Short answer: GST registration is usually required when your aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in specified special-category States. Eligible businesses that supply only goods within a State may use a notified threshold of up to ₹40 lakh, but ₹40 lakh is not a universal exemption. Inter-State taxable supplies, certain e-commerce arrangements and other section 24 categories can require registration earlier. A business dealing exclusively in exempt or non-taxable supplies is generally not liable to register regardless of turnover.
The practical test is not the sales of one shop or one app account. It is the aggregate turnover of all supplies made under the same PAN, considered across India. The sections below show which threshold applies, when an override removes it and how to register when liability arises.
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The GST thresholds that apply in common situations
Section 22 of the Central Goods and Services Tax Act sets the basic liability rule. The general threshold is ₹20 lakh, with a ₹10 lakh baseline for specified special-category States. The law also permits a notified increase up to ₹40 lakh for a supplier engaged exclusively in goods. Government guidance describes the operating thresholds as ₹40 lakh for intra-State taxable goods and ₹20 lakh for intra-State or inter-State taxable services, subject to the relevant notifications and conditions.
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| Business pattern | Threshold or rule | Important qualification |
|---|---|---|
| Intra-State taxable goods | Up to ₹40 lakh may apply | Only for an eligible supplier engaged exclusively in goods, and only where the applicable notification and State conditions are satisfied. It is not a universal ₹40 lakh limit. |
| Taxable services | ₹20 lakh in the general framework | The Government’s MSME summary lists ₹20 lakh for intra-State or inter-State taxable services. Check the notification applicable to your service and State. |
| Specified special-category State | ₹10 lakh baseline under section 22 | The lower baseline applies to the States covered by the statutory framework; do not assume every North-Eastern or hill State has the same treatment without checking the current notification. |
| Inter-State taxable supply | Threshold benefit is generally unavailable | Section 24 can require registration even when turnover is below the ordinary limit. Some notified service situations are treated differently. |
| Only exempt or non-taxable supplies | No registration merely because turnover is high | Section 23 generally excludes a person dealing exclusively in exempt or non-taxable supplies. |
| Compulsory-registration category | Registration can be required from the triggering activity | Section 24 overrides the ordinary turnover test. E-commerce and other notified categories need separate checking. |
In September 2025, the Government’s Press Information Bureau said that “The threshold limits for GST registration remain the same.” Rate changes effective 22 September 2025 therefore did not, by themselves, alter these registration thresholds.
How aggregate turnover is calculated
GST does not let a business split one PAN-wide operation into several small turnover buckets. Aggregate turnover is tested for the financial year across supplies made under the same PAN, including supplies made from different States. The CBIC’s examples treat the business as one economic unit for this purpose.
All branches under one PAN count together
Suppose the same proprietorship has an outlet in Maharashtra with ₹14 lakh of taxable service turnover and an outlet in Karnataka with ₹10 lakh. The combined figure is ₹24 lakh, not two independent figures of ₹14 lakh and ₹10 lakh. Once the applicable ₹20 lakh threshold is crossed, the proprietor must assess registration for the business.
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The PAN test applies to the person making the supplies. A company and an unrelated partnership with different PANs do not combine their turnover merely because they share premises or a trade name. Conversely, multiple outlets, warehouses or online storefronts operated by the same PAN cannot be treated as separate businesses simply to stay below a threshold.
Use the financial-year total and the date liability arises
Track turnover continuously during the financial year rather than waiting for the year-end accounts. The registration clock is tied to the date the threshold is crossed or a compulsory-registration condition is met. Preserve invoices and State-wise records so that you can identify that date and support the calculation.
When selling only exempt goods or services means no registration
Section 23 provides a major exclusion: a person dealing exclusively in exempt or non-taxable supplies is generally not liable to register, irrespective of turnover. CBIC gives the example of a printer selling only exempt books. A high turnover by itself does not convert an exclusively exempt business into a taxable supplier.
Exclusively exempt is different from mostly exempt
If even one line of business is taxable, the analysis changes. A shop selling exempt books but also taxable stationery cannot rely on the exempt-only rule for the whole operation. Likewise, a service provider with exempt educational work and a taxable consultancy engagement must test the taxable activity, the PAN-wide aggregate turnover and any section 24 trigger.
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Check every product and service classification
Do not decide that an entire business is exempt from a product label or customer description. Confirm whether each supply is exempt or non-taxable under the applicable GST notification. If any supply is taxable, document the classification and apply the appropriate threshold analysis before assuming that registration is unnecessary.
Inter-State sales and e-commerce overrides
Inter-State taxable goods can remove the ordinary threshold
An inter-State taxable supply generally removes the benefit of the ordinary turnover threshold. A small manufacturer making ₹5 lakh of local sales and ₹1 lakh of taxable goods to a customer in another State may therefore face registration even though the combined amount is far below ₹20 lakh or ₹40 lakh. Confirm the current section 24 position and any specific exemption before dispatching inter-State taxable goods.
Inter-State services require a closer reading
The Government’s MSME summary lists ₹20 lakh for intra-State or inter-State taxable services, while the general section 24 rule says inter-State taxable supplies can trigger registration. This apparent tension is resolved by the particular exemption or notification applicable to the service category. Service suppliers should identify the service, customer location, place-of-supply treatment and the current notification rather than applying the goods rule automatically.
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Marketplace sales where the operator collects TCS
CBIC states that a supplier using an e-commerce operator required to collect tax at source generally cannot claim the ordinary threshold. Selling through a marketplace is therefore not automatically equivalent to selling directly from a local shop. Determine whether the operator is required to collect TCS for your transaction and whether your activity falls within a notified exception.
Notified section 9(5) services
Some services are taxed under section 9(5), with the e-commerce operator responsible for paying the tax. CBIC explains that suppliers of notified section 9(5) services can retain threshold treatment because the operator, rather than the supplier, pays the tax under that mechanism. This exception is limited to the notified services; it does not cover every service sold through an app or website.
Section 24: situations where turnover is not the only test
Section 24 creates compulsory-registration categories that override the normal threshold analysis. The existence of one of these activities can make registration necessary from the point the condition is met, even if aggregate turnover remains below ₹20 lakh or an eligible goods supplier’s ₹40 lakh limit.
- Inter-State taxable supplies generally require separate review rather than automatic reliance on the threshold.
- Suppliers using an e-commerce operator required to collect TCS generally cannot claim the threshold.
- Suppliers of notified section 9(5) services are treated differently because the operator pays the tax.
- Any other section 24 category applicable to your business must be checked against the current Act and notifications.
Because compulsory-registration categories and notifications can change, keep a copy of the rule or notification on which your decision rests and re-check it when your business model changes.
A practical decision process before you register
- Identify the legal person. List every outlet, warehouse, website and marketplace account operated under the same PAN.
- Classify each supply. Mark supplies as taxable, exempt or non-taxable, and separately note any inter-State supply or e-commerce arrangement.
- Calculate PAN-wide aggregate turnover. Combine the relevant supplies across all States for the financial year; do not test each outlet in isolation.
- Apply the right threshold. Start with ₹20 lakh, use the ₹10 lakh baseline where the specified special-category State rule applies, and consider the notified up-to-₹40 lakh goods-only threshold only if you supply exclusively goods and satisfy the State conditions.
- Check section 24 overrides. Inter-State taxable activity, marketplace TCS and other compulsory-registration categories can make the threshold irrelevant.
- Check the section 23 exclusion. If every supply is exempt or non-taxable, registration is generally not required merely because turnover is large.
- Record the liability date. Note the invoice or transaction that crossed the threshold or the date the compulsory condition began. This date controls the application deadline.
- Reassess after a business change. Adding a taxable product, opening an outlet under the same PAN, beginning inter-State sales or joining a marketplace can change the answer immediately.
How to apply for GST registration
Fresh registration is electronic through the GST common portal, www.gst.gov.in, using FORM GST REG-01. The CBIC sectoral FAQ identifies the basic details required in Part A.
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- Open the GST portal and choose the option for new registration.
- Select the relevant taxpayer type and enter the State or Union territory in which the business is located.
- Complete Part A of FORM GST REG-01 with the PAN, mobile number, email address and State or Union territory details.
- Verify the contact details through the portal’s authentication process and continue with the remaining registration information and documents requested for the business.
- Submit the application electronically and retain the acknowledgement and application reference for tracking.
CBIC FAQ guidance says the application should be made within 30 days after turnover crosses the threshold or after a section 24 condition is met. Do not treat the 30 days as a grace period to continue ignoring an earlier compulsory-registration trigger; use the date of liability when planning invoices and tax collection.
Voluntary registration below the threshold
A business below the threshold may register voluntarily. CBIC says that once voluntarily registered, it is treated as a normal taxable person and GST provisions apply from registration. Voluntary registration can therefore create ongoing compliance, invoicing and return obligations; it is not a harmless reservation of a GST number. Take it only after considering the effect on pricing, records and customers.
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Example 1: local goods seller below ₹40 lakh
A sole proprietor sells taxable goods only within one State and records ₹32 lakh in the financial year. If that State permits the notified goods-only threshold and the proprietor has no compulsory-registration activity, the business may remain below the ₹40 lakh limit. The result must be revisited if the proprietor adds a taxable service or makes an inter-State sale.
Example 2: goods seller crossing the eligible limit
The same business reaches ₹41 lakh of intra-State taxable goods turnover. It has crossed the applicable ₹40 lakh threshold and should apply within 30 days of the liability date, assuming no different State rule or notification changes the calculation.
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A consultancy operated under one PAN earns ₹12 lakh from Maharashtra and ₹11 lakh from Karnataka. The ₹23 lakh aggregate exceeds the general ₹20 lakh service threshold. Treating the offices as unrelated would understate turnover.
Example 4: exempt-only printer
A printer sells only supplies that are confirmed exempt and has ₹80 lakh in turnover. Under section 23, the printer is generally not liable merely because the amount is high. A taxable printing service or taxable product would require a fresh analysis.
Example 5: marketplace seller
A home-goods seller has ₹6 lakh of sales through an operator required to collect TCS. The low turnover does not by itself preserve the ordinary threshold because the e-commerce arrangement can fall under compulsory registration. The seller must establish whether the operator is required to collect TCS and whether a notified exception applies.
Registration threshold versus composition scheme
Composition is a separate compliance option, not an increase in the registration threshold. The Government’s MSME summary records composition limits of up to ₹1.5 crore for goods and ₹50 lakh for services, subject to conditions. A business may need GST registration first and then decide whether it is eligible for composition; turnover below a composition limit does not automatically mean that registration is unnecessary.
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| Question | Registration threshold | Composition limit |
|---|---|---|
| Purpose | Determines when GST registration liability begins. | Determines whether an already registered, eligible taxpayer may use the composition method. |
| Figures cited by Government guidance | ₹20 lakh generally; up to ₹40 lakh for eligible intra-State goods; ₹10 lakh baseline in specified special-category States. | Up to ₹1.5 crore for goods and ₹50 lakh for services, subject to conditions. |
| Effect of section 24 | Compulsory-registration categories can override the threshold. | Separate eligibility restrictions still apply. |
Common mistakes and how to correct them
- Using ₹40 lakh as a universal rule: verify that all supplies are goods, sales are within the permitted framework and the State notification applies.
- Counting each shop separately: consolidate turnover under the same PAN across States.
- Assuming exempt turnover always counts toward registration: an exclusively exempt or non-taxable business is generally outside liability under section 23, but one taxable activity changes the analysis.
- Ignoring a small inter-State order: review section 24 before accepting inter-State taxable goods or another compulsory category.
- Treating every online sale alike: distinguish direct sales, marketplace TCS arrangements and notified section 9(5) services.
- Applying late: calculate the 30-day period from the date liability arose, not from the date you first noticed the issue.
- Volunteering without planning: understand that voluntary registration makes you a normal taxable person from registration and brings GST obligations with it.
What to monitor in 2026
The September 2025 PIB explanation confirms that the registration thresholds remained unchanged after the 22 September 2025 rate changes. GST notifications can still alter State eligibility, e-commerce treatment or compulsory-registration categories. Before relying on a threshold for a new product, State, marketplace or service, check the latest CBIC notification and the current text of sections 22, 23 and 24.
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