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CA Intermediate · Taxation · Registration

Sunita, an unregistered individual in Chennai, is an agent who supplies taxable goods on behalf of her principal, Vasan Foods, a registered supplier in Tamil Nadu. Sunita's own turnover is Rs 10 lakh, and she supplies on behalf of the principal. Is Sunita compulsorily required to register under CGST Act?

Sunita must register. Under the compulsory registration provisions, a person who supplies goods or services on behalf of other taxable persons as an agent has to register irrespective of the turnover threshold, so her Rs 10 lakh turnover does not give exemption.

  1. ANo, because her own turnover is below Rs 40 lakh
  2. BNo, because agents are always exempt from registration
  3. CYes, because an agent supplying goods on behalf of a registered principal must register irrespective of thresholdCorrect
  4. DYes, but only if the principal is also unregistered

Explanation

Section 24 makes registration compulsory, without threshold exemption, for agents who supply goods or services on behalf of other taxable persons. Sunita acts as an agent for Vasan Foods, so she must register even though her turnover is Rs 10 lakh. The turnover threshold test is therefore irrelevant, which makes the first option wrong.

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