Registration required in case of liability under RCM, even if no taxable supplies effected
In case of Joint Plant Committee  the Authority of Advance Ruling held that if Assessee is engaged in providing exempt goods or services only then they not liable to apply for registration under the rules of section 23(1) of the CGST Act, 2017.
Condition is that the applicant is not liable to pay under the reverse charge in accordance with the GST Law.
In the above case, applicant is involved fully in making supply of the goods and services which are wholly exempted from payment of tax, and therefore not liable to get registered in accordance with the provisions GST Act.
As per section 24 of the GST Act, 2017, even aggregate turnover is not exceeds the threshold limit which is provided under section 22(1) of the Act i.e. INR Twenty Lakhs, every person is required to get registration in a specific circumstances.
It is worth to note that the rules and provisions of section 23 shall not prevail over Section 24.
It means that if a person is dealing in exclusively exempt supplies of goods and services, but at the same time is liable to pay tax under Reverse Charges mechanism as specified under Section 9(3) of the GST Act or 5(3) of the IGST Act, then in such a case he/she shall be required to get themselves registered under the GST Act.
A brief analysis of Section 23 section 24 of Central Goods and Service Tax (CGST), 2017
According Section 23, the following persons shall not be liable to register, namely:–
(a) Person fully engaged in business of supplying goods or services or both that are exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
(b) Agriculturalist (who cultivates land personally for the purpose of agriculture) to the extent of supply of produce out of cultivation of land.
(2) The Government may from time to time, on the suggestions of the Council, specify the category of persons who may be exempted from registration.
As Section 24 of the Central Goods and Services Tax (CGST) Act, 2017 specifying the categories required to “Compulsory Registration in Certain Cases”, as below:-
- Making inter-state supply
- Required to pay under Reverse charge
- Taxable supply made by non-resident taxable person
- ISD whether or not registered under this Act separately
- Electronic Commerce operator
- Government of India may notified on the recommendations of the council
- Supplying online information and database access or retrieval services from outside India to a place in India
- Who required to deduct tax under section 51, whether registered under this Act or not
- Who supply goods other than those specified under section 9(5) through electronic commerce operator required to collect tax under section 52.