Understanding GST Registration: Who Needs It and Who Doesn’t

GST registration is the gateway for businesses to legally collect tax from customers and claim input tax credit. But not every business needs to register. The Goods and Services Tax (GST) law has laid down specific conditions under Section 22, 23, and 24 of the CGST Act to determine who must register, who may register voluntarily, and who is completely exempt. Let’s break it down in a simple and traditional yet forward-thinking way.

Section 22 – Who Is Required to Register Under GST?

Section 22 of the GST law talks about the basic requirement to register, which is mainly based on aggregate turnover.

What Is Aggregate Turnover?

It includes:

• Taxable supplies
• Exempt supplies
• Export of goods/services
• Inter-state supplies

It excludes:

• Taxes under GST (CGST, SGST, IGST, UTGST)
• Reverse charge inward supplies

Important: Turnover is calculated on a PAN-India basis across all business branches.

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Threshold Limits for Registration

These vary by state and type of supply:

🔹 ₹10 Lakh Limit (for goods & services):

• Manipur, Mizoram, Nagaland, Tripura

🔹 ₹10 Lakh for Both Goods & Services:

• Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry, Telangana

🔹 ₹20 Lakh for Services / ₹40 Lakh for Goods:

• All Other States (e.g., Maharashtra, Gujarat, Tamil Nadu, etc.)

Note: ₹40 lakh limit applies only if the person is engaged exclusively in the supply of goods.

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Exemptions from GST Registration

Even if your turnover is below the threshold, you may still not be required to register—provided you meet certain conditions.

Exempt If:

• You are exclusively supplying goods and turnover is below ₹40 lakh
• You are exclusively supplying services and turnover is below ₹20 lakh (or ₹10 lakh in special category states)

Exceptions (Where Registration Is Still Mandatory):

• If you deal in ice cream, tobacco, pan masala, bricks, or tiles
• If you make inter-state supplies (with limited exceptions)
• If you opt for voluntary registration
• If you’re supplying through an e-commerce operator

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Section 23 – Persons Not Liable to Register

This section clearly outlines who is not required to register, regardless of turnover.

Section 23(1): Straight Exemptions

• Persons exclusively dealing in exempt goods/services
• Agriculturists supplying produce grown on their own land

Section 23(2): Notified Persons

• Suppliers through e-commerce platforms below the turnover limit
• Handicraft suppliers and handmade goods sellers
• Casual taxable persons making taxable supplies up to ₹20 lakh
• Persons supplying goods through ECO (exempted if below threshold)

These people must fulfill conditions such as: only intra-state supply, single registration in one state, using the same PAN, etc.

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Section 24 – Compulsory Registration (Regardless of Turnover)

This section lists all the categories of persons who must register, no matter how small their turnover is.

Mandatory Registration Applies to:

• Inter-state suppliers of goods or services
• Casual taxable persons (CTP)
• Non-resident taxable persons
• Persons liable to pay tax under reverse charge
• E-commerce operators
• Persons required to deduct or collect TDS/TCS
• Input Service Distributors (ISD)
• Agents making taxable supply on behalf of others
• Suppliers of OIDAR services from outside India to Indian customers

Even if your turnover is ₹1, you’ll still need to register if you fall under these categories.

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Registration in Special Situations

• Business transfer (including death): New registration required for the successor.
• Merger or amalgamation: Fresh registration from the date of incorporation.
• Voluntary registration: Allowed anytime, but once taken, all compliance becomes mandatory.
• Multiple business locations: All places of business where taxable supplies are made must be registered.

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Final Thoughts

The GST system, though complex at first glance, is designed to ensure fair taxation and formalization of businesses across the country. Understanding when GST registration is mandatory, optional, or unnecessary not only ensures compliance but can also help your business grow with credibility.

While traditional values call for lawful and ethical business conduct, a forward-thinking approach would suggest that voluntary registration, even below the threshold, can open up opportunities—especially when dealing with corporate clients or claiming input tax credits.