What is GST Registration?
Goods and Services Tax (GST) is a taxation system applicable to both tangible goods and intangible services, ensuring a balance between Central and State Government revenues through a dual mechanism. Introduced on July 1, 2017, GST is a comprehensive, multi-stage, and destination-based tax levied on every value addition. This regime enhances transparency in the indirect tax framework, reduces inflation, eliminates the cascading effect of taxes, and boosts investment inflows, e-commerce, and the “Make in India” initiative.
Based on the principle of “One Nation, One Tax,” GST operates under different tax rate slabs, ranging from 0% to 28%. Despite its significance, many businesses still seek Chartered Accountant services to navigate its complexities.
Under the GST Act, all businesses engaged in buying or selling goods and services must obtain GST registration. Entities operating without registration are not permitted to collect GST from consumers or claim an input tax credit. Therefore, obtaining GST registration is essential for businesses to claim ITC and legally collect GST from customers. As a destination-based tax, GST applies to all transactions involving the supply of goods or services for consideration.
GST Turnover Limit
GST registration is mandatory for casual taxable persons, individuals supplying through e-commerce operators, and non-resident taxable persons, regardless of turnover. Such businesses often seek GST advisory services from professionals like CAs, CS, or lawyers to ensure compliance with the Act.
A “casual taxable person” refers to anyone occasionally supplying goods or services in a state or union territory where they do not have a fixed place of business.
For regular GST registration, the turnover limits are as follows:
- Goods Suppliers: Registration is required if the aggregate turnover exceeds ₹40 lakh in a financial year, provided:
- The business is not engaged in service supply.
- The business does not conduct intra-state supply in certain states, including Arunachal Pradesh, Manipur, Mizoram, Nagaland, Puducherry, Meghalaya, Sikkim, Telangana, Tripura, and Uttarakhand.
- The business does not deal in pan masala, tobacco, or ice cream.
- If these conditions are not met, GST registration is required when turnover exceeds ₹20 lakh. For special category states, the limit is ₹10 lakh.
Special Category States under GST:
- Arunachal Pradesh
- Assam
- Jammu and Kashmir
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Sikkim
- Tripura
- Himachal Pradesh
- Uttarakhand
GST Registration Thresholds:
| Aggregate Turnover | Registration Mandatory | Applicability |
|---|---|---|
|
Initial Threshold—Supply of Goods/Services
|
||
|
More than ₹20 lakh
|
Yes (Normal Category States)
|
Till March 31, 2019
|
|
More than ₹10 lakh
|
Yes (Special Category States)
|
Till March 31, 2019
|
|
New Limits—Sale of Goods
|
||
|
More than ₹40 lakh
|
Yes (Special Category States)
|
From April 1, 2019
|
|
More than ₹20 lakh
|
Yes (Special Category States)
|
From April 1, 2019
|
|
New Limits—Providing Services
|
No change in threshold limits
|
Aggregate Turnover under GST
Aggregate turnover under GST is calculated as:
(Taxable Supplies + Exempt Supplies + Exports + Inter-State Supplies) – (Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies).
This calculation is PAN-based, meaning all business locations under the same PAN must be combined to determine the total turnover.
Voluntary GST Registration
Any individual or entity, regardless of turnover, can voluntarily register under GST. Many businesses opt for GST registration even if they do not meet the mandatory threshold. GST consultants can provide guidance on whether voluntary registration is beneficial.
Reasons for Voluntary GST Registration:
- Enhancing business credibility
- Meeting B2B customer requirements
- Availing input tax credit benefits
Documents Required for GST Registration
1. PAN Card of Business or Applicant
Since GST registration is linked to the PAN of the business, obtaining a PAN card is mandatory before applying.
2. Identity & Address Proof (with Photographs)
Acceptable identity proofs: Passport, Voter ID, PAN, Aadhaar Card, Driving License.Acceptable address proofs: Passport, Aadhaar Card, Driving License, Voter ID, Ration Card.
Required for:
Company: Managing Director, Directors, Authorized Person
HUF: Karta
Proprietorship: Proprietor
Local Authority: CEO or equivalent
Statutory Body: CEO or equivalent
Trust: Managing Trustee, Trustees, Authorized Person
Partnership/LLP: Managing/Authorized/Designated Partners (Photos of up to 10 partners including the Managing Partner)
AOP/BOI: Members of the Managing Committee (Photos of up to 10 members including Chairman)
Others: Persons in charge
3. Business Registration Document
All business entities must provide proof of business registration, except proprietorships where the proprietor and business are considered the same.
4. Address Proof for Place of Business
- Owned Premises: Property Tax Receipt, Municipal Khata, Electricity Bill
- Rented/Leased Premises: Valid rental agreement + ownership proof of the lessor (Property Tax Receipt, Municipal Khata, Electricity Bill). If unavailable, an affidavit with supporting documents can be used.
- SEZ Premises: Relevant documents issued by the Government of India.
- Other Cases: Consent letter from the owner + ownership proof (Electricity Bill, Municipal Khata).
5. Proof of Bank Account
- Scanned copy of any of the following:
- First and relevant page of Passbook
- Relevant page of Bank Statement
- Cancelled Cheque with Name of Proprietor/Business, Account Number, IFSC, MICR, and Branch Details