What is the GST registration threshold in India?

## GST Registration Threshold in India

GST registration in India is governed by Section 22 and 24 of the CGST Act 2017. Whether you need to register depends on three factors: your aggregate turnover, the nature of your supplies, and whether you fall under any mandatory registration category.

## Standard Thresholds

### Goods-only businesses - INR 40 lakh aggregate turnover in the previous financial year triggers mandatory GST registration - Applicable to businesses supplying only goods (not services) - Note: the INR 40 lakh threshold was introduced in January 2020, replacing the earlier INR 20 lakh threshold for goods

### Service businesses and mixed (goods + services) - INR 20 lakh aggregate turnover for most states - INR 10 lakh aggregate turnover for special category states (Manipur, Mizoram, Nagaland, Tripura)

### Special category states (INR 10 lakh threshold) The following states have a lower INR 10 lakh threshold for services: Manipur, Mizoram, Nagaland, and Tripura. Note: Jammu and Kashmir, Himachal Pradesh, and Uttarakhand were moved to the standard INR 20 lakh threshold in 2019.

## Mandatory Registration Regardless of Turnover

Section 24 of the CGST Act requires mandatory GST registration irrespective of turnover for:

• **Inter-state taxable suppliers** — any business making taxable supplies to customers in another state (even INR 1 of inter-state supply triggers mandatory registration)
• **E-commerce sellers** — anyone selling through Amazon, Flipkart, Meesho, or any other e-commerce operator
• **E-commerce operators** (Amazon, Flipkart themselves)
• **Businesses liable to pay under reverse charge** — services imported from abroad, payments to unregistered vendors for specified services
• **Casual taxable persons** — individuals/businesses making occasional taxable supplies in a state where they are not normally resident
• **Non-resident taxable persons** — foreign businesses providing services in India without a fixed establishment
• **Input Service Distributors (ISD)** — head offices distributing ITC to branch offices
• **Agents of a registered supplier** — agents who supply or receive goods/services on behalf of their principal
• **Persons required to deduct TDS under GST** — government entities and notified persons

## Aggregate Turnover — What's Included

Aggregate turnover is the combined value across all registrations (GSTINs) under the same PAN nationwide. It includes: - Taxable supplies (standard rated) - Exempt supplies (nil-rated, zero-rated, exempt) - Exports - Inter-state supplies

Aggregate turnover excludes: - Inward supplies on which tax is paid under reverse charge by the recipient - Taxes collected under CGST, SGST, IGST, and cess

## Voluntary Registration

Businesses below the threshold can voluntarily register for GST. Benefits: - Claim input tax credit on purchases (significant for B2B-heavy businesses) - Appear GST-compliant to clients who require a GSTIN - Enables export of services with zero-rated treatment

## Composition Scheme Alternative

Businesses below INR 1.5 crore aggregate turnover (INR 75 lakh for select special category states) can opt for the Composition Scheme instead of regular GST: - Traders: pay 1% GST on turnover - Manufacturers: pay 1% on turnover - Restaurants: pay 5% on turnover - Service providers: pay 6% on turnover (50% CGST + 50% SGST) - Cannot issue tax invoices or collect GST from customers - Cannot claim input tax credit - File GSTR-4 annually

## Timeline for Registration

Once you exceed the threshold (or fall into a mandatory registration category), you must apply for GST registration within 30 days of the liability arising. Applications are processed online at gst.gov.in within 7 working days (if all documents are in order).

Documents required for company registration: - Certificate of Incorporation - PAN of the company - Proof of registered office (ownership or rent agreement + utility bill) - Bank account statement/cancelled cheque - Authorisation letter and ID of authorised signatory