Goods and Services Tax (GST) was introduced in India on 1st July 2017 through the 101st Amendment Act of the Constitution. Before GST, multiple indirect taxes were levied at both the central and state levels, such as VAT (Value Added Tax), Service Tax, and Excise Duty. GST replaced these taxes, creating a unified tax structure for the entire country.
GST is divided into three categories based on the level of taxation:
• CGST (Central Goods and Services Tax) – Collected by the Central Government on intra-state supplies.
• SGST/UTGST (State/Union Territory Goods and Services Tax) – Collected by the respective State or Union Territory on intra-state supplies.
• IGST (Integrated Goods and Services Tax) – Collected by the Central Government on inter-state supplies of goods and services.
GST registration is required for businesses depending on the nature of business activity and threshold turnover limits. It is a state-wise registration, meaning businesses operating in multiple states must register separately in each state.
Threshold Limits for GST Registration
For Sale of Goods
• Normal Category States: INR 40 Lakhs
• Special Category States: INR 20 Lakhs
For Sale of Services
• Normal Category States: INR 20 Lakhs
• Special Category States: INR 10 Lakhs
Normal Category States: Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, J&K, Assam, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Kerala, Telangana.
Special Category States: Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarakhand.
Businesses with lower turnover can opt for the Composition Scheme, which offers a simplified tax filing process with lower tax rates but without the benefit of Input Tax Credit (ITC).
• Threshold Limit for Goods: INR 1.5 Crore
• Threshold Limit for Services & Mixed Suppliers: INR 50 Lakhs
• Tax Rate for Service Providers: 6% (3% CGST + 3% SGST)
Some businesses must register for GST regardless of their turnover:
• Inter-State Suppliers – Businesses selling goods/services across multiple states.
• Casual Taxable Persons – Temporary businesses (e.g., trade fairs, exhibitions).
• Reverse Charge Taxpayers – Those who need to pay GST under reverse charge mechanism.
• Non-Resident Taxable Persons – Foreign businesses supplying goods/services in India.
• TDS/TCS Deductors – Entities required to deduct tax at source under GST.
• Input Service Distributors (ISD) – Distributing input tax credit (ITC) among branches.
• Agents & Principals – Businesses selling goods/services on behalf of others.
• E-Commerce Operators – Platforms like Amazon, Flipkart, Zomato, Swiggy.
• Online Service Providers (OIDAR Services) – Foreign companies providing online services to Indian consumers (e.g., Netflix, Google).
GST registration is a completely online process conducted via the GST Portal (www.gst.gov.in).
Steps for GST Registration
a. Visit the GST Portal – Log in to www.gst.gov.in.
b. Click on ‘New Registration’ – Enter PAN, mobile number, and email ID.
c. Receive OTP Verification – Verify the details via OTP.
d. Fill in Business Details – Enter business name, address, and bank details.
e. Upload Required Documents – Provide PAN, Aadhaar, bank statement, business proof.
f. Submit Application (Form GST REG-01) – Application is processed by authorities.
g. Receive GST Certificate (Form GST REG-06) – Issued within 7 working days.
• PAN Card of Business/Proprietor/Partners/Directors
• Aadhaar Card of Proprietor/Partners/Directors
• Business Address Proof (Electricity Bill, Rent Agreement, etc.)
• Bank Statement or Cancelled Cheque
• Digital Signature Certificate (DSC) (for Companies and LLPs)
• Authorization Letter (for partnerships and companies)
Failing to register for GST can lead to penalties and legal consequences:
• For Non-Registration (Non-Fraud Cases): 10% of tax due (Minimum INR 10,000)
• For Fraudulent Evasion: 100% of tax due (Minimum INR 10,000)
• Legal Recognition for business.
• Input Tax Credit (ITC) benefit.
• Ease of doing business with other registered entities.
• Seamless interstate sales without additional taxes.
• Compliance with government norms.
GST registration is a crucial compliance requirement for businesses operating in India. Understanding the threshold limits, types of GST, registration procedures, and penalties ensures smooth business operations and avoids legal complications. It is advisable to stay updated with the latest GST rules to ensure full compliance.
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