Who is required to register under GST?

In India, the Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services. The provisions and regulations related to GST are defined in the GST Act, 2017, and several other associated rules and amendments. Here’s an outline of the requirements for registration under GST, the provisions and acts in the Indian Constitution relating to GST, and some landmark cases that have shaped its application:

1. Who is required to register under GST?

The requirement for registration under GST depends on several factors, including turnover, the type of business, and the nature of the supplies. Here’s a breakdown of the entities required to register:

Mandatory Registration under GST:

Turnover-based Thresholds:
- For Goods: Businesses with a turnover exceeding ₹40 lakhs (₹20 lakhs for special category states).
- For Services: Businesses with a turnover exceeding ₹20 lakhs (₹10 lakhs for special category states).
Inter-state Supply: Any business engaging in the supply of goods and services across state boundaries must register for GST, irrespective of turnover.
E-commerce Operators: Any person operating as an e-commerce aggregator or platform is required to register under GST.
Casual Taxable Person: A person who occasionally undertakes taxable transactions and doesn’t have a fixed place of business, such as a person holding an event or exhibition.
Non-Resident Taxable Person: Foreign companies or individuals who engage in taxable activities in India.
Voluntary Registration: Any entity, regardless of turnover, can opt for voluntary registration under GST.

Other Circumstances for Mandatory Registration:

Input Service Distributor: Businesses that receive goods and services used for providing taxable services.
Agents of a Supplier: Individuals or entities acting as agents of a registered person for the supply of goods or services.

2. Provisions and Acts Related to GST in the Indian Constitution

The Goods and Services Tax (GST) Act, 2017, is the key piece of legislation governing GST. Several provisions within the Indian Constitution were amended to enable the GST framework.

Key Provisions in the Indian Constitution Related to GST:

Article 246A: Grants Parliament and State Legislatures the authority to levy taxes on the supply of goods and services, which is a unique provision for GST.
Article 279A: Deals with the establishment of the Goods and Services Tax Council (GSTC) to make recommendations on the implementation of GST.
Article 286: Specifies the limitations on the powers of the state to tax goods that are imported or exported, which was amended to remove barriers between states for trade in goods and services under GST.
Article 366(12A): Defines “goods and services” to include all forms of goods and services.
Article 268A: Empowered Parliament to levy taxes on goods and services at the national level.

These constitutional amendments were necessary for the creation of the GST system, which became operational in July 2017.

3. Landmark Cases Related to GST

Several landmark cases have influenced the interpretation and implementation of GST in India. Some key cases are:

i. Mohit Minerals Pvt. Ltd. v. Union of India (2021):

Issue: This case dealt with the applicability of Integrated Goods and Services Tax (IGST) on the import of goods under the provisions of the Customs Act.
Outcome: The Supreme Court ruled that the provisions of GST relating to the taxation of imported goods are not violative of the Constitution and that IGST is applicable in case of importation, as import is treated as an inter-state supply.

ii. State of West Bengal v. Calcutta Club Ltd. (2019):

Issue: The case concerned the applicability of GST on a social club and whether it was considered a “service” under the GST law.
Outcome: The court ruled that the club’s activities were not in the nature of a business, and therefore, it was not liable to pay GST on membership fees or other charges for services rendered by the club to its members.

iii. Union of India v. The Association of Tax Consultants (2020):

Issue: The challenge in this case was regarding the imposition of GST on services provided by professionals like chartered accountants.
Outcome: The Court upheld that professional services provided by chartered accountants, which are considered as a form of service under GST, are taxable.

iv. M/s. AAR & Associates v. Union of India (2022):

Issue: This case was focused on whether a group of entities engaged in business as a group under one GST registration could claim tax exemptions.
Outcome: The Supreme Court held that group entities could not claim exemptions under GST unless explicitly authorized by law and that separate GST registrations for each entity were required.

4. Acts Associated with GST

The Central Goods and Services Tax Act, 2017 (CGST Act): This is the main act dealing with GST at the national level, governing the tax on intra-state supplies of goods and services.
The State Goods and Services Tax Act, 2017 (SGST Act): Each state has its own SGST Act that applies to intra-state transactions, in conjunction with CGST.
The Integrated Goods and Services Tax Act, 2017 (IGST Act): Deals with inter-state transactions and the distribution of tax revenue between the Centre and the states.
The Union Territory Goods and Services Tax Act, 2017 (UTGST Act): Applies to the Union Territories of India.

Conclusion

GST registration is mandatory for businesses meeting certain criteria (like turnover thresholds, inter-state supply, or specific business activities). The Constitution of India was amended to accommodate the GST framework, with crucial provisions empowering the Parliament and States to levy taxes on goods and services. Landmark cases have clarified key aspects of GST implementation, and acts like CGST, SGST, IGST, and UTGST govern its practical application