Who shall be liable to pay GST ?

While the ultimate burden of an indirect tax is to be borne by the consumer, the responsibility to collect and deposit in such cases rests with the supplier.  Thus Supplier as provided in Schedule III of Model GST Acts shall be liable for collection and deposit of GST. 

Taxable Person means a person who carries on any business at any place in India in case of proposed Central Goods And Services Tax Act, 2016 or respective State in case of proposed State Goods And Services Tax Act, 2016  and who is registered or required to be registered under Schedule III of this Act. Thus, in case a person is not carrying any business, he shall not be called a taxable person and no liability as a supplier of output service can be fastened on such person.  The following category of persons have been specified in Schedule III who shall require to obtain registration and pay GST under the new regime:

  • Supplier making supplies above basic threshhold Limit: Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds Rs nine lakh.  This threshold of four lakh will apply only if the taxable person conducts his business in any of the NE States including Sikkim.
  • Persons already registered under an earlier law which are subsuming in GST
  • Transferee, or the successor of a business
  • Transferee in case of amalgamation or de-merger
  • Persons making any inter-State taxable supply
  • Casual taxable persons
  • Persons who are required to pay tax under reverse charge
  • non-resident taxable persons
  • persons who are required to deduct tax under section 37
  • persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold specified under paragraph 1
  • input service distributor
  • persons who supply goods and/or services, other than branded services, through electronic commerce operator
  • every electronic commerce operator
  • an aggregator who supplies services under his brand name or his trade name
  • 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.

All the above persons (except in the first case) are required to obtain registration irresptive of their turnover.  Such taxable persons shall be required to pay GST under the proposed law.  Further,

However, there are certain persons who are excluded from the definition of Taxable persons and thus, even when such persons are engaged in business and makes supply, they shall not be classified as taxable person for all GST Acts. Such persons as are excluded are:

  • Agriculturist:
  • Persons who are required to be registered under Schedfule III but have a turnover less than 10 Lakhs [5 Lakhs in North eastern states]
  • any person who provides services as an employee to his employer any person who provides services as an employee to his employer
  • any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under this Act

any person, liable to pay tax under sub-section (3) of section 7,  receiving services of value not exceeding a specified limit in a year for personal use, other than for use in the course or furtherance of his business

 

Specified persons shall be required to pay GST under reverse charge

As per Section of the proposed Acts, Central or State Governments have been empowered under the proposed Acts to specify categories of supply of goods and/or services the tax on which is payable on reverse charge basis and the tax thereon shall be paid by the person receiving such goods and/or services.  Thus, only in case of reverse charge, persons other than Taxable persons can be required to pay GST.

Payment of GST by Government

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 the two Acts.