The term Goods and Services Tax (GST) clearly indicates that it is a unified tax system applicable to both goods and services. In other words, GST is levied on tangible products as well as intangible services. It operates through a dual structure that ensures revenue sharing between the Central Government and the State Governments while maintaining their respective financial autonomy.
The GST system was implemented in India on 1st July 2017 under the framework of the Central Goods and Services Tax Act 2017. It introduced a comprehensive, multi-stage, and destination-based taxation model that is imposed on every stage of value addition. The objective of GST is to simplify the indirect tax system, enhance transparency, and eliminate the cascading effect of taxes. It is also expected to reduce inflationary pressure and encourage investment, e-commerce growth, and initiatives such as “Make in India.”
GST follows the principle of “One Nation, One Tax” and is structured into multiple tax slabs ranging from 0% to a maximum rate of 28%, depending on the category of goods or services.
Despite its nationwide implementation, many individuals and business owners still seek professional assistance, such as Chartered Accountant services, to better understand and comply with GST regulations.
Under the GST regime, businesses engaged in the supply of goods, services, or both are required to obtain GST registration if they meet the prescribed criteria. Without registration, a business cannot legally collect GST from customers nor claim Input Tax Credit (ITC) on taxes paid on purchases.
Therefore, GST registration is essential for collecting tax from customers and availing ITC benefits. Overall, GST is a destination-based tax levied on the supply of goods or services for consideration.
GST registration is compulsory for certain categories of persons regardless of their annual turnover. These include casual taxable persons, non-resident taxable persons, and individuals or businesses supplying goods or services through e-commerce operators. Since the legal provisions can be complex, such taxpayers often seek guidance from professionals like Chartered Accountants (CAs), Company Secretaries (CSs), or legal experts to ensure proper compliance.
A “casual taxable person” refers to someone who occasionally supplies goods or services in the course of business in a State or Union Territory where they do not have a fixed place of business. Such supply may be made as a principal, agent, or in any other capacity.
The requirement for GST registration for regular taxpayers depends upon the nature of supply and the aggregate turnover during a financial year.
For Suppliers of Goods
As per the notifications issued under the Central Goods and Services Tax Act 2017, a person exclusively engaged in the supply of goods must obtain GST registration if their aggregate turnover exceeds ₹40 lakhs in a financial year, subject to certain conditions:
The supplier must not be engaged in providing any services.
The supplier should not be making intra-state supplies in specified States such as Arunachal Pradesh, Manipur, Mizoram, Nagaland, Puducherry, Meghalaya, Sikkim, Telangana, Tripura, and Uttarakhand.
The supplier must not deal in goods like pan masala, tobacco, or ice cream.
If these conditions are not satisfied, the threshold for mandatory registration reduces to ₹20 lakhs. For special category States, the limit is further reduced to ₹10 lakhs in certain cases.
This implies that where the prescribed conditions are not fulfilled, GST registration becomes mandatory once the turnover crosses ₹20 lakhs. In specific northeastern and special category States, the threshold is ₹10 lakhs.
The following States are treated as special category States for GST purposes:
Arunachal Pradesh
Assam
Jammu and Kashmir
Manipur
Meghalaya
Mizoram
Nagaland
Sikkim
Tripura
Himachal Pradesh
Uttarakhand
The GST registration limits were revised during the 32nd meeting of the GST Council, particularly for suppliers of goods. The revised limits are summarized below:
Initial Threshold (up to 31st March 2019):
₹20 lakhs – Normal Category States
₹10 lakhs – Special Category States
Revised Limits (from 1st April 2019):
For Supply of Goods:
₹40 lakhs – Normal Category States
₹20 lakhs – Special Category States
For Supply of Services:
The threshold remains unchanged at ₹20 lakhs for normal States and ₹10 lakhs for special category States.
GST registration consultants and professionals assist businesses in understanding these turnover limits and ensure smooth and hassle-free registration under the Act.
Under GST, aggregate turnover is calculated by adding together the value of taxable supplies, exempt supplies, exports of goods or services, and inter-State supplies. From this total, certain amounts are excluded such as GST taxes charged, the value of inward supplies, supplies on which tax is payable under reverse charge, and non-taxable supplies.
This computation is based on the PAN of the taxpayer. Therefore, if a person operates multiple business locations under the same PAN, the turnover of all such establishments must be combined to determine the total aggregate turnover.
Any individual or entity, whether a natural person or a legal/artificial person, may apply for GST registration voluntarily, even if their turnover does not exceed the prescribed threshold limit. Several businesses choose to register under GST despite not being legally required to do so. Professional GST consultants can guide entrepreneurs on whether voluntary registration would be advantageous for their specific business model.
The main reasons for opting for voluntary GST registration include:
Enhancing the credibility and professional image of the business
Meeting compliance expectations of B2B clients who prefer dealing with registered suppliers
Availing the benefit of Input Tax Credit (ITC) on purchases and business expenses
If you are planning to apply for GST registration, it is important to understand the necessary documentation. Below is a clear overview of the documents generally required:
GST registration is PAN-based, meaning it is directly linked to the Permanent Account Number of the applicant or entity. Therefore, obtaining a valid PAN is mandatory before applying for GST registration.
Applicants must submit valid identity and address proof along with photographs.
Accepted Identity Proof documents include:
Passport
Voter ID Card
PAN Card
Aadhaar Card
Driving License
Accepted Address Proof documents include:
Passport
Aadhaar Card
Driving License
Voter ID Card
Ration Card
The following persons are required to submit these documents depending on the type of entity:
Company – Managing Director, Directors, and Authorized Signatory
HUF (Hindu Undivided Family) – Karta
Proprietorship – Proprietor
Local Authority / Statutory Body – CEO or equivalent officer
Trust – Managing Trustee, Trustees, and Authorized Person
Partnership Firm / LLP – Managing, Authorized, or Designated Partners (personal details of all partners must be provided; however, photographs of only up to 10 partners including the Managing Partner are required)
Association of Persons (AOP) / Body of Individuals (BOI) – Members of the Managing Committee (details of all members are required; photographs of up to 10 members including the Chairman must be submitted)
Others – Person in charge of the business
Most entities must provide proof of business registration along with their constitutional documents (such as incorporation certificate, partnership deed, etc.). However, in the case of a proprietorship, separate proof of registration is generally not required since the proprietor and the business are treated as the same legal person.
Proof of address for all declared places of business must be submitted with the application. Acceptable documents include:
Owned Premises: Latest Property Tax Receipt, Municipal Khata, or Electricity Bill.
Rented/Leased Premises: Valid Rent or Lease Agreement along with ownership proof of the landlord (Property Tax Receipt, Municipal Khata, or Electricity Bill). If no formal agreement exists, an affidavit with supporting possession proof such as an electricity bill may be submitted.
SEZ Premises: Relevant approvals and documents issued by the Government of India must be uploaded if the business operates in a Special Economic Zone (SEZ).
Other Cases: Consent letter from the owner along with ownership proof (e.g., electricity bill or Municipal Khata).
For detailed clarification, applicants can also refer to the official GST portal at Goods and Services Tax Network.
A scanned copy of any one of the following documents must be provided:
First and relevant page of bank passbook
Relevant page of bank statement
Cancelled cheque containing the name of the proprietor or business entity, bank account number, IFSC code, MICR code, and branch details
Proper documentation ensures a smooth and hassle-free GST registration process.
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