Fact: M/s J Abdul Rawoof Khan & Brothers, (“the applicant”), are engaged in manufacturing of Biris, for that the necessary raw material i.e. Biri leaves and Tobacco powder mostly purchases from both the registered and unregistered dealers within and outside the State of Andhra Pradesh and manufacturing the same into Biris. The resultant Biris are sold in within the State of Andhra Pradesh, at Kurnool district only and having an aggregate turnover of the applicant from the past (3) three years is less than Rs.20 lakhs.
Issue Involved: Whether the applicant is liable for registration under Sec.22 of CGST, SGST Acts 2017 as the annual business turnover is less than Rs. 20 Lakh and further he does not have any inter-state outward taxable supply?
Applicant Contention of Law: The applicant submitted that he is aware about the liabilities arising on Reverse Charge, if he purchases of Beedi leaves or Tobacco powder from un-registered dealers and he is also aware about compulsory registration if supplies made to outside the State of Andhra Pradesh.
Held: The Hon’ble AAR of Andhra Pradesh vide Advance Ruling No. AAR/AP/09(GST)/2018 dated August 20, 2018 stated that registration under Section 22 of APGST Act 2017/CGST Act 2017 is not mandatory for applicant with reference to the provisions of Sec. 22 of Registration under APGST Act, 2017 as follows:
(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.
(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.
Therefore, registration under Section 22 of APGST Act 2017/CGST Act 2017 is not mandatory for applicant, for the stated facts on even date as per the existing provisions of law as applicant aggregate turnover from the past 3 years is less that Rs. 20 lakhs.