Updated on July 23, 2025 01:22:36 PM
GST registration becomes required for businesses once their turnover hits a certain amount. The turnover amount for GST registration depends on the business type (goods or services) and the state. This threshold exists to ensure small businesses and startups are not significantly burdened with tax compliance in their early stage.
Typically, for the states in India, businesses that supply goods must be registered under GST if their annual turnover is above ₹40 lakhs. For services, the limit is ₹20 lakhs. But, for special category states, such as those in Northeast India and the hill states, the limit for goods is ₹20 lakhs and the limit for services is ₹10 lakhs.
A business must know these limits because it is illegal to operate above the threshold and not be registered for GST, resulting in penalties. A business can choose to also register voluntarily, even if below the threshold, to get the benefit of input tax credit and develop in the B2B segment. Knowing the GST turnover limit will help you stay compliant and plan business expansion.
The GST registration limit denotes the minimum annual turnover that a business must have in order to be mandatorily registered with the Goods and Services Tax (GST) system in India. This registration limit also serves the function of helping to identify which businesses GST needs to be collected and paid, and which businesses are exempt from collecting GST due to a low turnover. The GST Registration Limit for Goods helps determine whether a business supplying goods must obtain GST registration based on its turnover threshold.
The threshold limit for most of the states in India is ₹40 lakhs for goods and ₹20 lakhs for services. However, in special category states, which include certain states in the North-Eastern region and hill states, the registration limit is lower: ₹20 lakhs for goods, and ₹10 lakhs for services. If a business exceeds these limits, it must register for the GST so that it can incur an operational charge without incurring an unreasonable penalty. Businesses below the threshold can apply for voluntary registration and reap the benefits of input tax credit and a higher market credibility.
In India, the minimum turnover limit for GST registration varies based on the supply type and the location of the business. Here is a summary of the threshold limits as of now:
| Type of Supply | Regular States | Special Category States |
|---|---|---|
| Supply of Goods | ₹40 lakhs | ₹20 lakhs |
| Supply of Services | ₹20 lakhs | ₹10 lakhs |
There are significant legal and financial risks involved with failing to register under GST if your business exceeds the prescribed turnover limit. The consequences are outlined below:
As of May 2025, the Goods and Services Tax (GST) registration thresholds in India reflect the changes introduced in 2019. The thresholds aim to lessen compliance costs for small and medium enterprises (SMEs) and are based on the sort of supply and the state of supply in a business setting.
Current GST Registration Thresholds
| Type of Supply | Regular States | Special Category States |
|---|---|---|
| Supply of Goods | ₹40 lakhs | ₹20 lakhs |
| Supply of Services | ₹20 lakhs | ₹10 lakhs |
Conclusion
GST registration limit is crucial for every businessman, as these limits can vary, and technical interpretation may be involved with a legal definition, in which can create penalties. GST turnover, as to whether the business sells goods or services and what state they are in, will determine the limit. Most businesses are not required to register if they operate under the limit. Once the limit is exceeded, it is required for the business to register for GST.
If year-round turnover is tracked and stays current with GST requirements, you are better able to make educated decisions, plan tax measures, and decide whether to utilize benefits such as Input Tax Credit (ITC).
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions (FAQs)
The minimum turnover limit for GST registration is ₹40 lakhs for goods and ₹20 lakhs for services for regular states. For special category states, the limit is ₹20 lakhs for goods and ₹10 lakhs for services.
No, you do not have to register under GST if your turnover continues to be below the prescribed limit. However, you can apply for voluntary registration if you want to benefit from Input Tax Credit (ITC).
Special category states are Arunachal Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand, which have a different, i.e., lower, GST registration limit.
The Composition Scheme is for small taxpayers who can pay GST at a lower rate. The turnover limit under this scheme is ₹1.5 crore for manufacturers and traders and ₹50 lakhs for service providers.
If you do not register for GST when you should have because your turnover limits are exceeded, you may incur penalties.
Yes, businesses that are less than the GST threshold can register for the GST voluntarily. In doing so, they will be able to claim Input Tax Credits (ITCs) on their purchases and enhance their image as a business.
Asking the question a different way, businesses voluntarily registered with the GST receive: Input Tax Credits (ITCs), enhanced brand recognition, and a better likelihood to do business with other companies registered on the GST.
Average Turnover is the turnover for the business over all its locations and states, including all taxable, exempt, and export supplies, yet does not include taxes ( GST or otherwise).
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