Taxable Persons under GST (India) : Complete Guide

By | October 11, 2016
(Last Updated On: October 11, 2016)

Taxable Person under GST (India)

Taxable person

Meaning of Taxable Persons under GST (India)

“Taxable person’’ shall have the meaning as assigned to it in section 9 of this Act; [ section 2(96) of Model GST Law)

Section 9 of Model GST Law :-

(1) Taxable Person means a person who carries on any business at any place in India /State of ____ and who is registered or required to be registered under Schedule III of this Act:
Provided that an agriculturist shall not be considered as a taxable person.
Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs ten lakh]

Provided further that a person who is required to be registered under paragraph 1 of
Schedule III of this Act shall not be considered as a taxable person until his aggregate
turnover in a financial year exceeds [Rs five lakh]

[This threshold of 5 lacs will apply only if a taxable person conducts his business in any
of the NE States including Sikkim.]

(2) The Central Government, a State Government or any local authority shall be regarded as a taxable person in respect of activities or transactions in which they are engaged as public authorities other than the activities or transactions as specified in Schedule IV to this Act.

(3) The following persons shall not be considered as taxable persons for the purposes
of this Act –
(a) any person who provides services as an employee to his employer in the course of, or in relation to his employment, or by any other legal ties creating the relationship of employer and employee as regards working conditions, remunerations and employer’s liability;
(b) any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under this Act;
(c) any person, liable to pay tax under sub-section (3) of section 7, receiving services of value not exceeding ______ rupees in a year for personal use, other than for use in the course or furtherance of his business.

Key Points about Taxable Persons under GST (India) 

  • A taxable person is defined as any person who carries on any business in India and who is
    registered or who is required to be registered.
  • It is also important to understand that the threshold for GST registration and threshold for GST payment of tax are different. While the threshold for payment of tax is Rs. 10 lacs and Rs. 5 lacs as
    indicated above, the threshold for registration is Rs. 9 lacs and Rs. 4 lacs respectively.
  • Threshold based Taxable persons
    • A person who is required to be registered will be considered as a taxable person only if his aggregate turnover in a financial year exceeds Rs. 10 lacs (Rs. 5 lacs in case of North Eastern States i.e in  Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and
      Tripura and Sikkim.) .Schedule III of the Act (Model GST Law) , lists out persons who are liable to get registered.[While the threshold for payment of tax is Rs. 10 lacs and Rs. 5 lacs  the threshold for registration is Rs. 9 lacs and Rs. 4 lacs respectively.]
    • The Central Government, a State Government or any local authority shall be regarded as a taxable person in respect of activities or transactions in which they are engaged as public authorities other than the activities or transactions as specified in Schedule IV to this Act.
  • Taxable persons irrespective of the threshold 

    The following persons shall be taxable persons irrespective of the threshold /
    value of aggregate turnover: (Refer Para 5 of Schedule III)

    1. Persons making any inter-State taxable supply.
    2. Casual taxable persons. (Section 2(21) – a casual taxable person means a
    person who occasionally undertakes transactions involving supply of goods and/or
    services in the course or furtherance of business whether as principal, agent or in any
    other capacity, in a taxable territory where he has no fixed place of business.)
    3. Persons who are required to pay tax under reverse charge.
    4. Non-resident taxable persons.(Section 2(69) – a non-resident taxable person
    means a taxable person who occasionally undertakes transactions involving supply of
    goods and/or services whether as principal or agent or in any other capacity but who
    has no fixed place of business in India.)
    5. Persons who are required to deduct tax under section 37.

     Department or establishment of a Central or State Government; or
     Local authority; or
     Governmental agency; or
     Such other person or category of persons, as may be notified by the Central or
    State Government on recommendation of the Council

    6. Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise.
    7. Input service distributor (Section 2(56)- An Input service distributor means an
    office of the supplier of goods and / or services receiving or issuing tax invoices including debit / credit notes for the purposes of distributing SGST / CGST / IGST to the supplier of goods and / or services having the same PAN.)
    8. Persons who supply goods and/or services, other than branded services, through electronic commerce operator.
    9. Every electronic commerce operator.(In terms of Section 43B(e) of the Act, an electronic
    commerce operator means any person who directly or indirectly owns or operates or
    manages an e-platform that is engaged in enabling the supply of goods and / or
    services or information. It would however, not include person supplying goods and / or
    services on their own behalf.)

    10. An aggregator who supplies services under his brand name or his trade name.(In terms of
    Section 43B(a) of the Act, an aggregator is defined to mean a person, who owns and
    manages an electronic platform, and by means of the application and a communication
    device, enables a potential customer to connect with the persons providing service of a
    particular kind under the brand name or trade name of the said aggregator.)

    11.Job worker, in respect of goods supplied by the job worker after completion of job work
    (refer Section 43A)

    12. Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council. [UN bodies for allotment of Unique Identification Number]

  • Persons excluded from the meaning of ‘taxable person’:
    • Agriculturist as per Section 2(8) read with Section 2(103).
    • Person whose the aggregate turnover is less than the thresholds
      indicated above [Rs. 10 Lakhs/ Rs. 5 Lakhs]
    • Any person who provides services as an employee to his employer in the course of, or in relation to his employment, or by any other legal ties creating the relationship of employer and employee as regards working conditions, remunerations and employer’s liability;
    • Persons engaged wholly in supply of goods and / or services which are not liable to tax
      under this Act. This exclusion will not apply to a person supplying exempt goods and /
      or services.
    •  Any person, liable to pay tax under sub-section (3) of section 7( Reverse Charge), receiving services of value not exceeding ______ rupees in a year for personal use, other than for use in the course or furtherance of his business.

Read GST Registration (India): Examples and Analysis

Free Education Guide on Goods & Service Tax (GST)


SR No

Topic -GST

Resources

1

Model GST Law

Model GST Law

2

GST Overview

Goods and Services Tax (GST): An Overview

Integrated Goods & Service Tax (IGST) Act Overview

Meaning and Scope of Supply

Time of Supply

Place of Supply of Goods and Service under GST

Valuation in GST

Levy of GST & Exemption from Tax

Job Work under Goods & Service Tax (GST)

Electronic Commerce under Goods & Service Tax (GST)

3

Transition to GST

Transitional Provisions in Goods & Service Tax (GST)

4

Registration

GST Registration FAQ’s

GST Registration Process -Video

GST -Draft Registration Rules

GST -Draft Registration Formats

5

Invoice

GST Draft Invoice Rules released by CBEC

GST Draft Invoice formats Released by CBEC

6

Input Tax Credit

Input Tax Credit under Goods & Service Tax (GST)

Concept of Input Service Distributor in Goods & Service Tax (GST)

7

Payment

GST Payment of Tax

GST Draft Payment Rules Released by CBEC

GST Draft Payment formats Released by CBEC

8

Refunds

Refund under GST

Draft GST Refund Forms released by CBEC

Draft GST Refund Rules released by Govt

9

Returns

Returns Process and matching of Input Tax Credit under GST

Draft GST Return Rules Released by Govt

Draft GST Return Formats released by Govt

10

Assessment and Audit

Assessment and Audit under GST

11

Inspection, Search, Seizure and Arrest

Inspection, Search, Seizure and Arrest under GST

12

Offences, Penalty, Prosecution & Compounding

Offences, Penalty, Prosecution & Compounding in GST

13

Demands and Recovery

Demands and Recovery under GST

14

Appeals and Review

Appeals, Review and Revision in GST

15

Advance Ruling

Advance Ruling in Goods and Service Tax (GST)

16

Settlement Commission

Settlement Commission in Goods and Service Tax (GST)

17

GST Portal

Frontend Business Process on GST Portal

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