GST registration required for a manufacturer of exempt supplies where he is liable to pay tax on reverse charge basis

Jalaram Feeds, In re – [2019] 106 taxmann.com 241 (AAR – MAHARASHTRA) The applicant-firm is a manufacturer of animal feed which is exempt under GST. Any other supply of goods or services which are taxable under GST are not undertaken by them. It is receiving the services of goods transport agency (GTA). It has filed an application for advance ruling to determine whether it is liable to obtain GST registration or not? The Authority for Advance Rulings, Maharashtra observed that as per the CGST Act, 2017, a person, who is engaged exclusively in the business of goods or services or both which are not liable to tax or wholly exempt, need not obtain GST registration. However, the provisions of compulsory registration in the CGST Act, 2017 which overrule the registration section, state that persons who are required to pay tax on reverse charge basis are mandatorily required to obtain mandatory GST registration. In this case, the applicant-firm is taking the services of GTA on which tax is required to be paid by the recipient on reverse charge basis under GST. Therefore, recipient is liable to pay GST on reverse charge basis in respect of GTA services. The Authority for Advance Rulings, Maharashtra held that GST registration is required by the applicant even though he is a manufacturer of exempt supplies as he is liable to pay tax on reverse charge basis.