechanism under GST to ensure that applications are processed timely.

Time Limits for Deemed Registration:

• If the proper officer does not issue a registration certificate or rejection within 3 working days from the date of application, it is deemed approved.
• If additional information/clarification is asked and the applicant furnishes it, but the officer fails to act within 7 working days, registration is also deemed granted.

Legal Provision:

Rule 9(5) of the CGST Rules, 2017 deals with deemed registration and time-bound approval of applications.

Example:

Mr. Ramesh applies for GST registration online on 1st July. No response is received by 4th July. His application shall be deemed approved on the 4th working day.

Cancellation of Registration (Section 29)

Cancellation of GST registration can be initiated either by the registered person or by the proper officer.

A. Cancellation by Registered Person:

Possible when:

• Business has been discontinued or transferred
• No longer liable for registration (turnover falls below threshold)

B. Cancellation by Proper Officer:

Grounds include:

• Non-compliance with provisions of the GST Act
• Non-filing of returns for a continuous period
• Obtaining registration by means of fraud/misstatement

C. Suspension of Registration:

Registration may be temporarily suspended pending cancellation to avoid misuse of GSTIN during the process.

D. Revocation of Cancellation:

• Application to be filed within 30 days of cancellation order
• Can be extended by Commissioner if justified

Example:

XYZ Pvt. Ltd. stopped operating in March 2025. The company applied for cancellation and upon proper officer’s satisfaction, the GST registration was cancelled w.e.f. April 2025.

Types of Returns

GSTR-1 (Details of outward supplies)

GSTR-1 is filed by regular registered taxpayers to provide details of outward supplies (sales) of goods and services. This return enables the recipient to claim input tax credit.

• Frequency: Monthly or Quarterly (for small taxpayers under QRMP scheme)
• Due Date: 11th of the next month

GSTR-2 (Details of inward supplies) - Currently suspended

GSTR-2 was meant to capture the details of inward supplies (purchases). However, it is currently suspended due to technical and procedural issues.

GSTR-3B (Summary of self-assessed tax payable)

GSTR-3B is a simplified monthly return filed by all regular taxpayers. It includes summary figures for outward and inward supplies, and tax liability.

• Due Date: 20th of the next month (varies for QRMP scheme)

GSTR-4 (Composition Levy)

This return is filed annually by taxpayers who have opted for the Composition Scheme under Section 10 of the CGST Act.

• Due Date: 30th April following the end of the financial year

GSTR-5 (Non-resident taxable person)

Filed by non-resident taxable persons for reporting their inward and outward supplies during their period of business in India.

GSTR-6 (Input Service Distributor)

Filed by Input Service Distributors (ISD) to distribute input tax credit among branches.

GSTR-7 (TDS)

Filed by persons required to deduct tax at source under Section 51 of the CGST Act.

GSTR-8 (TCS)

Filed by e-commerce operators who collect tax at source under Section 52.

GSTR-9 (Annual Return)

It is an annual summary return filed by regular taxpayers. It includes consolidated details of all monthly/quarterly returns filed during the financial year.

• Due Date: 31st December following the end of the financial year

GSTR-9C (Reconciliation Statement)

Filed by taxpayers whose turnover exceeds the prescribed limit (₹5 crore). It contains reconciliation between the annual return (GSTR-9) and the audited financial statements.

Example Table:

Payment of Tax

Electronic Cash Ledger, Electronic Credit Ledger

GST payment is made through the following ledgers maintained on the GST portal:

• Electronic Cash Ledger: Shows cash deposited by taxpayer and used to pay tax, interest, penalty, etc.
• Electronic Credit Ledger: Reflects Input Tax Credit (ITC) available to the taxpayer, which can be used to pay tax liability (not interest or penalty).

Types of GST Payable:

• CGST – Central Goods and Services Tax
• SGST – State Goods and Services Tax
• IGST – Integrated Goods and Services Tax
• CESS – Compensation Cess (if applicable)

Time limit for payment

GST must be paid before filing GSTR-3B. Failure to pay on time leads to:

• Interest @ 18% per annum on delayed tax payment
• Late fee of ₹50 per day (₹20 per day for NIL returns), subject to maximum limits

Modes of Payment:

• Online via net banking/credit card/debit card
• Offline via over-the-counter (OTC) for amounts up to ₹10,000 per challan per tax period
• NEFT/RTGS

Example:

Mr. Arjun has an output tax liability of ₹18,000 for June. He has ₹12,000 as ITC in his credit ledger and pays the balance ₹6,000 using his cash ledger before filing GSTR-3B on 18th July.