Editor's note (updated 27 Sep 2026). This post was first published on 4 May 2026. We have corrected or updated the following points.
- Registration thresholds corrected. ₹40 lakh applies only to suppliers exclusively of goods, in states that adopted it. Services use ₹20 lakh. ₹10 lakh applies only in Manipur, Mizoram, Nagaland and Tripura. J&K, Himachal Pradesh and Uttarakhand are not ₹10 lakh states, as the original said.
- Registration timing. The law allows 30 days from the date of becoming liable. The original said there was "no grace period".
- Inter-state services. Suppliers of inter-state services below the threshold are exempt from compulsory registration.
- GSTR-9C has been self-certified by the taxpayer since FY 2020-21. CA certification is no longer required.
- Added:
- the rate rationalisation of 22 Sep 2025 (main rates 5% and 18%, plus a 40% rate for specified goods)
- QRMP due dates for GSTR-3B
- the 30-day e-invoice reporting limit for businesses with turnover of ₹10 crore or more
- the invoice management system and return time-bar changes
India's Goods and Services Tax (GST), introduced in July 2017, unified the country's indirect taxes. For foreign companies with India operations, whether in manufacturing, services or e-commerce, GST is a major operational requirement. This guide covers registration, monthly obligations, export zero-rating, e-invoicing and the recent changes.
When is GST registration mandatory?
| Supplier | Threshold (aggregate turnover, all-India per PAN) |
|---|---|
| Exclusively goods, in states that adopted the higher limit | ₹40 lakh |
| Services, or mixed supplies | ₹20 lakh |
| Special-category states: Manipur, Mizoram, Nagaland, Tripura | ₹10 lakh |
| Other special-category states (e.g. Arunachal, Meghalaya, Sikkim, Uttarakhand, HP, J&K), and some states for goods | ₹20 lakh |
Apply within 30 days of becoming liable. Registration is compulsory regardless of turnover for:
- inter-state supplies of goods
- persons liable under reverse charge
- casual and non-resident taxable persons
- e-commerce operators, and certain suppliers through them
- input service distributors
- persons who must deduct or collect tax
- OIDAR service providers from outside India to Indian consumers
Inter-state services below the threshold do not by themselves require registration.
Service exporters (IT, BPO, KPO). Registration is usually advisable even below the threshold. It lets you claim input tax credit on your costs and export under LUT without paying tax.
You need a separate registration in each state from which you supply. Branches in two states mean two GSTINs, and cross-charges between them for common services.
The monthly compliance calendar
| Return | Due date | Notes |
|---|---|---|
| GSTR-1 (outward supplies) | 11th of the next month | Quarterly under QRMP (turnover up to ₹5 crore), by the 13th after the quarter, with optional IFF for B2B invoices |
| GSTR-3B (summary return and payment) | 20th of the next month | QRMP: 22nd or 24th after the quarter, depending on the state, with monthly tax payment by the 25th |
| GSTR-9 (annual return) | 31 December after the financial year | Optional below ₹2 crore turnover |
| GSTR-9C (reconciliation statement) | With GSTR-9 | Turnover above ₹5 crore. Self-certified since FY 2020-21 |
Portal changes to know:
- The Invoice Management System (IMS) lets recipients accept, reject or hold supplier invoices before ITC flows into GSTR-2B.
- Auto-populated liability in GSTR-3B is being locked against GSTR-1 / 1A.
- Returns cannot be filed more than three years after their due date.
Correct errors through GSTR-1A before GSTR-3B is filed, not after.
2025 rate rationalisation
On the recommendation of the 56th GST Council (3 September 2025), most goods and services moved to a two-rate structure from 22 September 2025:
- 5% (merit rate)
- 18% (standard rate)
- 40% for specified luxury and sin goods
Tobacco products followed a separate timeline. Many services also changed rate. Re-check your rate master, and any contracts that quote GST-inclusive prices.
Zero-rating of exports: the LUT
Exports of services such as IT, consulting and BPO are zero-rated. The exporter charges no GST on the export invoice and can still claim input tax credit, or a refund of it. To export without paying IGST up front, file a Letter of Undertaking (LUT) in Form GST RFD-11 on the portal for each financial year, before the first export invoice of that year. In practice that means by 1 April.
Service exports must still meet the "export of services" conditions: the recipient outside India, the place of supply outside India, payment in convertible foreign exchange (or INR where RBI permits), and the parties not merely establishments of the same person.
Without an LUT, you pay IGST on export invoices and claim a refund, which is a cash-flow drain.
E-invoicing
E-invoicing is mandatory for businesses with aggregate turnover above ₹5 crore in any year since 2017-18. It applies to B2B invoices, export invoices, and credit and debit notes. Each document is reported to the Invoice Registration Portal (IRP), which returns an IRN and a signed QR code.
- A B2B invoice issued without an IRN is not a valid tax invoice, and the customer cannot claim ITC on it.
- Businesses with turnover of ₹10 crore or more must report invoices to the IRP within 30 days of the invoice date (from 1 April 2025). Late invoices are rejected.
Common mistakes by foreign-owned Indian entities
- Not filing the LUT before the first export invoice of the year.
- Claiming ITC on inputs used for exempt supplies, personal consumption or blocked credits (for example certain motor vehicles and food), or on invoices the supplier has not reported.
- Missing GSTR-1 deadlines, which cuts off customers' ITC.
- Using the wrong rate or classification: software services vs software products, and post-September 2025 rates.
- Missing a registration in a state from which you supply.
- Reporting e-invoices late (the 30-day limit), or issuing B2B invoices without an IRN.
- Ignoring GST on cross-charges between branches and on import of services from the parent under reverse charge.
Is your India entity's GST compliance up to date? Shardhan's GST team manages end-to-end compliance for Indian subsidiaries of foreign companies. Contact our GST practice.
General information, not legal advice. Last reviewed 27 Sep 2026.