Small business owners and entrepreneurs often find it confusing to understand applicability of GST registration in India. The general assumption amongst them is that they only need to register after crossing a specific turnover limit. However, there are certain cases that requires mandatory registration regardless of your income.
Under the CGST Act, 2017, even small businesses need to take registration if they sell goods across state lines, use e-commerce platforms, or fall under the reverse charge mechanism. Ignorance of such rules is quite risky and can lead to heavy penalties, interest, and the loss of input tax credits which can directly hurt the profits.
In this blog, we shall uncover the legal provisions of GST to help you identify your specific obligations. By understanding these rules early, you can avoid legal trouble and run your business with total confidence. We, at My Legal business LLP, break down the complex sections of the Act into practical steps so you can focus on growth instead of paperwork.
GST Registration in India: Legal Provisions
Central Goods and Services Tax Act, 2017 covers the legal framework for GST registration in India and within this legislation, Sections 22 and 24 specifies the specific timing and requirements for GST registration.
Under Section 22 of the Central Goods and Services Tax Act, 2017, GST registration in India is triggered when specific turnover thresholds are crossed by a business. On the other hand, Section 24 identifies various categories of persons for whom registration is compulsory, regardless of their total turnover.
These two sections of the Central Goods and Services Tax Act, 2017 creates a structured boundary to determine exactly when a taxpayer shall enter under the GST scope.
Let’s compare both the sections of the CGST Act, 2017:
| Particulars | Section 22 – Registration Based on Threshold | Section 24 – Mandatory Registration |
| Nature of registration | Conditional registration | Compulsory registration |
| Basis of applicability | Aggregate turnover exceeds prescribed threshold | Nature of business or supply, irrespective of turnover |
| Threshold limit | ₹40 lakh for goods and ₹20 lakh for services (₹20 lakh / ₹10 lakh for special category states, as applicable) | No threshold limit applies |
| Key persons covered | Regular suppliers of goods or services | Inter-state suppliers, casual taxable persons, non-resident taxable persons, e-commerce operators, persons liable under reverse charge, ISD, agents, etc. |
| Voluntary registration | Voluntary Registration is allowed even if turnover is below threshold | Not applicable |
| Objective | To bring medium and large businesses under GST | To ensure tax compliance in sensitive or high-risk categories |
| Applicability focus | Turnover-based GST registration applicability in India | Activity-based GST registration applicability in India |
Who is Required to take GST Registration in India?
This is a common question amongst small business owners and entrepreneurs that who is required to take GST Registration in India?
Let’s discuss it:
GST registration in India depends upon two things:
1)How your business makes money and,
2) What kind of work you do.
According to the GST rules, if your business makes money that crosses a certain threshold limit, you enter under the scope of GST registration in India.
- For people who sell goods, this amount is ₹40 lakh.
- For people who provide services, it is ₹20 lakh.
In some special states these amounts are lower.
Therefore, in these places you might need to get GST registration
GST registration is really important for businesses, in India.
Therefore, you need to get GST registration when your business crosses the amount prescribed.
As we discussed previously, turnover is not the only determining for GST registration in India. Under Section 24 of the CGST Act, 2017, compulsory registration is triggered for specific categories of people, even if their turnover is zero.
Irrespective of turnover limits, the businesses involved in inter-state supplies, casual taxable persons, and non-resident taxable persons comes under purview of GST. Additionally, it applies to anyone liable under the reverse charge mechanism, e-commerce operators, and vendors who sell through online platforms. Further, Input Service Distributors and agents acting on behalf of other dealers are also mandated for GST registration in India.
Conclusively, the determining factor for GST registration in India is decided not just by the amount earned, but by how and where business activities are conducted. The careful evaluation of these factors let us know about the registration requirements and businesses become compliant with the law.
Section 22: GST Registration Based on Turnover Threshold Limits
GST registration in India is largely based on the aggregate turnover of a person in a financial year. Let’s discuss briefly the thresholds prescribed under the Section 22 of the CGST Act, 2017.
| Threshold | Provisions |
| Threshold for Suppliers of Goods | Mandatory GST registration is triggered when your aggregate annual turnover crosses ₹40 lakh, though you must register immediately if you operate in specific states with lower limits or if you deal in “restricted” goods like ice cream, pan masala, or tobacco where the ₹20 lakh limit still applies. |
| Threshold for Service Providers | For most professionals, consultants, and service-based businesses, GST registration becomes mandatory as soon as your total turnover crosses ₹20 lakh in a single financial year. Once you hit this mark, you’re required to register immediately to stay compliant. |
| Special Category States | In Special Category States, the GST registration threshold is lower to accommodate regional economic conditions, with mandatory registration triggered at ₹20 lakh for goods suppliers and ₹10 lakh for service providers. |
Section 24: Persons Required to Take GST Registration Mandatorily
Under Section 24 of the CGST Act, 2017, GST registration in India becomes mandatory for the following persons, irrespective of turnover:
- Inter-state suppliers of goods or services
- Casual taxable persons
- Non-resident taxable persons
- Persons liable to pay tax under the reverse charge mechanism
- E-commerce operators required to collect tax at source
- Persons supplying goods or services through e-commerce platforms
- Input Service Distributors (ISD)
- Agents supplying goods or services on behalf of other taxable persons
- Persons required to deduct tax at source (TDS) under GST
- Persons required to collect tax at source (TCS) under GST
Where is GST Registration in India not required?
The law has mandated many businesses for GST registration in India but there are certain exemptions where you have to worry about the GST Registration. You can safely skip GST registration if you fall into any of these categories:
- You stay under the turnover limit: If your annual sales haven’t hit the ₹20 lakh or ₹40 lakh thresholds that depends on your business type, you aren’t legally forced to register.
- You only sell exempt items: In case you deal exclusively in goods or services that the government has exempted from tax, you don’t require a GST number.
- You deal in “out of scope” supplies: Iny case, your business only provides products or services that aren’t covered by GST laws like certain petroleum products or alcohol for human consumption, registration doesn’t apply to you.
- You are an agriculturist: If you are a farmer who makes money by selling produce grown directly from your own land, you are exempted by law.
- The government has exempted your category: Sometimes the government issues special notifications that excuse certain groups or small-scale industries from the registration net.
- You choose not to register voluntarily: Unless the law forces you to register, you have the right to stay outside the GST system if you don’t want to sign up voluntarily.
Conclusion
Understanding GST registration in India is important for every business, professional, and entrepreneur who wants to stay compliant and avoid unnecessary penalties. GST registration is not determined only by turnover limits. It also depends on the nature of supplies, the way a business operates, and the specific provisions of the CGST Act, 2017. Evaluation of these factors correctly can help taxpayers make the right decisions and ensure smooth compliance with GST law.
At My Legal Business LLP, we help clients clearly understand whether GST registration is required in their case and guide them through the entire registration process. From checking eligibility to handling post-registration compliances, our team offers practical and reliable support so you can focus on running your business while we take care of the legal and tax requirements.
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