Who is Taxable under GST?

Basics of GST

the buzz stand explains who are taxable under GST tax
People taxable under GST tax

Taxable person under GST is anyone who has registered for GST tax or needs to be registered for GST. There are different criteria’s such as business activity, turnover, or transactions which has been specified under the GST Act. Each of these details are compulsory for the person who is registered under GST. Any person who has VAT, Service Tax, or Central Excise on the date of GST will be taxable under  GST.

Definition of GST Taxable Peron

‘Person’  is a term which has been defined in the Section 2(73) of the GST ACT and is as follows:

  • A Hindu Undivided Family
  • Individual
  • Partnership Firm
  • LLP
  • Body of individuals, whether they are incorporates or not, present in India or not.
  • Any organization which is established by State, Central or Provincial Act or by a Government Company.
  • Any corporate incorporated with the laws of any country other than India.
  • Co-operative societies which are registered under laws related to the co-operative societies
  • Government
  • Local Authority
  • Society defined by Societies Act
  • Trusts Artificial judicial person who does not fall in any of the above categories.

 

Meaning of any taxable person under GST is similar to that of the current definition of Service Tax. It is vital to understand that definition of taxable person will include judicial person and not only natural persons.

 

Who requires GST tax Registration?

 

Criteria for person to be registered under GST are available in the Chapter 6 of GST Act. As per which, following person require registration under GST:

 

Aggregate Turnover Criteria

 

Any person of services or goods who has taxable supply with total turnover of Rs. 20 Lakhs every year will require GST tax registration. In states with special categories the limit is set to Rs. 10 Lakhs. All such cases would be taxable under GST

 

Special Categories States

 

As per now Jammu and Kashmir, Nagaland, Arunachal Pradesh, Manipur, Mizoram, Uttrakhand, Assam, Meghalaya, Sikkim, Himachal Pradesh and Tripura are tagges under special category states. NDC (National Development Council) which consists of Union Minister, Chief minister, Prime Minister, and other members of Planning commission will figure out the list of states with special category in India. The decision is dependent on actors like difficult terrain, hilly area, sizable tribal population, and low population density. States with strategic location along with the border of the country, infrastructure and economic backwardness or non viable nature of the state finances will also categories in the special category.

Who are mandatory for GST Registration?

 

There are few conditions in which even those persons who do not qualify under the GST regulation of aggregate turnover are required to obtain GST registration, if they satisfy any of the below conditions.

Person who makes a inter-state taxable supply

 

Inter state supply consisting for supply of services and goods between two states. This makes the person taxable of for the supply of goods and services to the person who is located outside of state. It is mandatory for that person to get GST Registration.

 

Casual taxable person who makes taxable supplies

 

Casual taxable person is one who occasionally supplies goods or services and doesn’t have a place of business. Example of casual taxable person are fireworks shops who sell firecrackers during Diwali.

 

Person who is required to pay tax under reverse charge

 

Under GST, for goods and services, liability for the payment is with the suppliers. But in some cases GST can be applicable and would rest with the recipients of goods and services. These transactions are called as reverse charges and thus anyone who is needed to pay the tax under the reverse charge will mandatory have to get the GST registration.

 

NRI taxable person making taxable supply

 

NRI taxable person is a person who will supply goods or provide services to any recipient of India. Person has no place of business or is not a resident of India. All non-resident taxable persons will have to obtain GST irrespective of the turnover.

 

Person who has to deduct TDS from GST tax

 

As per the Section 51 under GST Act, government will mandate any establishment or department of Central or State Government or Governmental agencies or to category of person to reduce the tax of 1% from the payment made or which has been credited to suppliers. Here the total value should be more than Rs. 2.5 Lakhs. This person will be required to obtain GST registration and will be referred as ‘deductor’.

 

Persons who make taxable supply of goods and services in behalf of other persons

 

Person who makes taxable supply of goods and services instead of other person will have to take help of brokers, agents, dealers, etc. These people are required to obtain GST mandatorily.

 

Input Service Distributor

 

Input Service Distributors is a supplier of goods and services which taxes invoice for the receipt of the input services and problems related to documents for distributing the State tax, credit of central tax, Union Territory tax, and integrated tax which will be paid on required services of supplier for taxable goods and services.

 

Electronic Commerce Operator

 

Electronic Commerce will mean supply of service and goods which includes digital products over electronic or digital network. Electronic commerce operator is a person who operates, manages or owns electronic or digital facility or platform for e-commerce. Electronic commerce operator are required to get GST registration, without any turnover.

 

Person supplying online information and database access or retrieval services (OIDAR)

 

Anyone who is supplying database access and online information along with retrieval services from a location outside of India to the person who is in India will have to get GST tax registration. Database access or retrieval means and Online information providing information or data, retrievable or otherwise, to a person in electric with the help of a computer.

 

Person who supplies goods and service via electronic commerce operators

 

Many people collaborate with ecommerce operators for supplying goods and services. For such person it is mandatory to get GST registration. Under GST, Government will have all the power for specific categories in which tax will be liable to be given by e-commerce operator or if any services are supplied with it.

 

Person who have Service Tax or Central Excise or VAT Registration

 

Any one, on the day right preceding to the appointment day has service tax or central excise or VAT license under current law will have to register under GST. Migration to GST is compulsory for all taxable person who have registration.

 

Successor or Transferee of Business

 

Anyone who is successor or transferee of business which has carried on by a person who has GST registration will have to get registered with effect from the date of transfer.

 

Who is not required to get GST Registration

 

A person who is currently engaged exclusively under business of supplying services or goods which are not liable to tax under GST or are completely exempted from tax (not taxable under GST) do not have to register for GST.

 

An agriculturist who is limited to supply of produced cultivation of land does not have to get GST registration. Under GST, agriculturist means a Hindu Undivided Family or individual who has to overtake cultivation of land.

  • By own labour
  • By labour of family
  • By servants who are on wages payble in cash or are hired by labour under personal supervision or personal supervision of any one of the family.

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