The GST registration limit is ₹40 lakh of aggregate turnover for businesses that supply only goods and ₹20 lakh for service providers in most states. This guide explains how to measure that turnover, what happens when you cross it, and when GST registration is compulsory or not needed at all. Once you cross the limit, you have 30 days to apply (section 25(1) of the CGST Act).
What is the GST registration limit for goods and services?
You must register once your aggregate turnover in a financial year exceeds ₹40 lakh if you supply only goods, or ₹20 lakh if you supply services or both. Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand apply ₹20 lakh to goods too. Manipur, Mizoram, Nagaland and Tripura apply ₹10 lakh under section 22, though some official guidance quotes ₹20 lakh for goods there, so confirm with the state.
Three details decide which GST threshold limit is yours:
- The test is "exceeds". Under section 22 of the CGST Act, you become liable when turnover goes above the limit. A services business at exactly ₹20,00,000 is not yet liable.
- It runs per financial year. Turnover is counted from 1 April to 31 March, not over a rolling twelve months.
- Goods only means goods only. The ₹40 lakh limit in Notification 10/2019-Central Tax is for suppliers engaged exclusively in goods. One service, taxable or exempt, such as rent from letting out a shop, moves your whole turnover to the ₹20 lakh limit. Interest on deposits, loans or advances is the only service that does not count against you.
Suppliers of ice cream, pan masala, tobacco products, fly ash bricks and blocks, building bricks, and earthen or roofing tiles stay at the general limit.
How do you calculate aggregate turnover for GST registration?
Add the value of every supply made under your PAN anywhere in India during the financial year: taxable sales, exempt sales, exports and inter-state sales. Leave out the GST and cess you charge, and purchases on which you pay tax under reverse charge. This all-India figure, defined in section 2(6) of the CGST Act, is what you compare with the limit.
| Count it | Leave it out |
|---|---|
| Taxable sales of goods and services, before GST | CGST, SGST, IGST and cess on your invoices |
| Exempt sales, such as fresh vegetables or healthcare services | Purchases on which you pay GST under reverse charge |
| Exports, and sales from branches in other states under the same PAN | Salary you earn as an employee, which is not a supply (Schedule III) |
| Supplies you make as an agent on behalf of principals | Goods a registered job worker returns after job work, which count for the principal |
A salaried freelancer with ₹8 lakh of consulting fees has aggregate turnover of ₹8 lakh. A business with shops in Pune and Indore adds both shops' sales, then registers in each state once liable.
Worked example: when does the 30-day clock start?
The clock starts on the day your aggregate turnover first goes above the limit. If you apply within 30 days, registration takes effect from that day (rule 10(2) of the CGST Rules). If you apply later, it takes effect only from the date it is granted (rule 10(3)).
Example. Kestrel Studio, a made-up interior design practice in Pune, supplies only services. By 31 October 2026 it has billed ₹18,40,000 in the financial year. On 12 November 2026 it raises an invoice for ₹2,10,000, taking aggregate turnover to ₹20,50,000, above the ₹20 lakh limit for Maharashtra. It becomes liable on 12 November 2026 and must apply by 12 December 2026. The checker above shows "Mandatory for you" for the same inputs.
Example. A made-up stationery trader in Nagpur sells only goods, all within Maharashtra, with turnover of ₹32 lakh. That is within the ₹40 lakh goods limit, so registration is not yet needed. The same business in Hyderabad would be liable, because Telangana uses ₹20 lakh for goods. If the Nagpur trader also earned ₹1,20,000 rent from letting out a shop, turnover becomes ₹33,20,000 against the ₹20 lakh general limit, and it must register.
One order shipped to a buyer in another state would make registration compulsory at any turnover.
Compulsory GST registration and the exceptions people miss
Section 24 makes GST registration compulsory at any turnover for inter-state sellers of goods, e-commerce sellers (with notified exceptions) and operators, casual and non-resident suppliers, agents, reverse charge payers and a few others. Section 23 and a notification free some businesses from registration even above the limit.
Compulsory cases beyond the usual list
Section 24 also covers persons required to deduct GST TDS under section 51, e-commerce operators that must pay the tax on notified services under section 9(5), and suppliers outside India selling online information and database access services to unregistered customers in India.
Who never needs to register
- Businesses that supply only goods or services that are wholly exempt or not taxable, and agriculturists selling produce from their own cultivation (section 23).
- Suppliers whose entire output is taxed in the buyer's hands under reverse charge (Notification 5/2017-Central Tax).
Since 10 October 2024, the reverse charge relief does not cover suppliers of metal scrap under Chapters 72 to 81 of the Customs Tariff (Notification 24/2024-Central Tax). An exempt supplier who adds one taxable product or service loses the section 23 relief.
How to apply for GST registration on the GST portal
Apply online in FORM GST REG-01 on the GST portal. Part A verifies your PAN, mobile number and email by OTP and gives you a temporary reference number. Part B takes your business details and documents. The officer normally decides within 7 working days, or up to 30 days if Aadhaar authentication is not done or a physical verification is ordered.
- Fill Part A with your PAN, mobile number, email and state, and verify the OTPs (rule 8).
- Fill Part B, upload documents, opt for Aadhaar authentication and sign with a DSC or EVC. You get an acknowledgement in FORM GST REG-02.
- If the officer raises a query in FORM GST REG-03, reply in FORM GST REG-04 within 7 working days of the notice (rule 9(2)).
- On approval, the certificate in FORM GST REG-06 and your GSTIN appear on the portal (rule 10(1)).
Since 1 November 2025, an applicant whose output tax on supplies to registered persons will not exceed ₹2.5 lakh a month can choose rule 14A instead. Aadhaar authentication is mandatory, the portal grants registration electronically within three working days, and only one such registration is allowed per PAN in a state (GST Council newsletter, October 2025).
What happens if you do not register on time?
A business that is liable but fails to register faces a penalty of ₹10,000 or the tax evaded, whichever is higher, under section 122(1)(xi) of the CGST Act. The tax on its supplies is still payable, with interest at 18% a year under section 50, and the officer can assess the tax to the best of judgment under section 63.
What changed in 2025 and 2026, and what is only proposed
The turnover limits did not change in 2025 or 2026; the ₹40 lakh goods limit has applied since 1 April 2019. The process changed: rule 14A from 1 November 2025, plus rule 9A for grant within 3 working days based on data analysis and risk parameters.
The 57th GST Council on 8 October 2026 made recommendations that are proposals until CBIC notifies them:
- A new rule 14B to let small sellers register through an e-commerce operator's warehouse in a state where they have no physical presence, if they pass on input tax credit of not more than ₹2.5 lakh a month.
- Automatic acceptance of most registration amendments, and of cancellations once returns are filed and dues paid.
- Reverse charge on plastic waste, e-waste, tyre scrap and used cooking oil supplied by unregistered persons, with the supplier registering once it crosses the threshold.
Common mistakes with the GST threshold
Most errors come from measuring the wrong turnover or the wrong date. Count all-India turnover under one PAN, including exempt sales and exports, and watch the day it crosses the limit, not 31 March.
- Testing each state separately instead of adding every branch under the PAN.
- Assuming the ₹40 lakh limit applies when you also earn rent, commission or any other service income.
- Registering voluntarily without planning for compliance. Under section 25(3), every provision of the Act then applies to you, including returns for periods with no sales.
- Forgetting the next steps. Once you have a GSTIN, check whether the composition scheme suits you, note your GST return due dates and use the GSTIN validator on supplier invoices. The business registration checklist covers other licences.
How Ofin Legal can help
Ofin Legal files your GST registration from ₹1,499, verifies your documents before submission and supports you through Aadhaar authentication and any officer query until the certificate is issued. If you need a business address, see our virtual office for GST registration.
