GST Registration

[Ethirajan Parthasarathy]

As per sec.24 of CGST Act, persons who are required to pay tax under reverse charge are liable for compulsory registration under GST. But Sec.23 provides that registration requirement is not applicable any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act.

In the light of the above, I request the Experts to clarify whether a NGO registered u/s 12AA of the income tax Act, which is engaged in recognized charitable organization is liable to take registration when it makes any payment to an advocate which attracts GST under RCM.

AI Summary

Reverse charge liability for legal services may compel NGO GST registration depending on exemption scope under the notification.
Whether an NGO must obtain GST registration when liable to pay tax under the reverse charge mechanism depends on whether it is a "business entity" and on interpretation of Notification No.12/2017 CT(R) serial 45(b)(iii). If the NGO's activities and turnover bring it within Section 22 thresholds or if the notification exemption does not extend to Section 23 situations, registration under Section 24 and RCM liability on legal services will apply; if the exemption covers the NGO, compulsory registration may not be triggered.