Analysis of applicability of GST registration for service providers

Applicability of GST registration for Service Providers

In this article, we have covered the provisions related to GST registration for Service Providers.

As per Section 22 of CGST Act, 2017, every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds twenty lakh rupees.

Provided that where such person makes taxable supplies of goods or services or both from any of the *special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

*For the purpose of this section, Special category states are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, Uttarakhand.

Also, section 23 of CGST act provides that a person need not to be registered under GST laws if the person is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;

Moreover, as per section 24 of CGST Act, 2017 which mandates compulsory registration for a certain class of taxpayer irrespective of the fact that whether the aggregate Turnover of the registered person is exceeding twenty lakh rupees or not and It specifically mandates persons making any inter-State taxable supply to take GST registration irrespective of turnover.

However, Notification no. 10/2017 – Integrated Tax dated as on 13th October, 2017 granted relaxation in obtaining GST registration in case the Taxpayer having aggregate turnover up to Twenty/ Ten Lakh Rupees in a year, even if person is supplying Interstate supplies of services.

So, We can conclude that GST registration is not required if the turnover of the service provider is below the limit specified in the act i.e. 20 Lakh/10 Lakh per annum, irrespective of the fact that the service provider is making interstate/intrastate supply. However, if the supplier of services is engaged exclusively in services that are not liable to tax or specifically made exempted, the supplier need not be registered in this case.

Invoicing Requirement for Unregistered Person

It is prescribed under section 31(2) of CGST Act that registered person shall issue tax invoice as per the format prescribed in the CGST rules.

However, an Unregistered person whose turnover is below the prescribed limit as mentioned under section 22, or the person is not covered under section 23 of the CGST Act, may issue an Invoice/ Bill of supply instead of Tax invoice.

Hope the above article on requirement of GST registration for Service Providers is useful for you.

Click here to subscribe Tax updates on WhatsApp- It’s Free


Author Profile

IndiaTaxLaws Team is an online knowledge bank for professionals like CA, CS, CMA, Advocates, MBAs, and Finance Professionals. We provide the latest updates, articles, notifications, circulars, court judgments etc. relating to taxation and corporate laws in India.

Leave a Comment