GST Section 24: Mandatory GST Registration Explained with Provisions, Rules & Exceptions

GST Section 24: Mandatory GST Registration Requirements Explained

Introduction

The Goods and Services Tax (GST) in India has revolutionized the way businesses operate. Introduced on 1st July 2017, GST unified multiple indirect taxes like VAT, Service Tax, Excise Duty, and others into a single comprehensive tax system. Every business owner, service provider, or supplier of goods needs to understand the provisions of GST for compliance.   mandatory GST registration

One of the most crucial aspects of GST law is registration. Without GST registration, a business cannot collect tax from customers or claim input tax credit (ITC). While Section 22 of the CGST Act defines who is liable to register under GST based on turnover, Section 24 of the CGST Act, 2017 lays down the cases where registration is mandatory irrespective of turnover.

This article will give you a complete guide to GST Section 24, its implications, mandatory registration requirements, examples, penalties for non-compliance, and FAQs for better clarity.

 

Categories Requiring Mandatory GST Registration Under Section 24

Let’s discuss each category under Section 24 in detail with practical examples:

1. Inter-State Taxable Supply

Any business making inter-state supply of goods or services must register under GST, regardless of turnover.

Example: A clothing trader in Delhi supplying to customers in Maharashtra needs GST registration, even if his turnover is below ₹20 lakh.

2. Casual Taxable Person

A person occasionally supplying goods/services in a state where they do not have a fixed place of business.

Example: A trader from Gujarat sets up a temporary stall at a trade fair in Mumbai. He must register as a casual taxable person.

3. Persons Required to Pay Tax Under Reverse Charge Mechanism (RCM)

Under RCM, the recipient of goods/services is liable to pay GST instead of the supplier. Such recipients must register.

Example: A business availing legal services from an advocate must pay GST under RCM, hence needs registration.

4. Non-Resident Taxable Person

Non-resident suppliers providing goods/services in India must register.

Example: A foreign company supplying software to Indian clients must obtain GST registration.

5. Agents Supplying Goods/Services on Behalf of Other Taxable Persons

Any agent or intermediary supplying on behalf of others must register.

Example: A commission agent selling agricultural machinery for multiple manufacturers must obtain GST registration.

6. Input Service Distributor (ISD)

An office that receives invoices for input services and distributes ITC to branches must register as ISD.

Example: A corporate head office distributing ITC to its regional offices.

7. E-commerce Operators

Platforms facilitating supply of goods/services through e-commerce must register.

Example: Amazon, Flipkart, Zomato, and Swiggy require GST registration.

8. Suppliers Through E-commerce Operators

Suppliers selling through e-commerce platforms must register, irrespective of turnover.

Example: A handicraft seller listing products on Amazon must obtain GST registration.

9. Persons Supplying Online Information and Database Access or Retrieval Services (OIDAR)

Foreign suppliers providing online services like software downloads, music, or cloud services to Indian customers must register.

Example: Netflix or Google providing services in India.

10. Persons Required to Deduct Tax at Source (TDS)

Government departments or notified persons deducting TDS under GST must register.

11. Persons Required to Collect Tax at Source (TCS)

E-commerce operators collecting TCS must register

Section 24 vs Section 22 – Key Difference

Section 22: Businesses must register if turnover exceeds threshold limits.

Section 24: Certain businesses must register even if turnover is below threshold.

For example:

A small Delhi-based bakery selling only locally can avoid GST registration until it crosses ₹20 lakh turnover (Section 22).

But the same bakery selling cakes online through Amazon must register mandatorily under Section 24.

Importance of Mandatory Registration under Section 24

1.     Legal Compliance – Avoids penalties and legal action.

2.     Wider Market Access – Enables interstate and online selling.

3.     Input Tax Credit Benefits – Businesses can claim ITC on purchases.

4.     Credibility – Registered businesses gain customer trust.

Penalty for Not Registering under Section 24

If a person is liable to register under GST but fails to do so:

·        Penalty: 10% of tax due (minimum ₹10,000).

·        In case of fraud: 100% of tax due.

Other consequences: Cannot issue tax invoices, no ITC claim, risk of legal proceedings

Documents Required for GST Registration

To comply with Section 24, businesses must provide:

1.     PAN Card of applicant/business

2.     Aadhaar Card

3.     Proof of business address (rent agreement, electricity bill)

4.     Bank account details

5.     Photograph of proprietor/partners/directors

Digital Signature (for companies/LLPs)

How to Register for GST under Section 24

Registration is online via the GST portal

Steps:

1.     Visit GST portal → Click “New Registration”

2.     Fill Part A (PAN, mobile, email) → OTP verification

3.     Fill Part B (business details, documents upload)

4.     Application reference number generated

5.     Verification by GST officer

6.     Issue of GSTIN within 7 working days

Real-Life Examples of Section 24 Application

1.     Small Artisan Selling on Amazon

Even with ₹3 lakh turnover, GST registration is mandatory due to online selling.

2.     Foreign Software Company

A Singapore-based firm providing cloud storage to Indian users must register as a non-resident taxable person.

3.     Law Firm Services

A business availing legal consultancy must register under RCM liability.

Recent Updates Related to Section 24

Exemption for Intra-State Supplies: Small suppliers making intra-state supply through e-commerce (like handicrafts) may get exemption.

Threshold Clarification: Section 24 overrides threshold; hence, businesses under this section must register regardless of turnover

FAQs on GST Section 24

Q1. What is Section 24 of GST?

Ans: Section 24 of the CGST Act lists categories of persons/businesses who must register under GST, even if their turnover is below the threshold limit.

Q2. Is GST registration mandatory for all e-commerce sellers?

Ans: Yes, any person supplying through e-commerce platforms like Amazon or Flipkart must register under Section 24.

Q3. Do freelancers need to register under Section 24?

Ans: If a freelancer provides services interstate or through online platforms, GST registration is mandatory.

Q4. What if I don’t register under Section 24?

Ans: You may face penalties, legal notices, and will not be allowed to claim ITC or issue tax invoices.

Q5. Can I apply for voluntary registration under GST?

Ans: Yes, businesses can voluntarily register for GST to avail ITC and expand their market

Conclusion

GST Section 24 is one of the most important provisions in the GST framework, ensuring that certain businesses register mandatorily, irrespective of turnover. This includes interstate suppliers, e-commerce operators, agents, casual taxable persons, and foreign service providers.

For businesses, compliance with Section 24 not only avoids penalties but also brings long-term benefits such as input tax credit, legal recognition, and expansion opportunities.

Understanding GST provisions like Section 24 is crucial for entrepreneurs, startups, freelancers, and even large corporations. If you fall under any category mentioned in Section 24, it is best to register for GST at the earliest to remain compliant and operate smoothly in today’s tax environment.

who needs GST registration under Section 24