As per Section 24 (i), anyone making inter-state taxable supplies, is compulsorily required to register. The biggest brunt of this was felt by the exporter engaged in service sector i.e. freelancer working in software sector. Exports have been categorised as “zero-rated” and hence “0%” GST was applicable to it. However, since exports were essentially “inter-state sales”, hence registration was mandatory.
Finally after representations, Government issued Notification No. 10/2017-IT dated 13-10-2017 w.e.f. 13-10-2017 & has specified the person making inter-State supplies of taxable services and having aggregate turnover, to be computed on all India basis, not exceeding Rs. 20 Lakh (Rs 10 lakhs in special category states) in a financial year, is exempt from obtaining registration. This measure is expected to significantly reduce the compliance cost of small service providers.
This perhaps is the biggest announcement that has been made. This is because this move will directly impact exporters in a huge way. Now lakhs of small service exporters do not need to register themselves since export was characterised as an inter-state sale, wherein the registration was mandatory. This has been exempted. But keep in mind only for “Service Provider”.