Understanding the GST Registration Threshold in India

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Published Date:  19-05-2023   Author:   ca-k-s-b-subramanyam
captainbiz understanding the gst registration threshold in india

GST is an indirect tax, and registration is required to be taken by a business when crosses the threshold. The common question that anyone has in their mind is, “What is the threshold limit for GST Registration?”.  Any person whose turnover exceeds the specified threshold limit in a Financial Year while selling goods or, renderings services, or both must register in the State or Union territory from which he/she makes the supplies. If a person’s turnover exceeds the prescribed limit must register under Section 22 of the CGST Act, 2017.

The threshold limit for registration under GST differs from state to state, and the updated threshold limit for GST Registration is provided below for ready reference.

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

Sl. No

Name of the States

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Threshold Limit for GST Registration for

Supply of Goods

Supply of Services

1

Mizoram, Tripura, Manipur and Nagaland

₹ 10 Lacs

₹ 10 Lacs

2

Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana, Uttarakhand

₹ 20 Lacs

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₹ 20 Lacs

3

Jammu and Kashmir, Assam, Himachal Pradesh and all other States

₹ 40 Lacs

₹ 20 Lacs

 

The threshold limit for GST Registration has been enhanced in order to facilitate ease of doing business, and some states, especially the Special Category States like Mizoram, Tripura, Manipur and Nagaland, have not increased the threshold limit to provide a level playing field to the MSMEs as it will enable them to avail input tax credit, which helps the MSMEs to price competitively be in the organized eco-system of the business.

The Government is also very sensitive to the growth of the MSMEs, which are in the unorganized sector and dealing exclusively with exempted goods and serving B2C Customers. To facilitate them to grow, the Government has increased the threshold limit to ₹ 40 lacs for persons dealing exclusively in the supply of goods.

There are certain businesses that must register for GST regardless of their turnover. The businesses are as follows:

  1. Any person providing goods to a customer in another state
  2. Any person who wishes to participate in an any exhibition and sell goods temporarily in a state where he is not registered
  3. Non-resident taxable persons
  4. E-commerce operators, i.e.a, person who manages and helps other to sell their goods through their website
  5. Businesses required to pay tax under the reverse charge mechanism
  6. Input service distributors
  7. Businesses that supply goods and/or services on behalf of other taxable persons
  8. Every person who is required to deduct tax at the source
  9. Persons who are supplying goods or services or both on behalf of another taxable person, as an agent or called through another name
  10. Any person who supplies goods and/or services through electronic commerce platforms i.e, selling goods through Amazon or Flipkart etc.,

In the initial days of business, entrepreneur is required to maintain their books of accounts in a systemized manner as it will help them to have control over their business and enable them to make effective business decisions. For this, they can adopt any mobile or online billing software like CaptianBiz.

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CA K. S. B. Subramanyam

CA K.S.B. Subramanyam is a Fellow Chartered Accountant and currently serves as the Chief Financial Partner at M/s Manohar Chowdhry & Associates, Chartered Accountants. He has been associated with the firm for nearly two decades and has played a pivotal role in its growth and success.

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