What is Voluntary Registration under GST?

Voluntary Registration means applying for registration under GST (Goods and Service Tax) on a voluntary basis. The taxpayers who are not required to register as per the GST Act can apply for voluntary registration under GST.

GST Registration is allotment of a unique GST Number or GSTIN i.e. GST Identification Number to a business by the GST Department. The business registered under GST should:

  • Collect GST on the outward supplies i.e. sales
  • Claim the GST Input Tax Credit on the inward supplies i.e. purchases
  • Pay GST to the government by making payment of challan on the GST Portal

A business will be required to register under GST if:

Apply for GST Registration
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Thus, a dealer whose aggregate turnover is less than the prescribed threshold limit does not need to register under GST. Such dealers can apply for voluntary registration under GST. The taxpayer may apply for voluntary registration under GST to avail of the benefits available to GST registered dealers.

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Who should opt for Voluntary Registration under GST?

Whether a dealer should apply for a GST registration or not depends on various factors. Check when should you apply for registration.

Apply for voluntary registration under GST for following reasons

  1. Claim ITC on purchases – If you are registered under GST, you can claim the input tax credit of the GST paid on your purchases. You can claim GST input tax credit if you are registered under GST.
  2. Status of the registered dealer – If you are a GST registered dealer, you will receive a certificate of registration that will act as a valid proof of the legal status of the business.
  3. Competitive Advantage – Larger organizations and MNCs prefer to work with the GST registered dealers. A GST registered dealer can work with such companies to gain a competitive advantage.
  4. Inter-state sales – If you plan to sell goods or services outside your state in the future, you can apply for voluntary registration. By voluntary registration, you can avoid compulsory GST registration in the future.
  5. E-Commerce sales – If you plan to sell goods or services on an e-commerce platform, you can apply for voluntary GST registration to avoid compulsory registration under GST in the future.
  6. Unutilised ITC of earlier taxes – Dealer who has unutilised input tax credit under service tax, VAT, etc can carry forward this credit. This credit can be used for payment of taxes after registering under GST.

Do not apply for voluntary registration under GST for following reasons

  1. Sales to unregistered dealers – If your customers are not registered under GST, they cannot claim the credit of GST paid on the purchase. Thus, it would be beneficial to not charge GST from them. In that case, do not apply for registration.
  2. Purchases from unregistered dealers – If you purchase goods and services from unregistered dealers, you do not pay GST on purchases. Thus, you do not have any input tax credit to claim and registration may not be taken.
  3. GST Compliances – Once you’re registered under GST, it is compulsory to follow the provisions of the GST Act. To avoid complicated compliances like filing returns, payment of tax, maintenance of accounts, etc, registration should not be taken.
I am registered under service tax but my turnover is below 20 lacs. Should I register under GST?
You should register under GST if you wish to claim the credit of taxes paid on purchases or plan to sell your product online on an e-commerce platform
Read Answer
I am registered under service tax but my turnover is below 20 lacs. Should I register under GST?
You should register under GST if you wish to claim the credit of taxes paid on purchases or plan to sell your product online on an e-commerce platform
Read Answer

FAQs

What is Voluntary Registration?

Voluntary Registration means applying for registration under GST (Goods and Service Tax) on a voluntary basis. The dealers who are not required to register as per the GST Act can apply for voluntary registration on GST Portal.

Why should you apply for Voluntary GST registration?

The following can be the reasons for a business to apply for Voluntary GST:
1. Claim ITC on purchases
2. Status of the registered dealer
3. Competitive Advantage
4. Inter-state sales
5. E-Commerce sales
6. Unutilized ITC of earlier taxes

What is the GST Registration process?

Mentioned below is a brief process for GST Registration on the GST Portal:

1. Under New Registration on GST Portal, enter the basic details
2. You will see a GSTIN/ UIN / Provisional ID
3. Verify using OTP (One-time Password)
4. You will receive a TRN (Temporary Registration Number)
5. Verify the TRN by OTP Verification
6. Enter the relevant details and Upload the documents
7. Verify your application
8. Submit

Got Questions? Ask Away!

  1. Hey @HarshitShah

    GST Registration is the application for GST Number or GSTIN(GST Identification Number). Under the GST(Goods and Service Tax) Regime, it is mandatory for to have GSTIN to collect, pay GST and claim the Input Tax credit.

    For GST registration, the dealer has the following options:

    • Compulsory Registration: Under certain scenarios, the businesses have to get registration under GST

    When is Compulsory GST Registration needed?

    • Voluntary Registration: The business does not have the liability to register under GST, however, can apply for GST Registration. This usually is when the businesses are willing to take advantage of the Input Tax Credit facility

    • Registration under Composition Scheme: Composition scheme is a voluntary and optional scheme for registering under GST. Under the composition scheme, the compliance is simpler and lesser returns are to be filed. The tax is to be filed at a fixed rate. If the business turnover is in between INR 40 Lakhs and 1.5 Crores, they can opt for GST Registration under Composition Scheme

    • No Registration: In the case, when your business does not fall under the conditions for compulsory registration you do not require GST Registration

    Read more on GST Registration Types.

    Hope this helps!