Do you need to register for GST?

The two limits

Registration under the CGST Act, 2017 depends first on your aggregate turnover for the financial year. The limit is ₹40 lakh for a business that supplies goods only, and ₹20 lakh for a business that supplies services, or goods and services together.

The test is that turnover exceeds the limit. A business that is exactly at ₹20 lakh has not crossed it; one rupee more has.

A mixed business does not get the higher figure. The ₹40 lakh limit is for suppliers of goods alone, so a shop that also charges for installation or repair works to ₹20 lakh.

These are the general limits, which apply in Tamil Nadu. A handful of states and union territories have lower ones, so a business based elsewhere should confirm its own.

What counts as turnover

Aggregate turnover adds up taxable supplies, exempt supplies and exports, across every business you run under the same PAN. The GST charged on top is left out, and so are purchases on which you pay tax under reverse charge.

It is counted for the financial year so far, not for the last twelve months and not per branch. A second business under your PAN counts toward the same limit as the first.

When turnover does not decide it

Some businesses must register whatever their turnover. The ones that come up most:

• Selling goods to customers in another state. Moving goods between states needs registration from the start, with narrow exceptions.
• No fixed place of business, such as a temporary stall or an exhibition, or a business based abroad. These are treated as casual or non-resident taxable persons.
• Selling goods through an e-commerce platform.
• Paying tax under reverse charge, deducting GST at source (TDS or TCS), or acting as an agent for someone else.

Selling services to another state

Providing a service to a client in another state does not by itself require registration while you are under the services limit. A consultancy with one client in Bengaluru is still decided by its turnover. This is a common mix-up with the rule for goods.

When to apply

Once you cross the limit you are liable to register, and the application is due within 30 days of that day. You are liable from the day you crossed, not the day you apply. Tax on supplies in between is still due, and you cannot collect it from customers on invoices you did not issue as a registered person.

If you are close, say above 80% of the limit, it is cheaper to prepare early than to apply in a hurry afterwards.

Registering when you do not have to

Registration is allowed below the limit. The reasons are real: customers who are registered businesses usually want a GST invoice so they can claim credit, and some marketplaces and suppliers expect it. The cost is just as real: returns every month or quarter that you would not otherwise file.