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CMA Intermediate · Direct and Indirect Taxation · Levy and Collection of CGST and IGST

Ravi Traders, a registered person, is required to pay tax under reverse charge on a notified supply. Which statement about its registration is correct under section 24 of the CGST Act, 2017?

Under section 24(iii) of the CGST Act, persons required to pay tax under reverse charge must be registered, notwithstanding the threshold in section 22(1). So the recipient liable under reverse charge cannot rely on turnover being below the threshold to avoid registration.

  1. ARegistration is compulsory because persons required to pay tax under reverse charge must be registered, notwithstanding the general threshold in section 22(1)Correct
  2. BRegistration is needed only if its aggregate turnover crosses the section 22(1) threshold
  3. CRegistration is optional because reverse charge shifts liability to the supplier
  4. DRegistration is needed only if the supply is inter-State

Explanation

Section 24 begins with 'notwithstanding anything contained in sub-section (1) of section 22' and lists, at clause (iii), persons required to pay tax under reverse charge. Hence the turnover threshold does not exempt such a person. The threshold-based option ignores this override.

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