A common assumption is that GST registration only becomes relevant once a business gets large. In practice, several categories need to register from the very first rupee.
Turnover is the usual trigger
Once your aggregate turnover crosses the prescribed threshold in a financial year, registration becomes mandatory. The threshold differs depending on whether you supply goods or services, and on which state you operate in.
Note that aggregate turnover is calculated across all your business verticals under the same PAN, not per business.
But some businesses must register regardless
- Anyone making inter-state taxable supplies
- Sellers on e-commerce platforms
- Businesses liable to pay tax under reverse charge
- Casual taxable persons and non-resident taxable persons
- Agents supplying on behalf of others
Voluntary registration is worth considering
If your clients are themselves registered businesses, they will generally prefer working with a registered supplier so they can claim input tax credit. Registering voluntarily can make you meaningfully easier to do business with.
The trade-off is compliance. Once registered, returns must be filed on schedule whether or not you had any transactions in that period.
Get the timing right
Registering late can mean penalties and the loss of input tax credit for the intervening period. If you are near the threshold or planning to expand across state lines, it is worth a conversation before you cross it, not after.