GST Registration: Limit, Compulsory Registration, When Not Required

Goods and Services Tax (GST) is a comprehensive tax that has replaced many indirect taxes that were applicable in India. GST registration is mandatory for businesses with turnovers exceeding a certain limit. Failure to comply with GST registration requirements can result in penalties and fines. This article provides an overview of GST registration, including limits, compulsory registration, and when registration is not required.

When is GST Registration Mandatory?

GST registration is mandatory for businesses whose annual turnover exceeds Rs. 20 lakhs. For businesses located in the northeastern states of India, the limit is Rs. 10 lakhs. For certain categories of businesses such as e-commerce operators and those making inter-state taxable supplies, the threshold limit for GST registration is Rs. 10 lakhs.

Compulsory GST Registration

Even if the annual turnover of a business is below the threshold limit, GST registration is compulsory in certain cases:

Inter-State Supply of Goods or Services

If a business is involved in the inter-state supply of goods or services, GST registration is mandatory irrespective of the turnover limit.

E-Commerce Operators

If a business operates as an e-commerce operator, GST registration is mandatory irrespective of the turnover limit. This includes businesses that provide an online platform for other businesses to sell their products.

TDS Deductors

If a business is required to deduct tax at source (TDS), GST registration is mandatory irrespective of the turnover limit.

Casual Taxable Person

If a business operates as a casual taxable person, GST registration is mandatory irrespective of the turnover limit. A casual taxable person is someone who periodically undertakes transactions in a taxable territory where they have no fixed place of business.

Non-Resident Taxable Person

If a business is a non-resident taxable person, GST registration is mandatory irrespective of the turnover limit. A non-resident taxable person is someone who occasionally undertakes transactions in a taxable territory where they have no fixed place of business.

When is GST Registration Not Required?

GST registration is not required for businesses whose annual turnover is below the threshold limit. In addition, the following categories of businesses are exempt from GST registration:

Small Business

Businesses with an annual turnover of up to Rs. 20 lakhs (Rs. 10 lakhs for businesses located in northeastern states) are not required to register for GST.

Exporters

Businesses involved in the export of goods or services are exempt from GST registration.

Service Providers

Service providers with an annual turnover of up to Rs. 20 lakhs (Rs. 10 lakhs for businesses located in northeastern states) are not required to register for GST.

Government Departments

Government departments and agencies are exempt from GST registration.

Conclusion

GST registration is mandatory for businesses whose annual turnover exceeds a certain limit. Failure to comply with GST registration requirements can result in penalties and fines. Even if the annual turnover of a business is below the threshold limit, GST registration is compulsory in certain cases such as inter-state supply of goods or services, e-commerce operators, TDS deductors, casual taxable person, and non-resident taxable person. Businesses with an annual turnover of up to Rs. 20 lakhs (Rs. 10 lakhs for businesses located in northeastern states) are not required to register for GST. Exporters, service providers, and government departments are also exempt from GST registration.