Most small businesses meet GST first as a question: do I have to register yet? The answer turns on four things you can check yourself: what you sell (goods, services or both), which State you supply from, whether any sales cross State lines or go through an online marketplace, and your turnover counted the way the GST law counts it. Each number below comes with the section or notification behind it, so you can confirm it rather than take our word for it.
The short answer
You must register once your aggregate turnover in a financial year exceeds the limit that applies to you:
| What you supply | Limit in most States | Where it differs |
|---|---|---|
| Services, or goods and services together | ₹20 lakh | ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura |
| Only goods | ₹40 lakh | ₹20 lakh for suppliers in Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand. Manipur, Mizoram, Nagaland and Tripura: see the note below. The ₹40 lakh limit never applies to suppliers of ice cream, pan masala or tobacco. |
The base figures are in section 22 of the CGST Act: ₹20 lakh generally, and ₹10 lakh in the “special category States” that remain after the exclusions written into the section, which leaves Manipur, Mizoram, Nagaland and Tripura. Notification No. 10/2019-Central Tax raised the limit to ₹40 lakh for goods-only suppliers from 1 April 2019, with the exclusions shown in the table.
A note on the four north-eastern States. For a goods-only supplier in Manipur, Mizoram, Nagaland or Tripura, the Act sets ₹10 lakh but allows the Government to raise it to as much as ₹20 lakh at the State’s request. Before relying on either figure, check the current position with the State’s tax department or on the GST portal.
Some businesses must register whatever their turnover. Those cases, covered further down, matter more than the limits for anyone selling online or across States. Once you know you are over the line, our GST registration service can prepare the documents and HSN/SAC codes and file the application for you.
How “aggregate turnover” is counted
The limit is tested against aggregate turnover, a defined term. It is not your bank credits and not your profit. Section 2(6) adds up the value of all taxable supplies, exempt supplies, exports and inter-State supplies of every person with the same PAN, across India. It leaves out the GST itself (central, State, union territory and integrated tax, and cess) and purchases on which you pay tax under reverse charge.
Three points catch people out:
- Exempt sales count. If part of what you sell is exempt, those sales still go into the total, even though no GST is charged on them.
- Exports count. A business that only exports still adds those sales, even though exports are zero-rated.
- It is PAN-wide. Two shops in different States run by the same proprietor under one PAN are added together.
Liability starts when turnover goes above the limit during the year, not when the year ends.
For example, a consultant in Noida bills ₹14 lakh of taxable services and ₹7 lakh of exempt services in a year. Aggregate turnover is ₹21 lakh, above the ₹20 lakh services limit, so registration is needed, even though only ₹14 lakh of the work attracts GST. Our post on GST for freelancers and consultants covers the rules for service providers in more detail.
Goods only, or goods and services?
The ₹40 lakh limit is for suppliers engaged exclusively in supplying goods. Section 22 makes one exception: a goods supplier still counts as “exclusive” if its only service income is interest or discount on deposits, loans or advances. Add any other stream of taxable services, such as separately billed installation, repairs or consulting, and the services limit (₹20 lakh, or ₹10 lakh in the four States) becomes the test for the whole turnover.
Who must register regardless of turnover
Section 24 lists the categories that need registration from the first sale. In plain terms:
- anyone making an inter-State taxable supply (subject to the services exemption below);
- casual taxable persons, such as a trader selling at an exhibition in a State where it has no fixed place of business;
- anyone liable to pay tax under reverse charge;
- non-resident taxable persons;
- persons required to deduct tax at source under section 51;
- agents supplying on behalf of other taxable persons;
- Input Service Distributors;
- suppliers selling through an e-commerce operator that collects tax at source, and every such operator itself;
- overseas suppliers of online information and database access services to unregistered persons in India, and of online money gaming to persons in India.
Exemptions that soften section 24
- Inter-State services. Service providers who bill clients in other States are exempt until aggregate turnover crosses the services limit, under a government notification. Inter-State supply of goods has no such relief: a trader shipping goods to another State needs registration from the start, however small.
- Services through e-commerce platforms. Service suppliers selling through an e-commerce operator are exempt up to the services limit under a government notification.
- Goods through e-commerce platforms. Since 1 October 2023, small suppliers of goods selling within their own State through e-commerce operators can stay unregistered below the limit, but only if they meet the conditions in Notification No. 34/2023-Central Tax, listed on the GST Council’s notification page. Read those conditions before relying on it.
Who does not need to register at all
Under section 23, two groups are outside registration whatever their turnover: a person supplying only goods or services that are not taxable or wholly exempt, and an agriculturist, for produce from cultivating land. The word “only” carries the weight. One taxable line of business brings the whole turnover back into the test.
When to apply once you cross the limit
Section 25(1) gives you 30 days from the date you become liable to apply, in every State where you are liable. Casual and non-resident taxable persons get no grace period: they must apply at least five days before they start business.
Registration is State-wise. A business supplying from Uttar Pradesh and Maharashtra needs a registration in each, and each one is treated as a separate person for GST. Within one State you get a single registration by default, though separate registrations for different places of business are allowed.
The application is made online on the GST portal, which charges no government fee.
Should you register before you have to?
Section 25(3) allows voluntary registration, and then every rule that binds a registered person binds you too. Weigh both sides.
Why businesses register early: company clients often want a GSTIN on your invoice so they can claim input tax credit; you can claim credit on GST you pay on purchases; and many marketplaces and government buyers ask for a GSTIN at onboarding.
What you take on: returns for every period, including nil returns in months with no sales (see what GST return filing involves); GST on your sales, which makes you dearer for customers who cannot claim credit, typically individual consumers; and late fees, interest and possible cancellation if filings slip.
A new company or LLP that bills other businesses often registers soon after it is incorporated, for example straight after setting up a private limited company. A small consumer-facing business well under the limit can often wait. That is a judgement to make with your accountant. The law does not decide it for you.
Other GST limits that get confused with this one
- Composition scheme. This decides whether a registered business can pay a flat rate on turnover instead of regular GST. The limit is ₹1.5 crore of previous-year turnover in most States and ₹75 lakh in eight, under Notification No. 14/2019-Central Tax. A separate option for service providers in section 10(2A) has a ₹50 lakh limit.
- E-invoicing. This applies to registered businesses above a separate turnover level, notified by the Government. Check the current figure on the GST portal.
Neither one changes whether you must register in the first place.
What happens if you miss it
A business that should have registered and did not still owes tax on its supplies from the date it became liable, with interest, and penalties can follow. Because it was not registered, it could not charge GST on those invoices, so the tax usually comes out of its own margin. If you think you crossed the limit some time ago, register now and take advice on the back period. Do not wait for the department to ask.
Frequently asked questions
Do I need GST registration to bill a client in another State for services?
Not below the services limit. Inter-State suppliers of services are exempt until aggregate turnover crosses it. Inter-State suppliers of goods must register from the first sale.
I have two businesses under the same PAN. Are they counted separately?
No. Aggregate turnover is computed on an all-India basis for all supplies under the same PAN.
Is there a government fee for GST registration?
No. Registration on the GST portal is free. Professionals who handle the application charge for their service.
Can I cancel a voluntary registration later?
Yes. Section 29 lets a person who registered voluntarily apply to opt out, but returns and any tax on stock must be settled first.
Complianto (complianto.in), operated by Mentorcorp Private Limited, is a private consultancy and is not affiliated with any government body. We do not issue official documents. We charge a professional fee for application assistance and advisory services. Applicants can apply directly to the government without our fees via the official portals: MCA (mca.gov.in), Income Tax (incometax.gov.in), GST (gst.gov.in), MSME (udyamregistration.gov.in), FSSAI (foscos.fssai.gov.in), Startup India (startupindia.gov.in), and IP India (ipindia.gov.in).
This article is general information, not legal or tax advice.
