How Many Types of Taxpayers Are There in GST?

Many Indian businesses are mandatorily required to obtain GST Registration, but the application of GST varies for each business based on the way they operate. The GST system classifies businesses into different categories based on turnover, nature of supply, and operating structure. This classification is done at the registration stage itself.

GST does not treat all taxpayers the same. Each category has its own compliance and return filing requirements. Being clear about the types of taxpayers in GST helps businesses register properly and avoid problems later on.

Different Types of Taxpayers in GST

In India, GST classifies businesses based on factors like their structure, turnover, location of supply, and regulatory obligations. These categories decide how much tax you pay, which returns to file, and whether you can claim input tax credit.

GST registration categories make more sense when you know the fundamentals first. This includes how registration works, who is eligible, and what documents are needed. The GST Registration Guide with Process, Rules, and Key Documents covers these points in detail.

1. Regular Taxpayer

A regular taxpayer is the most common GST registration category in India. Businesses whose annual turnover exceeds ₹40 lakhs in normal category states or ₹20 lakhs in special category states are required to register under this category.

Regular GST registration also applies to businesses that:

• Make inter-state supplies
• Sell goods or services through online platforms
• Do not opt for the composition scheme

Service providers such as consultants, agencies, traders, manufacturers, and growing service businesses are generally registered as regular taxpayers.

Compliance requirements:

Regular taxpayers must file:

• GSTR-1 for outward supplies
• GSTR-3B for tax payment and summary reporting

One key advantage of this category is Input Tax Credit (ITC). Regular taxpayers can claim credit for GST paid on business purchases and expenses, which helps reduce overall tax liability.

There is no fixed validity period for this registration. It continues unless cancelled, surrendered, or suspended due to non-compliance.

Regular taxpayers often handle both local and inter-state sales. If you want to learn more about the difference, check out Inter-State vs Intra-State Supply Under GST: What You Need to Know.

2. Composition Taxpayer

The composition scheme under GST is designed for small businesses that prefer simplified compliance. Businesses with an annual turnover of up to ₹1.5 crore can opt for this scheme, subject to eligibility conditions.

Under this scheme, taxpayers pay GST at a fixed rate on turnover instead of following regular GST rules.

Key features

• Fewer GST returns
• Simplified record-keeping
• Lower compliance burden

However, composition taxpayers:

• Cannot collect GST from customers
• Cannot claim input tax credit
• Are restricted from making inter-state outward supplies

This category is suitable for small traders, manufacturers, and eligible service providers who prioritise compliance simplicity over tax credit benefits.

3. Casual Taxable Person

A casual taxable person supplies goods or services occasionally in a state where they do not have a fixed place of business.

This category is relevant for:

• Exhibition participants
• Temporary stalls
• Event-based sellers

Key rules:

• Mandatory GST registration
• Advance tax payment is required
• Registration is valid for a limited period
• Extension can be requested if needed

4. Non-Resident Taxable Person

A non-resident taxable person is a business or individual located outside India but supplying goods or services within India.

Important points:

• GST registration is mandatory and must be obtained at least five days before starting business activities
• Advance tax must be deposited
• Registration is time-bound
• Input tax credit is generally not available, except in limited cases such as on goods imported into India for onward supply

This category applies mainly to foreign businesses operating temporarily in India.

5. Input Service Distributor (ISD)

An Input Service Distributor under GST is typically a head or central office that receives invoices for input services such as marketing, consulting, or IT support and distributes the input tax credit to its branches.

The credit distributed may include:

• CGST
• SGST
• IGST

All recipient branches must be registered under GST and share the same PAN. ISDs can distribute credit only for input services and not for goods or capital assets.

ISD registration is mandatory after April 1, 2025, when businesses receive common input service invoices and intend to distribute tax credit across multiple registrations.

6. TDS Deductor and TCS Collector

Some entities are required to deduct or collect tax at source under GST. These registrations are separate from regular GST registration and apply only for specific compliance purposes.

TDS Deductor under GST

TDS under GST mainly applies to:

• Government departments
• Local authorities
• Public sector units
• Other notified entities

These entities deduct GST when making payments to vendors for taxable supplies.

Key points:

• TDS is deducted at 2%
  • 1% CGST + 1% SGST, or
  • 2% IGST
• A separate GST registration as a TDS deductor is required
• GSTR-7 must be filed for TDS reporting

TCS Collector under GST

TCS under GST applies primarily to e-commerce operators that collect payments on behalf of sellers using their platform.

Key points:

• GST registration as a TCS collector is mandatory
• Tax must be collected at source on applicable supplies
• GSTR-8 must be filed for TCS returns
• Turnover limits do not apply for this category

Both TDS and TCS registrations are compliance-specific and do not replace a regular GST registration where one is otherwise required.

Want to know more about TDS and TCS, when they apply, who is responsible, and how the rates work? Our guide TDS and TCS in India Explained with Key Differences and Rates explains it all.

7. E-commerce Operator

An e-commerce operator runs a digital platform that facilitates the sale of goods or services. GST imposes separate compliance requirements on these operators, regardless of direct sales.

Common examples are platforms like Amazon, Flipkart, Swiggy, and Zomato.

Key features:

• GST registration is mandatory, regardless of turnover
• Required to collect Tax Collected at Source (TCS) under Section 52
• GSTR-8 must be filed monthly
• Must follow both platform-level and seller-level GST rules

This category also covers online marketplaces and service aggregators that connect sellers or service providers with customers.

GST rules for e-commerce businesses can be a bit tricky, especially around tax credits and limits. If you want a detailed overview, take a look at GST and Tax Credit Limits for E-commerce Sellers in India.

8. SEZ Developer or SEZ Unit

Special Economic Zone developers and units are treated as a separate GST taxpayer category.

Key aspects:

• GST registration is mandatory
• Supplies to SEZs are zero-rated
• Refunds can be claimed on eligible supplies

SEZ entities follow specific compliance rules different from regular taxpayers.

9. UN bodies, and other notified persons

Embassies, UN bodies, and other notified persons are issued a Unique Identity Number (UIN) instead of a regular GSTIN.

The UIN allows these organisations to:

• Purchase taxable goods and services in India
• Claim refunds of GST paid on eligible purchases

Refunds are claimed by:

• Filing GSTR-11 for inward supplies
• Submitting Form RFD-10 to process the refund

This category exists to support diplomatic and international organisations while keeping GST transactions properly recorded.

How to Choose the Right Taxpayer Type in GST

Before applying for GST registration, businesses should assess:

• Turnover
• Nature of supply
• State-wise operations
• Mode of sale
• Customer profile

Choosing the correct GST registration category ensures smoother compliance and reduces the risk of penalties or registration errors.

Conclusion

The understanding of types of taxpayers in GST enables businesses to follow tax rules properly while minimizing tax risks and creating effective growth plans.  Each GST category serves a specific purpose, and the right choice depends on how and where you operate. If you’re unsure about types of taxpayers in GST or how to manage compliance, LegalWiz.in can make it simple. LegalWiz supports businesses in choosing the right taxpayer type, online GST registration, and handling filings, so running your business becomes easier.