Taxation - GST Ch 08: Registration - Test 1: answer key

Question 1 · 2 marks · Taxation - GST Ch 08: Registration · medium

Scenario. M/s Vikramaditya Tech Labs LLP is a limited liability partnership in Bengaluru, Karnataka. For FY 2026-27, it reports the following supplies, all amounts being exclusive of GST unless stated otherwise: (i) inter-State taxable supply of software services to a client in Maharashtra ₹12,00,000; (ii) intra-State taxable supply of electronic accessories in Karnataka ₹8,00,000; (iii) inter-State taxable supply of notified handicraft goods to Rajasthan ₹15,00,000, and the LLP holds a PAN and generates e-way bills for these consignments; (iv) legal consultancy received from an independent advocate in Delhi ₹2,00,000, on which GST is payable by the LLP under reverse charge; and (v) supply of taxable goods as a commission agent for a registered principal in Tamil Nadu ₹6,00,000, with invoices issued in the LLP’s own name. During October 2026, it signed the agency contract and received the advocate’s invoice. The LLP has no exempt supplies, exports or other inward reverse-charge supplies. It has not obtained voluntary registration. Its accountant is unsure whether the inter-State software services, handicraft goods, agency supplies or advocate fees create registration liability. The LLP also wants to know whether the advocate fees form part of aggregate turnover and whether the handicraft consignments are covered by any exemption from compulsory registration. All statutory conditions for any exemption being claimed are met.

What is the aggregate turnover of M/s Vikramaditya Tech Labs LLP for determining registration liability?

1. ₹35,00,000
2. ₹41,00,000 (correct answer)
3. ₹43,00,000
4. ₹39,00,000

Answer: B — ₹41,00,000

Explanation. Aggregate turnover = ₹12,00,000 + ₹8,00,000 + ₹15,00,000 + ₹6,00,000 = ₹41,00,000. The ₹2,00,000 advocate fees are an inward supply taxable under reverse charge and are excluded by section 2(6) read with Explanation 2 to section 22. Agency supplies made in own name on behalf of a principal are included in the agent’s aggregate turnover. CGST/SGST/IGST are not part of the value. Hence option b.

Where it goes wrong. Adding the advocate fees to turnover or omitting agency supplies made in the agent’s own name.

Authority. Section 2(6) of the CGST Act, 2017; Explanation 2 to section 22 of the CGST Act, 2017

Question 2 · 2 marks · Taxation - GST Ch 08: Registration · hard

Disregarding the agency supply, which item makes registration compulsory because the relevant exemption limit is crossed?

1. Intra-State electronic accessories of ₹8,00,000, since the goods threshold is ₹20,00,000.
2. Advocate fees of ₹2,00,000, since reverse-charge supplies always require registration.
3. Inter-State software services of ₹12,00,000, since aggregate turnover exceeds ₹20,00,000. (correct answer)
4. Handicraft goods of ₹15,00,000, since inter-State goods always require registration.

Answer: C — Inter-State software services of ₹12,00,000, since aggregate turnover exceeds ₹20,00,000.

Explanation. Section 24(i) makes inter-State taxable supply compulsory. Notification No. 10/2017 IT exempts inter-State taxable services only if aggregate turnover does not exceed ₹20,00,000. Aggregate turnover is ₹41,00,000, so the exemption is unavailable. Handicraft goods qualify under Notification No. 3/2018 IT because their value is ₹15,00,000, PAN is held and e-way bills are generated. Intra-State goods are below the threshold. Reverse-charge receipt requires registration, but not because of the stated reason.

Where it goes wrong. Using only the ₹12,00,000 service value instead of aggregate turnover for the inter-State service exemption.

Authority. Section 24(i) of the CGST Act, 2017; Notification No. 10/2017 IT dated 13.10.2017; Notification No. 3/2018 IT dated 22.10.2018

Question 3 · 2 marks · Taxation - GST Ch 08: Registration · medium

What conditions must be satisfied for the inter-State supply of notified handicraft goods of ₹15,00,000 to remain exempt from compulsory registration?

1. PAN, e-way bill and aggregate value of such supplies up to ₹20,00,000. (correct answer)
2. GSTIN, tax invoice and aggregate value of such supplies up to ₹40,00,000.
3. PAN, bond and aggregate value of such supplies up to ₹10,00,000.
4. Enrolment number, e-way bill and aggregate value of such supplies up to ₹20,00,000.

Answer: A — PAN, e-way bill and aggregate value of such supplies up to ₹20,00,000.

Explanation. Notification No. 3/2018 IT exempts inter-State taxable supplies of notified handicraft goods from compulsory registration if the aggregate value of such supplies does not exceed ₹20,00,000, and the person holds PAN and generates an e-way bill. In specified Special Category States, the limit is ₹10,00,000. Option b uses the ₹40,00,000 goods threshold, option c uses an incorrect lower limit, and option d substitutes enrolment number for PAN.

Where it goes wrong. Applying the ₹40,00,000 goods threshold or confusing the ECO enrolment number with PAN.

Authority. Notification No. 3/2018 IT dated 22.10.2018; Section 24(i) of the CGST Act, 2017

Question 4 · 2 marks · Taxation - GST Ch 08: Registration · medium

What is the registration position for the agency supply of taxable goods of ₹6,00,000 made for a registered principal, with invoices issued in the LLP’s own name?

1. No registration, because the principal is already registered.
2. No registration, because agency turnover is below ₹20,00,000.
3. Registration under section 24, irrespective of turnover. (correct answer)
4. Registration only after agency turnover exceeds ₹40,00,000.

Answer: C — Registration under section 24, irrespective of turnover.

Explanation. Section 24(vii) requires compulsory registration for a person making taxable supply of goods or services on behalf of another taxable person, whether as an agent or otherwise. The LLP issues invoices in its own name for a registered principal, so the agency supply is covered. The principal’s registration does not relieve the agent, and the ₹20,00,000 or ₹40,00,000 thresholds do not apply to this compulsory category.

Where it goes wrong. Assuming the principal’s registration covers the agent or applying the ordinary turnover threshold.

Authority. Section 24(vii) of the CGST Act, 2017

Question 5 · 2 marks · Taxation - GST Ch 08: Registration · medium

Scenario. M/s Nandini Events & Exhibitions Pvt Ltd, registered in Maharashtra, plans a trade exhibition in Goa from 5 to 12 December 2026. It has no fixed place of business in Goa. Expected taxable supplies at the Goa venue are ₹18,00,000. It files a casual taxable person application on 28 November 2026 and deposits tax equal to estimated liability ₹3,24,000. A UK company, Brightline Global Ltd, will provide taxable event management services at the same exhibition; it has no fixed place or residence in India and no PAN. It files a non-resident taxable person application on 1 December 2026 for supplies from 7 December 2026 and submits a self-attested passport with an Indian resident authorised signatory having PAN. Separately, Nandini supplies taxable goods through e-commerce operator ShopNest, which collects TCS. Its intra-State goods supplies through ShopNest in Maharashtra are ₹9,00,000 and inter-State goods supplies through ShopNest to Gujarat are ₹3,00,000. Nandini holds PAN and an enrolment number for intra-State goods through ECO in Maharashtra. It also receives common input services for Maharashtra and Goa and wants to distribute credit through an Input Service Distributor. All amounts are exclusive of GST. All conditions for exemptions, where relevant, are met.

For the Goa exhibition, what is the correct time limit and validity period for Nandini’s casual taxable person registration?

1. At least 5 days before commencement; valid for the period specified or 90 days, whichever is earlier. (correct answer)
2. At least 15 days before commencement; valid for 90 days from application.
3. At least 5 days before commencement; valid for 180 days from registration.
4. At least 30 days before commencement; valid for one year from registration.

Answer: A — At least 5 days before commencement; valid for the period specified or 90 days, whichever is earlier.

Explanation. A casual taxable person must apply at least 5 days before commencement of business. Under section 27(1), the certificate is valid for the period specified in the application or 90 days from the effective date of registration, whichever is earlier, and can be extended by up to 90 days. Options b, c and d use incorrect lead times or validity periods.

Where it goes wrong. Using a 15-day or 30-day lead time, or ignoring that the shorter of the specified period and 90 days applies.

Authority. Proviso to section 25(1) of the CGST Act, 2017; Section 27(1) of the CGST Act, 2017

Question 6 · 2 marks · Taxation - GST Ch 08: Registration · hard

What documents and timing apply for Brightline Global Ltd’s non-resident taxable person registration?

1. PAN is mandatory; the NRTP applies at least 5 days before commencement.
2. Self-attested passport and Indian resident authorised signatory with PAN; apply at least 5 days before. (correct answer)
3. PAN is not required; the NRTP applies at least 15 days before commencement.
4. Only UIN is required; the NRTP applies at least 5 days before commencement.

Answer: B — Self-attested passport and Indian resident authorised signatory with PAN; apply at least 5 days before.

Explanation. A non-resident taxable person may be granted registration without an Indian PAN on the basis of prescribed documents. The application must include a self-attested copy of a valid passport and be signed by an Indian resident authorised signatory holding PAN. An NRTP must apply at least 5 days before commencement of business. UIN is for UN bodies, embassies and similar notified persons, not for an NRTP making taxable supplies.

Where it goes wrong. Treating the passport alone as sufficient without the Indian resident authorised signatory, or using a 15-day lead time.

Authority. Section 25(6) and (7) of the CGST Act, 2017; Rule 13 of the CGST Rules, 2017

Question 7 · 2 marks · Taxation - GST Ch 08: Registration · hard

What is Nandini’s registration liability for goods supplied through e-commerce operator ShopNest?

1. No registration, because ECO supplies are below ₹20,00,000.
2. Registration only for intra-State goods, not inter-State goods.
3. Compulsory registration under section 24 due to inter-State goods through ECO. (correct answer)
4. Registration only if ShopNest collects TCS at 1%.

Answer: C — Compulsory registration under section 24 due to inter-State goods through ECO.

Explanation. Section 24(v) covers persons supplying goods or services through an ECO required to collect TCS. The exemption for intra-State goods through ECO below the threshold is subject to conditions and does not cover inter-State supply. Nandini makes inter-State goods supplies through ShopNest of ₹3,00,000, so compulsory registration arises regardless of the intra-State ₹9,00,000. The TCS rate is not the test for registration.

Where it goes wrong. Applying the ₹20,00,000 limit to inter-State goods through an ECO or making registration depend on TCS rate.

Authority. Section 24(v) of the CGST Act, 2017; Notification No. 34/2023 CT dated 31.07.2023

Question 8 · 2 marks · Taxation - GST Ch 08: Registration · medium

What is the registration requirement for Nandini’s proposed Input Service Distributor function?

1. ISD registration is optional when all recipients are in the same State.
2. ISD registration is required only if turnover exceeds ₹20,00,000.
3. No ISD registration is needed; the head office can distribute credit without registration.
4. ISD registration is compulsory whether or not separately registered under the Act. (correct answer)

Answer: D — ISD registration is compulsory whether or not separately registered under the Act.

Explanation. Section 24(viii) lists Input Service Distributor as a person required to obtain compulsory registration whether or not separately registered under the Act. The ordinary turnover threshold is irrelevant. A head office cannot distribute common input tax credit as an ISD without obtaining ISD registration. Options a, b and c treat ISD registration as optional or threshold-based.

Where it goes wrong. Assuming normal registration or a head-office role removes the need for separate ISD registration.

Authority. Section 24(viii) of the CGST Act, 2017

Question 9 · 2 marks · Taxation - GST Ch 08: Registration · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Smt. Anuradha Sen provides taxable architectural services inter-State from Manipur. Her aggregate turnover on all-India basis is ₹9,50,000. Is she required to obtain GST registration?

1. No, inter-State services up to ₹10,00,000 in specified Special Category States are exempt from compulsory registration. (correct answer)
2. Yes, inter-State services always require compulsory registration.
3. No, because the services threshold is ₹20,00,000 in every State.
4. Yes, because Manipur has a ₹40,00,000 threshold for services.

Answer: A — No, inter-State services up to ₹10,00,000 in specified Special Category States are exempt from compulsory registration.

Explanation. Notification No. 10/2017 IT exempts persons making inter-State taxable supplies of services from compulsory registration if aggregate turnover does not exceed ₹20,00,000, and ₹10,00,000 for Mizoram, Tripura, Manipur and Nagaland. Manipur is a specified Special Category State and turnover is ₹9,50,000, so the exemption applies. Inter-State services are not always compulsory, and the ₹40,00,000 goods threshold does not apply to services.

Where it goes wrong. Using the ₹20,00,000 limit for Manipur or assuming all inter-State services are compulsorily registrable.

Authority. Notification No. 10/2017 IT dated 13.10.2017; Section 24(i) of the CGST Act, 2017

Question 10 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Aryan Steels Ltd supplies only metal scrap falling under Chapter 72. Tax on the scrap is payable by the recipient under reverse charge. Aryan’s turnover is ₹8,00,000. What is its registration position?

1. Not required, because exclusive outward RCM suppliers are exempt.
2. Required only after turnover exceeds ₹20,00,000.
3. Not required, because the recipient pays tax under reverse charge.
4. Required, because metal scrap is excluded from the exemption for exclusive RCM outward suppliers. (correct answer)

Answer: D — Required, because metal scrap is excluded from the exemption for exclusive RCM outward suppliers.

Explanation. Notification No. 5/2017 CT exempts persons engaged exclusively in making outward supplies on which tax is payable by the recipient under reverse charge, but expressly excludes suppliers of metal scrap falling under Chapters 72 to 81. Aryan supplies only metal scrap, so the exemption is unavailable. Section 24(iii) makes registration compulsory for persons liable to pay tax under reverse charge. Turnover is irrelevant.

Where it goes wrong. Applying the general exclusive-RCM exemption to metal scrap, which is expressly carved out.

Authority. Notification No. 5/2017 CT dated 19.06.2017; Section 24(iii) of the CGST Act, 2017

Question 11 · 2 marks · Taxation - GST Ch 08: Registration · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Goa Craft Mela is registered as a casual taxable person in Goa. It expects taxable supplies of ₹12,00,000 and estimates tax liability at ₹2,16,000 for the exhibition period. What advance deposit must it make with the registration application?

1. Nil, since CTP registration itself is enough.
2. ₹10,000 only as nominal deposit.
3. Amount equivalent to estimated tax liability for the period. (correct answer)
4. Fifty per cent of estimated tax liability.

Answer: C — Amount equivalent to estimated tax liability for the period.

Explanation. Section 27(2) requires a casual taxable person or non-resident taxable person to make an advance deposit of tax equal to the estimated tax liability for the period for which registration is sought. The amount is credited to the electronic cash ledger. There is no nominal ₹10,000 deposit or fifty per cent option. An acknowledgement is issued only after the deposit.

Where it goes wrong. Treating the advance deposit as optional, nominal or half of the estimated liability.

Authority. Section 27(2) of the CGST Act, 2017

Question 12 · 2 marks · Taxation - GST Ch 08: Registration · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A UK company obtains non-resident taxable person registration effective 1 January 2027 for taxable supplies for 60 days. What is the validity of the certificate?

1. One year from effective date.
2. Till taxable supplies continue.
3. 180 days from application.
4. Period specified or 90 days from effective date, whichever is earlier. (correct answer)

Answer: D — Period specified or 90 days from effective date, whichever is earlier.

Explanation. Section 27(1) provides that the certificate issued to a casual taxable person or non-resident taxable person is valid for the period specified in the application or 90 days from the effective date of registration, whichever is earlier. The proper officer may extend it by up to 90 days on sufficient cause. It does not run for one year or until supplies end, and 180 days is not automatic.

Where it goes wrong. Assuming validity continues until supplies end or that 180 days is available without extension.

Authority. Section 27(1) of the CGST Act, 2017

Question 13 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Ms. Riya provides taxable online tutoring services through e-commerce operator ShopNest, which collects TCS. Her aggregate turnover on all-India basis is ₹19,50,000. What is her registration position?

1. Required, because all supplies through ECO are compulsory.
2. Not required, because services through ECO up to ₹20,00,000 are exempt from compulsory registration. (correct answer)
3. Required only after turnover exceeds ₹10,00,000.
4. Not required, because online tutoring is exempt.

Answer: B — Not required, because services through ECO up to ₹20,00,000 are exempt from compulsory registration.

Explanation. Notification No. 65/2017 CT exempts persons supplying services through an ECO, other than services covered by section 9(5), from compulsory registration if aggregate turnover does not exceed ₹20,00,000, or ₹10,00,000 in specified Special Category States. Riya’s turnover is ₹19,50,000, so the exemption applies. Not all ECO supplies are compulsory, and online tutoring is not exempt merely because it is education-related.

Where it goes wrong. Ignoring the service-specific ECO exemption or applying the ₹10,00,000 limit outside specified Special Category States.

Authority. Notification No. 65/2017 CT dated 15.11.2017; Section 24(v) of the CGST Act, 2017

Question 14 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Tej acts as a commission agent under the APMC Act for an agriculturist principal. The principal issues invoices directly to buyers, and the commission for sale of agricultural produce is exempt. Is Mr. Tej compulsorily registrable under section 24 as an agent?

1. Not compulsory under section 24 because the principal is not taxable and the commission service is exempt; section 23 also supports non-registration. (correct answer)
2. Compulsory under section 24 because every commission agent must register.
3. Compulsory because invoices are issued by the principal.
4. Voluntary registration only, with no option to remain unregistered.

Answer: A — Not compulsory under section 24 because the principal is not taxable and the commission service is exempt; section 23 also supports non-registration.

Explanation. Section 24(vii) applies when an agent makes taxable supply on behalf of another taxable person. An agriculturist supplying produce out of cultivation is not a taxable person, and commission for APMC sale or purchase of agricultural produce is exempt. Section 23(1)(a) also excludes a person engaged exclusively in exempt supplies. Therefore, compulsory registration does not arise merely because Mr. Tej is a commission agent.

Where it goes wrong. Treating every commission agent as compulsorily registrable without checking the principal’s status and exemption.

Authority. Section 24(vii) of the CGST Act, 2017; Section 23(1)(a) of the CGST Act, 2017

Question 15 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Laltha of Mizoram is a casual taxable person making inter-State taxable supplies of notified handicraft goods of ₹8,00,000. He holds PAN and generates e-way bills. Is he liable to register?

1. Compulsory, because CTP is always liable irrespective of goods.
2. Exempt from compulsory registration if value of handicraft goods is up to ₹10,00,000 in specified Special Category State and conditions are met. (correct answer)
3. Exempt up to ₹20,00,000 in every State for CTP.
4. Required, because inter-State goods always require registration.

Answer: B — Exempt from compulsory registration if value of handicraft goods is up to ₹10,00,000 in specified Special Category State and conditions are met.

Explanation. A CTP making inter-State taxable supplies of notified handicraft goods can be exempt from compulsory registration if the conditions of Notification No. 3/2018 IT are met, including PAN, e-way bill and value limit. The limit is ₹20,00,000 generally, but ₹10,00,000 for specified Special Category States, including Mizoram. The value is ₹8,00,000, so the exemption applies. CTP status alone does not override this specific exemption.

Where it goes wrong. Using the ₹20,00,000 limit for Mizoram or treating CTP registration as invariably compulsory.

Authority. Notification No. 56/2018 CT dated 23.10.2018; Notification No. 3/2018 IT dated 22.10.2018; Section 24(ii) of the CGST Act, 2017

Question 16 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Pinnacle Ltd has a normal GST registration and also wants to distribute common input tax credit to its units. What is the correct position regarding Input Service Distributor registration?

1. ISD registration is optional for companies with normal registration.
2. ISD registration is required only if turnover exceeds ₹20,00,000.
3. Every ISD must obtain registration whether or not separately registered under the Act. (correct answer)
4. ISD can distribute credit without registration if invoices are in its name.

Answer: C — Every ISD must obtain registration whether or not separately registered under the Act.

Explanation. Section 24(viii) requires every Input Service Distributor to obtain registration whether or not separately registered under the Act. A normal registration does not cover the ISD function, and the ordinary turnover threshold is not the test. Holding invoices in the head office’s name does not permit distribution of credit without ISD registration. Option c states the statutory requirement.

Where it goes wrong. Assuming normal registration or invoice naming removes the need for ISD registration.

Authority. Section 24(viii) of the CGST Act, 2017

Question 17 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Can a casual taxable person opt to pay tax under the composition levy if its aggregate turnover is below ₹1,50,00,000?

1. No, a CTP cannot opt for composition levy. (correct answer)
2. Yes, if aggregate turnover is below ₹1,50,00,000.
3. Yes, if it has no fixed place in the State.
4. Yes, but only for supply of goods.

Answer: A — No, a CTP cannot opt for composition levy.

Explanation. The composition levy under section 10 is not available to a casual taxable person. A CTP is defined in section 2(20) as a person occasionally undertaking supplies in a State where there is no fixed place of business, and section 24(ii) makes registration compulsory. Turnover below ₹1,50,00,000 or absence of a fixed place does not create composition eligibility for a CTP.

Where it goes wrong. Applying the ordinary composition turnover limit to a CTP despite the statutory bar.

Authority. Section 10 of the CGST Act, 2017; Section 2(20) of the CGST Act, 2017; Section 24(ii) of the CGST Act, 2017

Question 18 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s QuickServe App facilitates housekeeping services provided by unregistered persons and is liable to pay tax on such supplies under section 9(5). What is its registration position?

1. Not required, because the service providers are unregistered.
2. Required only if it collects TCS.
3. Registration after aggregate turnover exceeds ₹20,00,000.
4. Compulsory registration under section 24 as ECO liable to pay tax under section 9(5). (correct answer)

Answer: D — Compulsory registration under section 24 as ECO liable to pay tax under section 9(5).

Explanation. Section 24(v) covers an e-commerce operator required to pay tax under section 9(5) on specified services. QuickServe is liable for housekeeping services supplied through its app, so registration is compulsory. The unregistered status of the service providers, the TCS requirement and the ₹20,00,000 threshold do not displace this specific compulsory category. Option d correctly identifies the trigger.

Where it goes wrong. Confusing a section 9(5) ECO with a TCS-collecting ECO or applying the ordinary threshold.

Authority. Section 24(v) of the CGST Act, 2017; Section 9(5) of the CGST Act, 2017

Question 19 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Soft Wings of West Bengal exclusively trades in garments and supplies taxable goods inter-State from its West Bengal outlet. Its aggregate turnover is ₹25,00,000. Is it liable to register?

1. Not required, because turnover is below ₹40,00,000.
2. Required, because inter-State taxable supply of goods is compulsory under section 24 and the ₹40,00,000 exemption is unavailable. (correct answer)
3. Required only after turnover exceeds ₹40,00,000.
4. Not required if an e-way bill is generated.

Answer: B — Required, because inter-State taxable supply of goods is compulsory under section 24 and the ₹40,00,000 exemption is unavailable.

Explanation. Section 24(i) makes inter-State taxable supply of goods compulsory regardless of turnover. The ₹40,00,000 threshold for exclusive goods suppliers under Notification No. 10/2019 CT does not override section 24 and carries exceptions for compulsory registration. Soft Wings makes inter-State taxable supplies of goods, so registration is required even at ₹25,00,000. Generating an e-way bill does not replace GST registration.

Where it goes wrong. Applying the ₹40,00,000 goods threshold to an inter-State supplier of goods.

Authority. Section 24(i) of the CGST Act, 2017; Notification No. 10/2019 CT dated 07.03.2019

Question 20 · 2 marks · Taxation - GST Ch 08: Registration · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Earth Movers is a Goods Transport Agency exclusively supplying GTA services on which tax is payable by the recipient under reverse charge. It has not opted for forward charge and turnover is ₹18,00,000. What is its registration position?

1. Compulsory, because a GTA always requires registration.
2. Required after turnover exceeds ₹20,00,000.
3. Required because the recipients are unregistered.
4. Exempt from registration as exclusively outward supplies taxable under reverse charge, except metal scrap. (correct answer)

Answer: D — Exempt from registration as exclusively outward supplies taxable under reverse charge, except metal scrap.

Explanation. Notification No. 5/2017 CT exempts persons engaged exclusively in making outward supplies on which the recipient pays tax under reverse charge, except suppliers of metal scrap under Chapters 72 to 81. Earth Movers supplies only GTA services under reverse charge and has not opted for forward charge. Its turnover and the recipients’ registration status do not create liability under section 24(iii) in these facts.

Where it goes wrong. Assuming every GTA must register or applying the ordinary threshold to an exclusive outward-RCM supplier.

Authority. Notification No. 5/2017 CT dated 19.06.2017; Section 24(iii) of the CGST Act, 2017