Glossary
What is the GST registration threshold?
The turnover at which registering for GST stops being a choice. Lower in some states, and irrelevant for some kinds of sale.
Updated
In short
The GST registration threshold is the aggregate turnover above which a business must register: ₹40 lakh for goods and ₹20 lakh for services in most states. SimpleERP shows your running sales from the registers.
The GST registration threshold is the aggregate turnover in a financial year above which a business must register for GST. As notified, it is ₹40 lakh for suppliers of only goods, or ₹20 lakh in special category states, and ₹20 lakh for suppliers of services, or ₹10 lakh in special category states. Some suppliers, such as inter-state sellers of goods and casual taxable persons, must register at any turnover.
GST registration threshold: a worked example
Lakshmi Steel Furnitures started as a small workshop in Coimbatore selling only goods within Tamil Nadu. Its turnover by year, illustrative:
| Year | Aggregate turnover | Must register? |
|---|---|---|
| Year 1 | ₹28,40,000 | No, under ₹40 lakh |
| Year 2 | ₹36,90,000 | No, still under |
| Year 3 | ₹41,20,000 by February | Yes, within 30 days of crossing ₹40 lakh |
FAQ
Questions, answered
Which states have the lower limit?
The lower limits apply in special category states that chose them, such as Manipur, Mizoram, Nagaland and Tripura for services, and a set of north-eastern and hill states for goods. The list is set by notification; check the GST portal for your state.
Does the ₹40 lakh limit apply if I sell goods and services?
The ₹40 lakh limit is for businesses supplying only goods. If you supply services as well, the ₹20 lakh limit for services applies to your whole aggregate turnover, as notified.
Can I register voluntarily below the limit?
A business can register for GST voluntarily below the limit, and many small businesses do, because registered buyers prefer suppliers whose invoices give them input tax credit. Once registered you must charge GST and file returns, even below the threshold.
When must I apply after crossing the limit?
Within 30 days of the date your aggregate turnover crosses the threshold, as notified. Tax becomes payable on supplies from the date you became liable, so apply promptly and keep your invoices from that date in order.
Related
Keep reading
Aggregate turnover
The all-India, PAN-wide value of taxable, exempt, export and inter-state supplies, excluding GST.
Read moreGSTIN
The 15-character GST number of a registered business: state code, PAN, entity number, check digit.
Read moreCasual taxable person
Someone who makes taxable supplies occasionally in a state or union territory where they have no fixed place of business.
Read more
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