GSTLegal Advice

What is The Eligibility for GST Registration?

A GST registration leads to the generation of a legal document called the GST certificate being issued. Let’s find out if you’re eligible for one.

Each and every taxpayer who possesses a GST registration online certificate is required to mandatorily showcase their registration certificate at a  prominently visible spot on all premises of their business.

GST Registration

GST is an indirect tax that has largely replaced many taxes in India, including excise duty, VAT, and services tax. Registration is required for businesses with a turnover of more than ₹ 40 lakhs for the sale of goods (₹ 20 lakhs for North Eastern – all hilly states for the sale of goods).

The threshold limits for service providers however have not changed. Persons providing services must register if their aggregate turnover exceeds ₹ 20 lakh (for normal category states) and ₹ 10 lakh (for special category states).

Eligibility for GST Registration

All businesses that are required to register for GST but haven’t done so must pay a penalty of 10% of the tax amount payable, up to a maximum of INR 10,000.

The following persons and organizations fall under the mandatory GST Registration category:

  • Businesses involved in inter-state supply of goods and services
  • Non-resident taxable person
  • Casual taxable person
  • Taxpayers under the reverse charge mechanism
  • Businesses registered under old tax services, such as VAT, excise, and service tax
  • Any business engaged in the supply of goods whose turnover in a fiscal year exceeds ₹40 lakhs for states in the normal category who have opted for the new threshold (₹20 lakhs for special category states and those in states which have not opted for the new threshold for example the state of Telangana)
  • Any business engaged in the rendering of services whose turnover in a fiscal year surpasses ₹20 lakhs in normal category states (₹10 lakhs for special category states)
  • Agents of a supplier
  • Input service distributors
  • Businesses that supply online information, database access, and/or retrieval services from outside India to a person/business within the country
  • E-commerce aggregators
  • Businesses that supply through an e-commerce aggregator
  • Other individuals and businesses as notified by the central/state govt, on recommendation by the GST Council.

Please note that even though you are not required to register for GST, you might choose to do so voluntarily. All GST provisions that apply to a registered taxable person will also apply to you. You would be regarded like any other taxable person.

Use our GST Calculator India to determine the exact amount of GST to be paid before registering for GST.

Benefits of GST Registration

GST registered taxpayers will benefit in the following ways from registration:

  • They will be legally recognised as a product or service supplier.
  • They will be able to legally collect taxes from their customers.
  • Taxpayers will also be able to credit purchasers/recipients for taxes paid on goods or services provided.
  • Registered taxpayers under the GST regime can also claim input tax credit for taxes paid on their purchases/procurements, which they can then use to pay taxes due on the provision of goods or services.
  • In addition, mandatory GST registration ensures a consistent flow of ITC from suppliers to recipients on a national scale.

The Bottom Line

Obtaining a GST registration can sometimes be a difficult undertaking, which is why we propose that you enlist the services of Vakilsearch GST professionals to ensure a smooth GST enrollment: https://reg.gst.gov.in/registration/ process.

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