GST Registration Requiremetns Under CGST Act, 2017

Summary: GST registration is mandatory where the applicable turnover threshold is exceeded or where a person falls within the compulsory-registration categories under Sections 22 and 24 of the Central Goods and Services Tax Act, 2017. The threshold is generally ₹40 lakh for persons exclusively supplying goods in specified States, subject to the conditions and exclusions of Notification No. 10/2019-Central Tax, while the threshold is ₹20 lakh for services or mixed supplies in most States and ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. Certain persons, including casual taxable persons, non-resident taxable persons, specified persons liable under reverse charge, e-commerce operators, ISDs and other notified categories, may be required to register irrespective of turnover, subject to applicable exemptions. Section 23 provides exemptions for specified persons, including agriculturists supplying produce from cultivation and persons exclusively making wholly exempt or non-taxable supplies. Eligible persons may also opt for voluntary registration under Section 25(3), subject to the resulting compliance obligations. Businesses should evaluate aggregate turnover, nature and location of supplies, applicable exemptions and compulsory-registration provisions before determining GST registration liability.

Introduction

The Goods and Services Tax (GST) regime, introduced through the Central Goods and Services Tax Act, 2017, the respective State/Union Territory GST laws and the Integrated Goods and Services Tax Act, 2017, established a unified indirect tax framework across India.

GST registration is not merely a procedural formality. Where registration is required under the law, failure to obtain registration can result in tax, interest and penalty consequences and may also affect the recipient’s ability to substantiate Input Tax Credit (ITC), depending upon the facts and applicable provisions.

This article explains the circumstances in which GST registration is mandatory, the applicable turnover thresholds, persons required to register irrespective of turnover, persons not liable for registration, voluntary registration and the principal requirements for obtaining registration.

1. When Is GST Registration Mandatory?

The principal provisions governing GST registration are Sections 22, 23, 24 and 25 of the CGST Act, 2017.

Under Section 22(1), a supplier becomes liable to registration when his aggregate turnover in a financial year exceeds the prescribed threshold, subject to the special provisions contained in the Act and notifications issued thereunder.

Importantly, the threshold is not simply a distinction between “goods” and “services” or between “normal” and “special category” States. The higher ₹40 lakh threshold is specifically available to persons engaged in exclusive supply of goods, subject to the conditions and exclusions prescribed by Notification No. 10/2019-Central Tax dated 07.03.2019.

A. Exclusive Supply of Goods

For persons engaged exclusively in the supply of goods, the threshold is:

• ₹40 lakh in most States/Union Territories; and
• ₹20 lakh for intra-State suppliers in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.

The ₹40 lakh exemption is subject to the conditions and exclusions prescribed under Notification No. 10/2019-Central Tax. In particular, the notification excludes persons required to obtain compulsory registration under Section 24 and persons dealing in specified goods such as ice cream, pan masala and tobacco products.

B. Supply of Services or Mixed Supplies

For suppliers of services or goods and services, the general threshold is:

• ₹20 lakh in most States/Union Territories; and
• ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura.

The ₹10 lakh threshold for these four States is also relevant to inter-State taxable services, subject to the specific exemption available under the applicable notification.

Important Clarification: ₹40 Lakh Is Not a General Goods Threshold

The ₹40 lakh threshold should not be described as a general threshold applicable to every supplier of goods.

It is an exemption from registration for persons exclusively supplying goods, subject to the conditions and exclusions prescribed under Notification No. 10/2019-Central Tax.

State-wise Threshold for Exclusive Supply of Goods

State/UT	Threshold
Andhra Pradesh	₹40 lakh
Arunachal Pradesh	₹20 lakh
Assam	₹40 lakh
Bihar	₹40 lakh
Chhattisgarh	₹40 lakh
Goa	₹40 lakh
Gujarat	₹40 lakh
Haryana	₹40 lakh
Himachal Pradesh	₹40 lakh
Jharkhand	₹40 lakh
Jammu & Kashmir	₹40 lakh
Karnataka	₹40 lakh
Kerala	₹40 lakh
Madhya Pradesh	₹40 lakh
Maharashtra	₹40 lakh
Manipur	₹20 lakh
Meghalaya	₹20 lakh
Mizoram	₹20 lakh
Nagaland	₹20 lakh
Odisha	₹40 lakh
Punjab	₹40 lakh
Rajasthan	₹40 lakh
Sikkim	₹20 lakh
Tamil Nadu	₹40 lakh
Telangana	₹20 lakh
Tripura	₹20 lakh
Uttar Pradesh	₹40 lakh
Uttarakhand	₹20 lakh
West Bengal	₹40 lakh
Delhi	₹40 lakh
Puducherry	₹20 lakh
Chandigarh	₹40 lakh
Andaman & Nicobar Islands	₹40 lakh
Dadra & Nagar Haveli and Daman & Diu	₹40 lakh
Ladakh	₹40 lakh
Lakshadweep	₹40 lakh

Threshold for Services or Mixed Supplies

State/UT	Threshold
Manipur	₹10 lakh
Mizoram	₹10 lakh
Nagaland	₹10 lakh
Tripura	₹10 lakh
All other States/UTs	₹20 lakh

Thus, for services and mixed supplies, the ₹10 lakh threshold applies in Manipur, Mizoram, Nagaland and Tripura, while the ₹20 lakh threshold generally applies in the remaining States and Union Territories.

What Is “Aggregate Turnover”?

For registration purposes, Section 2(6) of the CGST Act defines “aggregate turnover” on an all-India basis under the same PAN.

It broadly includes:

• taxable supplies;
• exempt supplies;
• exports of goods or services or both; and
• inter-State supplies.

It excludes:

• CGST;
• SGST;
• UTGST;
• IGST; and
• cess.

Accordingly, a taxpayer should not merely compare its taxable sales with the registration threshold. Exempt supplies and other amounts falling within the statutory definition may also affect the threshold calculation.

2. Persons Required to Register Irrespective of Turnover

Section 24 of the CGST Act contains categories of persons required to obtain compulsory registration notwithstanding Section 22.

These include:

1. Persons Making Inter-State Taxable Supplies

Section 24 generally requires persons making inter-State taxable supplies to obtain registration.

However, this provision is subject to specific exemptions. For example, certain persons making inter-State supplies of taxable services may avail exemption subject to the prescribed conditions and turnover limits.

Therefore, the statement that every inter-State supplier must register irrespective of turnover is too broad and should not be used without considering the applicable exemptions.

2. Casual Taxable Persons

A casual taxable person making taxable supplies is required to obtain registration.

This may apply, for example, to a person participating in an exhibition or trade fair in a State where the person does not have a fixed place of business.

Section 27 contains special provisions regarding registration of casual taxable persons, including advance payment of estimated tax liability.

3. Persons Liable to Pay Tax Under Reverse Charge

Persons required to pay tax under reverse charge under the applicable provisions of the GST law are covered by Section 24.

However, the provision should be read with the specific scope of reverse-charge liability under the relevant statutory provisions and notifications.

4. Persons Liable Under Section 9(5)

Persons required to pay tax under Section 9(5) are also covered by Section 24.

This provision is particularly relevant to specified services supplied through electronic commerce operators.

5. Non-Resident Taxable Persons

A non-resident taxable person making taxable supplies in India is required to obtain registration, subject to the specific provisions applicable to such persons.

6. Persons Required to Deduct Tax at Source

Persons required to deduct tax under Section 51 are covered by Section 24.

7. Agents and Persons Making Supplies on Behalf of Others

Persons making taxable supplies of goods or services on behalf of other taxable persons, whether as an agent or otherwise, are covered by Section 24.

8. Input Service Distributors

An Input Service Distributor (ISD) is required to obtain registration under Section 24.

9. Certain Suppliers Through E-Commerce Operators

Section 24 also covers persons supplying goods or services through an electronic commerce operator where the operator is required to collect tax at source under Section 52, subject to the specific statutory provisions and exemptions applicable to particular categories.

10. Electronic Commerce Operators

Every electronic commerce operator covered by Section 24 is required to obtain registration.

11. OIDAR Suppliers from Outside India

A person supplying online information and database access or retrieval (OIDAR) services from outside India to a person in India, other than a registered person, is also covered by Section 24.

12. Other Notified Persons

The Government may notify additional categories of persons required to obtain compulsory registration.

3. Persons Not Liable for GST Registration

Section 23 specifically identifies certain persons who are not liable to registration.

1. Persons Exclusively Making Non-Taxable or Wholly Exempt Supplies

A person engaged exclusively in supplying goods or services or both which are:

• not liable to tax; or
• wholly exempt from tax

is not liable for registration under Section 23(1)(a).

2. Agriculturists

An agriculturist, to the extent of supply of produce out of cultivation of land, is not liable to registration under Section 23(1)(b).

3. Persons Specifically Exempted by Notification

Section 23(2) empowers the Government, on the recommendations of the GST Council, to notify additional categories of persons who may be exempted from registration.

4. Persons Below the Applicable Threshold

A person whose aggregate turnover does not exceed the applicable threshold under Section 22, and who does not fall within Section 24 or another compulsory-registration provision, is generally not required to obtain registration.

4. Voluntary GST Registration

A person who is not otherwise liable to registration may nevertheless obtain registration voluntarily under Section 25(3) of the CGST Act.

Once voluntarily registered, the person is treated as a registered person and the provisions applicable to registered persons become applicable to him.

Benefits of Voluntary Registration

Voluntary registration may provide commercial advantages, including:

1. Input Tax Credit
   Subject to the conditions of Section 16 and other applicable provisions, registration enables the taxpayer to claim eligible ITC.
2. B2B Business
   Customers who are eligible to claim ITC may prefer dealing with registered suppliers.
3. GST Tax Invoice
   A registered person can issue tax invoices and collect GST in accordance with law.
4. Business Credibility
   GST registration may facilitate formal B2B transactions and vendor onboarding.
5. Business Expansion
   Registration can be commercially useful where customers, marketplaces or contractual counterparties require a GSTIN.

However, voluntary registration is not automatically beneficial in every case. It also creates ongoing compliance obligations, including return filing, invoicing, record maintenance and payment of tax where applicable.

Further, it should not be stated that voluntary registration can simply be “surrendered” whenever the taxpayer wishes. Cancellation is governed by Section 29 and the applicable rules, including the specific provisions applicable to voluntary registration.

5. Documents and Information Required for GST Registration

Registration is made electronically through FORM GST REG-01 under Rule 8 of the CGST Rules.

The exact documents and authentication requirements can vary depending upon the constitution and circumstances of the applicant. The registration application principally requires information relating to:

1. PAN

PAN of the applicant/business is generally required for GST registration.

2. Constitution of Business

Depending upon the entity, relevant evidence may include:

• Certificate of Incorporation;
• Partnership Deed;
• LLP Agreement;
• Trust Deed;
• Registration Certificate; or
• other relevant constitution documents.

3. Principal Place of Business

Documents establishing possession of the premises may include, depending upon the circumstances:

• ownership documents;
• rent/lease agreement;
• electricity bill;
• property tax receipt; or
• other prescribed evidence.

4. Bank Account Details

Bank-account information may be furnished in accordance with the applicable GST registration requirements. The precise timing and manner of furnishing bank details should be checked against the prevailing GST portal procedure.

5. Promoters/Partners/Directors and Authorised Signatory Details

Relevant identification and contact information is required for persons associated with the business and the authorised signatory.

6. Aadhaar Authentication

Aadhaar authentication requirements may apply depending upon the applicant and the applicable GST registration procedure.

Therefore, it is preferable not to state that a cancelled cheque, bank statement and passport-size photograph are mandatorily required in every case. The documents depend upon the constitution of the applicant and the circumstances of the application.

6. Time Limit for Applying for Registration

A person who becomes liable for registration under Section 22 or Section 24 is generally required to apply for registration within 30 days from the date on which he becomes liable to registration, under Section 25(1).

A casual taxable person or non-resident taxable person is required to apply at least five days before commencement of business, subject to the applicable statutory provisions.

7. Consequences of Failure to Obtain Registration

Failure to obtain GST registration when legally required can expose the taxpayer to:

• recovery of applicable tax;
• interest;
• penalties under the CGST Act;
• proceedings for failure to comply with registration requirements; and
• practical difficulties in undertaking compliant B2B transactions.

The precise consequence depends upon the nature and duration of the default and the applicable statutory provision. Therefore, it would be inappropriate to state that every case of delayed registration automatically results in the same penalty.

The recipient’s ITC position should also be examined separately. The absence of registration of the supplier can create practical and legal complications in relation to ITC, but ITC entitlement must be tested independently against Section 16 and other applicable provisions.

Conclusion

GST registration is a statutory requirement determined primarily by the nature of supplies, aggregate turnover, location of the supplier and the specific categories covered by Sections 22, 23 and 24 of the CGST Act.

A key distinction is that the ₹40 lakh threshold is not a general threshold for all suppliers of goods. It is an exemption available to persons exclusively supplying goods, subject to the conditions and exclusions of Notification No. 10/2019-Central Tax. In specified States, the corresponding threshold is ₹20 lakh. For services and mixed suppliers, the general threshold is ₹20 lakh, while the ₹10 lakh threshold applies in Manipur, Mizoram, Nagaland and Tripura, subject to the applicable statutory and notification framework.

At the same time, crossing the turnover threshold is not the only trigger for registration. Section 24 creates compulsory-registration requirements for specified categories, although particular exemptions and notifications must be considered—for example, the exemption available to certain inter-State suppliers of taxable services.

Businesses should therefore undertake a periodic GST registration review based on:

1. Aggregate turnover under Section 2(6);
2. Nature of supplies—goods, services or mixed supplies;
3. State/UT from which supplies are made;
4. Whether the taxpayer is eligible for the ₹40 lakh exclusive-goods exemption;
5. Whether any compulsory-registration provision under Section 24 applies;
6. Whether any specific exemption notification is available; and
7. Whether voluntary registration is commercially desirable.

Timely determination of registration liability helps avoid tax and penalty exposure and ensures that the business can maintain a compliant GST and ITC chain.

Disclaimer

This article is intended for general informational purposes and does not constitute legal or tax advice. GST registration requirements are subject to the CGST Act, IGST Act, applicable State/UT GST laws, rules, notifications, circulars and subsequent amendments. The position should be independently verified for the relevant transaction and period before taking a compliance position.