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CA Intermediate · Taxation · Registration

Ravi & Sons, a proprietorship in Indore supplying only goods within Madhya Pradesh, has a turnover of Rs 25 lakh. It also sells goods through an e-commerce operator that is required to collect tax at source on its supplies. Is Ravi & Sons required to register?

Ravi & Sons must register. Persons who supply goods or services through an e-commerce operator liable to collect tax at source fall under compulsory registration, so the normal Rs 40 lakh turnover threshold gives no relief even though its turnover is only Rs 25 lakh.

  1. ANo, because turnover is below Rs 40 lakh
  2. BYes, because persons supplying goods through an e-commerce operator who collects tax at source are compulsorily registered irrespective of the thresholdCorrect
  3. CNo, because registration for e-commerce suppliers is optional below Rs 40 lakh
  4. DYes, but only if the operator is not registered

Explanation

Persons supplying goods or services through an e-commerce operator who is required to collect tax at source under the CGST Act come under compulsory registration, with no threshold exemption. Here turnover of Rs 25 lakh does not help. The key distractor, below Rs 40 lakh, ignores the compulsory registration provision. Note that the operator's registration status is not the test.

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