GST Registration

GST Registration is the process of enrolling a business on the Goods and Services Tax Network (GSTN) to receive a GSTIN — a 15-digit state-wise identifier used for all indirect tax transactions. GST is a unified indirect tax levied on the supply of goods and services across India, administered jointly by the Central and State Governments through a dual-rate structure.

Who it applies to

Mandatory registration:

• Service providers with annual aggregate turnover above ₹20 lakh (₹10 lakh in special category states)
• Goods suppliers with annual aggregate turnover above ₹40 lakh (₹20 lakh in special category states)
• Any startup making interstate supplies, regardless of turnover
• E-commerce sellers — including those selling on marketplaces or through their own website with a payment gateway
• Businesses receiving services under reverse charge (legal services from advocates, goods transport agencies, etc.)

Voluntary registration: A startup below the threshold can register to claim Input Tax Credit on purchases and issue valid tax invoices to B2B buyers.

What you get

With a GSTIN:

• Collect GST on sales and issue valid tax invoices that enable B2B buyers to claim ITC
• Claim Input Tax Credit on GST paid on business purchases, reducing net tax outgo
• Access the Letter of Undertaking (LUT) mechanism for zero-rated export of services — supply without collecting GST, while claiming ITC refunds on inputs
• Appear as a compliant vendor in tendering, enterprise sales, and government procurement

Export of services: A GST-registered startup supplying services to foreign clients and receiving payment in foreign currency can file a Letter of Undertaking and supply without charging GST. Input GST paid on business expenses can be claimed as a refund. This is a meaningful benefit for SaaS and services exporters — the effective indirect tax rate on export revenue is zero, and input taxes are recoverable.

The Composition Scheme

For businesses with turnover up to ₹1.5 crore (₹75 lakh in some states), the Composition Scheme offers simplified compliance: a flat GST rate on turnover (1% for manufacturers, 5% for restaurants, 6% for other service providers), quarterly challan payments, and a single annual return (GSTR-4).

Drawbacks: no ITC, no interstate supply allowed, must display "Composition Taxable Person" on all invoices. Not available to e-commerce operators or most service providers.

What most founders miss

SaaS exports still require GST registration. A startup earning entirely from foreign clients in foreign currency may assume Indian GST does not apply. It does — the startup must register, file returns, and use the LUT mechanism to supply without collecting GST while recovering input taxes. Unregistered exporters cannot claim ITC refunds and may face compliance issues when their bank processes foreign receipts.

DPIIT recognition requires a GSTIN. The DPIIT recognition application lists GST registration as a required supporting document. Startups that have not yet registered may find GST compliance blocking their recognition application — not because DPIIT imposes a turnover requirement, but because the GSTIN is a mandatory field in the application.

Reverse charge applies even below the registration threshold. A startup that is not yet required to register may still owe GST as a recipient under the reverse charge mechanism — for example, if it receives services from overseas cloud providers in certain taxable categories or from certain domestic service providers. Reverse charge liability exists independent of the supplier's GST registration status and independent of the recipient's own registration status.

See also

• DPIIT Recognition — GSTIN is a prerequisite document for the DPIIT recognition application
• Udyam Registration — the MSME credential; many MSME benefits and lender assessments expect both Udyam and GSTIN
• GeM (Government e-Marketplace) — GeM seller registration requires a GSTIN for most product and service categories