Guides · updated 2026-07
GST registration: who needs it, and the composition shortcut
Most small businesses ask the GST question exactly once — usually the week an invoice crosses a line. Here are the lines, and the two honest paths once you cross one.
The thresholds
Registration becomes compulsory when aggregate annual turnover crosses ₹40 lakh for goods (₹20 lakh in some hill/special-category states) or ₹20 lakh for services (₹10 lakh in specified special-category states). "Aggregate" means all your supplies under one PAN, across India, taxable and exempt together.
Some activities require registration from rupee one, whatever the turnover: inter-state supply of goods, selling through e-commerce platforms that collect TCS, and liability under reverse charge (CGST Act s.24). Voluntary registration below the threshold is allowed — common when your customers are businesses that want input tax credit.
The composition scheme
Turnover up to ₹1.5 crore (₹75 lakh special states)? The composition scheme swaps the full GST machinery for a flat levy — 1% for traders and manufacturers, 5% for restaurants — paid out of your own pocket. Service providers have a parallel 6% scheme up to ₹50 lakh (s.10(2A)).
The trade-offs are real: no charging GST on invoices, no input tax credit, no inter-state outward supplies, and a BILL OF SUPPLY instead of a tax invoice, marked "composition taxable person, not eligible to collect tax on supplies". Filing is light: quarterly CMP-08, annual GSTR-4.
After registration: the paperwork that matters
A regular taxpayer issues tax invoices with the Rule 46 mandatory fields, shows CGST+SGST within the state and IGST across states, and files GSTR-1/GSTR-3B — quarterly under QRMP if turnover is within ₹5 crore. Above ₹5 crore, e-invoicing (IRN + QR code) is mandatory for B2B invoices, and 6-digit HSN codes on all invoices.
Your GSTIN itself is checkable: 15 characters — 2-digit state code, your 10-character PAN, entity count, "Z", checksum. Anyone can verify any GSTIN free on the GST portal's Search Taxpayer.
Make the documents this guide talks about
Sources
- CGST Act, 2017 ss.10, 22–24
- CGST Rules — Rule 46 (invoice)
- Notification 10/2023-CT (e-invoicing ₹5 Cr)
General information, not legal advice. Figures that vary by state are indicative — verify at the official portal named before acting.