Why not to delay GST Registration ?
Timely GST Registration will give you ITC on Stock held preceding the date from which Taxable person becomes liable to pay tax
As per the following FAQs on GST (ITC) released by CBEC
Q 5. What is the ITC entitlement of a person who has applied for registration under the Act within thirty days from the date on which he becomes liable to registration and has been granted such registration? (Section 16(2))
Ans. He shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act. It may be noted that the credit on pre-registration stock would not be admissible if the registration has not been obtained within a period of 30 days from the date on which he becomes liable to registration.
Q 6. A person becomes liable to pay tax on 1st August, 2017 and has obtained registration on 15th August, 2017. Such person is eligible for input tax credit on inputs held in stock as on …….
Ans. 31st July, 2017.
Q 15. Mr. A applies for voluntary registration on 5th June, 2017 and obtained registration on 22nd June, 2017. Mr. A is eligible for input tax credit on inputs in stock as on …………..
Ans. Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 21st June, 2017.
Legal Action against the person who failed to obtain GST Registration
As per the following FAQs on GST (Assessment and Audit) released by CBEC
Q 12. What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?
Ans. Section 47 of MGL provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non-payment of tax relates.
Confiscation of Goods if GST Registraton not obtained by Taxable Person
As per the following FAQs on GST (Inspection, Search, Seizure and Arrest) released by CBEC
Q 9. When does goods become liable to confiscation under the provisions of MGL?
Ans. As per section 70 of Model GST Law, goods become liable to confiscation when any person does the following:
(i) supplies any goods in contravention of any of the provisions of this Act or rules made thereunder leading to evasion of tax;
(ii) does not account for any goods on which he is liable to pay tax under this Act; 190 191
(iii) supplies any goods liable to tax under this Act without having applied for the registration;
(iv) contravenes any of the provisions of the CGST/ SGST Act or rules made thereunder with intent to evade payment of tax.
If GST Registraton not obtained by Taxable Person it is treated as ‘ Offence ‘
As per the following FAQs on GST (Offences and Penalties, Prosecution and Compounding) released by CBEC
Q 1. What are the prescribed offences under MGL?
Ans. The Model GST Law codifies the offences and penalties in Chapter XVI. The Act lists 21 offences in section 66, apart from the penalty prescribed under section 8 for availing compounding by a taxable person who is not eligible for it. The said offences are as follows:-
11) Failure to register despite being liable to pay tax;
Education Guide on Goods & Service Tax (GST)