Who are not Eligible for GST?

Goods and Services Tax (GST) is an indirect tax that was introduced in India on July 1, 2017, with the aim of unifying the country's indirect tax system. GST is applicable to all businesses and individuals involved in the supply of goods and services. However, certain entities are not eligible for GST registration. In this blog, we will discuss who is not eligible for GST registration.

Individuals earning less than the threshold limit of Rs. 20 lakhs per annum are not eligible for GST registration. This threshold limit is Rs. 10 lakhs per annum for businesses operating in certain states like Arunachal Pradesh, Manipur, Mizoram, Nagaland, Sikkim, and Tripura. It is important to note that the threshold limit is calculated on the basis of the aggregate turnover of the entity and not on the basis of the profit earned.

Entities that are involved in the supply of exempted goods and services are also not eligible for GST registration. Exempted goods and services are those that are not taxable under the GST regime. For instance, goods and services that are listed in the Schedule III of the CGST Act, 2017 are exempted from GST.

Entities that are involved in the supply of goods and services that are outside the purview of GST are also not eligible for GST registration. For instance, alcohol for human consumption and petroleum products are not covered under GST.

Entities that are engaged in the supply of goods and services that are exclusively for personal consumption are also not eligible for GST registration. For example, if an individual is engaged in the sale of goods that he or she uses for personal consumption, then such a person is not required to register under GST.

In conclusion, businesses and individuals who earn below the threshold limit, supply exempted goods and services, supply goods and services that are outside the purview of GST, and supply goods and services exclusively for personal consumption are not eligible for GST registration. It is important to understand these eligibility criteria to avoid any unnecessary compliance burden.