GST Registration for Business: Who Needs It and How to Apply

GST registration gives your business a 15 character GSTIN, lets you collect GST from customers and claim credit for GST you pay on purchases. For many small businesses it is also the document that makes them look established to banks, large buyers and online marketplaces. Registration is done online on the official GST portal, gst.gov.in, and there is no government fee for it.

This guide covers who must register, the turnover limits, the composition scheme for small taxpayers, the documents you need and the steps on the portal. GST rules change often, so confirm the latest position on gst.gov.in or cbic-gst.gov.in, or with a tax professional.

Who must register for GST

There are two kinds of triggers: turnover crossing a limit, and certain activities that need registration no matter how small you are.

1. When turnover crosses the limit

The limit is checked on your aggregate turnover in a financial year. This is the total value of all your taxable, exempt and export supplies across India under the same PAN. It does not include GST itself.

The higher ₹40 lakh limit for goods does not cover every item, and states could choose which limit to follow. Check the current list for your state on the GST portal before relying on it.

Once you cross the limit, you must apply within 30 days. If you apply within that time, registration takes effect from the date you became liable.

2. Compulsory registration, whatever your turnover

Under section 24 of the CGST Act, 2017, these persons must register even below the limit. The main ones for small businesses are:

• Anyone making inter state taxable supplies of goods. (Service providers with turnover up to ₹20 lakh who supply to other states are exempt from this rule.)
• Casual taxable persons, such as someone selling at a temporary exhibition in another state.
• Persons who must pay tax under reverse charge.
• Persons selling through an e commerce operator that collects tax at source. Small sellers of goods within their own state have been allowed some relief under conditions, so check the latest notification before you list on online marketplaces.
• Agents supplying on behalf of other taxable persons.
• Input service distributors, non resident taxable persons and e commerce operators themselves.

Voluntary registration

You can register even if you are below the limit. This helps if your buyers are GST registered businesses that want input tax credit, or if you plan to sell online. The flip side is that once registered, you must file returns regularly, even in months with no sales.

Composition scheme basics

The composition scheme is a simpler option for small taxpayers. You pay tax at a low fixed rate on turnover and file fewer returns.

Rates above are the total of central and state tax. Important conditions:

• You cannot collect GST from customers. You issue a bill of supply that states you are a composition taxable person.
• You cannot claim input tax credit on purchases.
• You cannot make inter state supplies of goods. You can sell goods through online marketplaces only within your own state, and the marketplace collects tax at source on these sales.
• Manufacturers of certain notified goods are not allowed.
• You must display "composition taxable person" on your signboard.
• You pay tax quarterly using Form CMP-08 and file an annual return in Form GSTR-4.

New businesses can choose composition in the registration application itself. Existing taxpayers opt in through Form CMP-02 before the start of the financial year.

Who should choose it: small shops and restaurants that sell mostly to final consumers within the state. If most of your buyers are businesses that want input tax credit, the regular scheme is usually better.

Documents needed for GST registration

• PAN of the business (for a proprietorship, the owner's PAN).
• Aadhaar of the proprietor, partners, directors and authorised signatory, for Aadhaar authentication.
• Photographs of the proprietor, partners or directors and the authorised signatory.
• Proof of constitution for firms, LLPs and companies, such as the partnership deed or certificate of incorporation.
• Proof of principal place of business:
  • Owned premises: a recent electricity bill, property tax receipt or municipal khata copy.
  • Rented premises: rent or lease agreement plus an ownership document of the owner.
  • Other premises (such as a relative's home): consent letter plus an ownership document of the person giving consent.
• Letter of authorisation or board resolution for the authorised signatory.
• Bank account details. These can also be added after registration.

GST registration step by step on the GST portal

1. Start Part A. Go to gst.gov.in, then Services, Registration, New Registration. Choose "Taxpayer", your state and district. Enter the legal name exactly as in PAN, the PAN, and the email and mobile number of the main authorised signatory.
2. Verify OTPs. Enter the OTPs sent to your mobile and email. You get a Temporary Reference Number (TRN).
3. Fill Part B. Log in with the TRN. Fill the tabs one by one: business details, promoters or partners, authorised signatory, principal place of business, additional places, goods and services you deal in (HSN or SAC codes), state specific information and bank details. Choose composition here if you want it. Upload documents as you go.
4. Choose Aadhaar authentication. Opting for Aadhaar authentication usually speeds things up. A link is sent to each promoter and the authorised signatory to complete e KYC with an Aadhaar OTP.
5. Submit. Sign with EVC (OTP), e signature or DSC. DSC is compulsory for companies and LLPs. Submit within 15 days of getting the TRN, or the draft is deleted.
6. Get your ARN. An Application Reference Number is sent by email and SMS. Use it to track status on the portal.
7. Respond to queries. If the officer raises a query, reply on the portal within the time given. In some cases the department may ask for biometric verification at a GST Suvidha Kendra or a physical check of your premises.
8. Download the certificate. Once approved, you get your GSTIN and can download the registration certificate (Form REG-06) from the portal. Display it at your place of business.

The GST rules now also offer an optional simplified registration route for small, low risk applicants whose monthly output tax on supplies to registered businesses is not expected to exceed ₹2.5 lakh. With Aadhaar authentication, registration under this route is granted electronically within three working days. Check the current conditions on the portal.

After registration

• Issue proper tax invoices with your GSTIN, or bills of supply if you are in composition.
• File returns on time: usually GSTR-1 for sales and GSTR-3B for tax payment for regular taxpayers. Late filing attracts late fees and interest.
• Keep purchase bills to claim input tax credit.
• Update the registration through an amendment if your address, partners or business details change.

GST is one part of setting up. See our guides on business registration in India and Udyam registration for the rest.