GST Advisory & Registration

Under Section 22 of the CGST Act 2017, registration is mandatory once aggregate turnover exceeds Rs 40 lakh (goods) or Rs 20 lakh (services) in a financial year. The threshold drops to Rs 10 lakh for Special Category States listed in Article 279A(4)(g) of the Constitution. Certain suppliers — inter-state taxable suppliers, e-commerce operators, and persons liable to pay tax under reverse charge (Section 9(3)) — must register regardless of turnover under Section 24 of the CGST Act.

Under Section 10 of the CGST Act 2017, read with Rule 3 of the CGST Rules, a registered person with aggregate turnover not exceeding Rs 1.5 crore (Rs 75 lakh for Special Category States) may opt for the Composition Scheme. Service providers (other than restaurant services) are excluded from the standard scheme but may opt for the Composition levy under Section 10(2A) if turnover does not exceed Rs 50 lakh, paying tax at 6% (3% CGST + 3% SGST) on outward supplies. Composition taxpayers cannot collect GST from customers and must file Form CMP-08 quarterly and GSTR-4 annually.

Form GST REG-01 is filed on the common portal under Rule 8 of the CGST Rules. Required documents include PAN of the entity, Aadhaar of the authorised signatory, proof of principal place of business (electricity bill, rent agreement), bank account statement, and photograph of proprietor/partners/directors. Rule 9 requires the proper officer to grant registration within 7 working days if the application is complete; if Aadhaar authentication fails or a physical verification is ordered under Rule 25, the period extends to 30 days. Registration takes effect from the date of liability under Rule 10(2).

A person switching from unregistered to registered status may claim ITC on stock held on the date immediately preceding the effective date of registration under Section 18(1)(a) of the CGST Act, subject to the condition in Rule 40(1) that the goods are used for taxable supplies. ITC on capital goods is available proportionate to remaining useful life. The claim must be filed in Form GST ITC-01 within 30 days of becoming eligible. No ITC is available on items blocked under Section 17(5), including motor vehicles (unless used for specified purposes), personal consumption goods, and food and beverages.

Rule 25 of the CGST Rules empowers the proper officer to conduct physical verification of the business premises before granting registration if Aadhaar authentication has not been completed or the officer deems it necessary. Post-registration, GST Notification No. 94/2020-Central Tax mandates system-based risk-flagging of new registrants, and CGST Rule 9(1A) (inserted w.e.f. 01-08-2022) requires Aadhaar-linked biometric authentication at a GST Suvidha Kendra for certain categories of applicants identified by the common portal. Failure to authenticate within the prescribed window suspends the application.