Whether such business is required to take the GST registration?
In general, the businesses with annual turnover up to Rs.20 lakhs are not required to take the GST registration. However, there are some specific cases, where a person is required to take GST registration even if the turnover is below Rs.20 lakhs.
With this write-up, we aim at enlightening the situations where a business dealing in non-taxable goods is exempt from GST registration and when is it required to take the registration.
Let us understand in detail:
I. A business which is engaged exclusively in the business of supplying exempt goods or services.
This is simple to understand, if a business is engaged only in supplying exempted goods and services, it does not require to register itself under GST under any situation, emphasis should be given to the word “exclusively”, this clearly indicate that business must deal only in the exempt goods or services to fall under this category.
So, it is evident that if a business deals in both exempt & taxable, he does not fall into the above category & it might or might not be liable to register under GST.
Let’s see some illustrative cases where a person deals with both the exempt & non-exempt goods or services
#1: Person engaged in the business of supplying taxable and non-taxable goods and/or services in a state but the aggregate turnover of taxable goods is less than 20 Lakh.
Since the person deals with both taxable & exempt goods & services, we have to see if he is otherwise exempt to register under GST as he does not fall under the “only exempt” category. Here, since his turnover is below 20 lakhs, he need not register under GST availing the threshold exemption
#2: Person engaged in the business of supplying taxable and non-taxable goods and/or services in a state and the aggregate turnover of taxable goods is more than 20 Lakh.
This is similar to the above case except for the fact that aggregate turnover exceeds 20 lakhs and so, he would neither be able to avail the exempt category nor the threshold exemption.
#3: Person engaged in the business of supplying taxable and non-taxable goods and/or services outside the state and the aggregate turnover of taxable goods is less than 20 Lakh.
In this case, though the turnover is below Rs.20 lakhs, the business is engaged in supplying outside the state, so he would not be eligible to avail the threshold exemption and would be liable to register under GST.
#4: Person engaged in the business of supplying non-taxable goods and also exporting some taxable goods and the aggregate turnover of which is less than 20 Lakh.
This is similar to #3, person would be liable for registration as exports are considered as supply outside the state.
#5: Person engaged exclusively in the business of supplying non-taxable goods and/or services outside the state.
Any person falling under exceptions to mandatory registration is not liable for registration even if the supplies are made outside the state or even exported.