Short answer: A supplier making taxable supplies generally has to register for GST when aggregate turnover in a financial year exceeds ₹20 lakh. The threshold is ₹10 lakh for taxable supplies in specified special category states. Some suppliers dealing exclusively in goods can use a conditional exemption up to ₹40 lakh under Notification No. 10/2019-Central Tax, but that is not a universal goods-business limit. Compulsory-registration rules, exempt supplies, exports, inter-State transactions, reverse-charge arrangements and the supplier’s state can change the result.
The figures below reflect the central GST law and CBIC material checked on 13 October 2026. GST rules and state or Union territory notifications can change, so an individual filing decision should be checked against the current provisions for the taxpayer’s facts.
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What is the threshold for registration in GST?
Section 22 of the Central Goods and Services Tax (CGST) Act sets the ordinary test: a person making taxable supplies becomes liable to register when aggregate turnover in a financial year exceeds the applicable limit. For the general case, that limit is ₹20 lakh. A lower ₹10 lakh limit applies to taxable supplies from specified special category states.
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The threshold is not a single nationwide number that can be applied without context. You need to identify the state or Union territory, whether the business supplies goods, services or both, the nature of each supply, and whether a compulsory-registration rule applies. The law also allows the government to alter the threshold by notification subject to conditions, which is why a current notification matters alongside the Act.
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| Situation | Turnover figure in the central rule | How to read it |
|---|---|---|
| General taxable-supply case | ₹20 lakh | Section 22’s ordinary threshold, subject to exceptions and compulsory-registration rules. |
| Taxable supplies from a specified special category state | ₹10 lakh | Lower threshold where the special-category rule applies. |
| Qualifying person supplying goods exclusively | Up to ₹40 lakh exemption | Conditional relief under Notification No. 10/2019-Central Tax; eligibility and state application must be checked. |
| Application after liability arises | Generally within 30 days | Section 25’s general filing window for a person liable under section 22 or section 24. |
These are legal thresholds and a legal deadline, not survey results or estimates. The ₹40 lakh figure is an exemption from registration for qualifying goods-only suppliers, not a replacement for the ₹20 lakh rule in every business.
How the goods-only ₹40 lakh exemption works
Notification No. 10/2019-Central Tax permits certain persons engaged exclusively in supplying goods to remain unregistered up to ₹40 lakh, subject to the notification’s conditions and exclusions. It is therefore important to distinguish “a business that sells some goods” from “a person engaged exclusively in supplying goods.” A business with services, mixed supplies or an excluded activity cannot assume that the exemption applies.
Why the exemption needs a separate check
- The relief is notification-based and conditional; the Act’s ordinary ₹20 lakh threshold still frames the general rule.
- Eligibility depends on the exact supplies and exclusions in the notification, not merely on the business’s turnover.
- State and Union territory application can differ, so the relevant central, state or UT material must be checked.
- CBIC’s notification listing records a later amendment concerning fly-ash products. A supplier dealing in such products should verify the current text and any connected conditions before relying on the exemption.
- A section 24 compulsory-registration category can override the practical benefit of staying below the ordinary threshold.
Do not describe ₹40 lakh as “the GST limit for goods” without these qualifications. It is safer to test the notification against the business’s supply mix, location and transaction model.
What counts as aggregate turnover?
Aggregate turnover is calculated on an all-India basis for persons having the same PAN. It is not the turnover of one shop, one GST registration or one state ledger. CBIC’s explanation includes the following supplies made by the PAN-wide group:
- Taxable supplies
- Exempt supplies
- Exports
- Inter-State supplies
The calculation excludes central tax, state tax, Union territory tax, integrated tax and compensation cess. It also excludes inward supplies on which the recipient pays tax under reverse charge. This is why a turnover worksheet should separate sales values from GST charged and should not add reverse-charge purchases to the supplier’s aggregate turnover.
Example: turnover across states
Suppose a proprietor has the same PAN for a trading outlet in one state and an online business operated from another. The threshold test uses the combined qualifying turnover of the PAN’s businesses across India. Looking only at the outlet that has not crossed ₹20 lakh can produce the wrong answer if the second operation pushes the aggregate above the applicable limit.
Example: exempt sales and exports
A business with ₹14 lakh of taxable domestic sales, ₹5 lakh of exempt sales and ₹3 lakh of exports has ₹22 lakh of included turnover before tax components are removed. The exempt sales and exports do not disappear from the threshold calculation merely because no GST was charged on them.
Example: reverse-charge purchases
Inward supplies on which the recipient pays GST under reverse charge are excluded from aggregate turnover. That exclusion concerns the recipient’s inward supplies; it does not turn the recipient’s own taxable sales into exempt turnover.
When registration can be compulsory below the threshold
Section 24 lists categories that may require registration notwithstanding the ordinary section 22 threshold. The statutory list has been amended over time and interacts with exceptions and notifications, so treat these as triggers to investigate rather than as a substitute for checking the current text.
Inter-State taxable suppliers
Specified persons making inter-State taxable supplies may fall within compulsory registration. The exact treatment depends on the category and the applicable amendments or exemptions. A business should not infer from a low local turnover that an inter-State transaction is automatically outside section 24.
Casual taxable persons
A person occasionally undertaking taxable business in a state or Union territory where the person has no fixed place of business can be treated as a casual taxable person. This category has its own registration and compliance mechanics and should be checked before starting the temporary activity.
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A non-resident making taxable supplies in India is listed separately. The ordinary domestic turnover calculation is not the only question; the non-resident category and its registration procedure must be considered.
Reverse-charge and section 9(5) liabilities
Persons liable to pay tax under reverse charge, and persons liable under section 9(5), appear in the compulsory-registration list. The exclusion of inward reverse-charge supplies from aggregate turnover does not remove a registration obligation created by these provisions.
Tax deductors
Persons required to deduct tax at source under GST are included in section 24. Their registration analysis is tied to the deduction role, not simply to sales turnover.
Agents
An agent making taxable supplies on behalf of other taxable persons can be covered even when the agent’s own commission or fee is below the ordinary threshold. Review the agency arrangement and the exact statutory category.
Input service distributors
An input service distributor is a separate compulsory-registration category. Businesses distributing eligible input-service credit between registrations should not wait for ordinary turnover to cross ₹20 lakh before checking the requirement.
E-commerce-related categories
Specified suppliers using e-commerce operators required to collect tax at source, and e-commerce operators themselves, are listed in section 24. The provision also addresses specified overseas suppliers of online information and database access or retrieval services to unregistered recipients in India. Whether a particular platform, supplier or transaction falls within the current wording requires a fact-specific review.
Who is not liable under the main statutory exclusions?
Section 23 carves out important exclusions. A person who exclusively supplies goods or services that are non-taxable or wholly exempt is not liable to register under the Act merely because the gross receipts are high. CBIC’s FAQ gives the same practical answer: a person dealing wholly in exempt supplies does not become liable solely by crossing the ordinary turnover figure.
Agriculturists
An agriculturist is not liable to register to the extent of produce supplied from cultivation of land. The protection is tied to produce from cultivation; it should not be extended automatically to processing, trading, services or other activities that are outside that description.
Mixed businesses
If a business makes both wholly exempt and taxable supplies, the exclusive-supply exclusion does not answer the whole question. Include the relevant turnover and test the threshold, then check section 24 categories and any notification-based relief.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to decide whether you need GST registration
Use this sequence before submitting an application or deciding to remain unregistered.
- Map the legal person. Group all businesses and registrations that use the same PAN. Prepare a financial-year turnover schedule for India as a whole.
- Classify every supply. Mark each item as taxable, exempt, non-taxable, export or inter-State. Keep inward purchases separate from outward supplies.
- Remove excluded amounts. Exclude central, state, Union territory and integrated GST, compensation cess, and inward supplies on which the recipient pays tax under reverse charge.
- Identify the location rule. Determine the state or Union territory from which the taxable supplies are made and whether a specified special category threshold applies.
- Check the supply mix. Decide whether the person is exclusively supplying goods, supplying services, or making mixed supplies. Do not apply the ₹40 lakh notification to a mixed business without verifying its conditions.
- Screen for section 24. Check inter-State taxable supply, casual or non-resident status, reverse charge, section 9(5), tax deduction, agency, input service distribution and e-commerce categories.
- Apply section 23. Confirm whether all supplies are non-taxable or wholly exempt, or whether the person is an agriculturist supplying produce from cultivation.
- Record the trigger date. When liability arises under section 22 or section 24, note the date and the facts that caused it.
- File on time. Section 25 generally allows 30 days from becoming liable to apply in each state or Union territory where registration is required. Category-specific rules can affect the practical process.
Common mistakes that lead to the wrong answer
- Using only one state’s sales: aggregate turnover is PAN-wide across India.
- Counting only taxable invoices: exempt supplies, exports and inter-State supplies are included.
- Calling ₹40 lakh a blanket goods threshold: the exemption is conditional, notification-based and limited to qualifying exclusive goods suppliers.
- Ignoring compulsory categories: section 24 can require registration below ₹20 lakh.
- Adding GST to turnover: specified GST components and compensation cess are excluded from aggregate turnover.
- Adding reverse-charge purchases: inward supplies on which the recipient pays tax under reverse charge are excluded from aggregate turnover.
- Assuming exempt businesses must register: exclusive wholly exempt or non-taxable suppliers are covered by section 23.
- Waiting until year-end: the 30-day application period generally runs from the date liability arises, not from the end of the financial year.
- Relying on an old state position: later notifications, amendments or state/UT enactments can change how a category or exemption applies.
What to verify before filing
Central CBIC material provides the framework, but it does not replace a review of every state and Union territory rule or every later notification. Before concluding that a particular business is or is not liable, verify:
- The current CGST, applicable SGST or UTGST provisions and amendments.
- The latest text and conditions of Notification No. 10/2019-Central Tax if relying on the ₹40 lakh goods exemption.
- Whether the business’s exact products or services are taxable, exempt or non-taxable.
- Whether any e-commerce, agency, reverse-charge, section 9(5), non-resident or casual-taxable-person rule applies.
- The PAN-wide turnover for the full financial year, including exports and exempt supplies.
- The state or Union territory in which the liability arises and the date the threshold or compulsory category was triggered.
For a disputed or high-value edge case, a qualified GST practitioner can map the facts to the current statutory text and notifications. Software can help track invoices and turnover, but it does not determine legal liability on its own.
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Bottom line
For most taxable suppliers, start with ₹20 lakh, or ₹10 lakh in a specified special category state. Then calculate aggregate turnover across India for the same PAN, including exempt supplies, exports and inter-State supplies. If the person supplies goods exclusively, test the conditions for the notified exemption up to ₹40 lakh. Finally, screen for section 24 compulsory-registration categories and section 23 exclusions. Only after those checks can a turnover figure answer whether GST registration is required.
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