GST is a simple value-added tax which is levied at all points in the supply chain, with credit allowed for any tax paid on inputs acquired for use in making the supply. GST is applicable to both goods and services in a comprehensive manner, with exemptions restricted to a minimum. GST subsumed central excise and service tax into a single unified tax regime. We provide services for Online GST Registration and act as your GST consultant.
GST Registration Threshold & Turnover Limits in India
Understanding the GST registration threshold is essential for every business owner, freelancer, startup, and professional. GST registration becomes mandatory when the aggregate turnover of a business exceeds the prescribed limit during a financial year.
For Suppliers of Goods
Businesses engaged exclusively in the supply of goods are required to obtain GST registration if their annual aggregate turnover exceeds:
- ₹40 lakh in most states.
- ₹20 lakh in certain special category states where the higher threshold has not been adopted.
The increase from ₹20 lakh to ₹40 lakh was introduced to reduce the compliance burden on small businesses and encourage ease of doing business.
For Service Providers
Businesses providing services are required to register under GST if their annual aggregate turnover exceeds:
- ₹20 lakh in most states.
- ₹10 lakh in special category states.
| Type of Supply | Normal Category States Threshold (₹) | Special Category States Threshold (₹) |
|---|---|---|
| Goods | 40 lac | 20 Lac |
| Services | 20 lac | 10 lac |
| Both Goods & Services | 20 lac | 10 lac |
Package Includes
- ARN and GST Certificate
- Simplified Excel template to maintain GST records (save accounting cost)
- HSN & SAC codes with rates
- GST invoice formats
- GST government return filing software
Benefits of Registration under GST
- Take GST Credit: Collect GST from customers, avail credit and make balance GST payment. Increase your cash flow.
- Issue GST Invoice: Most businesses need a GST invoice to avail credit and to enrol you as an official B2B supplier.
- Collect Taxes: A registered person is authorized to collect taxes from customers on supply.
What are the Benefits of GST Registration?
- Claim Input Tax Credit (ITC): Reduce your tax liability by claiming credit on eligible GST paid on business purchases.
- Legal Compliance: Operate your business legally under the GST Act and avoid penalties for non-compliance.
- Interstate Trade: Sell goods and services across India without tax-related restrictions.
- Business Credibility: Enhance customer and vendor confidence with a valid GSTIN.
- Sell on E-Commerce Platforms: Become eligible to sell on Amazon, Flipkart, Meesho, and other online marketplaces.
- Government Tender Eligibility: Participate in government tenders and contracts that require GST registration.
- Easy Business Loans: Improve your chances of obtaining business loans and credit facilities from banks and NBFCs.
- Export Benefits: Export goods and services smoothly while claiming eligible GST refunds and LUT benefits.
- Composition Scheme Option: Eligible small businesses can pay GST at concessional rates with simplified compliance.
- Business Growth: Expand your business, work with larger clients, and build a compliant business profile.
Choosing the Right GST Scheme
| Particulars | Regular Scheme | Composition Scheme |
|---|---|---|
| Turnover Limit | Mandatory after prescribed threshold | Up to ₹1.5 crore (₹75 lakh in specified states) |
| GST ITC | Yes | No |
| Input Tax Credit | Available | Not Available |
| Tax Rates | Standard GST rates (5%, 12%, 18%, 28%) | 1%, 5% or 6% etc. |
| Interstate Supply | Allowed | Restricted as per GST provisions |
| Return Filing | Regular GST Returns | Simplified Returns |
| Best For | Growing businesses, exporters, B2B companies | Small local businesses and retailers |
| E-Commerce | Allowed | Not Allowed |
| Tax Invoice | Can issue Tax Invoices | Cannot charge tax from customers |
| Compliance | Detailed monthly/quarterly return | Simple quarterly filings |
Applicability of GST Registration
- Aggregate turnover in a financial year of taxable supply of goods or services exceeds ₹40 lakh
- Interstate supply
- Non-resident taxable and casual taxable persons
- Persons who are required to pay tax under reverse charge
- Persons who are required to deduct tax at source
- Input Service Distributors
- Every e-commerce operator
Why Do I Need GST Registration?
E-Commerce Sales
For sale of goods on e-commerce sites like Amazon, Flipkart etc., you need a GSTIN to start selling.
Business with MNCs
Multinational companies have a precondition that vendors should be GST-registered persons. To create a vendor code at an MNC, a GSTIN is required.
Beat Competition
Compared to an unregistered supplier, you get the above benefits for business expansion. Beat the competition by enrolling under GST.
Apply for Tenders
Nowadays companies make a GST number a precondition to apply for tenders. For taking part in tenders, GST registration is required.
Key Areas Where GST Impacts Business
- Increase in Cash Flow: Under the earlier law structure, manufacturers paid excise at the time of removal from the factory, whereas under GST, tax is paid at the time of sale/supply — hence increased cash flow.
- Price & Profits: As tax rates, tax collection points, credit and utilization have changed, business persons need to revise pricing, as GST impacts the profit of the business.
GST Registration Certificate Details
A GST Registration Certificate is an online certificate issued by the GST Department. It serves as legal proof that your business is recognized and registered to collect and remit GST.
- GST Number
- Legal name of business
- Constitution of Business
- Address of business
- Date of Registration
- Details of Owner
Documents Required for GST Registration
Company
- PAN, AOA & MOA of company
- Board resolution
- PAN & Aadhaar Card / Voter ID / Passport / License of directors
- Address proof (electricity bill / NOC / rent agreement)
- Cancelled cheque / bank statement
Proprietorship
- PAN Card
- Aadhaar Card / Voter ID / Passport / License
- Passport size photo
- Address proof (electricity bill / NOC / rent agreement, etc.)
- Cancelled cheque / bank statement
Partnership Firm / LLP
- PAN Card of firm
- PAN & Aadhaar Card / Voter ID / Passport / License of partners
- Passport size photo of partners
- Address proof (electricity bill / NOC / rent agreement, etc.)
- Cancelled cheque / bank statement
What are the Penalties for Non-Registration under GST?
Failing to obtain mandatory GST number registration when required attracts severe GST registration penalties under the CGST Act, 2017. Here is the compliance breakdown:
| Offence | Penalty |
|---|---|
| Failure to Register | 100% of tax due or ₹10,000 (whichever is higher) |
| Collecting GST without Registration | 100% of tax collected + interest |
| Fraudulent ITC Claims | 100% of ITC claimed fraudulently |
| Non-issuance of GST E-Invoice | ₹10,000 or 100% of tax due (whichever is higher) per invoice |
Frequently Asked Questions (FAQs) – GST Registration
1. What is the GST registration threshold limit in India?
GST registration is mandatory when the aggregate annual turnover exceeds the prescribed limit. For suppliers of goods, the threshold is ₹40 lakh in most states (₹20 lakh for special category states), while for service providers, it is ₹20 lakh (₹10 lakh for special category states).
2. Is GST registration mandatory for service providers?
Yes. Service providers must obtain GST registration once their aggregate annual turnover exceeds ₹20 lakh (₹10 lakh in certain special category states).
3. Can I apply for GST registration voluntarily?
Yes. Even if your turnover is below the prescribed limit, you can voluntarily register under GST. Voluntary registration enables you to claim Input Tax Credit and expand your business credibility.
4. What documents are required for GST registration?
The commonly required documents include PAN Card, Aadhaar Card of the proprietor/directors, business address proof, bank account proof, passport-size photograph, Certificate of Incorporation (for companies), and authorization letter or Board Resolution where applicable.
5. How long does GST registration take?
If all documents are correctly submitted and no clarification is sought by the GST department, GST registration is generally processed within a few working days.
6. What is the difference between the Regular GST Scheme and the Composition Scheme?
Under the Regular GST Scheme, businesses can collect GST from customers and claim Input Tax Credit (ITC). Under the Composition Scheme, small businesses pay tax at a lower concessional rate on turnover without the benefit of claiming ITC.
7. Can I claim Input Tax Credit (ITC) after GST registration?
Yes. Businesses registered under the Regular GST Scheme can claim Input Tax Credit on eligible business purchases, subject to proper documentation and tax invoice compliance.
8. Is GST registration compulsory for online sellers and e-commerce businesses?
Many e-commerce sellers and persons supplying goods or services through e-commerce operators are required to obtain GST registration regardless of turnover limits.
9. What are the penalties for not obtaining GST registration?
If a person liable to register fails to obtain GST registration, the GST department may levy penalties along with applicable interest, such as 100% of tax due or minimum statutory penalties.
10. Why should I choose A N Bhutada & Co for GST registration?
A N Bhutada & Co provides end-to-end GST registration and compliance services across India, including GST Registration, Return Filing, Amendments, Cancellation, Notices & Litigation Support, Composition Scheme Advisory, Input Tax Credit Assistance, and Ongoing GST Compliance. Our professionals ensure a smooth and hassle-free process.
