Library / Goods and Services Tax: The Professional's Master Guide
20. Registration (Sections 22 to 30)
Registration under GST is PAN-based and State-wise. A business operating in three States needs three registrations, each with its own GSTIN, though the PAN is the same. The law is in sections 22 to 30 of the CGST Act and rules 8 to 26 of the CGST Rules.
20.1 Who must register: the threshold test
Section 22(1) requires a supplier to register in each State or Union territory from where he makes a taxable supply, once his aggregate turnover in a financial year exceeds the threshold. Aggregate turnover (section 2(6)) covers taxable, exempt, export and inter-State supplies of all persons with the same PAN across India, excluding reverse charge inward supplies and the taxes.
The basic limit is Rs. 20 lakh. From 1 April 2019 it was raised to Rs. 40 lakh for persons engaged exclusively in supply of goods (Notification 10/2019-Central Tax), except suppliers of ice cream, pan masala, tobacco and, later, bricks and certain tiles. Some States did not adopt the higher limit.
Category of supplier | General States | States that did not adopt Rs. 40 lakh | Manipur, Mizoram, Nagaland, Tripura |
|---|---|---|---|
Exclusively goods | Rs. 40 lakh | Rs. 20 lakh | Rs. 10 lakh |
Services, or goods and services | Rs. 20 lakh | Rs. 20 lakh | Rs. 10 lakh |
Excluded goods (ice cream, pan masala, tobacco, bricks) | Rs. 20 lakh | Rs. 20 lakh | Rs. 10 lakh |
When the notification was issued, Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand kept Rs. 20 lakh for goods. The four States in the last column are special category States for section 22. A State can change its choice, so check the current position before advising a client near the limit. A person earning interest on deposits or loans is still treated as exclusively supplying goods.
Application must be made within 30 days of becoming liable (section 25(1)). A late application gives registration only from the date of grant, leaving the gap exposed to tax, interest and penalty.
Illustration 118: Aggregate turnover of a goods trader Kavya Traders, Surat, deals only in goods. In FY 2025-26 up to December it sells packaged foods (5%) of Rs. 34,00,000 and fresh vegetables (exempt) of Rs. 7,50,000, all within Gujarat. Step 1: Aggregate turnover includes exempt supplies: Rs. 34,00,000 + Rs. 7,50,000 = Rs. 41,50,000. Result: Rs. 41,50,000 is more than Rs. 40,00,000, so registration is required within 30 days, though taxable sales alone are below the limit. |
Illustration 119: Supplier of both goods and services Ansari Electricals, Lucknow, sells fittings of Rs. 15,00,000 and earns Rs. 6,00,000 from wiring services. Step 1: It is not an exclusive goods supplier, so the limit is Rs. 20 lakh. Step 2: Aggregate turnover = Rs. 15,00,000 + Rs. 6,00,000 = Rs. 21,00,000, more than Rs. 20,00,000. Result: Registration is required, though each activity alone is below Rs. 20 lakh. |
20.2 Persons not liable to register
Section 23 excludes a person supplying only goods or services that are not taxable or wholly exempt (a fresh fruit dealer, a school), and an agriculturist to the extent of supply of produce from cultivation of land (section 2(7)). A farmer selling his own paddy is outside; if he also buys and trades in other farmers' paddy, that trade is a business.
20.3 Compulsory registration under section 24
Section 24 persons must register regardless of turnover.
Clause | Person required to register | Relief by notification |
|---|---|---|
(i) | Persons making inter-State taxable supply | Service providers within threshold; inter-State job workers; handicraft makers |
(ii) | Casual taxable persons | Handicraft suppliers within threshold |
(iii) | Persons liable to pay tax under reverse charge | None |
(iv) | E-commerce operators liable under section 9(5) | None |
(v) | Non-resident taxable persons | None |
(vi), (x) | TDS deductors under section 51; e-commerce operators collecting TCS | None |
(vii), (viii) | Agents supplying on behalf of principals; Input Service Distributors | None |
(ix) | Persons supplying through an e-commerce operator collecting TCS | Service providers within threshold; goods sellers within threshold from 1 October 2023 (conditions) |
(xi) | Foreign suppliers of online information and database access services to unregistered persons | None |
Service providers making inter-State supplies need not register within the services threshold, but a goods trader who ships even one consignment to another State must register. From 1 October 2023 a goods seller on an e-commerce platform is exempt if he is within the threshold, makes no inter-State supplies, sells in only one State, and obtains an enrolment number on the portal using his PAN.
Key point The Rs. 40 lakh limit and the reliefs answer only the threshold question. A person covered by section 24 must register even with a turnover of Rs. 1. A common error is a small goods trader who begins supplying across the State border and continues unregistered because his turnover is small. |
20.4 Voluntary registration, places of business and distinct persons
Any person may register voluntarily (section 25(3)), taking on all obligations, usually because buyers want credit or exporters want refunds. One registration covers all places of business in a State; separate registrations for different places in the same State are optional (rule 11).
Each registration under the same PAN is a distinct person (section 25(4)). A supply between distinct persons is taxable even without consideration (Schedule I, paragraph 2) and is valued under rule 28. An SEZ unit or developer must take a registration for the SEZ separate from its other places in the State (proviso to rule 8(1)), keeping the zero-rated SEZ regime apart from domestic operations.
Illustration 120: Stock transfer between distinct persons Sharma Textiles Pvt. Ltd. transfers shirting from Ahmedabad to its registered Mumbai depot. Cost is Rs. 8,00,000; the Mumbai depot is eligible for full ITC. The goods are taxed at 5%. Step 1: Inter-State supply between distinct persons: IGST applies. Step 2: Under the second proviso to rule 28(1), the invoice value is deemed open market value where the recipient gets full ITC. Value = Rs. 8,00,000. Step 3: IGST = 5% of Rs. 8,00,000 = Rs. 40,000, paid in Gujarat and taken as ITC in Mumbai. Step 4: Mumbai sells for Rs. 10,00,000: CGST Rs. 25,000 + SGST Rs. 25,000 = Rs. 50,000, less ITC Rs. 40,000 = Rs. 10,000 payable. |
20.5 The registration process
The application is made in REG-01 (rule 8). Part A captures PAN, mobile and e-mail, verified by OTP; Part B captures business, promoter, place of business and bank details, and an ARN is generated. Aadhaar authentication of the proprietor, partners, directors or authorised signatory is required (section 25(6B), rule 8(4A)). Where the system flags an application on risk parameters, the applicant must visit a GST Suvidha Kendra for biometric authentication, photograph and verification of original documents. This targets fake registrations used for bogus invoicing.
Stage | Time limit | Form |
|---|---|---|
Approval, Aadhaar authenticated | 7 working days | REG-06 |
Approval with physical verification | 30 days | REG-06 |
Query by officer / reply by applicant | Within the above period / 7 working days | REG-03 / REG-04 |
Order after reply | 7 working days | REG-06 or REG-05 |
Rule 14A and system-identified low-risk cases | 3 working days | REG-06 |
If the officer does not act within these periods, the registration is deemed approved (rule 9(5)). From 1 November 2025, applicants identified by the system as low risk are registered within 3 working days. On the same date rule 14A introduced an optional simplified registration for an applicant whose output tax on supplies to registered persons will not exceed Rs. 2.5 lakh a month. Aadhaar authentication is compulsory, only one rule 14A registration per PAN is allowed in a State, and registration is granted within 3 working days. A person who outgrows the limit withdraws through REG-32, after filing all returns due, covering at least three months (withdrawal before 1 April 2026) or at least one tax period (thereafter), and only if no amendment or cancellation is pending.
Practice note Most rejections come from mismatched address documents, unsigned rent agreements or photographs without the name board. Keep proofs ready and reply to REG-03 within 7 working days. |
20.6 Casual and non-resident taxable persons, and UIN
A casual taxable person occasionally supplies in a State without a fixed place of business there (a trade fair stall). A non-resident taxable person does so in India, applying in REG-09 through a resident signatory. Both must apply at least 5 days before starting, get registration for up to 90 days (extendable by up to 90 days in REG-11), and must deposit tax equal to the estimated liability in advance (section 27).
Illustration 121: Advance deposit by a casual taxable person Rao Handloom Weavers, Andhra Pradesh, takes a stall at a 20-day exhibition in Bengaluru. Expected sales: garments priced up to Rs. 2,500 a piece (5%) Rs. 12,00,000 and furnishings priced above Rs. 2,500 a piece (18%) Rs. 3,00,000. Step 1: Tax on garments = Rs. 60,000 (CGST Rs. 30,000 + SGST Rs. 30,000). Step 2: Tax on furnishings = Rs. 54,000 (CGST Rs. 27,000 + SGST Rs. 27,000). Result: Advance deposit = Rs. 1,14,000. It is used against actual liability, and any balance is refunded after the final return. |
UN agencies, embassies and notified bodies receive a Unique Identity Number (section 25(9), REG-13) to claim refund of tax on their purchases under section 55. Suppliers show the UIN on invoices and in GSTR-1.
20.7 Amendment and suspension
Changes are filed in REG-14 within 15 days (rule 19). Core fields (legal name without change of PAN, principal or additional place of business, partners or directors) need approval within 15 working days; other fields are self-amended. A change of PAN, as when a proprietorship becomes a company, needs a fresh registration, with transfer of credit under section 18(3).
Suspension (rule 21A) is an interim stage while cancellation is considered, from the date of the application or of the officer's proceedings. During suspension the person makes no taxable supplies, need not file returns and gets no refund. The system may also suspend where GSTR-1 exceeds GSTR-3B liability or GSTR-3B credit exceeds GSTR-2B (rule 21A(2A)), with an intimation in REG-31 to be answered within 30 days. If the proceedings are dropped, the suspension is revoked from its start.
20.8 Cancellation (section 29)
A taxpayer may apply in REG-16 within 30 days where the business is discontinued, transferred, amalgamated or demerged, the constitution changes, or he is no longer liable. The officer may cancel under section 29(2) for contravention of the law, non-filing of returns for a continuous period (six months for a monthly filer and two consecutive tax periods for a quarterly filer under rule 21; for a composition taxpayer, the annual return not filed within three months of its due date), failure of a voluntary registrant to start business within six months, or registration obtained by fraud. The procedure is a notice in REG-17, reply in REG-18 within 7 working days, and an order in REG-19 within 30 days (or REG-20 dropping proceedings). A final return in GSTR-10 is due within three months of the cancellation date or order date, whichever is later.
On cancellation, section 29(5) requires payment of the higher of the ITC on inputs in stock (as such or in semi-finished or finished goods) and the output tax on them. For capital goods, rule 44 takes ITC for the remaining life on a five-year basis, or tax on transaction value, if higher. Details are filed in ITC-03.
Illustration 122: Payment under section 29(5) Joshi Plastics, Rajkot, has its registration cancelled from 1 October 2026. It holds raw material with ITC of Rs. 45,000 (tax at market value Rs. 40,000) and a machine bought on 1 October 2024 with GST of Rs. 1,80,000, now worth Rs. 5,50,000. Step 1 (inputs): Higher of Rs. 45,000 and Rs. 40,000 = Rs. 45,000. Step 2 (machine): Used 24 months; remaining life 60 minus 24 = 36 months. ITC = Rs. 1,80,000 x 36 / 60 = Rs. 1,08,000. Tax on transaction value = 18% of Rs. 5,50,000 = Rs. 99,000. Higher = Rs. 1,08,000. Result: Total payable = Rs. 45,000 + Rs. 1,08,000 = Rs. 1,53,000. |
20.9 Retrospective cancellation and the buyer
Section 29(2) allows cancellation "from such date, including any retrospective date". Back-dating exposes the taxpayer and his customers' credit.
Judicial view: Retrospective cancellation needs reasons Riddhi Siddhi Enterprises v. Commissioner of Goods and Services Tax (Delhi High Court, 2024): Registration was cancelled from 2017 without any reason for back-dating. The Court held that the power cannot be used mechanically; the order must record the reasons and objective material that justify the earlier date, since customers lose credit. The order was quashed with liberty to proceed afresh. |
Judicial view: Buyer's credit when the supplier defaults Suncraft Energy (P) Ltd. v. Assistant Commissioner, State Tax (Calcutta High Court, 2023; SLP dismissed 2023): The department should first proceed against the defaulting supplier before denying credit to a buyer with valid invoices and proof of payment. Bhandari Scrap Traders v. Union of India (Supreme Court, 2026): The Supreme Court affirmed the Gujarat High Court and upheld section 16(2)(c): there is no ground to strike it down or read it down. Credit can be denied where the supplier has not paid, and is restored when he pays. Earlier rulings such as Suncraft Energy must be read subject to this. Practical relevance: Check supplier registration and return filing before onboarding, monitor GSTR-2B and supplier GSTR-3B, and keep payment terms that allow holding back the tax portion where a supplier stops filing. |
20.10 Revocation (section 30)
Where the officer cancels on his own motion, the person may apply in REG-21 within 90 days of service of the order, extendable on sufficient cause by the Commissioner or an authorised Additional or Joint Commissioner for a further period of up to 180 days (rule 23, as amended in 2023; the earlier limit was 30 days). Pending returns must be filed and dues paid first. The officer revokes in REG-22, or issues a notice in REG-23 and decides after the reply in REG-24. Rejection is appealable under section 107.
Illustration 123: Last date for revocation Nair Stores, Kochi, was served a cancellation order on 10 March 2026 for non-filing of returns. Step 1: 90 days end on 8 June 2026. Step 2: With extension, a further 180 days end on 5 December 2026. Result: An application on 28 September 2026 is in time only if the extension is granted on documented cause. |
Chapter summary • Registration is PAN-based and State-wise; each GSTIN is a distinct person, and supplies between them are taxable. • Threshold is on aggregate turnover including exempt supplies: Rs. 40 lakh for exclusive goods suppliers in most States, Rs. 20 lakh for services, Rs. 10 lakh in Manipur, Mizoram, Nagaland and Tripura. • Section 24 persons must register regardless of turnover, subject to specific notifications for services and e-commerce goods sellers. • Approval within 7 working days, or 30 days with physical verification, else deemed; 3 working days under rule 14A and for low-risk applicants from 1 November 2025. • Casual and non-resident persons deposit estimated tax in advance for registration of up to 90 days. • Cancellation requires payment on stock and capital goods and a GSTR-10; revocation within 90 days, extendable by up to 180 days. • Retrospective cancellation needs recorded reasons; buyers bear supplier default after Bhandari Scrap Traders. |
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