Compulsory Registration under GST Section 24

The Goods and Services Tax (GST) regime, which was implemented in India on July 1, 2017, revolutionized the indirect taxation system by consolidating multiple taxes into a single tax. Under the GST framework, businesses engaged in the supply of goods and services are required to register for GST and comply with its various provisions. One critical aspect of this regime is the compulsory registration under GST, particularly under Section 24 of the Central Goods and Services Tax Act, 2017 (CGST Act).

Section 24 of the CGST Act outlines the categories of persons who are required to mandatorily register under GST, irrespective of their turnover. This means that even if the aggregate turnover of these persons is below the threshold limit for GST registration, they must still obtain GST registration. This section is crucial for ensuring compliance and bringing all significant economic activities under the GST net.

1. Persons making inter-state taxable supply: Any person making a taxable supply of goods or services from one state to another must register under GST, regardless of their turnover.
2. Casual taxable persons making taxable supply: A casual taxable person is someone who occasionally supplies goods or services in a taxable territory where they do not have a fixed place of business. Such persons must register under GST.
3. Persons required to pay tax under reverse charge: In certain situations, the recipient of goods or services is liable to pay GST instead of the supplier. Such persons must register under GST.
4. Non-resident taxable persons making taxable supply: Non-resident individuals or entities supplying goods or services in India must register under GST.
5. Persons required to deduct tax at source (TDS): Entities that are required to deduct tax at source under GST provisions must register.
6. Persons required to collect tax at source (TCS): E-commerce operators collecting tax at source must register under GST.
7. Persons supplying goods or services on behalf of another registered taxable person: Agents or intermediaries who supply goods or services on behalf of other registered persons must register under GST.
8. Input service distributor (ISD): An input service distributor is a business that receives tax invoices for services used by its branches and distributes the input tax credit to such branches. They must register under GST.
9. Persons supplying online information and database access or retrieval services (OIDAR) from outside India to a person in India: Foreign service providers supplying OIDAR services to non-taxable online recipients in India must register under GST.
10. Other persons notified by the government: The government may notify other categories of persons who must register under GST.

Compulsory registration under Section 24 ensures that all significant economic activities are captured within the GST framework. It prevents tax evasion and ensures a broader tax base, contributing to higher revenue collection for the government. Additionally, it promotes transparency and accountability among businesses, ensuring they comply with the provisions of GST law.

Consequences of Non-Compliance

Failure to obtain compulsory registration under Section 24 can lead to severe consequences, including:

• Penalties: Non-compliance can attract penalties and fines under the GST Act.
• Denial of Input Tax Credit: Businesses that fail to register will not be able to claim input tax credit, increasing their overall tax burden.
• Legal Actions: The authorities can take legal actions against businesses that do not comply with GST registration requirements.
• Reputational Damage: Non-compliance can harm the business’s reputation, affecting its relationships with customers and suppliers.

The process for GST registration under Section 24 involves several steps:

1. Visit the GST Portal: Go to the official GST portal (www.gst.gov.in) and click on ‘Register Now’ under the ‘Taxpayers’ tab.
2. Select New Registration: Select ‘New Registration’ and fill in the required details such as legal name, PAN, email, and mobile number.
3. Receive OTP: An OTP will be sent to your registered email and mobile number for verification.
4. Fill in the Details: Provide details such as business name, address, nature of business, and bank account details.
5. Upload Documents: Upload the required documents, including PAN card, proof of business address, and photographs.
6. Submit the Application: Submit the application form along with the documents. You will receive an Application Reference Number (ARN) for tracking the status.
7. Verification and Approval: The GST officer will verify the application and documents. If everything is in order, the GST registration will be approved, and the GSTIN will be issued.

The following documents are generally required for GST registration under Section 24:

• PAN Card: PAN card of the business or individual.
• Proof of Business Address: Utility bill, rent agreement, or lease deed.
• Photograph: Passport-sized photograph of the owner or partners.
• Bank Account Details: Cancelled cheque or bank statement.
• Identity Proof: Aadhaar card, driving license, passport, or voter ID.

1. What is the threshold limit for compulsory registration under GST?
   • There is no threshold limit for compulsory registration under Section 24. Certain categories of persons must register irrespective of their turnover.
2. What is a casual taxable person under GST?
   • A casual taxable person is someone who occasionally supplies goods or services in a taxable territory where they do not have a fixed place of business.
3. Who is a non-resident taxable person?
   • A non-resident taxable person is an individual or entity supplying goods or services in India but does not have a permanent place of business in India.
4. What is the reverse charge mechanism under GST?
   • Under the reverse charge mechanism, the recipient of goods or services is liable to pay GST instead of the supplier.
5. Who needs to deduct tax at source under GST?
   • Certain entities, such as government departments and agencies, are required to deduct tax at source under GST.
6. What is an input service distributor (ISD)?
   • An input service distributor is a business that receives tax invoices for services used by its branches and distributes the input tax credit to such branches.
7. What are OIDAR services?
   • OIDAR stands for Online Information and Database Access or Retrieval services, which are provided through the internet or electronic network.
8. What documents are required for GST registration?
   • Documents such as PAN card, proof of business address, photograph, bank account details, and identity proof are required for GST registration.
9. How long does it take to get GST registration?
   • The GST registration process typically takes 7-10 working days, subject to verification by the GST officer.
10. What are the consequences of not registering under GST?
    • Non-registration can lead to penalties, denial of input tax credit, legal actions, and reputational damage.

Compulsory registration under Section 24 of the CGST Act is crucial for bringing significant economic activities under the GST framework. It ensures compliance, prevents tax evasion, and contributes to higher revenue collection for the government. Businesses falling under the categories specified in Section 24 must ensure they obtain GST registration and comply with its provisions to avoid penalties and other legal consequences.