CA Ruby Bansal
Some banks may insist for GST number while opening a current account, especially in the case of Private Limited or LLP companies.
But it is not mandatory for LLP, Private Limited, or Limited Companies to obtain a GST number from the beginning of their operations.
Actual Rule For Bank Account Opening and GST
For proprietorship firms, GST is typically required when you open a current bank account only if the business intends to exceed the GST thresholds.
Freelancers operating as individuals can earn up to Rs 20 lakhs from their savings account without needing a GST number.
For LLP, Private Limited, Limited, or Partnership firms, GST is not mandatory to open a bank account if it does not exceeds the GST thresholds.
GST Thresholds
| Business Type | GST Threshold (Annual) |
| Service | Rs 20 Lakhs |
| Trading | Rs 40 Lakhs |
| Manufacturing | Rs 40 Lakhs |
When to Apply for GST?
The decision to apply for a GST number depends on the nature of the business.
- If your business involves in dealing with other GST businesses registered such as sales are made to other GST-registered businesses - will expect you to provide a GST invoice.
- Many large companies require GST registration for vendor enlistment and will not conduct business without it.
- For B2C (Business-to-Consumer) sales, if you are selling directly to end consumers, GST is not needed until you crosses the threshold limit.
Financial Year-Based Turnover Calculation
GST thresholds apply per financial year, not cumulatively across years.
For example:
If you earn Rs 25 lakh in FY 2025-26, GST is not mandatory.
But if in the next year you cross the limit, you must register.
Points To Remember
- GST registration is not mandatory from 1st day for Private Limited, LLP or Limited companies.
- Bank accounts can be opened without GST, though some banks may incorrectly demand it.
- Turnover thresholds determine when GST becomes mandatory.
- In B2B models, it is practical to register early for GST.
- In B2C models, you can delay GST registration until you approach the threshold.
- Turnover calculations are financial year-specific.
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