GST on voluntary - below threshold entities

[Jabira S]

Hi,

The threshold for GST for entities is 20L, and in case of entities below the threshold, though there is no need of registering with GST, dealing with other entities (with GST ) enforces them to register for GST. In these cases, which normally is voluntary registraton, it is not fair that these kind of entities are made to pay GST , irrespective of the threshold limit.

Please let me know if my understanding is wrong and if there is any clause which helps entities under threshold limit to get waiver on GST.

Regards

Nishi/Jabira

[KASTURI SETHI]

Dear Querist, You are absolutely right. Threshold exemption is conditional. First condition is that threshold exemption is not available to those who are engaged in inter- State sale or service. Casual taxable is not allowed. The persons who are engaged in composition scheme are not allowed to avail threshold exemption. There are many other conditions. The registered persons motivate others to get registration certificate because they want to avail ITC.

My article on this issue has been published in TMI on 7.7.17. Pl. Go through for more information.

[RAMESH PRAJAPATI]

If supplier is unregistered then GST registered recipient is required to generate tax invoice and pay tax under RCM. At present, any GST registered co is not willing to do that. Secondly, unregistered person is not allowed to do interstate business. For this reason registration is required.

[subramanian vijayakumar]

I endorse expert Sethy sir views rightly enlightened

[Himansu Sekhar]

A voluntary registered person even if below the limit will have to pay the gst as he is a registered person. Any supply from registered person attracts gst.

[Ganeshan Kalyani]

It is better to transact with a registered dealer.

AI Summary

GST threshold exemption limited; voluntary registration obliges tax payment and may trigger reverse charge obligations. Threshold exemption from GST is conditional; inter state suppliers, casual taxable persons, and composition taxpayers cannot claim the exemption and must register. Voluntary registration makes an entity a taxable person whose supplies attract GST, and registered recipients may need to account for tax under the reverse charge mechanism when dealing with unregistered suppliers, creating practical incentives to register.