In India, a person dealing exclusively in tax-free (or exempt) goods is not required to obtain GST registration under certain conditions. Specifically:
- Dealing exclusively in exempt goods or services: If a person’s entire turnover consists only of goods or services that are wholly exempt from GST, they are not required to register under GST. This includes tax-free goods or services that are either zero-rated or exempt under the GST regime.
- Aggregate turnover threshold: Even if a person deals in taxable goods, GST registration is mandatory only if the aggregate turnover exceeds the prescribed threshold limit. As of now, the limits are:
- â‚ą40 lakhs for goods (â‚ą20 lakhs for special category states).
- â‚ą20 lakhs for services (â‚ą10 lakhs for special category states).
Since tax-free goods do not contribute to the taxable turnover, there is no need to register for GST if a person deals solely in exempt supplies.
However, if the person is also involved in taxable supplies, they would need to assess their aggregate turnover for registration.
