The introduction of the Goods and Services Tax (GST) in India simplified the indirect tax system by merging various state and central taxes into one unified tax structure. For businesses operating in India, GST registration is a legal requirement if their turnover exceeds the prescribed limit. However, many business owners often wonder about the cost of GST registration and whether any government fees are involved.
In this guide, we will cover the cost of GST registration, whether any government fees apply, professional service charges, and factors that may affect the cost of obtaining GST registration.
What is GST Registration?
GST registration is the process of getting a business recognized under the Goods and Services Tax (GST) system. Upon successful registration, businesses receive a Goods and Services Tax Identification Number (GSTIN), which is a unique 15-digit code issued by the GST authorities.
GST registration is mandatory for:
- Businesses with an annual turnover exceeding ₹40 lakhs for goods and ₹20 lakhs for services.
- E-commerce operators and online marketplaces.
- Businesses involved in interstate supply of goods or services.
- Casual taxable persons and non-resident taxable persons.
Without GST registration, businesses cannot legally collect GST from customers or claim input tax credit (ITC).
Is There Any Government Fee for GST Registration?
No, the Government of India does not charge any fee for GST registration.
GST registration is a free process facilitated through the official GST portal . Businesses and individuals can register under GST without paying any statutory fee.
However, if a business opts to hire a professional or consultant for assistance with the registration process, there may be associated service fees, which vary depending on the complexity of the business.
Professional Fees for GST Registration
Although the government does not impose any fees for GST registration, many businesses prefer to hire professionals such as Chartered Accountants (CAs), Company Secretaries (CS), or GST consultants to ensure a smooth and error-free registration process.
Average Professional Fees
The cost of hiring a professional for GST registration depends on several factors, including the business type, number of locations, and documentation required.
Estimated Professional Fees for GST Registration:
- Proprietorship Firms: ₹1,000 – ₹2,500
- Partnership Firms and LLPs: ₹2,500 – ₹5,000
- Private Limited Companies and Corporations: ₹5,000 – ₹10,000
These fees generally include assistance with:
✔ Document verification and submission
✔ Application filing on the GST portal
✔ Follow-ups and resolving queries raised by GST authorities
Factors Affecting GST Registration Fees
1. Type of Business Entity
The complexity of the GST registration process varies depending on the type of business. For instance:
- Sole proprietors may have a simpler registration process.
- Companies and LLPs require additional documentation, increasing the complexity and cost of registration.
2. Number of Business Locations
If a business operates from multiple states or locations, it may need to register for separate GSTINs in each state. This adds to the documentation process and professional service fees.
3. Complexity of Documentation
The volume and type of documents required can affect professional charges. Businesses with multiple branches or diverse product/service offerings may require more complex documentation.
4. Additional Compliance Services
Some professionals offer bundled services that include GST registration along with compliance services such as filing GST returns, maintaining records, and generating e-invoices. This may increase the overall service cost.
Documents Required for GST Registration
To complete the GST registration process, businesses must provide the following documents:
For Proprietorship Firms
✔ PAN Card of the Proprietor
✔ Aadhaar Card
✔ Proof of Business Address (Electricity Bill/ Rent Agreement)
✔ Bank Account Statement/Cancelled Cheque
For Partnership Firms and LLPs
✔ PAN Cards of Partners
✔ Partnership Deed/LLP Agreement
✔ Proof of Principal Place of Business
✔ Authorization Letter
For Private Limited Companies and OPCs
✔ PAN Card of the Company
✔ Certificate of Incorporation
✔ Memorandum and Articles of Association (MoA and AoA)
✔ Board Resolution for Authorized Signatory
✔ Bank Statement and Address Proof
Who Needs to Register for GST?
Businesses and individuals need to register for GST if they meet any of the following criteria:
1. Annual Turnover Threshold
✔ ₹40 lakhs for businesses involved in the supply of goods (₹20 lakhs for northeastern and hill states).
✔ ₹20 lakhs for service providers (₹10 lakhs for northeastern and hill states).
2. Interstate Supply of Goods/Services
Businesses that supply goods or services across state borders must register under GST, regardless of turnover.
3. E-commerce Operators
E-commerce operators and sellers supplying goods or services through online platforms need to register under GST.
4. Casual Taxable Persons
Businesses operating temporarily in different states must register as casual taxable persons.
5. Voluntary Registration
Even if a business does not meet the mandatory threshold, it can voluntarily register under GST to avail input tax credit and enhance its market credibility.
Step-by-Step Process for GST Registration
Step 1: Visit the GST Portal
Go to the official GST portal –
Step 2: Click on ‘New Registration’
Select ‘Services’ → ‘Registration’ → ‘New Registration’
Step 3: Fill Out Basic Details
Provide details such as:
✔ PAN of the business
✔ Mobile number and email for OTP verification
✔ Business name and address
Step 4: Submit Required Documents
Upload scanned copies of necessary documents based on the business type.
Step 5: Verification and Approval
After document verification, the GST department issues a GSTIN within 7-10 working days.
Penalty for Non-Registration under GST
Failure to register under GST when required can result in penalties and legal consequences:
✔ A penalty of 10% of the tax amount due, subject to a minimum of ₹10,000.
✔ If deliberate tax evasion is detected, the penalty can be 100% of the tax amount.
To avoid penalties, businesses must ensure timely registration and compliance with GST regulations.
Benefits of GST Registration
1. Legal Recognition and Compliance
GST registration ensures compliance with Indian tax laws and provides businesses with legal recognition.
2. Input Tax Credit (ITC)
Registered businesses can claim input tax credit on purchases, reducing the overall tax burden.
3. Expansion of Market Reach
GST registration allows businesses to operate seamlessly across India, facilitating interstate trade and expansion.
4. Increased Credibility
A GST-registered business gains credibility and trust among customers, suppliers, and partners.
5. Avoidance of Penalties
Timely registration ensures that businesses avoid legal penalties and maintain compliance with tax regulations.
Conclusion
GST registration is an essential process for businesses operating in India, ensuring compliance with tax laws and enabling access to benefits such as input tax credit. While the Government of India does not charge any fee for GST registration, businesses often seek professional assistance to ensure a hassle-free process, which may involve service fees.
By understanding the factors affecting GST registration costs and complying with the prescribed regulations, businesses can avoid penalties, enhance credibility, and focus on growth and expansion.
