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CS Executive · Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

Karan runs a proprietorship in Surat and wants to start trading in goods across states. Which statement about registrations is correct?

GST registration depends on turnover thresholds and the nature of supply, such as inter-state supply, and not on the entity form alone. A proprietor still needs a PAN, company registration is not compulsory for traders, and a local shops licence cannot substitute for GST registration.

  1. AA proprietorship needs no PAN since it is not a separate entity
  2. BGST registration depends on turnover and nature of supply, and is not decided by the entity form aloneCorrect
  3. CRegistration under the Companies Act is compulsory for every trader
  4. DA shops and establishments licence replaces GST registration

Explanation

GST registration is triggered by turnover thresholds and supply type, such as inter-state supply, regardless of entity type. A proprietor uses his own PAN, so the first option is wrong. Company registration is not mandatory for traders, and a shops licence is a separate local law requirement that does not replace GST.

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