Understanding Updated GST Registration Thresholds in India
The article details the revised GST registration threshold limits in India, implemented following the 32nd GST Council meeting in January 2019. It explains the increased turnover limits for goods suppliers in both normal and special category states, while thresholds for service providers remain unchanged. Additionally, the article covers mandatory GST registration requirements regardless of turnover and outlines changes to the GST Composition Scheme, including increased turnover limits and its extension to service providers.
The Goods and Services Tax (GST) Council raised the GST registration threshold limits to simplify compliance. These revisions were initially suggested during the 32nd GST Council meeting on January 10, 2019. This article details the GST registration threshold limits, including previous and current thresholds, and clarifies who is affected by these changes.
Overview of Previous and New Limits with Effective Dates
The following table summarizes the old and new aggregate turnover limits for GST registration and their effective dates:
| Aggregate Turnover | Registration Requirement | Applicability |
|---|---|---|
| Earlier Limits – For Goods Sales/Service Provision | ||
| Exceeds Rs.20 lakh | Yes – Normal Category States | Up to March 31, 2019 |
| Exceeds Rs.10 lakh | Yes – Special Category States | Up to March 31, 2019 |
| New Limits – For Goods Sales | ||
| Exceeds Rs.40 lakh | Yes – Normal Category States | From April 1, 2019 |
| Exceeds Rs.20 lakh | Yes – Special Category States | From April 1, 2019 |
| New Limits – For Service Provision | ||
| No change in service provider thresholds. Service providers must register if their aggregate turnover surpasses Rs.20 lakh (Normal Category States) or Rs.10 lakh (Special Category States). |
States Adopting the New Thresholds
States were given the option to either adopt the revised limits or maintain their existing thresholds:
| Normal Category States/UTs opting for Rs.40 lakh limit | Normal Category States maintaining status quo | Special Category States/UTs opting for Rs.40 lakh limit | Special Category States/UTs opting for Rs.20 lakh limit |
|---|---|---|---|
| Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands, Chandigarh | Telangana | Jammu and Kashmir, Ladakh, Assam | Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarakhand |
Note 1: Jammu & Kashmir and Assam, despite being Special Category States with the option for lower thresholds, chose to increase their limit to Rs.40 lakh. Previously, they had also opted for a higher threshold of Rs.20 lakh instead of Rs.10 lakh.
Note 2: Kerala is authorized to levy a 'calamity cess' of up to 1% on all intra-state supplies of goods and services. This measure aims to assist the state in recovering from natural disasters experienced in the previous year.
The aggregate turnover for the current financial year (e.g., FY 2025-2026) is used to determine the applicability of these new threshold limits.
Mandatory GST Registration Requirements
Any supplier whose aggregate turnover in the current financial year exceeds the specified threshold limits is required to register under GST. Additionally, certain categories of individuals and entities are mandated to obtain GST registration irrespective of their turnover:
- Interstate suppliers
- Casual Taxable persons
- Persons subject to reverse charge mechanism
- Non-resident taxable persons
- Entities obligated to deduct TDS under GST
- Entities obligated to collect TCS under GST
- Input Service Distributors
- Persons selling goods or services on behalf of others, either as an Agent or Principal
- All e-commerce operators providing platforms for suppliers
- Suppliers distributing goods via e-commerce operators who are responsible for tax collection at source
- Online service providers based outside India supplying services to non-registered persons in India
- Any person supplying online money gaming from outside India to an Indian resident
Calculating the GST Threshold Limit
To calculate the GST threshold limit, the aggregate turnover for the current financial year (e.g., FY 2025-2026) is considered. A taxpayer should sum the values of the following components when computing their aggregate turnover:
- Value of all taxable supplies
- Exempt supplies
- Exports of goods, services, or both
- Inter-state supplies made by persons operating under the same PAN
Revisions to Composition Scheme Thresholds
Significant changes were introduced to the GST Composition Scheme:
- The annual turnover threshold for opting into the composition scheme was increased to Rs.1.5 crore, effective April 1, 2019.
- Taxpayers registered under this scheme must now file quarterly tax payments and annual returns starting April 1, 2019.
- For North Eastern states and Uttarakhand, the limit remains at Rs.75 lakh.
- This limit also applies to restaurants that do not serve alcoholic beverages.
Furthermore, the composition scheme was expanded to include service providers:
- A new scheme offers a fixed tax rate of 6%, comprising 3% Central GST (CGST) and 3% State GST (SGST).
- Independent service providers and mixed suppliers of goods and services with an annual turnover up to Rs.50 lakh in the preceding financial year are eligible to opt for this scheme.