Section 22 of CGST Act 2017: Persons Liable for Registration

Provisions under Section 22 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Persons Liable for Registration”, are as under:

Section 22 of CGST Act 2017: Persons Liable for Registration (CHAPTER VI – REGISTRATION)

(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:

Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified. [second proviso inserted from 01/02/2019: refer Note 2(a)]

Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified. [third proviso inserted from 01/01/2020: refer Note 3]

Explanation.– For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount. [explanation inserted from 01/01/2020: refer Note 3]

(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.

(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

Explanation: For the purposes of this section,

(i) the expression “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;

(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;

(iii) the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution except the State of Jammu and Kashmir [text inserted from 08/07/2017: refer Note 1] and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand [text inserted from 01/02/2019: refer Note 2(b)].

Amendments History:

1. In Clause (ii) of Explanation to the Section, the text “except the State of Jammu and Kashmir” inserted vide section 2(b) of the CGST (Extension to J&K) Act 2017, w.e.f. 08/07/2017.

2. Amendments vide Section 11 of the CGST (Amendment) Act, 2018, followed with Notification 2/2019 on commencement date of 01/02/2019:

a) In sub-section (1), Second Proviso inserted; and

b) in the Explanation, in clause (iii), the text “and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand” inserted.

3. Third proviso and Explanation to sub-section (1) inserted, vide Section 94 of the Finance Act, 2019, followed with Notification 1/2020 on commencement date of 01/01/2020.

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