Voluntary Registration Under GST: Everything You Need to Know!

Your business doesn't need to meet the mandatory turnover thresholds for being registered under GST. Ya, you read it right- Voluntary GST registration lets you register even if your business doesn't meet the turnover requirements.

SMEs, sole proprietors, and startups register voluntarily to leverage ITCs, enhanced credibility, as well as ensure streamlined interstate trade. Doesn’t matter if you have expansion plans or just want to strengthen your compliance reputation, voluntary GST registration opens the gateway to trust and confidence.

The blog below will take you through what is voluntary registration in GST, what are the benefits of voluntary registration, who is eligible, why you should apply, and more. Let’s quickly get started before it's too late. 

What is Voluntary Registration Under GST? 

Voluntary GST registration is a term used to describe the process that allows businesses to register for goods and services tax even if they are not legally required to do so. The word “Voluntary” refers to optional or not mandatory by law. In other words, it means GST registration, which isn’t mandatory for businesses, but they wish to do it. 

Why Should You Apply For Voluntary Registration Under GST? 

Claim Input Tax Credits 

• If you wish to claim ITCs but your turnover limit doesn’t meet the GST needs, you can apply for voluntary registration. 
• This will encourage improved cash flow and profitability. 

Legal Document 

• If you register for goods and services tax, a certificate of registration will be issued.
• This is a legal document that depicts the company’s compliance status, playing a vital role during business expansions and partnerships. 

Competitive Edge

Voluntary registration under GST offers a competitive edge as most of the industry giants and leaders deal with GST-registered businesses. 

Inter-state Trade 

It drives interstate trade seamlessly, which supports further expansions and development plans. 

Improve Ecommerce Trade 

Businesses leveraging eCommerce platforms can opt for voluntary GST registration to prevent mandatory gst registration ahead. 

What are the Benefits of Voluntary Registration? 

Offers Clients with ITCs 

• Legally identified businesses can avail tax invoices, allowing buyers to claim ITCs on the purchases made.
• This helps to strengthen the client base and get a competitive edge. 

Ensure Strong Reputation 

• A GST registration certificate adds credibility to the business, especially while interacting with industry leaders or engaging in collaborations.
• It identifies that the company complies with India's tax regulations and supports an improved compliance grade. 

Business Expansion 

• Voluntary registration under GST supports business expansion plans by unlocking participation opportunities in government tenders and interstate sales. 
• It eliminates registration hassles in the future. 

Who can Opt for Voluntary Registration Under GST? 

1. Businesses with a Turnover greater than 20 lakhs
2. Businesses selling on online platforms
3. Businesses involved in interstate trade 

Tips to Consider Before Opting for Voluntary Registration Under GST! 

Before you proceed with voluntary GST registration, ask the following questions:

• What category of sellers do you have?
• What category buyers do you have?
• How many resources are available to you?

Tips to Consider: 

• Your buyers and sellers should be registered under GST, then only can you benefit from voluntary registration under GST. Otherwise, you might break the ITC chain.
• If your end-customers, i.e., buyers, aren’t registered, don’t go ahead with GST registration.
• For businesses planning expansions in future might leverage composition schemes, voluntary GST registration can be beneficial.

Read More: GST Registration for LLP

Is Voluntary GST Registration Permanent? 

No, voluntary registration is permanent. If a person has opted for voluntary registration under GST but has not initiated the business within 6 months starting from the registration date, it remains cancelled.

​Also, after availing the voluntary registration, you can cancel it later or post a year.

​Here’s a list of people who can cancel the registration:

• GST officials
• Business owner or taxpayer who has requested registration
• In case the registered person dies, their legal heirs can apply for cancellation.

However, the registration can be cancelled only after one year from the date of commencement. 

Conclusion 

Voluntary registration under GST can be opted for by people whose turnover does not meet the GST registration threshold but wish to leverage the benefits. Doesn’t matter if you have a startup or a growing business; Voluntary GST registration offers credibility, supports expansions, and allows claiming ITCs.

Stay competitive and opt for GST registration voluntarily to unlock benefits that go beyond turnover thresholds. 

FAQs on Voluntary Registration Under GST 

1. How do mandatory and voluntary GST registration differ? 

Mandatory registrations apply to those with turnovers crossing the given thresholds. Voluntary registration can be done by business owners with turnovers below threshold. 

2. Do you need a PAN number for voluntary registration under GST? 

Yes, a PAN number is mandatory for registration since it serves as an official proof document. 

3. How can I apply for voluntary registration under GST? 

You can apply for voluntary registration through the online GST portal. 

4. Which documents do I need for voluntary registration? 

• PAN card 
• Business Constitution proof like agreement or partnership deed. 
• Bank account details. 

5. Do I need to pay charges for voluntary GST registration? 

No, you can apply for free voluntary registration under GST.

About the author

Priyanka Chaudhari

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Priyanka Chaudhari is an enthusiastic writer with an ocean of experience in the tech world. She writes mainly on topics like accounting, e-invoicing, GST, and billing. Currently, she is working with Munim and comes up with innovative topics for the readers. Stay tuned to her blogs.