Register for GST as a Small Business or Startup: Process, Benefits, and Documents Required

Introduction: GST and the Startup Ecosystem

The Goods and Services Tax is an integrated indirect tax system, which standardizes businesses across the nation within one system. For start-ups or small businesses, the significance of GST registration cannot be overstated, as it helps to formalize their operations and allow them to become a part of the mainstream economy. Registration of businesses under the GST Act not only enables them to charge tax but also enhances their credibility among customers, suppliers, and banks.

It is common for startup founders to mistakenly believe that they will not need to register for GST until their business reaches a minimum required turnover. This is somewhat accurate; however, there are various other situations where most new businesses would be advised to take advantage of this registration option, such as when they are selling products/services via B2B sales, doing business globally or selling products/services through an eCommerce platform.

This document is intended to guide startups and small businesses regarding the key components associated with GST registration and how to build their business related to GST, so they can properly evaluate whether or not to register for GST.

The Decision Point: When & Why Startups Should Register

When considering new GST registration, it is crucial to understand how the decision to register or not will impact the growth of the company, the ability to comply with tax laws, and the company’s cash flow. By knowing both sides of the argument, founders will be able to more effectively weigh their options and choose the right time in the life cycle of their company.

Mandatory Registration Thresholds (The Limit)
According to Goods and Services Tax (GST), a certain minimum turnover must be earned by a business in order for it to become compulsory for the business to register to be able to collect and remit the GST taxes. In the case of suppliers of goods, the minimum turnover requirement is Rs 40 Lakhs, and in the case of suppliers of services, it is Rs 20 Lakhs, although the minimum requirements for certain categories of States are lower. There are certain types of businesses, such as e-commerce businesses, interstate suppliers and businesses that charge their customers’ tax based on reverse charging, that will need to register for the GST immediately, regardless of their total revenue.

The Power of Voluntary Registration (The Opportunity)
Once startups take care of the regulatory compliance and register for the GST, the voluntary registration for the GST provides them with many advantages. Through their Registration Number (GSTIN), they can obtain input tax credits on their purchases that will ultimately lower their overall tax liability with respect to their operational costs. In addition, having a GSTIN increases the businesses’ credibility, because most larger businesses will only deal with businesses that have GST registration numbers.

Composition Scheme: A Simpler Option for Small Taxpayers
Eligible small businesses can benefit from a simple tax structure and lower rates under the Composition Scheme as set out in the GST Act. However, there are still restrictions placed upon them, so companies should be aware that they will not be able to claim Input Tax Credits when registered under this scheme and also that they may only trade within the same state if registered under this scheme.

Documents Checklist for Startups and Small Businesses

Preparation of the required documentation for proper preparation of GST registration will ensure that there are no problems with completing the GST registration process. Documentation varies by type of business, so new startups need to ensure they have all of the correct documentation in all forms.

Proprietorship / Individual (Common Startup Structure)

In the case of proprietors and individuals, GST registration requires basic information related to identity and business. The documents that are needed are:

Identity Proof: PAN card and Aadhaar card of the proprietor for verification.
Business Address Proof: Lease or rental agreement, recent utility bill, or No Objection Certificate (NOC) from the property owner for shared premises.
Bank Account Details: Cancelled cheque or recent bank statement to link the business account with GST records.

Private Limited Company (Venture-Backed Structure)

Incorporation and Company Identity Proof: To confirm the company’s existence and tax identification, present both the PAN card and Certificate of Incorporation of the company.
Constitutional Documents: To determine the goals of the company and how they conduct their business internally, it is necessary to file both the Articles of Association (AOA) and Memorandum of Association (MOA).
Director and Authorized Signatory Details: Each director and the authorized signatory must provide their PAN cards and Aadhaar cards to verify that they are responsible for paying GST.
Board Resolution: A Board Resolution must be passed to legally allow someone to be appointed the authorized signatory for GST purposes.

Key Digital Requirements

Meeting Points for Digital Requirements – Applicants must have a phone number and an email address to complete the initial stage of the OTP-verification process, as well as all notification communications associated with the GST Registration Process. When registering new Businesses, Business Names, Companies, Proprietorships, and Partnerships, a Digital Signature Certificate (DSC) is required for GST registration.

Step-by-Step GST Registration Process

Step 1: Initiating Registration (Part A)
Steps to Register for GST – To apply for GST Registration, log on to the official GST Website at www.gst.gov.in, click on the GST Registration link, and follow the prompts to complete the initial information portion of the application, including all personal information, including PAN Number, Mobile Number, and Email Address. After applying, the system will validate the above information and provide you with a Temporary Reference Number (TRN) allowing further processing on your behalf.

Step 2: Filling the Final Application (Part B)
After receiving the TRN, the applicant logs back onto the GST website to complete verification using the One-Time Password (OTP). After that, the applicant must complete a detailed application form containing details about the Business, Directors and Promoters, Authorized Signatories, and Principal Place of Business. It’s important that this application form is accurately completed to avoid delays and/or queries.

Step 3: Uploading Documents and Verification
Applicants must complete an application form and then upload all supporting documents necessary for the Business type to the application portal via the scan/upload option of the application form. After completing the application form, the final submission of the completed application must be performed via either the Aadhaar E-Sign option or via a Digital Signature Certificate (DSC). The Aadhaar E-Sign is an electronic Citizen identity verification option provided by the Government of India, and cannot be used by all applicants. A completed application form that has been either submitted through Aadhaar E-sign or Digital Signature Certificate (DSC) will confirm that the applicant has submitted the application, and will generate an Application Reference Number (ARN), which can be used to track the application status.

Step 4: Verification, Query, and Approval
After a GST officer determines that a submitted application and documents meet the processing criteria, the GST officer will review the application and documents submitted for processing within a specified period. If additional clarification and/or information is required, the GST officer will issue a deficiency notice (Form GST REG-03) requesting further clarification and/or information, as necessary. The applicant shall respond to the deficiency notice issued pursuant to Form GST REG-03 by submitting the required information on Form GST REG-04 within the timeframe specified in Form GST REG-03, to avoid being denied their application for registration.

Step 5: Obtaining the GSTIN (The Final License)
Upon completion of verification and approval, the GST Registration Certificate (Form GST REG-06) will be issued. This certificate provides the business with a Goods and Services Tax Identification Number (15-digit GSTIN), allowing the business to operate as a registered GST taxpayer.

Post-Registration Compliance for Small Businesses

Once GST registration is completed, small businesses must follow certain compliance requirements to remain legally valid and avoid penalties. These obligations are designed to maintain transparency while keeping the process manageable for small taxpayers.

To begin with, understanding HSN and SAC codes is essential for correctly classifying goods and services under GST. HSN codes apply to goods, while SAC codes are used for services, and using the correct code ensures accurate tax rates and smooth return filing.
Next, issuing GST-compliant invoices becomes mandatory for every taxable supply. These invoices must include key details such as GSTIN, invoice number, date, taxable value, applicable tax rates, and tax amount to meet statutory requirements.
Finally, filing GST returns on time is a critical compliance step. Small businesses must regularly file GSTR-1 for outward supplies and GSTR-3B for tax payment, while those under the Composition Scheme file GSTR-4. The simplified return structure for small taxpayers helps reduce compliance burden when filings are done accurately and within deadlines.

Conclusion

GST registration is more than a statutory requirement for startups and small businesses—it is a strategic investment in formalizing operations and enabling long-term growth. With Vakilsearch GST registration, businesses gain legal recognition, access to Input Tax Credit, improved credibility with clients, and the flexibility to scale across states without regulatory barriers.

To fully realize these benefits, it is essential to maintain accurate financial records and follow GST compliance timelines diligently. Regular return filing, proper invoicing, and correct classification of goods and services help prevent penalties and operational disruptions. Consistent compliance not only keeps the business legally secure but also lays a strong foundation for sustainable expansion.