When is GST Mandatory?

In India, the Goods and Services Tax (GST) is mandatory for businesses meeting certain criteria, the general criteria for mandatory GST registration include:

1. Threshold Turnover: GST registration is mandatory for businesses whose aggregate turnover exceeds the prescribed threshold limit. The threshold limit may vary for different states and Union Territories. As of my last update, the threshold limit for businesses involved in the supply of goods was Rs. 40 lakhs (Rs. 20 lakhs for special category states), and for service providers, it was Rs. 20 lakhs (Rs. 10 lakhs for special category states).

2. Inter-State Supply: If a business makes inter-state supplies of goods or services, GST registration is mandatory, irrespective of the turnover.

3. Casual Taxable Person: Individuals or businesses that supply goods or services on a casual basis, without having a fixed place of business, are required to obtain GST registration.

4. Reverse Charge Mechanism: If a recipient is liable to pay tax under the reverse charge mechanism, they need to register for GST.

5. E-commerce Sellers: Businesses engaged in selling goods or services through e-commerce platforms are required to register for GST, regardless of the turnover.

6. Input Service Distributor: An Input Service Distributor, which is an office that receives invoices for services used by its branches and distributes the input tax credit accordingly, must register for GST.