Applicability of GST Registration in India: FAQs

Goods and Services Tax (GST) is a destination-based indirect tax levied on the supply of goods and services across India. One of the most important compliance requirements under the GST law is registration. Without appropriate registration, taxpayers cannot legally collect GST or claim input tax credits (ITC). This article explains the applicability of GST registration in a Frequently Asked Questions (FAQ) manner to help taxpayers understand when and how registration becomes mandatory.

1. What is GST Registration?

GST registration is a process by which a person becomes a taxable entity under the GST law. After registration, a unique GSTIN (Goods and Services Tax Identification Number) is allotted. It enables the taxpayer to:

• Collect GST legally
• Claim Input Tax Credit
• File GST returns
• Issue tax invoices

2. When does GST registration become mandatory?

GST registration becomes mandatory when a person’s aggregate turnover exceeds the prescribed threshold limits under GST. The limit depends on the type of business and nature of supply.

3. What are the basic turnover thresholds for GST registration?

As per the current provisions:

• ₹20 Lakhs for service providers (₹10 lakhs in special category states)
• ₹40 Lakhs for suppliers of goods (₹20 lakhs in special category states)

However, several exceptions exist where registration is required even below these limits.

4. Are threshold limits uniform across India?

No. Threshold limits are lower for special category states such as:

• Manipur
• Mizoram
• Nagaland
• Arunachal Pradesh
• Meghalaya
• Tripura
• Sikkim
• Uttarakhand

These states have historically lower thresholds to accommodate regional business capacities.

5. Who is required to register compulsorily irrespective of turnover?

The following persons must register even if their turnover is below the threshold:

• Casual taxable persons
• Persons making inter-state taxable supply
• E-commerce operators
• Suppliers selling through e-commerce operators
• Persons liable to pay tax under Reverse Charge (RCM)
• Non-resident taxable persons
• TDS/TCS deductors under GST
• Input Service Distributors (ISD)
• Online information service providers located outside India

6. Is GST registration mandatory for inter-state supply?

Yes. For many businesses, inter-state taxable supply triggers mandatory registration.
However, exceptions exist for:

• Service providers delivering inter-state supply up to threshold turnover
• Suppliers of exempt goods
• Job workers (specific conditions)

7. Do small retailers selling through Amazon/Flipkart require registration?

Yes. Any person supplying goods through e-commerce operators is required to register irrespective of turnover. This ensures proper tax collection at the source (TCS).

8. What is the rule for service providers supplying through online platforms?

Service providers are exempt up to the threshold limit, unless:

• The platform is liable to pay tax under RCM, or
• Services fall under categories like passenger transport, housekeeping etc.

9. When is registration required under Reverse Charge Mechanism (RCM)?

If you are a business receiving supplies covered under RCM, you must register to pay the applicable GST even if you fall below the threshold.

10. Is GST registration mandatory for casual taxable persons?

Yes. A casual taxable person undertakes supply occasionally without having a fixed place of business. Examples include:

• Exhibition stalls
• Trade fairs

Such persons must obtain temporary registration before making taxable supplies.

11. Do non-resident foreigners need registration?

Yes. Non-resident taxable persons supplying goods or services in India must register regardless of turnover. They must pay tax in advance as estimated liability.

12. Are farmers required to register?

Generally, No. Agricultural activities relating to unprocessed produce are exempt, and farmers are not considered suppliers of taxable goods.

13. Should an employee providing services to employer register?

No. Employer-employee relationships are neither supply nor taxable under GST, hence no registration.

14. What if business turnover crosses the threshold mid-year?

Registration must be obtained within 30 days from the date turnover exceeds the limit. Supplies made after crossing the limit and before registration approval may also attract tax.

15. Can voluntarily registration be obtained?

Yes. Businesses may register voluntarily to:

• Claim ITC
• Demonstrate tax compliance
• Supply to registered clients

However, once registered, all compliances apply.

16. Is GST registration required if turnover is a mix of exempt and taxable supplies?

Yes, if aggregate turnover including exempt supplies crosses the threshold limit.

17. What happens if a business is not registered but is liable?

Consequences include:

• Penalty under Section 122 (₹10,000 or amount of tax evaded)
• Interest on unpaid tax
• No ITC availability
• Legal proceedings

18. Can multiple branches operate under the same GSTIN?

Yes, but businesses may opt for separate registrations for different states or business verticals.

19. Is GST registration PAN-based?

Yes. PAN is mandatory for obtaining GST registration in India (except for non-residents, who can use passport).

20. Can GST registration be cancelled?

Yes, in cases like:

• Discontinuance of business
• Change in ownership
• Transfer of business
• No longer liable for registration

Cancellation relieves the taxpayer from regular filings.

Conclusion

GST registration ensures transparency, input credit flow, and proper tax compliance. While turnover threshold is a primary factor, several activities mandatorily require registration irrespective of volume. Understanding these provisions helps taxpayers remain compliant and avoid penalties.