Do I need GST registration? A quick decision guide
Answer four questions to know whether GST registration is compulsory, optional or not needed for your business.
Question 1: Are you in a compulsory category?
You must register whatever your turnover if you:
- Sell goods from one state to another (inter-state supply of goods).
- Are a casual or non-resident taxable person.
- Have to pay tax under reverse charge.
- Run an e-commerce platform, or are required to deduct GST TDS or collect GST TCS.
- Are an Input Service Distributor, or supply goods or services as an agent for a registered person.
- Sell goods through an e-commerce platform. Small sellers supplying only within their own state can enrol on the GST portal and sell without registration, subject to conditions.
Yes to any? Register before you start supplying.
Question 2: Has your turnover crossed the limit?
Count aggregate turnover: all taxable, exempt, export and inter-state supplies across India under the same PAN, excluding GST itself.
| You supply | Limit in most states | Lower limits |
|---|---|---|
| Only goods | ₹40 lakh | ₹20 lakh in some states, ₹10 lakh to ₹20 lakh in some north-eastern and hill states |
| Services, or goods and services | ₹20 lakh | ₹10 lakh in some north-eastern and hill states |
Crossed it? Apply within 30 days of crossing. Check your state's limit before relying on ₹40 lakh.
Question 3: Below the limit, should you register anyway?
Voluntary registration makes sense if:
- Your customers are businesses that want to claim ITC on your invoices.
- You buy a lot with GST and want to claim that ITC.
- You export and want refunds of ITC under LUT.
- You want to sell on large marketplaces or bid for tenders.
It may not be worth it if you sell mostly to consumers, your purchases carry little GST, or your goods are exempt. Remember: once registered, you must file returns every period, even nil returns.
Question 4: Regular or composition?
If you register, the composition scheme is simpler: turnover up to ₹1.5 crore for goods and restaurants (₹75 lakh in some special category states) or ₹50 lakh for services. You pay a small fixed rate, but you can't claim ITC, can't sell inter-state and issue a bill of supply instead of a tax invoice. See Regular vs composition taxpayer.
Quick examples
| Business | Needs GST? |
|---|---|
| Kirana shop in Lucknow, ₹28 lakh sales, all within UP | No (below ₹40 lakh) |
| Freelance designer, ₹15 lakh fees, clients in other states | No (inter-state services below ₹20 lakh don't force registration) |
| Workshop in Jaipur selling ₹8 lakh of goods to Delhi | Yes (inter-state supply of goods) |
| Consultant, ₹22 lakh fees in one state | Yes (above ₹20 lakh) |
If you should have registered but didn't
You owe the GST you should have charged, with interest at 18%, plus penalties, even though you never collected it from customers. Register as soon as you notice and talk to your CA about clearing the past period.
Related
- GST registration: who, when and how
- GSTIN structure and state codes
- Which licences and registrations does my business need?
Sources
- Exemption from registration for suppliers of goods up to ₹40 lakh aggregate turnover (opt-out states and ice cream / pan masala / tobacco excluded)