5 Weird Cases where GST registration is mandatory – All about Mandatory GST registration as per GST rules
by Paras Mehra 5.81K
Introduction
Suppose you are a trader with a total annual turnover around Rs.10 lakh. Since you are under basic exemption limit of GST of Rs.20 lakh hence not registered under GST. One fine day you made an interstate sale of Rs.100.
Now did know that just because of the single interstate sale your whole exemption under GST ceases and you became liable for GST registration? Sounds weird but it is GST.
Under section 24 of CGST, any person making any interstate sale shall be liable to registration and basic exemption of Rs.20 lakh per annum does not apply.
It is only a beginning, let us proceed to read the seven weird cases where GST registration is mandatory and basic exemption limit of Rs.20 lakh per annum shall not apply.
#Weird Case No.1 – Buying from Unregistered person
Suppose you are a blogger earning $100 per month. Now to further promote your website, you hire a freelancer content writer for a consideration of Rs.30,000/-.
Do you know you just fall under the net of mandatory registration? weird? But true. As per GST rules, if you take any goods or services from any unregistered seller or service provider, then you shall be become liable to pay GST instead of that freelancer. We call this arrangement as Reverse Charge Mechanism (RCM).
Further, as per section 24 of CGST act, if you are liable to pay GST under reverse charge, then you shall need to take GST registration and pay the required taxes.
Hence, just by taking the services of that unregistered person, you did fall under a GST trap.
#Weird Case No.2 – Not dealing exclusively in exempted goods under GST
Under GST, if you are a dealer dealing in exempted goods only then you shall not require GST registration in India. Suppose you are a seller and dealing only in exclusive exempted products. One fine day, to increase your sale, you offer a scheme under which if any person buys your product then he may claim another product at 30% discount.
Further, if in case that another product which you are offering at 30% discount is taxable under GST, then your basic exemption limit shall cease to apply and you shall become liable for GST registration.
#Weird Case No.3 – Selling on flipkart, Amazon under GST
Suppose you are running a small shop of selling cloths. You turnover is Rs.12 lakh per annum and hence you are not registered under GST. However, one day you thought of selling your goods through flipkart and Amazon.
From the time you register on Amazon and started your first online sale, your basic exemption limit of Rs.20 lakh ceases to apply and you shall liable to register under GST.
#Weird Case No.4 – Selling goods or services to client in another state
This is something which we have already explained you in the beginning of this article. Under GST, if you are small trader having total turnover of Rs.12 lakh and you just made a sale of Rs.100 to another state. Now, in this case your basic exemption shall cease and you shall become liable to register under GST.
#Weird Case No.5 – Hired a Goods transport Agency (GTA)
Suppose you hired a Goods transport agency to transport your goods from one place to another. Did you know, that hiring the Goods Transport Agency (GTA) will make you liable for GST registration in India? Weird? Yes. This is because GTA services has been notifed under reverse charge and as per GST if you are liable to pay tax under reverse charge, then GST registration becomes mandatory.
Conclusion
We have discussed only a few important cases. However, there are still many cases where you may become liable to pay GST. Therefore, we recommend you to take the help of our expert panel to decode the GST.
In case you have any query, kindly write to us at info@hubco.in.
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