When Is GST Registration Actually Mandatory?

"Do I need GST?" is the question we field most often, and the honest answer is: it depends less on your revenue than most people assume.

The turnover thresholds

For most businesses, registration becomes mandatory when aggregate annual turnover crosses:

• ₹40 lakh for suppliers of goods in most states
• ₹20 lakh for suppliers of services
• ₹20 lakh / ₹10 lakh respectively in special category states

"Aggregate turnover" means all taxable, exempt, export and inter-state supplies under the same PAN across India — not just the revenue of one branch.

The cases where turnover doesn't matter

This is the part that catches people out. Registration is compulsory regardless of turnover if you fall into any of these categories:

• You make inter-state taxable supplies of goods
• You sell through an e-commerce operator that collects tax at source — Amazon, Flipkart, Myntra and similar
• You are liable to pay tax under reverse charge
• You are a casual taxable person or a non-resident taxable person
• You are an input service distributor or an agent supplying on behalf of another registered person

The e-commerce one bites hardest. A home baker doing ₹6 lakh a year is under every threshold — but the moment they list on a marketplace that collects TCS, registration becomes compulsory.

Why voluntary registration is often worth it

Even below the threshold, registering voluntarily buys you three things:

1. Input tax credit. You can claim back the GST you pay on rent, software, raw materials and professional services. For a business with meaningful input costs, this alone can outweigh the compliance burden.
2. B2B credibility. Many corporate buyers simply will not onboard an unregistered vendor, because they cannot claim credit on your invoice.
3. Headroom to grow. Registering before you cross the threshold avoids a scramble — and avoids the penalty exposure of having crossed it without noticing.

The trade-off is real: monthly or quarterly returns, and penalties for late filing. Don't register voluntarily unless you have a plan for keeping up with the filings.

The composition scheme

If your turnover is under ₹1.5 crore (₹75 lakh in special category states) and you supply within a single state, the composition scheme lets you pay a flat rate on turnover — 1% for traders and manufacturers, 5% for restaurants, 6% for eligible service providers — with quarterly rather than monthly returns.

The catch: you cannot claim input tax credit, and you cannot collect GST from your customers. It works well for B2C businesses with low input costs. It works badly for B2B businesses whose customers want credit.

What registration takes

Application, Aadhaar authentication and departmental review typically produce a GSTIN in 5–7 working days, provided your documents are clean:

• PAN and Aadhaar of the proprietor, partners or directors
• Proof of business address — rent agreement plus a utility bill, or an ownership document
• Bank statement or cancelled cheque
• Photograph and, for companies, a digital signature

The most common cause of delay is an address proof that doesn't match the applicant's name. Sort that out before you file.

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Not sure which side of the line you fall on? Send us your numbers and we'll tell you plainly whether you need to register — including when the answer is "not yet."