Detailed Analysis of Section 25 of the GST Act: Registration and Associated Provisions

The Goods and Services Tax (GST) Act is a comprehensive legislation that governs the taxation of goods and services in India. Among its various sections, Section 25 is particularly crucial as it details the process for registration under GST. This article delves into the intricacies of Section 25, highlighting the relevant rules, time limits, documentation requirements, and provisions for deemed registration.

Section 25: Provisions on Registration

Section 25 of the GST Act outlines the procedure for the registration of businesses under GST. It is essential for professionals to understand these provisions to ensure compliance and to assist clients effectively.

Subsection (1): Application for Registration

Every person liable to be registered under GST shall apply for registration in every State or Union territory from where he makes a taxable supply of goods or services or both. Application is to be submitted within 30 days from the date on which he becomes liable for registration.

Provided that a casual Taxable person or a non-resident Taxable person shall apply for registration at least five days prior to the commencement of business.

Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his Place of business located outside the Special Economic Zone in the same State or Union territory.

Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

Subsection (2): Registration for Multiple Business Verticals

A person having multiple places of business in a State or Union territory may obtain a separate registration for each places of business, subject to conditions prescribed in Rule 11 which is reproduced as under-

Rule 11. Separate registration for multiple places of business within a State or a Union territory.-

(1) Any person having multiple places of business within a State or a Union territory, requiring a separate registration for any such Place of business under sub-section (2) of Section 25 shall be granted separate registration in respect of each such Place of business subject to the following conditions, namely:-

(a) such person has more than one Place of business as defined in clause (85) of section 2;

(b) such person shall not pay tax under section 10 (Composition Dealer) for any of his places of business if he is paying tax under section 9 (Regular Dealer) for any other Place of business;

(c) all separately registered places of business of such person shall pay tax under the Act on supply of goods or services or both made to another registered Place of business of such person and issue a tax invoice or a bill of supply, as the case may be, for such supply.

Explanation.-For the purposes of clause (b), it is hereby clarified that where any Place of business of a Registered person that has been granted a separate registration becomes ineligible to pay tax under section 10 , all other registered places of business of the said person shall become ineligible to pay tax under the said section.

(2) A Registered person opting to obtain separate registration for a Place of business shall submit a separate application in FORM GST REG-01 in respect of such Place of business.

(3) The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.

Place of Business u/s 2(85) is defined as under-

“"place of business" includes—

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a Taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a Taxable person maintains his books of account; or

(c) a place where a Taxable person is engaged in business through an agent, by whatever name called;”

Further summary of Rule 8, Rule 9 and Rule 10 are reproduced in later part of the article.

Subsection (3): Voluntary Registration

A person, though not liable to be registered under Section 22/24, may get himself registered voluntarily, and all provisions of this Act, as applicable to a registered person, shall apply to such person.

Subsection (4): Distinct Person

A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.

Subsection (5): Distinct Persons

Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

Subsection (6): PAN Compulsory for obtaining registration-

Every person shall have a Permanent Account Number issued under the Incometax Act, 1961 in order to be eligible for grant of registration:

Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.

Subsection (6A): AADHAAR AUTHENTICATION-

Every Registered person shall undergo authentication, or furnish proof of possession of Aadhaar number.

Subsection (7): Grant of registration to NRTP

Notwithstanding anything contained in sub-section (6), a non-resident Taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed in Rule 13 which is reproduced as under-

Rule 13. Grant of registration to Non-resident taxable person.-

(1) A non-resident Taxable person shall electronically submit an application, along with a self-attested copy of his valid passport, for registration, duly signed or verified through electronic verification code, in FORM GST REG-09, at least five days prior to the commencement of business at the Common portal either directly or through a Facilitation Centre notified by the Commissioner:

Provided that in the case of a Business entity incorporated or established outside India, the application for registration shall be submitted along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its Permanent Account Number, if available.

(2) A person applying for registration as a non-resident Taxable person shall be given a temporary reference number by the Common portal for making an advance deposit of tax in accordance with the provisions of section 27 and the acknowledgement under sub-rule (5) of rule 8 shall be issued electronically only after the said deposit in his Electronic cash ledger.

(3) The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.

(4) The application for registration made by a non-resident Taxable person shall be duly signed or verified through electronic verification code by his authorised signatory who shall be a person resident in India having a valid Permanent Account Number.

Subsection (8): Grant of registration by Proper Officer in case of failure of Taxpayer to obtain registration

Where a person who is liable to be registered under this Act fails to obtain registration, the Proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed in Rule 16 which is reproduced as under-

Rule 16. Suo moto registration.-

(1) Where, pursuant to any survey, enquiry, inspection, search or any other proceedings under the Act, the Proper officer finds that a person liable to registration under the Act has failed to apply for such registration, such officer may register the said person on a temporary basis and issue an order in FORM GST REG-12.

(2) The registration granted under sub-rule (1) shall be effective from the date of such order granting registration.

(3) Every person to whom a temporary registration has been granted under sub-rule (1) shall, within a period of ninety days from the date of the grant of such registration, submit an application for registration in the form and manner provided in rule 8 or rule 12:

Provided that where the said person has filed an appeal against the grant of temporary registration, in such case, the application for registration shall be submitted within a period of thirty days from the date of the issuance of the order upholding the liability to registration by the Appellate Authority.

(4) The provisions of rule 9 and rule 10 relating to verification and the issue of the certificate of registration shall, mutatis mutandis, apply to an application submitted under sub-rule (3).

(5) The Goods and Services Tax Identification Number assigned, pursuant to the verification under sub-rule (4), shall be effective from the date of the order granting registration under sub-rule (1).

Subsection (9/10/11/12): Unique Identification Number

(9) Notwithstanding anything contained in sub-section (1),—

(a) any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and

(b) any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed. [See Rule 17]

(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed. [See Rule 9 & Rule 25]

(11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed. [See Rule 10]

(12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period.

Summary of Rule 8: Application for Registration

Rule 8 of the Central Goods and Services Tax (CGST) Rules, 2017, outlines the procedure for applying for GST registration. Here is a simplified summary in point form, incorporating the specific details as provided:

Summary of Rules 8, 9, and 10 for GST Registration: Chronological Series of Events

This comprehensive summary provides a step-by-step guide to the GST registration process, incorporating Rules 8, 9, and 10 of the Central Goods and Services Tax (CGST) Rules, 2017.

Rule 8: Application for Registration

1. Eligible Applicants:

• This rule shall apply to persons liable to be registered under Section 25(1) and those seeking voluntary registration under Section 25(3).

• Exceptions include:

  • Non-resident taxable persons.

  • Persons required to deduct tax at source under Section 51.

  • Persons required to collect tax at source under Section 52.

  • Persons supplying online information and database access or retrieval services from outside India to non-taxable online recipients or persons supplying Online Money Gaming from outside India to persons in India under Section 14 or Section 14A of the IGST Act, 2017.

2. Declaration and Validation of PAN:

• Applicants must declare their Permanent Account Number (PAN), State, or Union territory in Part A of FORM GST REG-01 on the Common Portal.

• The PAN is validated online by the common portal and verified through one-time passwords sent to the mobile number and email address linked to the PAN.

3. Verification of Mobile Number and Email Address:

• The declared mobile number is verified through a one-time password.

• The declared email address is verified through a separate one-time password.

4. Temporary Reference Number (TRN):

• Upon successful verification of PAN, mobile number, and email address, a temporary reference number is generated and communicated to the applicant.

5. Submission of Application:

• Using the TRN, the applicant must electronically submit Part B of FORM GST REG-01, duly signed or verified through an electronic verification code, along with the required documents on the Common Portal.

6. Aadhaar Authentication (if applicable):

• Applicants, except those notified under Section 25(6D), may opt for Aadhaar authentication.

• The date of submission of the application is either the date of Aadhaar authentication or fifteen days from the submission of Part B of FORM GST REG-01, whichever is earlier.

• Applications identified for biometric-based Aadhaar authentication and photo verification must complete this process at a notified Facilitation Centre for the application to be deemed complete.

7. Notification for Aadhaar Authentication Exceptions:

• The Central Government may specify States or Union territories where the Aadhaar authentication provision does not apply, based on the recommendations of the Council.

8. Acknowledgment of Application:

• Upon receipt of the application, an acknowledgment is issued electronically to the applicant in FORM GST REG-02.

9. Registration for Casual Taxable Persons:

• Casual taxable persons receive a temporary reference number for making an advance deposit of tax.

• The acknowledgment in FORM GST REG-02 is issued only after the advance tax deposit is made.

Rule 9: Verification of the Application and Approval

1. Forwarding and Examination of Application:

• The application is forwarded to the Proper Officer who examines the application and accompanying documents.

• If found in order, the registration is approved within seven working days from the date of submission of the application.

2. Conditions for Extended Verification:

• In certain cases, such as failure to undergo Aadhaar authentication, opting out of Aadhaar authentication, or identification for physical verification based on data analysis and risk parameters, physical verification of the place of business may be required.

• With approval from an officer not below the rank of Assistant Commissioner, physical verification is conducted, and registration is granted within thirty days of the application submission after physical verification and document verification.

3. Deficiency or Clarification Requirement:

• If the application is deficient or requires clarification, the Proper Officer issues a notice electronically in FORM GST REG-03 within seven working days from the application submission date.

• The applicant must furnish the required clarification, information, or documents electronically in FORM GST REG-04 within seven working days from the receipt of the notice.

4. Extended Notice Issuance Period:

• For cases requiring physical verification or where Aadhaar authentication was not opted for or failed, the notice in FORM GST REG-03 may be issued within thirty days from the date of application submission.

5. Satisfaction of Proper Officer:

• If the Proper Officer is satisfied with the provided clarification, information, or documents, registration is approved within seven working days from the receipt of such clarification or information.

6. Rejection of Application:

• If no reply is furnished or the Proper Officer is not satisfied with the provided information, the application may be rejected, and the applicant is informed electronically in FORM GST REG-05.

7. Deemed Approval:

• If the Proper Officer fails to take action within specified periods (seven days for straightforward cases, thirty days for cases requiring extended verification, or seven days from receipt of clarification), the registration application is deemed approved.

Rule 10: Issue of Registration Certificate

1. Issuance of Registration Certificate:

• Subject to Section 25(12), upon approval of the application under Rule 9, a registration certificate in FORM GST REG-06, showing the principal place of business and additional place(s) of business, is made available on the Common Portal.

• A Goods and Services Tax Identification Number (GSTIN) is assigned with the following structure:

  • Two characters for the State code.

  • Ten characters for the PAN or Tax Deduction and Collection Account Number.

  • Two characters for the entity code.

  • One checksum character.

2. Effective Date of Registration:

• If the application is submitted within thirty days from the date of becoming liable for registration, the registration is effective from the date of liability.

• If the application is submitted after thirty days, the effective date is the date of grant of registration under Rule 9(1), (3), or (5).

3. Signature or Verification:

• Every registration certificate is duly signed or verified through an electronic verification code by the Proper Officer.

4. Communication and Availability:

When registration is granted under Rule 9(5), the registration number is communicated to the applicant, and the certificate is made available on the Common Portal within three days after the specified period in Rule 9(5).

Conclusion

Section 25 of the GST Act, along with the associated rules, lays down a detailed framework for the registration process under GST. Understanding these provisions is crucial to navigate the complexities of GST registration effectively.