Module 4: GST Registration
Comprehensive Study Notes with Charts, Diagrams & Examples
1. GST Registration
GST (Goods and Services Tax) registration is the process by which a business gets enrolled
under GST law and is assigned a unique GSTIN. Registration is mandatory for businesses
crossing specified turnover limits, and optional (voluntary) for others.
Threshold Limits
The turnover threshold determines who must register. The limits differ based on the type of
supply and the state of operation.
• Goods (Regular States): ₹40 lakhs annual turnover
• Services (Regular States): ₹20 lakhs annual turnover
• Special Category States (NE states, Uttarakhand, J&K): ₹10 lakhs
Example: A freelance designer in Kerala earning ₹22 lakhs/year must register since the services
threshold is ₹20 lakhs.
Fig 1: GST Registration Threshold Limits by Category
Who Should Register?
Any supplier of goods or services whose annual turnover crosses the applicable threshold must
register. Additionally, the following must register regardless of turnover:
• Inter-state suppliers of goods or services
• E-commerce operators and sellers on e-commerce platforms (Amazon, Flipkart, etc.)
• Persons liable to pay tax under Reverse Charge Mechanism (RCM)
• Input Service Distributors (ISD)
• Casual taxable persons and Non-resident taxable persons
Example: A seller on Amazon must register even with ₹8 lakh turnover, because e-commerce
sellers fall under mandatory registration.
Voluntary Registration
Businesses below the threshold can voluntarily register to claim Input Tax Credit (ITC) on
purchases, appear credible to GST-registered buyers, and participate in government tenders.
Example: A startup with ₹10 lakh turnover registers voluntarily to claim ITC on office rent,
equipment, and software subscriptions.
2. GSTIN (GST Registration Number)
GSTIN (Goods and Services Tax Identification Number) is a unique 15-character alphanumeric
code assigned to every registered taxpayer. It is used in all invoices, returns, and GST
transactions.
Example GSTIN: 32ABCDE1234F1Z5
Visual Breakdown of GSTIN
Fig 3: Structure of a GSTIN — each segment explained
Colour-coded Reference Table
State Code PAN Number (10 characters) Entity Default Check
Z
3 2 A B C D E 1 2 3 4 F 1 Z 5
Understanding Each Part
State Code (digits 1–2): 2-digit numeric code for the state/UT. Kerala = 32, Maharashtra = 27,
Tamil Nadu = 33, Delhi = 07.
Example: '32' in 32ABCDE1234F1Z5 identifies Kerala as the state of registration.
PAN Number (digits 3–12): The taxpayer's 10-character Permanent Account Number. Links
GST to income-tax identity. Format: 5 letters + 4 digits + 1 letter.
Example: 'ABCDE1234F' is the PAN of the registered business or individual.
Entity Code (digit 13): Number (1–9) or letter (A–Z) showing how many registrations the same
PAN holds in the same state. First = 1, Second = 2, etc.
Example: A business with two branches in Kerala has entity code '1' for the first and '2' for the
second registration.
Default 'Z' (digit 14): Always 'Z' in the current system. Reserved for future use.
Check Digit (digit 15): Auto-calculated alphanumeric character derived from the first 14
characters. Used to detect errors in the GSTIN.
Example: If any character in a GSTIN is mistyped, the check-digit validation will fail, revealing
the error.
3. Types of GST Registration
Different taxpayer categories can register under GST in different ways depending on their
nature of business, location, and turnover.
Fig 4: Overview of the Four Types of GST Registration
Summary Comparison Table
Type Who it applies to Key features Example
Normal All businesses above Full ITC; regular return Manufacturer in Kochi
Registration threshold filing (GSTR-1, 3B) with ₹1 crore turnover
Composition Small businesses Flat tax; no ITC; simplified Sweet shop in Thrissur
Scheme (goods ≤ ₹1.5 crore) returns with ₹60L turnover
Casual Taxable Suppliers with no fixed Temp. registration; valid 90 Delhi seller at Kochi
Person place in state days trade fair
Non-Resident Foreign entities Apply 5 days prior; pay Singapore firm
Taxable Person supplying in India advance tax conducting workshop in
India
Fig 5: Normal Registration vs Composition Scheme — Feature Comparison
Normal Registration
The standard registration for businesses above the threshold. Full ITC is available on all inward
supplies. Regular return filing is required (GSTR-1 for sales, GSTR-3B for tax payment).
Example: A garment manufacturer in Ernakulam with ₹1.5 crore turnover registers normally and
claims ITC on fabric and machinery purchases.
Composition Scheme
A simplified scheme for small taxpayers (goods ≤ ₹1.5 crore). Pay a flat low rate on turnover.
Cannot collect GST from customers, cannot issue tax invoices, and cannot claim ITC.
• Goods traders/manufacturers: 1% flat tax rate
• Restaurants (non-alcohol): 5% flat tax rate
• Other service providers: 6% flat tax rate
Example: A small bakery in Kozhikode with ₹80 lakh turnover opts for composition scheme —
pays 1% on sales, files quarterly returns with far less paperwork.
Casual Taxable Person
For those who supply goods/services in a state where they do not have a fixed place of
business. Registration is temporary — valid up to 90 days, extendable. Advance tax deposit
equal to estimated liability is mandatory before starting.
Example: A handicraft seller from Jaipur who sets up a stall at the Kochi trade fair for 15 days
registers as a casual taxable person in Kerala.
Non-Resident Taxable Person
For foreign businesses with no permanent establishment in India who supply goods/services
here temporarily. Must apply at least 5 days before commencing business. Advance GST
deposit required. Registration valid up to 90 days.
Example: A UK-based training firm conducting a 3-week workshop in Chennai must register as a
non-resident taxable person and pay GST on the fee charged.
Quick Summary
• Registration is mandatory above threshold limits (₹40L goods / ₹20L services).
• Some businesses must register regardless of turnover (e-commerce, inter-state, RCM).
• GSTIN is 15 characters: State code + PAN + Entity code + Z + Check digit.
• Four types of registration: Normal, Composition, Casual Taxable Person, Non-Resident
Taxable Person.
• Composition scheme offers simplicity but blocks ITC and tax invoice issuance.
• Casual and non-resident registrations are temporary (valid up to 90 days).
End of Module 4 Notes