Registration requirement in case of interstate supply of handicraft goods

[Satyam Agarwal]

If a person is engaged in inter state supply of goods , he is required to obtain a compulsory registration under section 24 of CGST Act However, the relief has been provided if he makes inter state supply of handicraft goods having an aggregate turnover of upto 20L/10L.

Also as per Section 23, if a person is engaged in making exclusive supply of goods the threshold limit is extended to 40L for registration.

Let's say a person makes an intrastate supply of goods of 25L and inter state supply of handicraft goods of 10L. Will he be liable for registration?

[Sadanand Bulbule]

As far as your query is concerned, total turnover has to be reckoned for the purpose of registration in the light of thresh hold limit indicated under Section 24.

[KASTURI SETHI]

   Yes, Sir.

The aggregate turnover for the purpose of threshold exemption limit includes exempt supplies also but excluding interest on deposits, loans and advances as per Explanation to Section 22 (1) of CGST Act.

[Shilpi Jain]

40L limit is not available in certain States. Pls chk that.

[Yash Shah]

According to N/No. 03/2018-IT, persons making inter-state taxable supplies of handicraft goods are exempted from obtaining registration if the aggregate value of such supplies does not exceed the amount of aggregate turnover above which a person becomes liable for registration u/s 22(1) read with clause (iii) of the Explanation to that section.

Further, according to Section 22(1) & N/No. 10/2019-CT, a person, who is engaged in exclusive supply of goods other than persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand is exempt from obtaining registration if aggregate turnover in the FY does not exceed Rs. 40 lakhs.

In the given scenario, since handicraft goods are supplying inter-state and supplier is engaged in exclusive supply of goods, therefore the threshold limit for registration u/s 22(1) shall be Rs. 40 lakhs (assuming he is not engaged in making intra-state supplies from above-mentioned states). Hence, the person with an aggregate turnover of 35L (25L intra-state & 10L inter-state handicraft goods) is not liable for registration.

Previously as per N/No. 08/2017-IT, the threshold limit in case of inter-state supply of handicraft goods was Rs. 20 lakhs (10 lakhs in case of special category states). However, this has been superseded by N/No. 03/2018-IT. Hence, the threshold limit of 20L/10L is not relevant as of now.

AI Summary

Registration threshold for inter state supply clarified: exclusive goods suppliers may rely on the higher aggregate turnover exemption. Registration for inter state suppliers of goods is determined by the aggregate turnover threshold; recent notifications superseded earlier lower handicraft specific thresholds. Aggregate turnover (including exempt supplies subject to statutory exclusions) governs liability. If a supplier makes exclusive supplies of goods and is not operating in specified special category regions, the higher threshold for exclusive goods suppliers applies and may exempt that person from registration despite some inter state handicraft supplies.