Person Under the GST Law

The definition

Section 2(84) of the Central Goods and Services Tax Act, 2017:

"person" includes-

(a) an individual;

(b) a Hindu Undivided Family;

(c) a company;

(d) a firm;

(e) a Limited Liability Partnership;

(f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(g) any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013;

(h) any body corporate incorporated by or under the laws of a country outside India;

(i) a co-operative society registered under any law relating to co-operative societies;

(j) a local authority;

(k) Central Government or a State Government;

(l) society as defined under the Societies Registration Act, 1860;

(m) trust; and

(n) every artificial juridical person, not falling within any of the above.

Fourteen limbs against the income-tax law's seven.

The four differences that matter

1. The limited liability partnership has its own limb. Clause (e). Under the income-tax law an LLP is assessed as a firm; under GST it is named separately. A candidate asked to distinguish the two definitions should lead with this.

2. A society and a trust are named. Clauses (l) and (m). Under the income-tax law they arrive through the residual limb (g) or as an association of persons.

3. Government is a person. Clause (k) names the Central Government and a State Government. Under the income-tax law they are not in the list at all, because the Union and the States are not taxed on their income in the same way.

4. The definition reaches outside India. Clause (f) says "in India or outside India" and clause (h) covers a body corporate incorporated abroad. GST is a tax on supply, and a supply can be made into India by somebody who has never been here.

Why GST needs a wider list

Because the two taxes catch different things.

Income tax taxes income. A body with no income is of no interest to it.

GST taxes supply. A society, a trust, a government department or a foreign company can all make a taxable supply, and if the definition did not reach them the supply would escape.

"Person" and "taxable person" are not the same

This is the distinction most often missed.

A person is anyone in section 2(84).

A taxable person is defined in section 2(107): a person who is registered or liable to be registered under section 22 or section 24.

So the chain runs: person, then liable to be registered, then taxable person. A proprietor with a turnover of Rs. 8,00,000 supplying only within Maharashtra is a person and is not a taxable person. The chapter on who must register under GST works through section 22 and section 24.