GST Registration for Small Business, Home Based Business and Restaurant: 2026 Guide

GST registration for a small business becomes mandatory when yearly turnover crosses ₹40 lakh for goods or ₹20 lakh for services (₹20 lakh and ₹10 lakh in special-category states). A home based business follows the same limits and can register from its residential address. A restaurant must register above ₹20 lakh and may opt for the composition scheme up to ₹1.5 crore. Registration is free on the GST portal and takes about 3 to 7 working days.

At a glance

Business type	When registration is required	Usual GST treatment	Key point
Small trader or manufacturer (goods)	Turnover above ₹40 lakh	Rate as per product (HSN code)	Composition scheme available up to ₹1.5 crore
Small service provider	Turnover above ₹20 lakh	Mostly 18%	Inter-state services are exempt from registration below ₹20 lakh
Home based business	Same limits; earlier if selling goods on e-commerce platforms	As per goods or services supplied	Home address works with utility bill or NOC
Restaurant	Turnover above ₹20 lakh	5% without input tax credit	Composition scheme at 5% flat up to ₹1.5 crore

Do You Need GST Registration? The Turnover Limits

You need GST registration when your aggregate turnover in a financial year exceeds the threshold for your type of supply. Aggregate turnover means the total of all taxable, exempt and export supplies made under the same PAN across India, so income from two small ventures is added together.

Type of supply	Delhi and most states	Special-category states
Only goods	₹40 lakh	₹20 lakh
Services, or goods and services together	₹20 lakh	₹10 lakh

Registration is compulsory even below these limits if you:

• sell goods to customers in other states
• sell goods through e-commerce platforms such as Amazon or Flipkart (a limited exemption exists for some small intra-state sellers)
• work as a casual or non-resident taxable person
• pay tax under the reverse charge mechanism, or deduct TDS or collect TCS

You must apply within 30 days of becoming liable. You can also register voluntarily before that point, which lets you claim input tax credit, issue tax invoices to business customers, sell on marketplaces and build credibility with banks and larger buyers.

GST Registration for Small Business

A small business should register for GST as soon as turnover nears ₹40 lakh (goods) or ₹20 lakh (services), or earlier if its customers are businesses that want input tax credit on your invoices. Many small suppliers register voluntarily because registered buyers often prefer GST-compliant vendors.

Regular scheme or composition scheme?

Small businesses can choose between regular registration and the composition scheme. Composition suits businesses that mostly sell to consumers and have few inputs on which credit could be claimed.

Category	Composition tax rate	Turnover limit
Manufacturers and traders (goods)	1% of turnover	Up to ₹1.5 crore in most states
Restaurants	5% of turnover	Up to ₹1.5 crore in most states
Eligible service providers	6% of turnover	Up to ₹50 lakh

The trade-offs are clear. Under composition you cannot claim input tax credit, you cannot collect GST separately from customers (you issue a bill of supply), and you cannot make inter-state sales of goods. You file a quarterly CMP-08 and an annual GSTR-4 instead of monthly returns. If your buyers are other businesses or you buy heavily from registered suppliers, regular registration usually works out better.

GST Registration for Home Based Business

Yes, you can take GST registration for home based business, and your residence can be declared as the principal place of business. The turnover limits are the same as for any other business, and the portal asks for proof that you have the right to use the address.

Address proof for home based business

• Own home: latest electricity bill, property tax receipt or municipal document in your name.
• Rented home: a registered rent agreement, the landlord’s electricity bill or property tax receipt, and a no-objection certificate (NOC) from the owner.
• Home owned by a parent or relative: a consent letter or NOC from the owner, plus their ownership document and ID proof.

How GST applies to common home businesses

• Boutiques, tailoring, design and consulting: services, so the ₹20 lakh limit applies.
• Online resellers on Instagram or marketplaces: selling goods through e-commerce platforms generally needs registration from the first sale, so check this before you list products.
• Home food businesses: the treatment depends on whether you supply prepared food (a service) or packaged goods. An FSSAI licence is a separate requirement.
• Freelancers and consultants working from home: services, and inter-state service supplies are exempt from mandatory registration below ₹20 lakh.

Use the same address on your PAN-linked records, bank account, invoices and Google Business Profile. Mismatched addresses are one of the most common reasons the GST officer raises a query.

GST Registration for Restaurant

A restaurant must take GST registration once its yearly turnover crosses ₹20 lakh, because restaurant services are treated as services. Dine-in, takeaway and home delivery all count towards turnover, and a restaurant can opt for the composition scheme if turnover stays within ₹1.5 crore.

GST rates for restaurants

Type of restaurant	GST rate	Input tax credit
Standalone restaurant, including takeaway and delivery	5%	Not allowed
Restaurant inside a hotel with room tariff of ₹7,500 or more per day	18%	Allowed
Restaurant under composition scheme	5% of turnover	Not allowed; no GST collected separately

Licences to keep alongside GST

GST registration does not replace the licences a restaurant needs to operate. These usually include an FSSAI licence, a local health or trade licence, fire safety clearance, a Shops and Establishment registration and, in Delhi, an Eating House licence. Requirements vary by location and size, so confirm them with the relevant authority.

Food delivery apps

Under Section 9(5) of the CGST Act, food delivery platforms collect and deposit GST registration for restaurant services supplied through them. Orders taken directly, or dine-in sales, remain your responsibility. Confirm with a professional how app-based sales affect your registration and returns before you decide on regular or composition registration.

Documents Required for GST Registration

The documents depend on your constitution. Every applicant needs a PAN, Aadhaar, passport-size photograph, bank account proof and address proof for the business premises.

Applicant	Documents
Proprietorship	Owner’s PAN, Aadhaar and photograph; business address proof; cancelled cheque or bank statement
Partnership firm	Firm’s PAN; partnership deed; PAN, Aadhaar and photographs of partners; address proof; bank proof
Company or LLP	Company or LLP PAN; certificate of incorporation; board resolution or authorisation letter; directors’ or partners’ PAN, Aadhaar and photographs; address proof; bank proof
Rented or shared premises	Rent agreement, owner’s utility bill or tax receipt, and owner’s NOC

Step-by-Step GST Registration Process

1. Go to gst.gov.in and choose Services, then Registration, then New Registration.
2. In Part A, enter your legal name as per PAN, PAN, mobile number and email, then verify the OTPs to get a Temporary Reference Number (TRN).
3. Log in with the TRN and complete Part B: business details, promoters, principal place of business, goods or services supplied (HSN or SAC codes) and bank details.
4. Upload the documents listed above in the prescribed size and format.
5. Complete Aadhaar authentication for the authorised signatory and promoter or partner.
6. Verify the application with an EVC (OTP) for proprietors, or a digital signature for companies and LLPs.
7. Submit and note the Application Reference Number (ARN) to track the status.
8. Reply promptly if the officer raises a query in Form REG-03. On approval you receive your GSTIN and the registration certificate.

Since November 2025, eligible low-risk applicants under the simplified scheme (Rule 14A, with monthly B2B output tax up to ₹2.5 lakh) can be approved electronically within 3 working days after Aadhaar authentication. Other applications are verified by an officer and typically clear in about 7 working days. If Aadhaar authentication is not completed, a physical verification can add several weeks.

How Much Does GST Registration Cost?

The government charges nothing for GST registration. The only cost is a professional fee if you hire a consultant, which varies with the complexity of your case and the support included. Ask what the fee covers: document review, application filing, query replies, and help with your first returns.

After registration, display the certificate at your premises, show your GSTIN on invoices and file returns on time. Regular taxpayers file GSTR-1 and GSTR-3B (monthly, or quarterly under the QRMP scheme), while composition taxpayers file CMP-08 quarterly and GSTR-4 annually.

Penalty for Not Registering and Mistakes to Avoid

If you are required to register and do not, you owe the tax from the date you became liable, with interest, and a penalty of 10% of the tax due (minimum ₹10,000) can apply. Avoid these common mistakes:

• Not tracking turnover across all businesses under the same PAN.
• Entering a name or address that does not match PAN or the proof uploaded.
• Choosing the wrong HSN or SAC code, which leads to the wrong tax rate.
• Picking composition without checking its restrictions on credit and inter-state sales.
• Registering but then not filing returns, which attracts late fees and can lead to cancellation.

Get Help With GST Registration in Delhi

CorpInd Cart is a New Delhi company registration and compliance firm. If you want an expert to handle your application, see our GST registration services in Delhi or contact us on +91 8851354695 or +91 8595840841. You can visit our offices at Kirti Nagar, Anand Parbat and Bali Nagar, New Delhi.

Frequently Asked Questions

Is GST registration compulsory for a small business?

Only when annual turnover crosses ₹40 lakh for goods or ₹20 lakh for services (₹20 lakh and ₹10 lakh in special-category states). Below these limits it is optional, except for specific cases such as selling goods inter-state or through most e-commerce platforms.

Can I get GST registration for home based business using my home address?

Yes. A residential address can be your principal place of business. You need address proof such as an electricity bill or property tax receipt, plus a rent agreement and the owner’s NOC if the home is rented or belongs to a family member.

Is GST registration mandatory for a restaurant?

Yes, once aggregate turnover exceeds ₹20 lakh in a year (₹10 lakh in special-category states). Restaurants below this limit may still register voluntarily.

What is the GST rate for a restaurant?

A standalone restaurant charges 5% GST without input tax credit. Restaurants inside hotels with room tariffs of ₹7,500 or more per day charge 18% with input tax credit. Composition restaurants pay 5% of turnover from their own pocket.

How long does GST registration take?

Aadhaar-authenticated, low-risk applications can be approved within 3 working days. Standard applications usually take around 7 working days from the ARN if no query is raised.

Is there any government fee for GST registration?

No. Applying on the GST portal is free. Only professional fees apply if you hire a consultant to handle the application and follow-up.

Do I need GST registration to sell on Instagram or online marketplaces?

If you sell goods through an e-commerce platform, registration is generally required irrespective of turnover, with a limited exemption for some small intra-state sellers. Confirm your case before you start selling. Services sold online follow the ₹20 lakh limit.

Can I switch from the composition scheme to regular GST later?

Yes. You can opt out of composition at any time by filing the prescribed form, and you must opt out if you cross the turnover limit or break the scheme’s conditions.

What happens if I cross the limit and do not register?

You still owe the tax, along with interest, and a penalty of 10% of the tax due (minimum ₹10,000) can apply. Apply within 30 days of becoming liable to register.

Disclaimer and sources: This guide is for general information and reflects GST rules as understood on 2 October 2026. Thresholds, rates and procedures change, so verify them before acting. Primary sources: GST Portal (gst.gov.in) and the CBIC GST resources (cbic-gst.gov.in).