Who is Liable for GST Registration in India?

GST registration is often seen as a formality, but it is a legal requirement for many businesses. Once a business crosses the turnover limit or falls under compulsory registration rules, it becomes mandatory to register under GST. Delaying it can lead to penalties and compliance problems later on.

This is where many people get stuck. Turnover limits, inter-state supply, online sales and special categories, each change who is liable for GST registration. Without clarity, it is easy to assume the law does not apply to you.

This blog explains the situations where GST registration becomes mandatory, how the law applies to different types of businesses, and why knowing your GST liability early helps you make the right decisions.

When Does GST Registration Become Mandatory?

GST registration becomes mandatory when a business meets specific conditions set under GST law. These conditions are not based only on turnover. In many cases, the way a business operates or supplies goods or services also creates liability.

A business must register for GST if:

• Its aggregate turnover crosses the applicable threshold in a financial year
• It makes inter-state taxable supplies of goods
• It operates as an e-commerce operator or is required to collect tax at source
• It is liable to pay GST under the reverse charge mechanism in specified cases
• It supplies goods or services as an agent or distributes input tax credit as an ISD
• It supplies online information or digital services to customers in India
• It falls under any other category notified for compulsory registration

In several of these situations, GST registration is required from the start of operations, even if the business has not yet earned any revenue.

GST Registration Criteria in India

The GST registration criteria in India explain how GST liability is assessed, not just when it starts. Registration is decided by looking at multiple factors together, not turnover alone.

Under GST law, liability is determined based on:

• Aggregate turnover under a single PAN
• Nature of supply, whether goods or services
• Place of supply, including inter-state or intra-state transactions
• Mode of operation, such as online sales or agency arrangements
• Specific categories notified for compulsory registration

These factors work together. Even if turnover is below the threshold, a business may still need GST registration due to how or where it operates. Relying only on turnover often leads to incorrect conclusions about GST liability.

Turnover is usually the first thing businesses look at when checking GST liability, yet it is not always clear how the threshold works or what should be included. Small gaps in understanding here often lead to wrong decisions. For a clearer explanation, you can read our guide on minimum turnover for GST.

Basic GST Registration Threshold Limits

Under normal circumstances, GST registration is required when aggregate turnover exceeds:

• ₹40 lakhs for suppliers of goods
• ₹20 lakhs for service providers

For special category states, the limits are lower:

• ₹20 lakhs for goods
• ₹10 lakhs for services

These limits form the base GST registration criteria in India. However, several cases require compulsory registration regardless of turnover.

Persons Liable for Compulsory GST Registration

In certain cases, GST registration becomes mandatory from the start. Turnover limits do not apply here. If your business activity falls under any of the situations below, registration is required by law.

1. Inter-State Taxable Suppliers

If you sell goods or services from one state to another, GST registration is compulsory, regardless of turnover. In the case of inter-state services, registration is required only when aggregate turnover crosses the prescribed limit, unless the supplier falls under a compulsory registration category.

2. Casual Taxable Persons

If you supply goods or services occasionally in a state where you do not have a fixed place of business, you must take GST registration before starting such supply.

3. Non-Resident Taxable Persons

If you are based outside India and supply taxable goods or services in India, GST registration is mandatory. There is no minimum turnover exemption in this case.

4. Persons Liable to Pay Tax Under Reverse Charge

GST registration is mandatory for individuals who are required to pay tax under the reverse charge mechanism on goods or services they receive. In such cases, the turnover limit does not apply, and registration becomes compulsory under GST law.

There is, however, a limited exception. If a person makes only outward supplies where GST is payable by the recipient under reverse charge, registration is not required for that reason alone.

5. Agents of a Taxable Person

Agents supplying goods or services on behalf of another taxable person must take GST registration. The law treats agents as independent taxable persons for this purpose.

6. Input Service Distributors (ISD)

Input Service Distributors are also required to register. If a business distributes input tax credit to its branches or units, ISD registration is mandatory.

7. E-Commerce Operators

Any person or entity operating an e-commerce platform that facilitates the supply of goods or services must obtain GST registration, regardless of turnover.

Once an e-commerce operator is registered under GST, the focus shifts to how tax is collected and how input tax credit is handled for online sales. This is an area where many businesses face practical challenges after registration. For a clearer understanding, refer to our guide on GST and Tax credit limits for online sellers.

9. Persons Required to Deduct TDS Under GST

Certain notified entities must deduct tax at source while making payments to suppliers. Such persons are required to register under GST.

9. Persons Required to Collect TCS Under GST

E-commerce operators collecting tax at source on behalf of sellers must take GST registration without considering turnover limits.

10. Suppliers of Online Information and Database Access Services (OIDAR)

If you supply online information or digital services from outside India to unregistered persons in India, GST registration is compulsory.

In all these situations, GST registration is not optional. Once your business falls into any of these categories, the law expects you to register and comply from day one.

Who is Not Liable for GST Registration?

GST registration is not required for everyone.

In general, registration is not mandatory if you are:

• An agriculturist supplying produce from cultivation
• Engaged exclusively in exempt supplies
• Operating below the turnover threshold and not covered under compulsory registration

Understanding this distinction helps avoid unnecessary registration and compliance burden.

Time Limit for GST Registration

Once GST liability arises, registration should not be delayed. The law allows a limited window to complete the process and missing it can create avoidable compliance issues.

In most cases, GST registration must be obtained within 30 days from the date on which registration becomes mandatory. This date is usually linked to turnover crossing the prescribed limit or the start of a compulsory registration activity.

For casual taxable persons and non-resident taxable persons, registration is required before business operations begin. Taking timely action here helps avoid penalties and ensures smoother compliance from the start.

Once the registration timeline is understood, the next concern is usually the application itself. Many businesses face delays simply because the process and document requirements are not clear at the start. To understand this better, you can go through our guide on the GST registration process.

Final Thoughts

Understanding who is liable for GST registration is not just about knowing the law. It is about recognising the exact point where GST registration becomes mandatory for your business. Missing that point can lead to penalties, blocked input tax credit, and avoidable compliance stress.

GST rules may look straightforward, but real business situations are rarely simple. Turnover limits, online sales, inter-state supplies, and business structure often overlap. This is why many businesses delay or misjudge online GST registration. If you want to be sure you’re taking the right step, LegalWiz assists businesses with online GST registration in a clear and structured way. From assessing registration liability to completing the process and staying compliant, the support is practical, timely, and built for long-term ease.