GST Registration Threshold: Is It ₹40 Lakh, ₹20 Lakh, or ₹10 Lakh?

Ask three people when GST registration becomes mandatory and you will get three numbers. They are all partly right, because the threshold depends on what you sell and where you sell it from.

The Two Numbers That Matter Most

For most of India:

• Goods: ₹40 lakh of aggregate turnover in a financial year.
• Services: ₹20 lakh.

If you supply both, the lower services threshold is the one to plan around.

The Special Category States Are Lower

A group of states, mostly in the north-east along with a few hill states, run at half those figures: ₹20 lakh for goods and ₹10 lakh for services. If you are registered in one of them, use these numbers rather than the headline ones.

Aggregate Turnover Is Bigger Than You Think

This is where businesses miscount. Aggregate turnover is calculated PAN-wide, across all of India, and it includes:

• Taxable supplies
• Exempt supplies
• Exports
• Inter-state supplies

So a consultant billing ₹14 lakh domestically and ₹8 lakh abroad has crossed ₹20 lakh, even though neither figure alone does it. Exempt income counts too, which surprises people who assume only taxable sales are added up.

When Turnover Stops Mattering Entirely

Several situations require registration from your very first rupee, threshold or not:

• Inter-state supply of goods. Ship a taxable product to another state and you must register, even at ₹50,000 of turnover.
• E-commerce operators required to collect TCS.
• Casual taxable persons — think an exhibition stall in a state where you have no fixed place of business.
• Anyone liable to pay tax under reverse charge.
• Agents supplying on behalf of another taxable person.

The Services Exception Worth Knowing

Here is the nuance that catches people out. That inter-state rule is about goods. A service provider making inter-state supplies still gets the benefit of the ₹20 lakh threshold.

A freelance designer in Pune billing a client in Bengaluru does not need GST registration at ₹9 lakh of turnover. A trader in Pune shipping goods to Bengaluru does, on day one.

Registering Before You Have To

Plenty of businesses register voluntarily below the threshold, and often for good reason. B2B customers want a tax invoice so they can claim input tax credit, and marketplaces frequently require a GSTIN regardless of your size. The trade-off is real though: once registered, you file returns every period whether or not you traded, and nil returns still have to be filed on time.

Working Out Where You Stand

Add up twelve months of everything, across every state and every income type, under one PAN. If that number is close to your threshold, you are better off registering slightly early than discovering you crossed it four months ago.

Not sure which side of the line you're on? Talk to us about GST registration — we'll tell you whether you actually need it before you pay for anything.