Is It Mandatory to Get GST Registration for OPC?

The Goods and Services Tax (GST) regime has transformed the taxation landscape in India. This article aims to clarify whether GST registration is mandatory for One Person Companies (OPCs) operating in the country. It explores the provisions of the GST law and provides an in-depth analysis of the criteria that determine the applicability of GST Registration for OPCs.

By understanding the specific scenarios and thresholds set by the law, entrepreneurs and OPCs can ensure compliance with GST regulations and make informed decisions regarding their tax obligations. In this article, we will discuss the importance of GST Registration for OPCs in India.

Understanding GST Registration for OPC in India

Let’s understand the importance of GST Registration for OPC in India:

1. Threshold Limit

The GST law mandates that businesses with an annual turnover exceeding the prescribed threshold are required to register for GST. As per the current threshold, businesses with an aggregate turnover of Rs. 40 lakhs or more (Rs. 10 lakhs for specified special category states) are obligated to obtain GST registration. If an OPC’s turnover exceeds this threshold, GST registration becomes mandatory.

2. Voluntary Registration

Even if an OPC’s turnover is below the threshold limit, it can opt for voluntary GST registration. Voluntary registration allows the OPC to avail of various benefits, such as input tax credits, facilitating smoother business operations, and enabling seamless transactions with other registered entities.

3. Interstate Supply and E-commerce Operations

OPCs engaged in the interstate supply of goods or services, or those involved in e-commerce operations, irrespective of their turnover, are required to obtain GST registration. These activities fall under the ambit of GST regulations, necessitating compliance with registration obligations.

4. Composition Scheme

OPCs with an annual turnover below the prescribed threshold can opt for the Composition Scheme under GST. This scheme provides certain relaxations and allows for the payment of tax at a lower rate. However, OPCs availing of the Composition Scheme are not eligible for the input tax credit.

5. Input Tax Credit and Compliance Benefits

GST registration offers OPCs the advantage of claiming input tax credits on their purchases. This benefit allows the business to set off the GST paid on inputs against the GST collected on sales, reducing the overall tax liability.

Additionally, being registered under GST enables OPCs to comply with the necessary tax obligations, file regular returns, and maintain transparency in their business transactions.

How to Apply for an OPC GST Number?

Whether you are wondering about GST registration for OPC or confirming whether GST registration is mandatory for OPC, these steps will help:

Step 1: Check Whether GST Registration for OPC Is Mandatory

Before applying, you must confirm whether your OPC needs to register under GST. As per the Indian GST law:

• If your OPC’s aggregate turnover exceeds the prescribed threshold (currently ₹40 lakh for most states, ₹20 lakh in special category states), then OPC GST registration becomes mandatory.
• Even if turnover is below the threshold, GST registration for OPC becomes mandatory in certain cases, such as when you supply goods or services interstate or via e-commerce.
• If none of these conditions apply, registration is not mandatory, though voluntary registration is allowed.

If you satisfy any of the mandatory criteria, proceed to apply.

Step 2: Arrange the Documents

To complete GST registration for OPC, you’ll need to submit the following documents:

Document	Purpose / Notes
PAN card of OPC	Proof of identity
Certificate of incorporation / OPC registration certificate	Proof of OPC existence
Address proof of registered office	Utility bill, rent agreement, etc.
Identity and address proof of the Proprietor / Director	Aadhar, Passport, Voter ID, etc.
Photograph of the Proprietor / Director	Authorization letter/board resolution
Bank account statement / canceled cheque	For verifying the bank details
Digital signature certificate (DSC) / Aadhaar e-KYC	For electronic filing and verification
Authorization letter / board resolution	Authorizing a person (if someone else is applying)

Make sure each document is valid and recent, and in the specified format (scanned copies in acceptable formats).

Step 3: Log in to the GST Portal & Fill Application

1. Visit the official GST portal and select “New Registration.”
2. Choose “Taxpayer” → “Company / LLP / Others” → Select “One Person Company (OPC)” under the legal entity type.
3. Enter basic details — PAN, mobile number, email, etc.
4. Verify OTPs sent to your mobile and email.
5. Fill in the “Part B” section — business address, bank details, details of directors/proprietors, etc.
6. Upload scanned documents as required (identity proof, address proof, bank details, etc.).
7. Choose verification method (DSC or e-verification via Aadhaar / EVC).
8. Submit the application.

Ensure to follow all the steps rigorously to avoid dismissal or rejection of the application.

Step 4: ARN Generation & Verification

• Upon successful submission, the system generates an Application Reference Number (ARN).
• The GST officer may further verify your application or ask for clarifications / additional documents.
• With the application’s approval, your OPC will receive a GSTIN (Goods and Services Tax Identification Number) and a certificate of registration.

Step 5: Compliance

Once your OPC GST registration is complete, you must comply with certain obligations:

• File periodic GST returns (monthly, quarterly, etc.)
• Issue GST-compliant invoices
• Maintain records of purchases, sales, and input tax credits
• Pay tax within the due dates

Conclusion

In conclusion, the applicability of GST Registration for OPC (One Person Company) in India depends on various factors, including turnover, the nature of business activities, and the desire to avail of an input tax credit. While the threshold limit sets the mandatory requirement for registration, OPCs can also opt for voluntary registration to avail the benefits of GST compliance.

Engaging in interstate supply or e-commerce operations, irrespective of turnover, also mandates GST registration. Understanding these criteria is crucial for OPCs to ensure compliance with GST regulations, streamline their tax obligations, and leverage the benefits offered under the GST regime.

---

Frequently Asked Questions (FAQs)

1. Is GST registration mandatory for a One Person Company (OPC) in India?

GST registration becomes mandatory for a One Person Company (OPC) if its annual turnover exceeds ₹40 lakhs (₹20 lakhs for service providers). However, even below this limit, registration is required if the OPC engages in interstate trade, e-commerce, or supplies via online marketplaces.

2. What happens if an OPC does not register under GST despite being eligible?

If an eligible OPC fails to register under GST, it may face penalties, including a fine of 10% of the tax due or ₹10,000, whichever is higher. Additionally, it cannot claim input tax credit or issue GST-compliant invoices to clients, affecting credibility and compliance.

3. Can an OPC voluntarily register for GST even if turnover is below the threshold?

Yes, an OPC can voluntarily apply for GST registration even if its turnover is below the mandatory limit. Doing so helps claim input tax credits, improves business credibility, and enables seamless transactions with GST-registered clients and government tenders.

4. How can I apply for GST registration for my OPC online?

You can apply for GST registration for your OPC online through the official GST portal (gst.gov.in). The process includes submitting business details, PAN, proof of address, bank statements, and a digital signature. Alternatively, professional service providers like RegisterKaro can help simplify and fast-track the process.

5. What documents does a One Person Company need for GST registration?

The key documents include the OPC’s Certificate of Incorporation, PAN card, address proof, bank account statement, digital signature of the director, and passport-sized photograph. You may also need to provide proof of business address and an authorization form, depending on your business setup.

6. What are the benefits of getting GST registration for an OPC?

GST registration enhances an OPC’s credibility, enables input tax credit claims, allows participation in interstate trade, and improves eligibility for government and corporate projects. It also ensures transparency in taxation, making your OPC compliant and more attractive to potential clients or investors.

7. Can an OPC cancel its GST registration later if not needed?

Yes, an OPC can apply for GST registration cancellation if its turnover consistently remains below the threshold or if the business is closed. However, proper compliance and filing of final returns are necessary before cancellation approval.

8. Does an OPC providing only services need GST registration?

Yes, if an OPC provides services and its annual turnover exceeds ₹20 lakhs (₹10 lakhs in special category states), GST registration becomes mandatory. Even below this limit, registration is required if the OPC deals with interstate clients or e-commerce platforms.

9. How much does GST registration for an OPC cost in India?

The government does not charge any fee for GST registration; however, professional assistance fees may vary depending on your consultant or firm. RegisterKaro offers affordable, end-to-end assistance for smooth and error-free GST registration for OPCs.

10. Can an OPC operate without GST registration?

An OPC can operate without GST registration only if its turnover is below the prescribed limit and it does not engage in inter-state trade or e-commerce. However, getting registered early ensures better tax compliance and access to growth opportunities.