Overview

GST (Goods and Services Tax) registration is mandatory for businesses in many countries to collect and remit taxes on their sales. The process may vary slightly depending on your country’s regulations. Below are general criteria that may make GST registration mandatory:

  1. Turnover Threshold:

Most countries have a turnover threshold, and businesses that exceed 40 lakhs (for goods), 20 lakhs (for services) and 10 lakhs for goods & services in Special category state (MMNT). 20 lakh (for goods & services) in case of other special category state (SAMPUT)

  1. Interstate Sales:

Businesses involved in interstate sales may be required to register for GST, regardless of their turnover. Selling goods or services across state or national borders can trigger the need for registration.

  1. Special Categories:

Mizoram, Manipur, Nagaland, Tripura (MMNT) Sikkim, Arunachal Pradesh, Meghalaya, Puducherry, Uttarakhand,  Telangana (SAMPUT) Assam, Himachal Pradesh, Jammu & Kashmir.

  1. E-commerce Operators:

In some jurisdictions, e-commerce operators facilitating the sale of goods or services may be required to register for GST, irrespective of their turnover. (Like: – Amazon, Flipkart, Snapdeal, etc.)

  1. Voluntary Registration:

Even if your turnover is below the mandatory threshold, you may choose to voluntarily register for GST. This can be advantageous if you want to avail input tax credit or if it aligns with your business strategy.

Different Entities taking GST Registration are as follows:

  1. Individuals and Proprietorships:

Sole proprietors or individuals engaged in business activities may opt for GST registration if their turnover exceeds the prescribed threshold.

  1. Partnerships:

Partnerships, including Limited Liability Partnerships (LLPs), are often required to register for GST if their aggregate turnover crosses 40Lakhs the specified limit.

  1. Companies:

Private Limited Companies, Public Limited Companies, and other corporate entities are mandated to register for GST once their turnover surpasses the prescribed threshold.

  1. Hindu Undivided Family (HUF):

In some jurisdictions, HUFs engaged in business activities may be required to register for GST if their turnover exceeds the threshold 20Lakhs.

 

Applicability:

Mandatory Registration in below cases:

  • Person dealing only in goods and turnover exceeds Rs 40 lakhs in a year
  • Person dealing only in services and goods or services both and turnover exceeds Rs 20 lakhs in a year
  • Person making any interstate taxable supply of goods.
  • Casual taxable person making taxable supply
  • Persons who are required to pay tax under RCM basis.
  • Electronic commerce operator
  • Non-resident taxable persons making taxable supply
  • Persons who make taxable supply of goods or services or both as agent on behalf of other taxable persons.
  • Input Service Distributor
  • Persons who supply goods or services or both through electronic commerce operator.
  • Every person supplying OIDAR services from a place outside India to a person in India.

(Like: online advertising, Cloud Computer Services, digital content distribution, etc.)

 Benefits of taking GST registration:

  • Input Tax Credit (ITC):

One of the significant advantages of GST registration is the ability to claim Input Tax Credit. Businesses can offset the GST paid on purchases against the GST collected on sales, reducing the overall tax liability.

  • Interstate Transactions:

GST registration is often mandatory for businesses engaged in interstate transactions. It facilitates a seamless flow of goods and services across state borders.

  • Government Contracts:

Some government contracts and tenders may require GST registration as a prerequisite for participation. Being registered can open up opportunities for government business.

  • Penalties:
  • Monetary Penalties
  • Disqualification from Government Contracts
  • Interest Charges

Inability to Claim Input Tax Credit (ITC)

Documents Required: