Threshold Limit Calculation for GST Registration (Other than Composition Scheme)

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The Goods and Services Tax (GST) threshold limit is the minimum annual turnover above which businesses must register for GST in India. It is essential to observe that the GST Threshold Limit for Sole Trade, Company, partnership firm, or LLP is the same.  The GST Threshold Limit for Services and Goods is different.

  1. For businesses engaged in the supply of goods, the GST threshold limit is:
  • ₹ 40 lakhs for businesses located in most states and Union Territories of India (except for special category states)
  • ₹ 20 lakhs for the state of Telangana
  • ₹ 10 lakhs for businesses located in North Eastern and hill states of India (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh)
  1. For businesses engaged in the supply of services or both goods and services, the GST threshold limit is:
  • ₹ 20 lakhs for businesses located in most states and Union Territories of India (except for special category states)
  • ₹ 10 lakhs for businesses located in North Eastern and hill states of India (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh)

How to Calculate Threshold Limit for GST Registration

Knowing the computation method for determining the threshold is essential; else, one may end up not having GST Registration, which could lead to the payment of penalties or obtaining it without requirement, leading to an unnecessary compliance burden.

GST Threshold Limit Calculation should include the following

  • Turnover of the person/entity across the country for the particular PAN number
  • All taxable supplies
  • All exempted supplies
  • Exports

And excludes the following

  • Central Goods and Service Tax Amount,
  • State/Union Territory Goods and Services Tax Amount,
  • Integrated Goods and Services Tax Amount,
  • GST Compensation Cess
  • Transactions on which Tax is payable on Reverse Charge Mechanism

There are different GST calculators online that we can use to calculate the threshold limit and GST charges.

Also Read: Types of GST Registrations

The above computation is called Aggregate Annual Turnover, and the treatment of various

Sl.No

Particulars

Included in Aggregate Annual Turnover

1

Partners’ salary from a Partnership Firm

No

2

Salary as a Director of a Private Limited Company

No

3

Incentives Received by Executive

No

4

Interest on Partners Capital in Partnership Firm

Yes

5

Interest earned on Post Office Deposits

Yes

6

Interest earned on Bank Deposits

Yes

7

Rental income on Residential Property

Yes

8

Rental Income on Commercial Property

Yes

9

Dividend Income

No

10

Proceeds from the Maturity of the Insurance Policy

No

11

Capital Gains Arising on Sale of Securities

No

12

Proceeds from the sale of Land

No

13

Proceeds from the sale of Buildings during construction

Yes

14

Proceeds from the sale of Buildings after Receipt of Occupancy Certificate or any other equivalent Certificate

No

It is essential to understand and obtain GST Registration as and when the threshold crosses and the above table will help in understanding the various types of income to be included while determining the Aggregate Annual Turnover.

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