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CA Intermediate · Taxation · Registration

Meera Consultants, a firm based in Jaipur, supplies only taxable services from its Jaipur office. Its turnover in the current year is Rs 15 lakh. It also makes a supply of services to a customer in Mumbai, an inter-State supply, worth Rs 2 lakh. Under the CGST and IGST Acts, what is the registration position of Meera Consultants?

Registration is compulsory. Meera Consultants makes an inter-State taxable supply of services to Mumbai, and the exemption from registration for small service providers applies only to intra-State supplies. Therefore low turnover does not protect it, and it must register under the CGST and IGST Acts.

  1. ARegistration is compulsory because it makes an inter-State taxable supply of servicesCorrect
  2. BRegistration is not required because turnover is below Rs 20 lakh
  3. CRegistration is required only after turnover crosses Rs 40 lakh
  4. DRegistration is required only if the Mumbai customer is a registered person

Explanation

Persons making inter-State taxable supplies of services are generally exempt from registration only up to the notified limit. Under the notification, an intra-State service provider is exempt up to Rs 20 lakh, but inter-State supply of services is not exempt from registration where the limit applies only to intra-State supplies. Here the Rs 2 lakh Mumbai supply is inter-State, so registration is required irrespective of turnover. Hence option B is wrong.

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