Most people believe GST registration is a single number: cross a turnover figure and you register, stay below it and you do not. That is the most common trigger, but it is not the only one, and a business can be legally required to register on day one with zero revenue.
The turnover trigger
Registration becomes compulsory once your aggregate turnover in a financial year crosses the threshold for your state and your line of business. The thresholds differ for goods and for services, and special category states sit lower.
| Nature of supply | Most states | Special category states |
|---|---|---|
| Exclusively goods | ₹40 lakh | ₹20 lakh |
| Services, or goods and services | ₹20 lakh | ₹10 lakh |
Aggregate turnover is wider than most people expect. It is computed PAN-wide across all your GSTINs in India, and it includes exempt supplies, exports and inter-state supplies — not just the taxable sales you invoice.
The triggers that ignore turnover entirely
These make registration compulsory regardless of how small you are. This is where businesses get caught.
- You make inter-state taxable supplies of goods. One sale across a state border can trigger it.
- You sell through an e-commerce operator that collects tax at source — a marketplace seller, for instance.
- You are liable to pay tax under reverse charge on inward supplies.
- You are a casual taxable person or a non-resident taxable person.
- You are required to deduct TDS or collect TCS under GST.
- You supply on behalf of another registered person as an agent.
- You are an input service distributor.
Why businesses register voluntarily
Registration is not only a burden. Below the threshold, it can be a commercial decision rather than a legal one.
- 01Input tax credit. Unregistered, the GST you pay on rent, software, professional fees and raw materials is a pure cost. Registered, most of it is recoverable.
- 02Your customers want it. A registered buyer cannot claim credit on your invoice if you are unregistered, so your price is effectively 18% higher to them than a registered competitor's.
- 03Exports. You cannot export under a Letter of Undertaking, or claim a refund of accumulated credit, without a GSTIN.
- 04Marketplaces and tenders. Most require a GSTIN before onboarding.
- 05You are close to the threshold anyway. Crossing it mid-year forces registration in a hurry, usually in the middle of your busiest quarter.
What registering actually commits you to
Be clear-eyed about the ongoing obligation. Once registered you file returns whether or not you trade — a nil return is still a return, and late fees run per day per return until it is filed.
- GSTR-1 for outward supplies, monthly or quarterly depending on your scheme.
- GSTR-3B summary return with the tax payment.
- GSTR-9 annual return once you cross the prescribed turnover.
- Invoices in the prescribed format, with your GSTIN and HSN or SAC codes.
- Records retained for the period the law prescribes.
The composition scheme, briefly
Small taxpayers under a prescribed turnover can opt for composition: a low flat rate on turnover, a simple quarterly statement in CMP-08 instead of monthly returns, and far less paperwork. The trade-off is real — you cannot claim input tax credit, you cannot collect GST from your customers, and you cannot make inter-state outward supplies. It suits a local retailer or restaurant. It rarely suits anyone selling B2B.
If you should have registered and did not
Do not wait for a notice. Tax is payable from the date you became liable, not from the date you eventually registered, and it comes with interest and penalty. Registering voluntarily and disclosing the position is almost always cheaper than being found. Bring the numbers to a professional and work out the exposure before you file anything.