GST Registration Threshold Limits

Eligibility to register for GST must be verified before registration. Individuals registered under the Pre-GST law should also opt for online GST registration. It is mandatory for businesses that have a turnover of ₹40 lakhs for the sale of goods in normal category states and ₹20 lakhs in special category states. A company must register as a regular taxable entity under GST law if its annual threshold limit exceeds ₹40 lakhs. The GST council recommends GST rates, tax exemptions, and other tax-related policies.

Aggregate Turnover Registration Required Applicability
Exceeds ₹20 lakh Yes – For Normal Category States Up to 31 March 2019
Exceeds ₹10 lakh Yes – For Special Category States Up to 31 March 2019
Exceeds ₹40 lakh Yes – For Normal Category States From 1 April 2019
Exceeds ₹20 lakh Yes – For Special Category States From 1 April 2019
Service Providers – Exceeds ₹20 lakh Yes – For Normal Category States From 1 April 2019

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Turnover Limits for GST Registration

GST registration is optional and can be obtained voluntarily by any person or entity, regardless of turnover. However, it becomes mandatory when aggregate turnover exceeds ₹20 lakh for service providers or ₹40 lakh for goods suppliers in most states. For special category states, the limit is ₹10 lakh. Aggregate turnover includes all taxable supplies, exempt supplies, exports, and inter-state supplies calculated on a PAN-India basis.

Sector/Category Threshold Limit for GST Registration
Manufacturing Sector ₹40 lakhs or higher
Service Sector ₹20 lakhs or higher
Special Category States ₹10 lakhs or higher

Special Category States include Assam, Arunachal Pradesh, Manipur, Jammu & Kashmir, Meghalaya, Nagaland, Mizoram, Sikkim, Tripura, and Uttarakhand.

Mandatory GST Registration for Specific Businesses

Irrespective of the threshold limit, GST registration is mandatory for the following:

Benefits of Registering for GST

Registration under GST is an important step towards a unified tax system in India. It offers many advantages to registered businesses. A taxpayer who registers under the GST Act of 2017 will receive the following benefits:

Legal Recognition

A firm can obtain legal recognition as a supplier of goods or services by registering for GST. This validates the company's legal status as an official entity.

Input Tax Credit (ITC)

Businesses that are registered can deduct the GST they pay on purchases from the GST they collect on sales by claiming the Input Tax Credit. Consequently, the entire tax liability is decreased.

Simplified Process

The GST system has reduced the complexity and time needed for compliance by streamlining the process for submitting taxes and making payments. With the help of a single online platform, businesses can more effectively manage their tax obligations.

Composition Scheme

Composition Scheme Under GST for Small Businesses allows them to pay tax at a lower, fixed rate. This reduces their tax burden and compliance requirements, making it easier to manage their finances.

Higher Threshold for Online GST Registration

With a higher registration threshold, only businesses with an annual turnover above ₹40 lakh are required to register for GST. This excludes many small businesses from mandatory registration, easing their operational processes.

Eliminates the Cascading Effect of Taxes

GST eliminates the cascading effect of taxes by allowing input tax credit across the supply chain. This means that businesses can claim credit for the taxes paid on purchases, reducing the overall tax burden on end consumers.