Should You Opt for Voluntary Registration under GST? | H&R Block
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Who Should Opt for Voluntary GST Registration?

GST has become a talk of the town. With all confusions and excitements, GST finally rolled out on 01st July 2017. There is a common concern among all whether they should opt for voluntary registration under GST. So simple answer is any business can opt for voluntary registration under the Goods and Service Tax (GST) regime; even if their turnover is below INR 20 lakhs (INR 10 lakhs for NE States).

Let us understand whether you should opt for voluntary registration under GST and if yes then how, with the help of a practical example:

As per the provisions of the Act, the turnover threshold for normal taxpayers is INR 20 lakhs (for NE states INR 10 lakhs). This indicates that a spare parts dealer having a turnover of INR 13-15 lakh is not required to register under the GST regime.

However, somehow this time, the government is seeking some voluntary GST registrations under a unique set of tax rules and regulations. Hence, the taxpayer whose turnover does not exceed the limits of INR 20 lakh can also register under GST.

According to tax experts, voluntary registration under GST can bring some healthy chance for dealers. For example, business of Small spare parts might not exceed the predetermined limits, but if it is a supplier to a large dealer who is registered under GST, it will be the resourceful side of the GST registrations.

What benefits you can avail if you opt for voluntary registration under GST?

  • Various shortcomings of composition schemes can be handled well with voluntary registrations under GST.
  • It is pretty obvious that buyers will get benefited because registered dealers can provide a privilege of availing ITC (input tax credit) to their community in the form of issuing tax invoice. Resultantly, this helps an organisation to widen its customer base.
  • If you have to deal in interstate transactions, voluntary registration under GST will assist you with hassle free interstate transactions. With this, you can cater to a wider customer base and grow your profit margins due to ITC.
  • GSTN will provide compliance ratings for all its registrants. Your voluntary registration under GST will grant better compliance with trading communities due to timely filings of returns and timely payments of taxes and hence, fewer reconciliations. Furthermore, more businesses will prefer doing transactions with you due to your compliance awareness.

What shortfalls you may face if you opt for voluntary registration under GST?

The above-mentioned benefits are certainly there if you opt for voluntary registration under GST. However, there are certain criteria which need to be taken into consideration.

  • All those business units that are registered under GST need to set apart additional resources for both the capital liquidity and the compliances.
  • The THREE GST forms GSTR-1, GSTR-2, GSTR-3 need to be filled duly within stipulated time on monthly basis without committing any error.
  • Failure to timely and duly may lead to penalty added with the rejection of input tax credit.

GST forms are based on the transactions of sales, purchases, and the ITC input tax credit for the purpose of the tax liability. The GST being a destination based tax and state wise different registration is required to be taken unlike centralised registration under service tax, returns should be filed for every GSTIN where the business unit is situated. ITC will be available only if the dealer is registered in all the states where he is conducting the business and received the local tax invoices of CGST and SGST.

Closing words:

Based on the above arguments, it is needless to say that if you are willing to opt for voluntary registration under GST, it is not at all a bad idea. Registration under GST will surely result in marvellous growth and expansion prospects for SMEs.


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CA Ankita Mathur
CA Ankita Mathur
Ankita, a Big 4 alumna, is a tax expert at H&R Block (India) with vast experience in managing GST-related business services. An avid traveller, Ankita is a regular contributor to the CAclubindia and loves helping people understand about GST and helping companies be GST compliant.