The issue of registration is still quite confusing for some and in some way perhaps harsh also. For example, while the service or goods suppliers are exempted from registration under Goods & Service Tax Act upto 20 Lakh , but not to small service providers who are defined as "e-commerce operators " or online sellers through their own websites. This post is to clear the air on the consequences of non-registration under GST : 1.Penalty Section 122(1)(xi) of the CGST Act lays down a maximum penalty of Rs 10,000 on the failure to register by a person who is liable to register. But, only if there is no other offence. If there are other penalties leviable, then higher penalty will be levied.T he law laid down under section 122 of the CGST Act says higher of following will be the penalty : Rs 10000 or an amount equivalent to the tax evaded or the tax not deducted under section 51 or Amount short deducted or Amount deducted but not paid to the Government or tax not collected under section 52 or short collected or collected but not paid to the Government or input tax credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is higher.  2. Can't Claim Input Tax Credit Since the only way to claim input tax credit is by filing the tax return under GST, you need to register for that. You are allowed to claim input tax credit on your purchases only if your supplier is GST compliant and has paid the tax they had collected from you and you have filed tax return. If not, how can you claim input tax credit 3. Can't issue of Tax Invoice Section 31 of CGST Act lays down that the registered supplier supplying taxable goods or services shall, before or after the supply, delivery or removal or  provision of service but within a prescribed period, issue a tax invoice, showing the description, value, the tax charged thereon and such other particulars So if you are not registered, you can not issue an invoice related to supply of goods or service. 4. Can't Transfer of Input Tax Credit Transfer of input tax credit can take place only through tax return filed by supplier. So if you are not registered, you can not transfer input tax credit as per section 53 of CGST Act 5.Detention of Goods & Conveyance Section 129 of the CGST Act empowers authorities to detain or seize any goods being transported or stores any goods while they are in transit in contravention of the provisions of this GST Act. If you are liable to register and pay GST on supply, not being registered gives prima facie a cause for initiating action under section 129 under which your goods may be seized and may be released once the tax is paid. 6.Confiscation of Goods or conveyance Section 130 deal with confiscation of goods or conveyance under GST Act.  This is harsher than detention . If authorities feel that you are evading GST , he can order for confiscation of goods or conveyance used for transporting goods . 7. You May Lose Opportunity to Earn Under the Reverse Charge Mechanism, a registered recipient of the goods or service from a non- registered supplier needs to deduct the GST , pay and file the return. This is a huge liability for buying goods from an unregistered person. So why will such a registered person buy from the non-registered person and have a headache? In other words, unregistered supplier of goods or service may not get the order to supply from such registered person. That is the single most important reason for a non-registered person to get registered.