Authored by VipinContext for FY 2026-27: GST rates were rationalised following the 56th GST Council meeting, with a predominantly two-rate structure (5% and 18%) and a higher rate for specified goods, effective from 22 September 2025. The registration and return architecture explained here continues to apply; it is the backbone on which those rates are reported.
1. Statutory Overview and Legislative Intent
GST is a destination-based tax on supply, levied concurrently by the Centre (CGST) and the States (SGST) or Union Territories (UTGST) on intra-State supplies, and by the Centre as IGST on inter-State supplies and imports. Registration is the gateway: only a registered person can collect tax, issue tax invoices and pass on input tax credit. Returns are the mechanism by which the tax collected is reported and the credit chain is validated.
- Section 22, CGST Act, 2017: every supplier whose aggregate turnover in a financial year exceeds the threshold must register in the State or UT from which taxable supplies are made.
- Section 23: persons not liable to register (for example those dealing exclusively in exempt or non-taxable supplies, and agriculturists for produce from cultivation).
- Section 24: categories that must register irrespective of turnover.
- Section 25: procedure for registration, separate registration for each State and optional separate registrations for business verticals; voluntary registration.
- Section 2(6): aggregate turnover means the value of all taxable supplies (excluding inward supplies on reverse charge), exempt supplies, exports and inter-State supplies of persons having the same PAN, computed on an all-India basis, excluding taxes.
- Sections 37, 39 and 44: outward supply statement (GSTR-1), summary return with tax payment (GSTR-3B) and annual return (GSTR-9), with the reconciliation statement (GSTR-9C) under Section 44 read with Rule 80.
- CGST Rules, 2017: Rules 8 to 26 (registration), Rule 59 (GSTR-1 and IFF), Rule 61 (GSTR-3B and QRMP), Rule 61A (option for quarterly return), Rule 80 (annual return and reconciliation statement).
2. Applicability and Threshold Matrix
Registration thresholds (Section 22 read with Notification No. 10/2019-Central Tax)
| Category of supplier | General States | Special category States | Notes |
|---|---|---|---|
| Exclusively supplying goods | Rs. 40 lakh | Rs. 10 lakh or Rs. 20 lakh depending on the State | The Rs. 40 lakh limit is not available for persons supplying ice cream, pan masala and tobacco products, persons making intra-State supplies in States that did not adopt the higher limit, and persons registered voluntarily |
| Supplying services, or both goods and services | Rs. 20 lakh | Rs. 10 lakh (Manipur, Mizoram, Nagaland and Tripura) | Exempt services count towards aggregate turnover |
States that did not adopt the Rs. 40 lakh limit for goods, and the special category States, apply lower thresholds. Confirm the State-specific position on the State GST portal or the CBIC website before relying on a threshold.
Compulsory registration irrespective of turnover (Section 24)
| Category | Relaxation, where available |
|---|---|
| Persons making inter-State taxable supplies | Service providers making inter-State supplies are exempt up to the threshold (Notification No. 10/2017-Integrated Tax). Small suppliers of goods through e-commerce operators may register under the relaxed framework notified in 2023, subject to conditions |
| Casual taxable persons | Handicraft goods suppliers relaxed by notification |
| Persons liable to pay tax under reverse charge | None |
| Electronic commerce operators liable to pay tax under Section 9(5) | None |
| Non-resident taxable persons | None |
| Persons required to deduct tax at source (Section 51) | Registration as a TDS deductor |
| Persons who supply goods or services on behalf of other registered persons as agents | None |
| Input Service Distributors (mandatory ISD registration for distribution of common input services from 1 April 2025) | None |
| Persons supplying through an e-commerce operator who collects TCS under Section 52 (other than specified exemptions) | Service providers through ECO are exempt up to the threshold |
| Every e-commerce operator required to collect TCS | None |
| Persons supplying online information and database access or retrieval services from outside India to unregistered persons in India | None |
Return filing options
| Taxpayer profile | GSTR-1 | GSTR-3B | Annual return |
|---|---|---|---|
| Regular taxpayer, aggregate turnover above Rs. 5 crore | Monthly | Monthly | GSTR-9 mandatory; GSTR-9C (self-certified) mandatory |
| Regular taxpayer, aggregate turnover up to Rs. 5 crore, not opting for QRMP | Monthly | Monthly | GSTR-9 mandatory above Rs. 2 crore; optional up to Rs. 2 crore |
| QRMP taxpayer (aggregate turnover up to Rs. 5 crore) | Quarterly, with optional IFF for the first two months | Quarterly, with monthly tax payment in PMT-06 | As above |
| Composition taxpayer (Section 10) | Not applicable | CMP-08 quarterly statement-cum-challan | GSTR-4 annual return |
3. Step-by-Step Compliance and Filing Workflow
A. Obtaining registration
- Part A of REG-01: on gst.gov.in, go to Services, then Registration, then New Registration. Enter legal name as per PAN, PAN, State, mobile number and email. Verify both through OTP to obtain a Temporary Reference Number (TRN).
- Part B: log in with the TRN and complete business details, promoters or partners, authorised signatory, principal place of business, additional places, goods and services (HSN and SAC), bank account (or later within 30 days under Rule 10A), and State-specific information.
- Documents: constitution document (partnership deed, certificate of incorporation), photographs, proof of principal place of business (ownership document, rent agreement with consent letter, electricity bill), and authorisation for the signatory.
- Aadhaar authentication: opt for Aadhaar authentication for the promoters and authorised signatory. Under Rule 8(4A), applicants identified on the basis of data analytics and risk parameters must undergo biometric-based Aadhaar authentication and have their photograph taken, along with verification of original documents, at a designated GST Suvidha Kendra.
- Verification and submission: sign with DSC (mandatory for companies and LLPs) or EVC. An Application Reference Number (ARN) is generated.
- Processing: the officer may seek clarification in REG-03, to which the applicant replies in REG-04 within seven working days. Where Aadhaar authentication is completed and no physical verification is required, the application is deemed approved if not acted upon within seven working days. Where physical verification is required or Aadhaar authentication is not done, the period extends to 30 days.
- Certificate: the registration certificate is issued in REG-06 with the 15-character GSTIN. Display it at the principal and every additional place of business (Rule 18).
Simplified registration for small suppliers: the CGST Rules were amended in 2025 to introduce Rule 14A, an optional simplified registration for applicants whose output tax liability on supplies to registered persons does not exceed Rs. 2.5 lakh per month, with quicker electronic approval. Persons under this option must remain within the limit or withdraw from it.
B. Monthly cycle for a regular taxpayer
- Invoices and e-invoices: issue tax invoices under Section 31 and Rule 46. E-invoicing taxpayers obtain an IRN for every B2B invoice, and the details flow into GSTR-1 automatically.
- GSTR-1 by the 11th: report B2B invoices (invoice-wise), B2C large inter-State invoices above the specified value, B2C others (rate-wise and State-wise), exports, credit and debit notes, amendments, advances, nil-rated and exempt supplies, HSN-wise summary (Table 12, with HSN digits as per turnover) and documents issued (Table 13). Use GSTR-1A to correct before GSTR-3B is filed, where needed.
- Invoice Management System (IMS): review inward invoices uploaded by suppliers, and accept, reject or keep them pending. GSTR-2B for the month is generated from IMS actions.
- GSTR-2B on the 14th: download and reconcile with the purchase register.
- GSTR-3B by the 20th: the system auto-populates outward liability from GSTR-1 and ITC from GSTR-2B. Report outward supplies (Table 3.1), inter-State supplies to unregistered persons (3.2), ITC availed and reversed (Table 4), exempt inward supplies (Table 5) and interest and late fee (5.1). Offset liability using the electronic credit ledger in the order prescribed by Section 49 and Rule 88A, pay the balance in cash through PMT-06, and file with DSC or EVC.
C. Quarterly Return Monthly Payment (QRMP) scheme
- Eligibility: registered persons (other than composition taxpayers) with aggregate turnover up to Rs. 5 crore in the preceding financial year, or new registrants expecting turnover within the limit.
- Opting in: select the quarterly option on the portal from the first day of the second month of the preceding quarter to the last day of the first month of the quarter. The option continues until changed.
- Invoice Furnishing Facility (IFF): optionally upload B2B invoices for the first and second months of the quarter by the 13th of the following month (value of invoices up to Rs. 50 lakh per month), so that customers get credit in their GSTR-2B.
- Monthly payment by the 25th for the first two months through PMT-06, using either the Fixed Sum Method (system-computed: 35% of the cash tax paid in the last quarter, or the tax paid in cash in the last month where the preceding quarter was filed monthly) or the Self-Assessment Method (actual liability less ITC). No payment is needed if the balance in the ledgers covers the liability, or if liability is nil.
- Quarterly GSTR-1 by the 13th of the month after the quarter, and quarterly GSTR-3B by the 22nd or 24th of that month depending on the State.
D. Annual return and reconciliation
- Prepare GSTR-9 by aggregating outward supplies, ITC (with reconciliation against GSTR-2B and books), tax paid and amendments reported in the following year up to the cut-off. Use the auto-drafted values as a starting point only.
- Taxpayers with aggregate turnover above Rs. 5 crore also file GSTR-9C, a self-certified reconciliation between audited financial statements and GSTR-9 (certification by a Chartered Accountant or Cost Accountant was removed by the Finance Act, 2021 and Notification No. 30/2021-Central Tax).
- Pay any additional liability through DRC-03 with interest before filing.
4. Statutory Due Dates and Frequency Table
| Return or payment | Who | Frequency | Due date |
|---|---|---|---|
| GSTR-1 | Monthly filers | Monthly | 11th of the following month |
| IFF | QRMP taxpayers (optional) | Months 1 and 2 of each quarter | 13th of the following month |
| GSTR-1 | QRMP taxpayers | Quarterly | 13th of the month after the quarter |
| GSTR-2B | System generated | Monthly | 14th of the following month |
| GSTR-3B | Monthly filers | Monthly | 20th of the following month |
| PMT-06 | QRMP taxpayers | Months 1 and 2 of each quarter | 25th of the following month |
| GSTR-3B | QRMP taxpayers in Category X States (Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh and specified UTs) | Quarterly | 22nd of the month after the quarter |
| GSTR-3B | QRMP taxpayers in other States and UTs | Quarterly | 24th of the month after the quarter |
| CMP-08 | Composition taxpayers | Quarterly | 18th of the month after the quarter |
| GSTR-4 | Composition taxpayers | Annual | 30 April following the financial year |
| GSTR-9 and GSTR-9C for FY 2025-26 | Regular taxpayers as applicable | Annual | 31 December 2026 |
| GSTR-9 and GSTR-9C for FY 2026-27 | Regular taxpayers as applicable | Annual | 31 December 2027 |
Three-year time bar: the Finance Act, 2023 amended Sections 37, 39, 44 and 52 so that a return cannot be filed after three years from its due date. The GST portal has enforced this restriction since 2025. Old returns that are not filed can no longer be regularised; the only route left is departmental proceedings.
5. Interest, Late Fees and Penal Consequences
| Default | Provision | Amount |
|---|---|---|
| Late GSTR-3B or GSTR-1 (with tax liability) | Section 47; Notification Nos. 19/2021 and 20/2021-Central Tax | Rs. 50 per day (Rs. 25 CGST plus Rs. 25 SGST). Maximum per return: Rs. 2,000 where aggregate turnover is up to Rs. 1.5 crore; Rs. 5,000 for Rs. 1.5 crore to Rs. 5 crore; Rs. 10,000 above Rs. 5 crore |
| Late GSTR-3B or GSTR-1 (nil return) | Same | Rs. 20 per day (Rs. 10 plus Rs. 10), maximum Rs. 500 per return |
| Late GSTR-9 | Section 47(2); Notification No. 07/2023-Central Tax | Aggregate turnover up to Rs. 5 crore: Rs. 50 per day, maximum 0.04% of turnover in the State. Rs. 5 crore to Rs. 20 crore: Rs. 100 per day, maximum 0.04%. Above Rs. 20 crore: Rs. 200 per day, maximum 0.5% |
| Late GSTR-4 | Section 47 | Rs. 50 per day, maximum Rs. 2,000; Rs. 500 for nil returns |
| Delayed payment of tax | Section 50(1); Notification No. 13/2017-Central Tax | Interest at 18% per annum on the portion of tax paid in cash (net cash liability) for the period of delay |
| Wrongly availed and utilised ITC | Section 50(3) | Interest at 18% per annum |
| Failure to register when liable | Section 122(1)(xi) | Rs. 10,000 or the tax evaded, whichever is higher |
| General contravention | Section 125 | Up to Rs. 25,000 under each Act |
| Non-filing for six months (three periods for composition) | Section 29(2)(c); Rule 21 | Cancellation of registration by the proper officer |
| GSTR-3B not filed for previous period | Rule 59(6) | GSTR-1 and IFF cannot be filed |
| GSTR-3B not filed for two consecutive periods | Rule 138E | E-way bill generation blocked |
6. Practical Audit Pitfalls and Best Practices
- Reconcile GSTR-1 with GSTR-3B every month. Under Rule 88C, if liability in GSTR-1 exceeds GSTR-3B beyond the prescribed limit, the system issues DRC-01B and blocks the next GSTR-1 until the difference is paid or explained.
- Reconcile e-invoice and e-way bill data with GSTR-1. Department analytics compare these three sources automatically.
- Get HSN reporting right. Table 12 now uses a validated drop-down of HSN codes; mismatches with invoice data are flagged.
- Keep registration data current. Amend core fields (address, partners, directors) through REG-14 within 15 days of change. An unregistered additional place of business is a frequent audit observation.
- Track turnover across all registrations. Aggregate turnover is PAN-wide; QRMP eligibility, e-invoicing, HSN digits and GSTR-9C applicability all depend on it.
- File nil returns too. A nil return missed for months triggers cancellation and blocks e-way bills.
- Maintain records for 72 months from the due date of the annual return under Section 35 and Section 36, or longer if proceedings are pending.
7. Statutory References and Official Sources
- Central Goods and Services Tax Act, 2017: Sections 2(6), 9, 10, 22, 23, 24, 25, 29, 31, 35, 37, 39, 44, 47, 49, 50, 52, 122 and 125.
- Integrated Goods and Services Tax Act, 2017: Section 5 and Section 20.
- Central Goods and Services Tax Rules, 2017: Rules 8, 8(4A), 9, 10A, 14A, 18, 21, 46, 59, 61, 61A, 80, 88A, 88C and 138E.
- Notification No. 10/2019-Central Tax dated 7 March 2019 (Rs. 40 lakh threshold for goods).
- Notification No. 10/2017-Integrated Tax dated 13 October 2017 (exemption for inter-State service suppliers).
- Notification No. 13/2017-Central Tax dated 28 June 2017, as amended (interest rates).
- Notification Nos. 19/2021 and 20/2021-Central Tax dated 1 June 2021 (late fee caps for GSTR-3B and GSTR-1).
- Notification No. 07/2023-Central Tax dated 31 March 2023 (GSTR-9 late fee).
- Notification No. 30/2021-Central Tax dated 30 July 2021 (self-certification of GSTR-9C).
- Finance Act, 2023 (three-year time bar under Sections 37(5), 39(11), 44(2) and 52(15)).
- Press release of the 56th GST Council meeting, 3 September 2025 (rate rationalisation).
- Official portals: gst.gov.in (filing and GSTN advisories); cbic-gst.gov.in (Acts, Rules, notifications and circulars).