A guide to the GST registration process

While the Goods and Services Tax has been abuzz in India ever since it came into effect on July 1st, 2017, much about the actual registration process remains shrouded in mystery and misinformation. With more than 3,500 cases booked, 10,400 fake GSTIN entities unearthed, and 357 arrested on record in 2021 alone, ignorance is certainly not bliss. If anything, it might just see you on the wrong side of the law. 

With the exception of businesses in the “Special Category States”,  businesses with an annual turnover of more than ₹ 20 Lakhs are mandated to register under the GST portal. 

List of Special Category States include-

Arunachal Pradesh
Assam
Jammu & Kashmir
Manipur
Meghalaya
Mizoram
Nagaland
Sikkim
Tripura
Himachal Pradesh
Uttarakhand

For businesses in the aforementioned list of special category states, the threshold annual turnover is  ₹ 10 Lakhs. So, if your business operates in and out of the special category states and records an annual turnover of ₹ 10 Lakhs, it is eligible for GST registration as per the regulations.

For a more detailed compilation of the different regulations pertaining to composition schemes, ITC, electronic way bill, IGST, TDS & TCS, click here.

Here is a detailed description of all you need to know about the process of registering a new business for GST. 

GST Registration For Service Providers

Service providers who operate intra- or interstate (Normal Category States) with an annual turnover of more than ₹ 20 Lakhs must be GST registered. Similarly, Service providers who operate intra- or interstate (Special Category States) with an annual turnover of more than ₹ 10 Lakhs must be GST registered.

This eligibility criteria for service providers came into effect from 1st April, 2019, and still holds true. In accordance with the notification no-10/2019, dated 7th March, 2019 by the CBIC( Central Board of Indirect Taxes & Customs)

GST Registration for Sale of Goods

GST registration is mandatory for businesses that engage in the sale of goods intra- or interstate (Normal Category States) with an annual turnover of more than ₹ 40 Lakhs. Likewise, GST registration is mandatory for businesses that engage in the sale of goods intra- or interstate (Special Category States) with an annual turnover of more than ₹ 20 Lakhs.

This eligibility requirement for the sale of goods came into effect on April 1, 2019, and is still valid. In accordance with the notification no-10/2019, dated 7th March, 2019 by the CBIC( Central Board of Indirect Taxes & Customs)

GST Registration for the Casual Taxable Person

Anyone who periodically engages in transactions involving the supply of goods and/or services in a state or territory where he/she has no established place of business (*no proof of address for the business) is considered a casual taxable person.

A casual taxable person is mandated to be GST registered irrespective of the turnover of their business or the value of the sporadic transactions that take place. 

Neither is a casual taxable person eligible for composition levy nor for a post transaction GST deposit. He/she must deposit the applicable GST in advance and apply for their registration a minimum of five days prior to the commencement of the business. 

Composition levy is an alternative method of tax collection for taxpayers with turnover up to  ₹75 Lakhs (Normal Category States) or  ₹50 Lakhs (Special Category States)

A casual taxable person can not conduct their business, i.e., render services and/or sell goods until they have been issued a certificate of registration.

GST Registration for the Non-Resident Taxable Person

Similar to a casual taxable person, any non-resident of the nation, is mandated to be GST registered irrespective of the turnover of their business. He/she must submit an application for GST registration at least five days before the start of the business and deposit the liable GST in advance.

A noteworthy exception to the supporting documents required for GST registration is that unlike other taxpayers, though a non-resident taxable person need not submit a copy of his/her PAN card, they must provide a proof of identity in the form of their attested passport.

Click here for more in depth information.

When an international musical artist performs in India, they are required to adhere to the regulations pertaining to the non-resident taxable person. 

GST Registration for multiple branches of the same business

If a business has multiple branches in different states of the nation, individual GST registrations from each branch and each state is mandated under GST regulations. Moreover, separate registrations are also required in the case of distinct company verticals.

The eligibility with regards to the annual turnover for each of the different branches/states will depend on whether it falls under the purview of the Normal Category States or Special Category States

GST Registration for Reverse-charge Mechanism

A reverse-charge mechanism is when the buyer of the products is liable to pay the taxes applicable on the goods and not the seller. Applicable for businesses that import goods/products into the nation, reverse charge transactions are mandated to register under GST regulations.

Please note that any business or taxable person registered under previous tax systems of the country like excise duty, service tax or VAT must register under GST to remain compliant with the government’s regulations. 

Similarly, if the rights /profits of a business are transferred to a new person/business entity, the new proprietor must be GST registered.

Supporting documents at a glance