GST Registration for Inter-State Supply Startup

August 11, 2025 by Team Instabizfilings

Launching a new business is a thrilling experience, but it comes with certain tax and legal duties, particularly in case you are intending to establish an operation over several state limits in India. GST registration is one of such requisites among a business with inter-state supply. Every startup that plans to deliver its services to customers in India needs to understand and comply with GST.

What Is GST?

Unified indirect tax is the Goods and Services Tax (GST), which applies throughout India. It ousted numerous indirect taxes such as value-added tax, service tax, excise duty etc. GST applies to both services and goods, and thus, it is easier in dealing with taxation by the businesses.

What Is Inter-State Supply Under GST?

Inter-state supply is the supply of goods or services between or among Indian states or Union Territories. Under the GST law, the following are the rights of a family:

It will be an inter-state supply where the place of supply and the location of the supplier do not match with the same state of domicile.
Integrated GST is attracted to inter-state supply.

Is GST Registration Mandatory for Inter-State Supply?

Yes. Section 24 of the CGST Act further requires GST registration of any business involved in supply of goods or services involving interstate movement of the goods or services, despite turnover.

Though your turnover is less than 40 lakhs (goods) or 20 lakhs (services) you still will have to be registered under GST as long as you are carrying inter-state supplies.

Key Benefits of GST Registration for Startups

Legally Compliant: Lose some legal fees and work comfortably out of states.
Input Tax Credit: Take tax credit on what you buy and lessen tax load all-round.
Wider Market Reach: You are able to sell across India without any restrictions.
Professional Image: Increases the credibility of the business, especially to business to business clients.
E-commerce Eligibility: It is necessary to sell the products on sites like Amazon, Flipkart, etc.

Step-by-Step Process for GST Registration

Step 1: Visit the GST Portal

Click on the official site: www.gst.gov.in

Step 2: Fill Part-A in Form GST REG-01

Business business PAN
Phone number and mail
State/UT and district

An OTP will be sent for verification.

Step 3: Receive Temporary Reference Number (TRN)
Step 4: Complete Part B of the Form

Evidence of address proof of business
Bank account information
Promoter/Partner details
Digital signature

Step 5: Submit Documents

Documents that are required:

Business PAN card
Business address renter agreement or utility bill Proof of Business address
This is identity/address proof of promoters/directors
Evidence of bank account (cancelled cheque/passbook)

Step 6: ARN Generation & GSTIN Allotment

Once your submission is done successfully, you will get an Application Reference Number (ARN). GSTIN (GST Identification Number) typically is assigned in 7 days of work.

Common Mistakes to Avoid

Engaging inter-state sales before obtaining GST registration
Late registration is subject to a fine and loss of business.
Improper documentation resulting in rejection
Failure to make GST returns after registration (yes, you are required to do even when there is zero turnover)

Penalties for Not Registering

In case a startup has an interstate supply without GST registration, then, the following penalties are charged:

The greater between 10,000 and the tax evaded
Raiding of stock and even law-breaks

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same.

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.