A freelancer comfortably under the turnover limit does not need to register for GST. A trader listing a handful of items on an online marketplace does, from the first sale, however small. The turnover threshold is the rule everyone knows, and it is only half of the test — which is why people who are certain they are under the limit keep getting notices.
You must register for GST once your aggregate turnover crosses ₹40 lakh for goods or ₹20 lakh for services in a normal-category state, and separately, regardless of turnover, if you fall into one of the compulsory categories under Section 24 such as inter-state supply or selling through an e-commerce operator.
The bottom line
What it costs: nothing. Registration on gst.gov.in is free, and the GSTIN is usually issued in about 7 working days.
What you get: the right to collect GST, issue tax invoices and claim input tax credit, plus access to B2B customers and government tenders that will not deal with an unregistered supplier.
What it costs you afterwards: permanent compliance. Returns, reconciliations and records continue even if turnover later falls, until you formally cancel.
What registration actually gives you
Registration issues a 15-digit GST Identification Number, the GSTIN, which makes you a legally recognised supplier. From that point you charge GST on your supplies, file returns, and can claim input tax credit on your purchases.
Without it you cannot lawfully collect GST or claim credit, and you are effectively shut out of business customers, because they need your GSTIN to claim credit on what they buy from you.
The turnover thresholds
Registration becomes mandatory under Section 22 of the CGST Act, 2017 once aggregate turnover crosses:
- Goods — ₹40 lakh in normal-category states, ₹20 lakh in special-category states.
- Services — ₹20 lakh in normal-category states, ₹10 lakh in special-category states.
The special-category states are mostly the North-Eastern and certain hilly states, and a few of them opted for the higher limit instead. The 2025 GST 2.0 reform changed rates but left these thresholds alone.
Aggregate turnover is the term that trips people up. It is the total value of all supplies under one PAN across India — taxable, exempt, exports and inter-state together — excluding GST itself. It is not your profit, and it is not the turnover of one branch. A business with three state registrations under one PAN adds all of it together.
Who must register regardless of turnover
Section 24 overrides the threshold entirely for certain categories. Registration is compulsory from the first rupee for anyone making inter-state supplies of goods, for e-commerce operators and most sellers supplying through them, for casual and non-resident taxable persons, for persons liable to pay under reverse charge, for input service distributors, and for those required to deduct TDS.
From 1 April 2025, a business operating multiple GSTINs under one PAN must also register as an Input Service Distributor.
This is where the expensive mistakes live. A small seller listing on a marketplace is inside Section 24 on day one, whatever the turnover, and being under ₹40 lakh is no defence.
How to register
Section 25 sets out the procedure, and the whole of it runs online at gst.gov.in.
- Open the portal and choose New Registration.
- Complete Part A with the business name, PAN, email and mobile number. Verify by OTP and you receive a Temporary Reference Number.
- Log in with the TRN and complete Part B: business details, principal place of business, bank account and authorised signatory.
- Upload the documents.
- Complete Aadhaar and biometric authentication. GSTN advisories through 2025 have made timely biometric verification the difference between a smooth application and one that stalls for weeks.
- Submit. An Application Reference Number is generated, which is what you quote when following up.
- The officer reviews the application, with premises verification where applicable, and the GSTIN is issued — typically within about 7 working days. The GST Council has approved 3-day registration for businesses assessed as non-risky.
The documents are predictable: PAN of the business or proprietor, Aadhaar, proof of constitution such as the incorporation certificate or partnership deed, address proof for the principal place of business, bank account details, photographs, and the authorisation for the signatory. A 2025 advisory requires valid bank details to be furnished within 30 days of registration.
Voluntary registration, and when it pays
Anyone below the threshold can register voluntarily. It is worth doing when your customers are businesses, because they need your GSTIN to claim credit, and when you have meaningful input tax to recover on software, rent or equipment.
It is not free of consequence. Voluntary registration brings the full compliance burden — the same returns, the same deadlines, the same penalties for missing them.
The Composition Scheme
Section 10 offers small taxpayers a simpler path: a low flat rate on turnover, around 1%, 5% or 6% depending on the business, paid through a quarterly CMP-08 with an annual return. It is open up to ₹1.5 crore of turnover for goods, ₹75 lakh in some states, and ₹50 lakh for service providers and mixed suppliers.
The trade-offs are severe and permanent while you are in it. A composition dealer cannot claim input tax credit, cannot sell inter-state, cannot supply through an e-commerce aggregator, and cannot collect GST from customers — so the tax comes out of the margin rather than being passed on. It suits a local retailer with local, non-business customers, and nobody else.
A worked comparison
A freelance graphic designer in a normal-category state earns ₹15 lakh a year. She is below the ₹20 lakh services threshold and is not required to register. When a corporate client insists on a GST invoice so it can claim credit, she registers voluntarily, keeps the client, and begins claiming credit on her own software subscriptions.
A small trader selling goods through an online marketplace turns over a fraction of that. He must still register from day one, because supplying through an e-commerce operator triggers Section 24 regardless of size.
Same country, same year, opposite answers — because the threshold is only one of the two triggers.
Common mistakes
- Treating the turnover threshold as the only test and missing the compulsory categories in Section 24.
- Registering after crossing the limit rather than when you cross it, which invites a penalty on the tax you should have been collecting.
- Reading "turnover" as income or profit. Aggregate turnover is all supplies under the PAN, across India.
- Taking the Composition Scheme for its simplicity without checking whether your buyers need credit from you.
- Leaving Aadhaar or biometric authentication incomplete, or missing the 30-day bank detail deadline, and wondering why the application has not moved.
Frequently asked questions
Is the GST limit ₹20 lakh or ₹40 lakh? ₹40 lakh for goods and ₹20 lakh for services in normal-category states, and lower in special-category states.
Do I have to register if I sell online? Generally yes. Supplying through an e-commerce operator requires registration regardless of turnover.
Can I register voluntarily below the threshold? Yes, and it makes sense if your customers are businesses or you have real input tax to recover. You take on the full compliance load with it.
What is the penalty for not registering? 10% of the tax due, subject to a minimum of ₹10,000, and considerably higher where the evasion is deliberate.
How long does registration take? Usually about 7 working days, and as little as 3 days for businesses assessed as non-risky.
My turnover has fallen below the threshold. Can I stop filing? No. The obligation continues until the registration is formally cancelled through the portal.