In India, GST replaced multiple existing indirect taxes under a single and uniform regime. The single query that small business owners, freelancers, and online sellers generally ask is – Who requires GST registration? The response varies based on aggregate turnover, the type of supply, and whether you belong to a compulsory category.
Who needs GST registration in India?
There are two general tests under GST law. The first, based on turnover, determines whether a business, which supplies goods or services, is liable for GST. The second, based on the category within which a business falls, requires GST registration, irrespective of turnover. In either case, a GSTIN must be obtained before making any taxable supplies.
Who is eligible for GST registration?
- Goods suppliers above ₹40 lakh: Suppliers of goods with an aggregate turnover exceeding ₹40 lakh in a financial year, in normal states, must register. In special category states, the limit is ₹20 lakh.
- Service providers above ₹20 lakh: A service provider has to register once turnover is above ₹20 lakh. In special category states, the limit is ₹10 lakh.
- Inter-state suppliers of goods: Registration is required in case of taxable inter-state supplies of goods, even below the threshold. It helps in the collection of tax at both the stages of origin and destination.
- E-commerce sellers: Sellers on platforms like Amazon or Flipkart generally need GST registration. However, small goods sellers making only intra-state supplies below the threshold may be exempt under recent notifications. Service sellers on e-commerce platforms and inter-state goods sellers must register.
- Casual and non-resident taxable persons: Casual taxable persons making occasional supplies in a state where they have no fixed place of business, and non-resident taxable persons making supplies in India, are required to register regardless of turnover.
- Reverse charge and TDS/TCS: Persons liable to pay tax under reverse charge, and entities required to deduct TDS or collect TCS under GST, must register.
Who can apply for a GST number?
Any person liable to register, or who opts for voluntary registration, can apply for a GSTIN through the official GST portal. You require a valid PAN, mobile number, email, and proof of business. Foxtax can check eligibility and file the application for you.
Is GST required below 20 lakhs?
Generally, no. For goods, the normal threshold is ₹40 lakh, so turnover below ₹20 lakh is well under the limit. For services, the threshold is ₹20 lakh, so exactly at or below ₹20 lakh usually does not trigger registration.
But mandatory categories such as inter-state goods supply, e-commerce services, reverse charge, and non-resident taxable persons override the threshold. Voluntary registration is always allowed if you want input tax credit.
Is GST compulsory for small businesses?
Not always. “Small” is measured by aggregate turnover, not employee count or capital. If your turnover is below the applicable threshold and you are not in a mandatory category, GST registration is optional. Small businesses can also explore the Composition Scheme for lower compliance, subject to turnover limits and eligibility.
Who is exempt from GST registration in India?
Some persons are not required to register even if they make supplies:
- Agriculturists: Individuals supplying produce from personal cultivation do not require GST registration. It’s good for agriculturists.
- Exclusively exempt suppliers: If you only supply goods or services that are fully exempt from GST, registration is not mandatory. You cannot claim input tax credit.
- Below-threshold businesses: Suppliers below the threshold limit (goods below ₹40 lakh and services below ₹20 lakh in a normal state) are not compulsorily required to register, subject to special category limits.
- Non-taxable persons: Individuals earning a salary, or making non-taxable supplies outside GST, are not required to register on this basis.
What is required for GST registration?
To complete GST registration, keep your documents ready. You need a PAN, Aadhaar, photograph, business address proof, bank account details, and a digital signature or EVC. For companies or LLPs, the certificate of incorporation, MOA/AOA, and partner details are also mandatory. Foxtax can prepare and verify these documents to prevent rejection.
Final checklist for who needs GST registration
- Goods turnover above ₹40 lakh (₹20 lakh in special states): Yes.
- Services turnover above ₹20 lakh (₹10 lakh in special states): Yes.
- Inter-state supply of goods: Yes, regardless of turnover.
- E-commerce sales: Usually yes; limited exemption for small intra-state goods sellers.
- Casual or non-resident taxable person: Yes.
- Reverse charge, TDS, or TCS liability: Yes.
- Agriculturist or exclusively exempt supplier: Usually no.
- Below threshold and not in mandatory category: No, unless voluntary.
To avoid penalties and avail input tax credit it is important to know the person or organization liable to register for GST. The basis is to know the turnover, nature of supply and mandatory categories. Foxtax offers end-to-end GST registration, advisory, and compliance support in one place for Indian businesses, freelancers, and online sellers.
FAQ
Q1: Is GST registration mandatory for freelancers?
A: For services provided by freelancers, registration is mandatory when gross receipts exceed the threshold limit of ₹20 lakh in a normal state and ₹10 lakh in a special category state. If their gross receipts fall below the threshold limit, then registration is optional unless they are providing services through an e-commerce operator.
Q2: Can a salaried person apply for GST?
A: Yes, if they are also earning from a business or freelancing work. Salary income alone is not subject to GST. They may register voluntarily or compulsorily based on the turnover of the business.
Q3: How long does GST registration take?
A: Usually 7 to 10 working days if documents are correct. Foxtax can help file accurately and respond to queries.
Q4: What is the penalty for not registering under GST?
A: The penalty is 10% of the tax due or ₹10,000, whichever is higher. In case of intentional evasion, the penalty may extend to 100%.