GST Registration in India — Do You Need It and How to Get It

My uncle has been running a tailoring shop for fifteen years. He resisted GST registration for years because he thought it would mean more paperwork and higher costs. Then he started losing orders to larger garment businesses that wanted GST invoices and input tax credit. Within three months of registering, he had two new wholesale clients. The perception around GST and small businesses is very different from the reality. Let me walk through what I learned helping him.

Who actually needs GST registration

The most common question is: do I need to register? The basic answer is determined by your annual turnover. For businesses supplying goods, the mandatory threshold is Rs. 40 lakh in most states (Rs. 20 lakh in special category states). For service providers, it is Rs. 20 lakh. Cross that threshold and registration is mandatory — you cannot legally collect GST from customers without being registered.

But the threshold is not the only trigger. Several categories must register regardless of turnover: e-commerce sellers (anyone selling on Amazon, Flipkart, Meesho, etc.), businesses making inter-state supply of goods, those paying tax under reverse charge, and anyone already registered under the old service tax or VAT who migrated to GST.

Voluntary registration is also available. A business earning less than the threshold can choose to register — and many small businesses should — to access input tax credit on their purchases and to issue proper GST invoices to registered buyers who need them.

What you need for the GST portal application

The GST registration application is entirely on the GST portal at gst.gov.in. Before you start, keep these ready.

• PAN Card of the business — the GSTIN is derived partly from the PAN
• Aadhaar of the proprietor, partners, or directors for identity verification
• Proof of business address — rent agreement and latest electricity bill work well
• Cancelled cheque or bank statement showing the current bank account
• Photograph of the applicant
• For companies and LLPs — Certificate of Incorporation, MoA, AoA, and DSC

The application process

The process has two parts. Part A is quick — you enter your PAN, mobile number, and email, verify with OTPs, and get a Temporary Reference Number (TRN). Part B is the main application where you fill in all the business details: address, nature of business, type of goods or services (using HSN or SAC codes), bank account information, and details of all proprietors, partners, or directors.

After submission, you get an Application Reference Number (ARN). At this stage you can choose Aadhaar authentication, which speeds up approval significantly — most such applications are processed within a few working days without a physical inspection. If you do not authenticate via Aadhaar, the officer may schedule a visit to verify the premises.

What input tax credit actually means for a small business

This is the benefit that my uncle had been missing by not registering. When a registered business buys raw materials, equipment, or services for its business, it pays GST on those purchases. If it is GST-registered, it can claim that GST paid as a credit against the GST it collects from customers. The net GST liability is reduced.

For a tailor who buys fabric (paying GST on it) and charges for stitching (collecting GST), the ITC on fabric purchases reduces the GST he owes. Over a year, this is a real cash saving that an unregistered business simply cannot access. It is one of the most significant financial arguments for voluntary registration even below the threshold.

GST returns — what you commit to when you register

Registration comes with filing obligations. Under the regular scheme, you file GSTR-1 (details of outward supplies, monthly or quarterly) and GSTR-3B (a monthly summary with tax payment). An annual return is also required. Under the QRMP scheme for smaller taxpayers, you file quarterly returns with a monthly payment.

The Composition Scheme is a simpler option for eligible businesses with turnover up to Rs. 1.5 crore — you pay a flat percentage of turnover as tax and file only quarterly returns, but you cannot issue a tax invoice or claim ITC. For service providers the scheme is more limited.

Before registering, think about which scheme suits your business. My uncle went with the regular scheme because his business sells to other businesses who want input tax credit. A small retailer selling only to end consumers might find the Composition Scheme much simpler.