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easyTax Consultant interview question

A client is starting a small business. How would you explain when they need GST registration?

What the interviewer wants to hear

  • Registration is required when aggregate turnover crosses the threshold for their state and type of supply
  • Some cases need compulsory registration regardless of turnover
  • Examples: inter-state supply of goods, e-commerce sellers, reverse charge recipients
  • Voluntary registration option and its pros and cons
  • Obligations after registration

Model answer

I would first explain that registration depends on aggregate turnover across all their branches with the same PAN. Once it crosses the limit that applies to their state and to whether they supply goods or services, they must register. I would check the current limit for their case rather than quote a number from memory. Then I would explain that some businesses must register regardless of turnover, for example those making inter-state supplies of goods, many sellers on e-commerce platforms, and persons liable under reverse charge. They can also register voluntarily, which lets them claim input tax credit and deal with larger business customers who want GST invoices, but it brings monthly or quarterly returns and compliance. Once registered, they must issue proper tax invoices, file returns on time, pay tax and keep records, so I would help them set up their accounting software accordingly.

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