Under the Goods and Services Tax (GST) regime in India, registration is mandatory for certain categories of businesses and voluntary for others. Proper GST registration not only ensures compliance but also unlocks input tax credit benefits, enables seamless interstate trade, and builds credibility with clients. Below is an in-depth guide on who must register for GST and why.
1. Businesses Exceeding Aggregate Turnover Thresholds
A. Goods Suppliers: Any person supplying goods with an annual aggregate turnover exceeding ₹40 lakh must register. In special-category states, the thresholds are lower:
- ₹10 lakh: Manipur, Mizoram, Nagaland, Tripura
- ₹20 lakh: Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, Uttarakhand
- ₹40 lakh: All other states and UTs
B. Service Providers: Any person supplying services with an annual aggregate turnover exceeding ₹20 lakh must register. In special-category states, the threshold is ₹10 lakh:
- ₹10 lakh: Manipur, Mizoram, Nagaland, Tripura, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, Uttarakhand
- ₹20 lakh: All other states and Union Territories
C. Mixed Supply Businesses: Entities supplying both goods and services must consider the higher of the two thresholds applicable in their state:
- Special Category States: Registration required if aggregate turnover exceeds ₹20 lakh.
- All Other States and Union Territories: Registration required if aggregate turnover exceeds ₹40 lakh.
2. Interstate Suppliers
Any business supplying goods or services across state lines must register, regardless of turnover. Interstate trade falls under IGST, and registration facilitates proper tax collection and remittance.
3. E-Commerce Operators and Sellers
- E-Commerce Aggregators (e.g., online marketplaces) that facilitate supplies must register and act as “nominated persons” responsible for collecting and remitting tax at source (TCS).
- Small Sellers on E-Commerce Platforms: Even if a seller’s turnover is below thresholds, registration becomes compulsory if they sell through an aggregator, as the aggregator collects TCS and needs the supplier’s GSTIN.
4. Casual Taxable Persons
Individuals who occasionally supply goods or services in a state where they have no fixed place of business must register as a casual taxable person if turnover in the period of activity exceeds ₹20,000 (or ₹10,000 in special category states). Registration must be obtained at least five days in advance of commencement.
5. Persons Required to Deduct TDS/TCS
Government bodies, local authorities, and large corporates that deduct TDS under section 51 must register to deposit tax deducted. Similarly, e-commerce operators collecting TCS under section 52 must register to remit collected amounts.
6. Composition Scheme Opt-Ins
Small taxpayers with turnover below ₹1.5 crore (₹75 lakh for special category states) may opt for the Composition Scheme, attracting a lower tax rate but restricted from inter-state supplies and input tax credits. Once opted in, they must register under the regular GST portal.
7. Voluntary Registration
Businesses can also register for GST even if they don’t have to. This can help you:
- Get back the tax you paid on your purchases (input credit).
- Look more professional and trustworthy to clients and suppliers.
- Do business with other GST-registered companies, since only they can issue valid tax invoices.
