Persons Liable for Registration – Section 22 of GST

GST compliance is crucial for businesses operating in India. One of the fundamental aspects of GST is the requirement for registration under Section 22 of the CGST Act, 2017. This provision outlines who must register under GST based on their turnover and business operations. Understanding this section is vital for businesses to ensure compliance and avoid penalties.

Who is Liable for GST Registration Under Section 22?

Any supplier of goods or services is required to register under GST if their aggregate turnover in a financial year exceeds ₹20 lakh for services and ₹40 lakh for goods in States and Union Territories, excluding special category states.

For businesses operating in special category states, the registration threshold is reduced to ₹20 lakh. These states include:

• Mizoram

• Manipur

• Nagaland

• Tripura

Pre-Existing Registrations

Any person registered under previous tax laws (such as VAT, Service Tax, or Excise) before GST came into effect must register under GST from the appointed day.

Business Transfers & Succession

When a registered business undergoes transfer or succession, the new owner must obtain a fresh GST registration from the date of transfer.

Amalgamation & Demerger

In case of mergers or demergers under a High Court or Tribunal order, the transferee company must register from the date of incorporation issued by the Registrar of Companies.

• Aggregate Turnover: Includes all taxable, exempt, export, and inter-state supplies by a person across India but excludes taxes under GST.

• Job Work Transactions: Supplies made by a registered job worker after job work are considered supplies of the principal, and their value is not included in the job worker’s turnover.

• Special Category States: As per Article 279A(4)(g) of the Constitution, initially, all northeastern and hilly states were included. However, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, and Uttarakhand have been removed from this classification.

Conclusion

Understanding Section 22 of the CGST Act is critical for businesses to determine their GST registration requirements. The turnover-based thresholds, provisions for business transfers, and special category states play a vital role in determining tax compliance obligations. Businesses must stay updated with GST regulations to ensure smooth operations and avoid non-compliance penalties.

For further details on GST registration and compliance, consult a professional or refer to the latest GST notifications from the government.