Should you register for GST? Here is everything you need to factor in

From understanding turnover thresholds to inter-state rules, RCM and dropshipping—explained in a nutshell

- Anil Poste

If you run a business and are wondering whether GST registration is necessary, this Mint guide will help you navigate the essentials. While the decision hinges on your annual turnover, that's not all there is to it. GST registration is not just about hitting a certain sales figure—it's also about the nature and geography of your operations.

Registering for GST

Let's start with the basics. The GST Act prescribes turnover thresholds for mandatory registration. For goods, registration is required once annual turnover exceeds ₹40 lakh, and for services the threshold is ₹20 lakh (though lower thresholds may apply to special category states).

However, even if your turnover is below these thresholds, registration is mandatory in specific situations. Under Section 24 of the CGST Act, GST registration is mandatory for specific categories of businesses and individuals, regardless of turnover.

These include those involved in the inter-state taxable supply of goods, the reverse charge mechanism (RCM), and casual taxable persons.

Gautam Khattar, principal at Price Waterhouse & Co LLP, said, "For inter-state supplies, there is no turnover exemption for goods. You must register from day one."

Under RCM, the tax liability shifts from the supplier to the recipient. In such cases, the recipient must register for and pay GST on the services received, regardless of turnover.

A casual taxable person is someone who occasionally undertakes taxable transactions in a state or union territory where they do not have a fixed place of business. Imagine a designer from Gujarat sets up a stall at a trade fair in Karnataka for a few days. This makes them a casual taxable person, necessitating GST registration.

If you are selling online: You should register