GST Registration Eligibility: Rules, Process & Benefits

Tally Solutions |Updated on: November 4, 2022

Introduction

The new Goods and Services Tax that is simply called as GST was introduced across the country on July 1, 2017. GST is a single tax that replaces several indirect taxes levied by both the State and the Central government.

All businesses are required to assess whether the business is liable to register for GST and accordingly obtain GST registration. The unique registration number must be obtained by every supplier affecting taxable supplies, subject to a threshold limit, by registering with the tax authorities so that all the operations and data relating to the business can be correlated and agglomerated.

Check out the below-mentioned eligibility criteria for GST registration and assess whether your business needs to obtain GST registration.

What is GST Registration?

Every supplier affecting taxable supplies, subject to a threshold limit is liable to get his business registered with the tax authorities by obtaining a unique identification code (i.e. GSTIN) from the concerned tax authorities so that all the operations of, and data relating to the business can be agglomerated and correlated.

And this process we call it GST Registration process.

GST Registration Eligibility: Threshold Limit Study

Up to March 2019

Special category states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand) – INR 10 lakhs
Rest of India – INR 20 lakhs

From 1^st April 2019 for businesses who are engaged in the exclusive supply of goods

Special category states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand) – INR 20 lakhs
Rest of India – INR 40 lakhs

In the 32nd GST Council Meeting held on 10th January 2019, States are given an option to opt for new registration limits or can continue with the previous threshold.

Important Note: The turnover considered here is the aggregate pan-India turnover (including value of taxable, exempt and export supplies) of a business entity, and not state-wise.

Aggregate Turnover & GST Registration Eligibility

Example: ABC Pvt Ltd is a manufacturing unit in Calcutta, West Bengal along with unit at Uttarakhand. Turnover details of all the units are as follows:

Calcutta Unit	Rs. 8 lacs
Uttarakhand Unit	Rs.11 lacs

Analysis of GST registration considering the above example

Analysis No.1	Uttarakhand unit falls under a special category state. Hence the threshold limit stays as Rs. 10 lacs to determine GST Registration eligibility
Result	In the given case, ABC Pvt. Ltd. would be required to take registration in Uttarakhand due to aggregate turnover exceeding Rs. 10 Lakhs (Rs. 11 lacs in the given case)

Analysis No.2	Calcutta unit having a turnover of less than threshold limit i.e., Rs. 20 lacs as it does not fall under a special category state.
Result	But Still, require to be registered separately by virtue of compulsory registration in the state of Uttarakhand. In the given case, the supplier has to separately register for state of Calcutta. The aggregate turnover limit of Rs. 20 lacs for other than special category state has to be overlooked in this case.

Separate Registration for each State vs.GST Registration Eligibility

From the results derived at Analysis 2, it clearly means that for each state for which the supplier is liable for registration, the supplier will have to take a separate registration even though he may be supplying goods or services or both from more than one State as a single entity.

Multiple Business Verticals and Eligibility for GST Registration

A person having multiple business verticals in one State may obtain separate registrations for each of the business vertical, subject to prescribed conditions to be eligible for GST Registration.

For this purpose, a business vertical means:

A distinguishable component of an enterprise
That is engaged in the supply of individual goods or services or a group of related goods or services
Which is subject to risks and returns that are different from those of the other business verticals

Documentation Role in GST Registration Process

The person eligible for GST Registration must keep ready the following documents:

A copy of PAN Card	Address proof of place of business
A copy of Aadhar Card	Bank account statement/Cancelled cheque leaf
Proof of business registration or incorporation certificate	Digital Signature
Identity and address proof of Promoters/Directors/Partners/Sole proprietor with photographs	Letter of authorization/Board Resolution for Authorized signatory

Benefits to Follow: Determining the Eligibility for GST Registration

The registration will confer the following benefits to the registrant:

Legally recognised as a supplier of Goods and/or Services;
Proper accounting of taxes paid on the input goods and/or services;
Utilisation of input taxes for the payment of GST due on supply of goods and/or services or both;
Pass on the credit of the taxes paid on the goods and/or services supplied to purchasers or recipients.

Know More about GST Registration

GST Registration, GST Registration Certificate, Documents Required for GST Registration, How to Check GST Registration Status, GSTIN

GST

GST Software, GST Calculator, GST on Freight, GST Exempted Goods & Services, Reverse Charge Mechanism in GST, GST Declaration

GST Rates & Charges

GST Rates, GST Rate Finder, HSN Codes, SAC Codes, GST State Codes

GST Returns

GST Returns, Types of GST Returns, New GST Returns & Forms, Sahaj GST Returns, Sugam GST Returns