GST registration is one of the first compliance decisions a new business in India faces — and getting it wrong, either by registering when not required or failing to register when mandatory, can create unnecessary compliance burden or attract penalties. Here is how the thresholds and mandatory categories work.
Turnover-Based Registration Thresholds
GST registration becomes mandatory once aggregate turnover crosses certain thresholds, which vary by state category and by whether the business deals in goods or services:
- Goods suppliers: ₹40 lakh aggregate turnover in most states; ₹20 lakh in specified special category states.
- Service providers: ₹20 lakh aggregate turnover in most states; ₹10 lakh in specified special category states.
"Aggregate turnover" is computed on a PAN-wide basis — i.e., across all business verticals and branches operating under the same PAN, not per individual branch or vertical.
Mandatory Registration Regardless of Turnover
Certain categories of suppliers must register for GST irrespective of turnover, including:
- Businesses making inter-state taxable supplies (with limited exceptions for certain services and handicraft goods)
- E-commerce operators and persons supplying goods/services through an e-commerce platform (with some exceptions for specified services below the threshold)
- Persons required to pay tax under the reverse charge mechanism
- Casual taxable persons and non-resident taxable persons
- Persons required to deduct TDS or collect TCS under GST
- Input Service Distributors and persons supplying via an agent on behalf of another taxable person
Composition Scheme — An Alternative for Small Businesses
Small businesses with turnover up to ₹1.5 crore (₹75 lakh for specified states) for goods, or up to ₹50 lakh for services, can opt for the Composition Scheme — paying GST at a flat, lower rate on turnover with simplified quarterly returns, but giving up the ability to claim input tax credit and to make inter-state outward supplies (for goods dealers).
Documents Required for GST Registration
- PAN of the business/proprietor/partners/directors
- Proof of business registration (incorporation certificate, partnership deed, etc.) where applicable
- Identity and address proof of promoters/directors with photographs
- Address proof of the place of business (electricity bill, rent agreement, NOC from owner, etc.)
- Bank account details — cancelled cheque, bank statement, or passbook copy
- Digital signature (mandatory for companies and LLPs)
- Authorization letter/board resolution for the authorized signatory
The GST Registration Process (Broad Steps)
- Generate a Temporary Reference Number (TRN) on the GST portal using PAN, mobile number, and email for OTP verification.
- Complete Part B of the application (Form GST REG-01) with business details, promoter details, place of business, goods/services to be supplied, and bank account information, uploading the required documents.
- Aadhaar authentication or e-KYC of promoters/authorized signatory (where applicable).
- The application is processed by the jurisdictional officer; if no discrepancy is found, registration is typically granted within a defined time frame (commonly within 7 working days, or up to 30 days if physical verification is required).
- On approval, a GSTIN (GST Identification Number) — a 15-digit, PAN-based, state-specific number — is issued along with the registration certificate.
⚠ Penalty for non-registration: A person liable to register but failing to do so can be liable to a penalty equal to the tax amount evaded, or ₹10,000, whichever is higher — in addition to having to pay the GST that should have been collected, generally without the ability to recover it from customers retroactively.
Voluntary Registration
Businesses below the threshold can also register voluntarily — often useful for claiming input tax credit, supplying to GST-registered businesses (who may prefer registered vendors for their own ITC), or building credibility with larger clients. Once voluntarily registered, the same compliance obligations (returns, invoicing, etc.) apply as for mandatory registrants.
Frequently Asked Questions
Is GST registration mandatory for a freelancer or consultant with low income? ▼
Not necessarily. If a freelancer/consultant provides services only within their home state and their aggregate turnover is below ₹20 lakh (₹10 lakh in special category states), registration is generally not mandatory on a turnover basis. However, if they provide services to clients in other states (inter-state supply), registration may become mandatory regardless of turnover, subject to limited exemptions for certain services.
Can I sell on e-commerce platforms like Amazon or Flipkart without GST registration? ▼
Generally no — suppliers of goods through e-commerce operators are required to register for GST irrespective of turnover. There are limited exceptions for suppliers of certain services through e-commerce platforms below the threshold, but for goods sellers, GST registration is typically a prerequisite for listing on major marketplaces.
How long does it take to get a GSTIN after applying? ▼
If the application and Aadhaar authentication go through without issues and no physical verification is required, registration is often granted within about 7 working days of application. If discrepancies are flagged or physical verification of the business premises is needed, it can take longer — typically up to 30 days from the date of application.