What is the GST Registration Threshold?
The GST registration threshold is the minimum annual turnover above which a business must compulsorily register for GST. Below this limit, registration is optional (except in specific cases). The threshold differs based on whether you supply goods or services and which state your business operates in.
💡 Quick Reference 2026
Goods suppliers: ₹40 lakh | Service providers: ₹20 lakh | Special category states: ₹10 lakh
GST Threshold Limits — 2026
| Business Type | Regular States | Special Category States |
|---|---|---|
| Supplier of Goods | ₹40 lakh | ₹20 lakh |
| Supplier of Services | ₹20 lakh | ₹10 lakh |
| Both Goods and Services | ₹20 lakh | ₹10 lakh |
Special Category States
The following states have lower GST thresholds due to their smaller economic size:
- Arunachal Pradesh
- Assam
- Jammu & Kashmir
- Ladakh
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Sikkim
- Tripura
- Uttarakhand
- Himachal Pradesh
Who Must Register Regardless of Turnover?
Certain businesses must register for GST even if their turnover is zero. The threshold limit does not apply to:
- Inter-state suppliers — selling goods or services across state borders
- E-commerce sellers — selling through platforms like Amazon, Flipkart, Meesho
- E-commerce operators — platforms that collect payment on behalf of sellers
- Non-resident taxable persons — foreign businesses supplying in India
- Casual taxable persons — businesses without a fixed place of supply
- Persons liable under Reverse Charge Mechanism (RCM)
- Input Service Distributors (ISD)
- Exporters of services — supplying services to foreign clients
- TDS deductors — government entities deducting TDS on payments
⚠️ E-Commerce Sellers — Important Note
If you sell on Amazon, Flipkart, or any online marketplace, you must register for GST regardless of your turnover. There is no threshold exemption for e-commerce sellers.
How is Turnover Calculated for Threshold?
The threshold is based on Aggregate Annual Turnover (AATO), which includes:
- All taxable supplies (goods + services)
- Exempt supplies
- Exports (zero-rated supplies)
- Inter-state supplies
It excludes inward supplies taxable under Reverse Charge, taxes paid under GST, and the value of land/building sold (in certain cases).
⚠️ PAN-Based Calculation
Aggregate turnover is calculated across all businesses under the same PAN, not per GST registration. If you have two businesses under the same PAN, their combined turnover determines threshold eligibility.
Voluntary GST Registration — Should You Register Early?
Even below the threshold, you can voluntarily register for GST. This makes sense if:
- Your clients are GST-registered businesses who need your GSTIN to claim ITC
- You want to claim ITC on your own business purchases
- You plan to supply inter-state in the future
- You want to build credibility with corporate clients
- You are close to the threshold and want to avoid disruption
Penalty for Not Registering When Required
If you were required to register and failed to do so, the penalties are severe:
| Violation | Penalty |
|---|---|
| Non-registration despite being liable | 10% of tax due (min ₹10,000) |
| Deliberate non-registration / fraud | 100% of tax due |
| Late registration (after liability arose) | Interest at 18% p.a. on unpaid tax |
🔍 Check If You Need to Register
Use our free Registration Checker tool — answer a few questions and get an instant answer.
Check Registration Requirement →Composition Scheme — Lower Threshold Option
If your turnover is below ₹1.5 crore (₹75 lakh for special category states), you may opt for the Composition Scheme — a simplified compliance option with:
- Flat tax rate of 1% (traders), 2% (manufacturers), 5% (restaurants)
- Quarterly returns instead of monthly
- No ITC allowed
- Cannot supply inter-state
- Cannot issue tax invoices — only bill of supply
Frequently Asked Questions
My turnover is exactly ₹40 lakh — do I need to register?
The threshold is exceeding ₹40 lakh, not reaching it. If your turnover is exactly ₹40 lakh, registration is not yet mandatory. It becomes mandatory the moment it crosses ₹40 lakh.
Do I count GST collected in my turnover?
No. Turnover for threshold purposes is the taxable value excluding GST. GST collected is not your income — it is collected on behalf of the government.
I have a shop and also provide repair services — which threshold applies?
The lower threshold of ₹20 lakh applies when you supply both goods and services. Your combined turnover is used for the calculation.
Does turnover from a salary job count toward the GST threshold?
No. Employment income (salary) is not a supply under GST and does not count toward the threshold. Only business/professional income counts.
I crossed ₹20 lakh last month — how quickly must I register?
You must apply for registration within 30 days of becoming liable. Failing to do so attracts the penalties mentioned above.