Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover.

For those taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.

The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST.

Persons who are required to take compulsory GST registration

• Persons making any interstate taxable supply (however the threshold of Rs 20 lakhs/10 lakhs is available in case of inter state supply of taxable services, notified handicraft goods and handmade goods).
• Casual taxable persons making taxable supply.
• Persons who are required to pay tax under reverse charge on inward supplies received.
• Non resident taxable persons making taxable supply.
• E-Commerce (every e commerce operator and persons who supply goods and/or services).
• Persons who are required to deduct tax u/s 51.
• Input service distributor.
• OIDAR Services.
• Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.

Who is required to register for GST?

GST registration is essential for the following persons:

• Business Entities: Any enterprise with an aggregate annual turnover exceeding Rs. 40 lakhs. For special category states under GST, the threshold is Rs. 20 lakhs.
• Service Providers: Those with an aggregate annual turnover surpassing Rs. 20 lakhs. For special category states, this limit is Rs. 10 lakhs.
• Exemptions: It's important to note that entities dealing exclusively in GST-exempted goods or services are not bound by these thresholds.
• Previously Registered Entities: Entities that were registered under older tax frameworks (like Excise, VAT, Service Tax, etc.) need to migrate and register under the GST regime.
• Inter-State Suppliers: Any entity or individual involved in the supply of goods across state boundaries.
• Casual Taxable Entities: Those who undertake taxable supply occasionally.
• Entities under Reverse Charge Mechanism: Businesses obligated to pay tax under the reverse charge.
• Input Service Distributors & Agents: Distributors of input services, including their representatives.
• E-Commerce Platforms: Operators or aggregators of e-commerce platforms.
• Non-Resident Taxable Entities: Individuals or entities that are non-resident but engage in taxable supply within India.
• Supplier's Agents:  Representatives who supply on behalf of a principal supplier.
• E-Commerce Suppliers: Individuals or entities that offer goods or services through an e-commerce aggregator.
• Online Service Providers: Entities delivering online information, database access, or retrieval services from outside India to an individual in India, excluding those.