Introduction to GST Non-Enrollment Declarations

A significant transformation in business operations followed the implementation of the Goods and Services Tax (GST). Businesses initially focused on obtaining GSTINs from their suppliers and recipients to facilitate the smooth transfer of tax credits. Suppliers were tasked with ensuring precise record-keeping for business-to-business (B2B) transactions, while recipients needed to secure their eligible input tax credits.

Recent Updates on GST Registration RequirementsStay informed about the latest changes concerning GST registration:

• December 21, 2021: Effective January 1, 2022, the CBIC mandated Aadhaar authentication for applying for revocation of cancelled GST registration under CGST Rule 23, utilizing form REG-21.
• August 29, 2021: Taxpayers received an extension until September 30, 2021, to revoke cancelled GST registrations if their previous deadline fell between March 1, 2020, and August 31, 2021. This applied to registrations cancelled under Section 29(2) clause (b) or (c) of the CGST Act, as per CGST notification number 34/2021 dated August 29, 2021.
• May 28, 2021: The due date for filing applications for cancellation revocation, originally between April 15, 2021, and June 29, 2021, was extended to June 30, 2021.
• May 1, 2021: The timeframe for actions, replies, or order issuances under Rule 9 of the CGST Rules, 2017, that were due between May 1, 2021, and May 31, 2021, was extended to June 15, 2021.
• March 5, 2021: Enhancements were made to the Search ARN (Application Reference Number) functionality for registration, accessible after TRN (Temporary Reference Number) login, for the benefit of taxpayers.

What Constitutes a GST Non-Enrollment Declaration?

A declaration of GST non-enrollment is typically issued by a supplier whose services or goods are not subject to GST according to the prevailing GST legislation. This situation commonly arises for professionals like freelancers, small-scale service providers, individuals involved in labor contracts, or businesses with minor transactions, particularly when their annual aggregate turnover remains below the stipulated registration threshold.

Who Needs to Provide a GST Non-Enrollment Declaration?

Suppliers who are not considered taxable persons under GST law are generally required to provide a GST non-enrollment declaration due to various circumstances, including:

• Their aggregate turnover falls below the prescribed threshold limit.
• They exclusively engage in supplies that are entirely subject to the reverse charge mechanism.
• They only provide goods or services that are exempt from GST.

Recipients commonly request a GST non-enrollment declaration from their suppliers for primarily three reasons:

• To determine whether input tax credit can be claimed.
• To ascertain the applicability of TDS/TCS provisions under GST. For instance, while certain e-commerce operators are obliged to deduct tax at source before paying vendors, this obligation does not apply if the e-commerce vendors are unregistered.
• To safeguard themselves from potential penalties or financial losses resulting from the supplier's failure to comply with GST payment obligations.

Standard Format for GST Non-Enrollment Declaration

Although GST law does not specify a mandatory format for this declaration, an illustrative example is provided below. It is important to note that this format may vary across different sectors, both governmental and private. Should a business entity register for GST in the future, it must promptly inform the recipient and acquire their GSTIN for inclusion in invoices and GST returns. Furthermore, the agreement between the supplier and recipient should ideally contain an indemnification clause to protect the recipient from losses due to the supplier's non-compliance, oversight, or failure. The following declaration should be printed on the business entity's letterhead:

(Letterhead of the business entity)

DECLARATION OF GST NON-ENROLMENT

Dear Sir/Madam,

Sub: Declaration of non-requirement of registration under the Central/State/UT/Integrated Goods and Services Tax Act, 2017

I/We……………………(Name of the service provider/business entity)_, do hereby declare that I/we am/are not registered under the Goods and Services Tax Act, 2017 as _(select and fill below for the relevant reason)_
   -I/We deal in/supply the category of goods or services …………………………………………_(Describe the nature of the services/goods)_ which are exempted under the Goods and Service Tax Act, 2017.
   -I/We have the annual aggregate turnover below the taxable limit as specified under the Goods and Services Tax Act, 2017.
   -I/We are yet to register ourselves under the Goods and Services Tax Act, 2017.

I/We hereby also confirm that if anytime during any financial year I/we decide or require or become liable to register under the GST, I/we undertake to provide all the requisite documents and information. 

I/We request you to consider this communication as a declaration for not requiring to be registered under the Goods and Service Tax Act, 2017. 

I/We hereby also confirm that ………………………(Name of the service recipient) shall not be liable for any loss accrued to me/us, due to any registration default with the GST. 

Signature of Authorised Signatory: 

Name of the Authorised Signatory: 

Name of Business: 

Date: 

Stamp/Seal of the business entity: