New Goods and Services Tax Registration – Simplified Section 22, 23 and 24

Goods and Services Tax Registration is PAN based and State specific i.e. a person having multiple places of business in more than one state or union territory will have to take a separate registration for each state/UT. The lawmakers in India had introduced this new indirect tax structure in the year 2017 to eradicate the gaps and flaws in the old indirect tax structure that was causing heavy litigation and inconsistent laws. Whether or not the taxpayer is required to take Goods and Services Tax Registration depends on a variety of factors.

Basis for Goods and Services Tax Registration

The GST Act contains specific conditions and provisions in Section 22 and Section 24 of the CGST Act, 2017 regarding persons liable to registration. The turnover limit for Goods and Services Tax registration is based on the threshold limit of the aggregate turnover for the financial year.

Aggregate Turnover – Meaning and Computation

Let us first understand what aggregate turnover is and how it is computed.

As per section 2(6) of the CGST Act, 2017, “aggregate turnover” refers to the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same Permanent Account Number, to be computed on an all-India basis but excludes Central tax, State tax, Union territory tax, Integrated tax and cess. 

Table showing summary of the Inclusions and Exclusions for computing Aggregate turnover

Inclusions	Exclusions
Taxable Supply including supply to distinct person having same PAN	Value of inward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism
Zero rated supplies	CGST, SGST, IGST, UT-GST and Compensation cess
Nil Rated supplies	Goods supplied for job work or received back after job work under section 143 of CGST Act, 2017
Non GST supplies
Taxes other than GST
Value of outward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism
Goods supplied to/received from job workers on principal to principal basis

Example :- For understanding computation of aggregate turnover

Mr. ABC is a trader of goods having an outlet in Mumbai and has other outlets in the same PAN in Jaipur and Bhopal. He has made the following supplies during F.Y. 2022-23 :-

Computation of Aggregate Turnover

Particulars	Amount (Rs. In Lacs)	Included or Excluded in computing Aggregate Turnover	Aggregate Turnover (Rs. In Lacs)
Taxable Sales excluding GST from the outlet at Mumbai	5.00	Included	5.00
Taxable Sales excluding GST from the outlet at Jaipur	9.00	Included	9.00
Exempt Sales excluding GST from the outlet at Bhopal	4.00	Included	4.00
Non – GST supplies from the outlet at Jaipur	1.00	Included	1.00
GST on the sales	1.50	Excluded	–
Outward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism	2.00	Included	2.00
Inward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism	3.00	Excluded	–
		Aggregate Turnover	21.00

Now that we have clarity on the computation of aggregate turnover, let us understand the turnover limit for Goods and Services Tax registration.

Section 22 of the CGST Act, 2017 – Turnover limit for Goods and Services Tax registration

As per Section 22, a person is liable to registration if the aggregate turnover exceeds the threshold of Rs. 20 lakhs. However, in case of special category states i.e. Mizoram, Tripura, Manipur and Nagaland, the threshold limit for registration is Rs. 10 lakhs.

The Government, at the request of the Council and the states has enhanced the limit of aggregate turnover from Rs. 20 lakhs to Rs. 40 lakhs for any person who is engaged exclusively in the supply of goods. However, the benefit of this enhanced aggregate turnover is not available to the following persons :-

• Any person required to take compulsory registration u/s 24 of the said Act;
• Persons engaged in making supplies of tobacco, pan masala, ice cream and other edible ice, fly ash bricks and blocks, bricks of fossil fuels or similar siliceous earths, building bricks, earthen or roofing tiles [Amended by Notification No. 15/2022-CT w.e.f. 18.07.20222];
• Persons engaged in making intra-state supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telengana, Tripura and Uttarakhand;
• Person exercising the option of voluntary registration

Table showing summary of Turnover Limit for Goods and Services Tax Registration

Threshold limit is Rs. 10 lakhs for both goods and services	Threshold limit is Rs. 20 lakhs for both goods and services	Threshold limit is Rs. 20 lakhs for services and Rs. 40 lakhs for goods (exclusive supply of goods)
Manipur	Arunachal Pradesh	All other States
Mizoram	Meghalaya
Nagaland	Sikkim
Tripura	Uttarakhand
	Puducherry
	Telengana

Example :- For understanding the Turnover Limit for GST Registration

Party	State	Supply – Goods or Services or both	Aggregate Turnover	Liable for registration u/s 22
ABC	Uttar Pradesh	Goods	Rs. 32 lacs	No
XYZ	Tripura	Services	Rs. 14 lacs	Yes
PQR	Telengana	Both	Rs. 22 lacs	Yes

However, the benefit of threshold limit for registration is not available to those persons who are liable to compulsory registration u/s 24 of CGST Act, 2017.

Section 24 of the CGST Act, 2017 – Compulsory registration

As per Section 24 of the CGST Act, 2017, the following category of persons is mandatorily required to obtain registration under GST:-

• Persons making inter-state taxable supplies
• Casual Taxable persons who do not have a fixed place of business in the State of Union Territory from where he wants to make supply
• Persons who are required to pay tax under reverse charge i.e. recipient of supply is liable to pay tax
• E-commerce operators who are required to pay tax u/s 9(5)
• Non-resident taxable persons making taxable supply
• Persons required to deduct tax u/s 51 (TDS)
• E-commerce operators who are required to collect tax at source u/s 52 (TCS)
• Input Service distributors
• Persons supplying online information and database access or retrieval services from a place outside India to a person in India
• Persons making taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.

Section 23 of the CGST Act, 2017 – Exemption from Goods and Services Tax registration

As per Section 23 of the CGST Act, 2017, the following category of persons has exemption from Goods and Services Tax registration:-

• Persons engaged exclusively in the supply of goods/services/both not liable to tax
• Persons engaged exclusively in the supply of goods/services/both wholly exempted from tax
• Agriculturist limited to supply of produce out of cultivation of land
• Specified category of persons notified by the Government

For any further queries on whether a person is liable for registration or not, leave us a comment below.