The Goods and Services Tax (GST) regime in India, the term “taxable person” plays a fundamental role in determining tax liability and compliance obligations. A taxable person is any individual or entity engaged in the supply of taxable goods or services and is either registered or required to be registered under the GST law. This includes businesses exceeding the prescribed turnover threshold, as well as those falling under mandatory registration criteria. Identifying whether one qualifies as a taxable person is the first step in the GST journey, as it brings with it responsibilities like registration, invoicing, and regular return filing.

Definition of a Taxable Person under GST

A taxable person under GST is defined under Section 2(107) of the Central Goods and Services Tax (CGST) Act, 2017, as any person who is registered or liable to be registered under Sections 22 or 24 of the Act. This includes individuals, Hindu Undivided Families (HUFs), companies, firms, LLPs, trusts, and any other legal entities engaged in the supply of taxable goods or services. A taxable person is required to collect GST, file returns, and comply with all provisions of the GST law. Even non-residents and casual taxable persons fall under this category if they conduct taxable transactions in India.

Who is Liable to Get Registered Under GST?

Under the Goods and Services Tax (GST) law, registration is a fundamental requirement for businesses engaged in the supply of goods or services. Registration provides legal recognition, ensures tax compliance, and enables businesses to collect and remit GST. The following categories of persons and entities are mandatorily required to obtain GST registration:

Threshold-Based Liability for Registration 

• Suppliers of Goods: Any business involved in the supply of goods with an annual aggregate turnover exceeding:

• Rs.40 lakhs in Normal Category States

• Rs.20 lakhs in Special Category States (e.g., Manipur, Mizoram, Nagaland, Tripura)

• Suppliers of Services: Any business providing taxable services with annual aggregate turnover exceeding:

• Rs.20 lakhs in Normal Category States

• Rs.10 lakhs in Special Category States 

Persons Mandatorily Required to Register (Regardless of Turnover) 

• Persons already registered under previous laws like VAT, Service Tax, or Excise must migrate to GST.

• Persons making inter-state taxable supplies of goods or services.

• Casual Taxable Persons those who occasionally undertake taxable supply in a state where they have no fixed place of business.

• Non-Resident Taxable Persons those who supply goods or services occasionally from outside India.

• Agents of a supplier who act on behalf of a principal.

• Persons liable to pay tax under the reverse charge mechanism.

• Input Service Distributors (ISD) who distribute input tax credit to branches or units.

• E-commerce operators or aggregators managing platforms for supply.

• Persons supplying through e-commerce operators, such as sellers on online marketplaces.

• Suppliers of OIDAR (Online Information and Database Access or Retrieval) services from outside India to unregistered persons in India. 

Transfer or Demerger of Business

In cases where a registered business is transferred or demerged, the transferee or successor is required to obtain GST registration from the date of transfer to ensure legal continuity.

Exemption from Registration

A person engaged exclusively in the supply of exempted goods or services, or non-taxable supplies under GST, is not required to register, irrespective of their turnover.

Update from Budget 2023: Section 23 Amendment

The Union Budget 2023 introduced a retrospective amendment to Section 23 of the CGST Act, effective from 1st July 2017. This amendment overrides Sections 22(1) and 24, clarifying that persons mentioned in Section 23 such as agriculturists and those engaged solely in exempt supplies do not require GST registration, even if they fall under other registration conditions. This change ensures clarity and relief for exempted categories. However, the final implementation awaits notification from CBIC.

Latest Updates on GST Registration

Budget 2023 Update – 1st February 2023

The Union Budget 2023 introduced a significant retrospective amendment to Section 23 of the CGST Act, effective from 1st July 2017. This amendment clarifies that persons falling under Section 23 are not required to obtain GST registration, even if they fulfill the conditions specified under Sections 22(1) or 24 of the CGST Act. This update eliminates ambiguity and provides relief to exempted persons retrospectively.

Aadhaar Authentication Made Mandatory – 21st December 2021

Effective 1st January 2022, the Central Board of Indirect Taxes and Customs (CBIC) mandated Aadhaar authentication for filing an application for revocation of cancelled GST registration. This applies under Rule 23 of the CGST Rules, using Form REG-21. Applicants must complete Aadhaar verification to proceed with revocation requests.

Extension to Revoke Cancelled GST Registration – 29th August 2021

Through Notification No. 34/2021, the government allowed taxpayers additional time up to 30th September 2021 to apply for revocation of GST registration if the last date for such application fell between 1st March 2020 and 31st August 2021. This applies to cases where GST registration was cancelled under Section 29(2)(b) or 29(2)(c) of the CGST Act, offering a relief window during the COVID-19 pandemic.

Revocation Deadline Extension – 28th May 2021

The due date to apply for revocation of cancelled GST registration, where the deadline falls between 15th April 2021 and 29th June 2021, was extended to 30th June 2021. This extension provided relief to taxpayers unable to file applications due to lockdowns and operational challenges.

Extension of Timelines for Rule 9 Actions – 1st May 2021

The government extended the timeline for actions such as reply submission and order issuance under Rule 9 of the CGST Rules, 2017, where such actions were due between 1st May 2021 and 31st May 2021. The revised deadline for completing these tasks was extended up to 15th June 2021.

Enhancement of ARN Search Functionality – 5th March 2021

The GST portal introduced an enhanced "Search ARN" functionality for GST registration after TRN (Temporary Reference Number) login. This improvement aimed at providing better tracking and transparency for taxpayers applying for GST registration.

Who is a Casual Taxable Person under GST?

A Casual Taxable Person (CTP) under the Goods and Services Tax (GST) regime refers to an individual or entity that occasionally undertakes taxable supply of goods or services in a state or union territory where they do not have a fixed place of business. Such persons are required to obtain a temporary GST registration in the jurisdiction where they intend to make the supply.

Example: If a consultant based in Bangalore provides taxable services in Pune, and has no fixed place of business in Pune, they will be treated as a casual taxable person in Pune and must obtain registration accordingly before commencing business there.

Casual taxable persons must apply for registration at least 5 days prior to starting their business activities in the respective location and are also required to pay an advance tax based on the estimated turnover. 

Who is a Non-Resident Taxable Person under GST?

A Non-Resident Taxable Person (NRTP) under GST is an individual or business entity located outside India that occasionally supplies goods or services within India, but does not have a fixed place of business or residence in India.

While similar to a Casual Taxable Person, the key distinction is that an NRTP is not a resident of India and has no business establishment within the country. Such persons are required to obtain GST registration in advance and must deposit advance tax based on the estimated value of taxable supplies before initiating any business activities in India.

Who is an Input Service Distributor (ISD) under GST?

An Input Service Distributor (ISD) is a centralized office of a business that receives tax invoices for input services used by multiple branches or units under the same PAN, and distributes the eligible input tax credit (ITC) of CGST, SGST, or IGST to those respective branches.

The ISD mechanism is applicable only for input services—it does not cover input goods or capital goods. The ISD issues tax invoices while distributing credit, and such credit can be allocated only to units engaged in taxable outward supplies.

This system is particularly useful for businesses with centralized administrative functions (like HR or marketing) whose services are used across various state-registered locations. Although registering as an ISD is not mandatory, it is a voluntary and beneficial option for efficient credit management and compliance.

Who is a Composition Taxpayer under GST?

A composition taxpayer is a person registered under the Composition Scheme of GST, which offers a simplified compliance framework for small taxpayers. Instead of collecting GST at the standard rates from customers, a composition taxpayer pays tax at a fixed nominal rate on their turnover, and files quarterly returns through Form CMP-08.

Initially, the scheme was available only to suppliers of goods with an annual turnover of up to Rs.1.5 crore, as provided under Section 10 of the CGST Act. However, from 1st April 2019, service providers and mixed suppliers with annual turnover up to Rs.50 lakh are also allowed to opt into a similar scheme.

The Composition Scheme comes with certain conditions—composition taxpayers cannot claim input tax credit (ITC), must mention "composition taxable person" on invoices, and cannot engage in inter-state supplies or supply through e-commerce operators. The scheme is voluntary but ideal for small businesses seeking reduced compliance and lower tax rates.

Who is a QRMP Taxpayer under GST?

A QRMP taxpayer is a registered person eligible to opt for the Quarterly Return Filing and Monthly Payment (QRMP) Scheme under GST. This scheme is available to taxpayers who are required to file GSTR-3B and whose aggregate turnover in the preceding financial year does not exceed Rs.5 crore.

Under the QRMP Scheme, taxpayers are allowed to file GSTR-1 and GSTR-3B returns on a quarterly basis, thereby reducing the compliance burden. However, tax payments must be made every month using Form PMT-06, either on a fixed sum or self-assessment basis.

For those engaged in B2B transactions, the Invoice Furnishing Facility (IFF) allows them to upload invoices for the first two months of each quarter. This ensures that their buyers can claim timely input tax credit, even before the quarterly GSTR-1 is filed.

The QRMP Scheme offers flexibility and ease of compliance for small and medium-sized businesses, while maintaining the monthly tax flow to the government.

GST Registration by Type of Taxable Person 

• State-Wise Registration: Businesses must register under GST in every State or Union Territory where they supply goods or services, as GST is a destination-based, state-administered tax system.

• Timeline for Application: Once a person becomes liable for GST registration based on turnover or other criteria, they must apply within 30 days to avoid penalties and ensure legal compliance.

• Casual/Non-Resident Taxable Persons: Individuals or entities making occasional taxable supplies in a State must register at least five days before starting business, as they lack a fixed place of business there.

• PAN-Based Registration: GST registration is linked to the applicant’s PAN, which serves as a unique identity across the country, making it a mandatory requirement for obtaining a GSTIN.

• Separate Registration for Each State: A business operating in more than one State must obtain a distinct GST registration for each State, as GST laws and administration are enforced State-wise.

• Optional Registration for Business Verticals: A taxpayer may opt for separate GST registrations for independent business segments or verticals within the same State, provided these verticals are clearly distinguishable in operations and accounting. 

Special Provisions of GST Registration for Casual and Non-Resident Taxable Persons

Under GST, Casual Taxable Persons (CTPs) and Non-Resident Taxable Persons (NRTPs) must apply for registration at least five days before commencing business. As per Section 24 of the CGST Act, registration is mandatory regardless of turnover. They are granted a temporary GST registration valid for 90 days, extendable by another 90 days. At the time of registration, they must make an advance tax deposit based on their estimated liability. This provision ensures tax compliance for persons conducting occasional or temporary business in a State where they have no fixed place of business in India.

Conclusion

The classification of a taxable person under GST forms the foundation of the GST framework. It determines who must register, collect, and remit tax, and comply with return filing and record-keeping obligations. From individuals and companies to casual and non-resident suppliers, the law ensures that every eligible entity contributing to the supply chain is brought under the tax net. Recognizing your status as a taxable person not only ensures legal compliance but also enables smooth business operations, access to input tax credit, and credibility in the marketplace. With evolving rules and digital compliance systems, timely registration and adherence to obligations are important for avoiding penalties and fostering responsible business growth under GST.

If you have any queries regarding GST Registration and Taxable Person Under GST, then you can connect with Compliance Calendar LLP experts through email info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What is a taxable person under GST?

Ans. A taxable person under GST is any individual or entity who is registered or required to be registered under the GST law and is engaged in the supply of taxable goods or services.

Q2. Who is required to register as a taxable person under GST?

Ans. Persons crossing the prescribed turnover threshold (Rs.40 lakh for goods, Rs.20 lakh for services) or involved in activities like inter-state supply, e-commerce, or reverse charge are mandatorily required to register.

Q3. Are casual and non-resident suppliers considered taxable persons?

Ans. Yes, casual taxable persons and non-resident taxable persons are considered taxable persons and must register before commencing any business in India, even if temporarily.

Q4. Is GST registration state-specific for a taxable person?

Ans. Yes, GST registration is state-specific. A taxable person must obtain separate registration in each State or Union Territory where they conduct taxable supplies.

Q5. Can a person opt for voluntary registration under GST?

Ans. Yes, even if a person is not liable to register (e.g., turnover below threshold), they may opt for voluntary registration and become a taxable person under GST.

Q6. What happens if a taxable person fails to register under GST?

Ans. Failure to register when required attracts penalties, denial of input tax credit, and potential legal action. Registration is important for lawful operation and claiming tax benefits.