GST registration for a new business: when and how

GST registration is one of the most-searched steps in starting up, and one of the most misunderstood. Registering too late invites penalties; registering unnecessarily early buys you monthly return filings you did not need. Here is how to get the timing right.

The turnover thresholds

Registration becomes mandatory when aggregate annual turnover crosses ₹40 lakh for goods or ₹20 lakh for services in most states (₹20 lakh and ₹10 lakh respectively in special-category states). "Aggregate turnover" is PAN-wide — all branches and business verticals count together, including exempt supplies.

When the threshold does not protect you

Several categories must register regardless of turnover. The ones that matter most to new businesses: anyone making inter-state taxable supplies of goods, sellers on e-commerce marketplaces such as Amazon and Flipkart, businesses liable under reverse charge, and non-resident or casual taxable persons. If you plan to sell on a marketplace, assume you need GSTIN before your first listing goes live.

Voluntary registration: sometimes the smart move

Below the threshold, registration is optional — but often worth it. A GSTIN lets you claim input tax credit on purchases, makes you eligible to supply to companies that insist on GST invoices, and is effectively required for export businesses that want refunds. The trade-off is a permanent monthly or quarterly filing obligation, so weigh it rather than default to it.

The process, step by step

Registration on the GST portal is free — there is no government fee. Part A of form REG-01 verifies PAN, email and mobile; Part B takes the business details and documents and generates an ARN. Aadhaar-authenticated applications are typically approved within about a week; without Aadhaar authentication, or where the officer seeks clarification, physical verification can stretch the timeline to a month. Once granted, the GSTIN is live and return filing obligations begin immediately — file nil returns even for months with no sales.

Composition scheme: the small-business shortcut

Businesses up to ₹1.5 crore turnover (₹50 lakh for most services) can opt for the composition scheme — a flat low tax on turnover, quarterly payment, minimal returns, but no input credit and no inter-state sales. It suits local traders and small manufacturers, not marketplace sellers or exporters. Choosing between regular and composition at registration is worth a short professional conversation; see also our company registration guide for how GST fits into the SPICe+ incorporation filing itself.

Frequently asked questions

Is GST registration free?

Yes. The GST portal charges no fee for registration. Costs arise only if you engage a professional to prepare and follow up the application.

What is the GST registration limit for a new business?

₹40 lakh aggregate turnover for goods and ₹20 lakh for services in most states (₹20/₹10 lakh in special-category states) — but several categories, including marketplace sellers and inter-state goods suppliers, must register regardless of turnover.

Do I need GST to sell on Amazon or Flipkart?

Yes. E-commerce marketplace sellers of taxable goods need GST registration irrespective of turnover, and marketplaces collect TCS which only a registered seller can claim.

How long does GST registration take?

Around 3–7 working days with successful Aadhaar authentication. Applications routed to physical verification or officer queries can take up to 30 days.