Is GST Mandatory for Private Limited & LLP Companies? The Truth No One Tells You!

CA Ruby Bansal , Last updated: 18 July 2025
Share

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.

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.

GST thresholds apply per financial year, not cumulatively across years.

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.

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.