GST Registration Limit: When You Must Register
In short
A business must register for GST once its aggregate turnover in a financial year crosses ₹40 lakh if it supplies only goods, or ₹20 lakh if it supplies services or both goods and services (section 22 of the CGST Act read with Notification No. 10/2019-Central Tax). The goods limit is ₹20 lakh in ten states, including Telangana, Uttarakhand and Puducherry, and the services limit is ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. Some businesses must register whatever their turnover, such as inter-state sellers of goods, e-commerce sellers and casual taxable persons, and the application is due within 30 days of becoming liable.
Most small businesses first meet GST through one question: at what turnover do I have to register? The answer depends on three things: whether you supply goods, services or both, which state you supply from, and whether your business falls into one of the categories that must register at any turnover.
The rules sit in sections 22 to 25 of the Central Goods and Services Tax Act, 2017 (CGST Act) and in exemption notifications issued under section 23(2). CBIC restated the limits in Annexure-I of Circular No. 257/03/2026-GST dated 26 October 2026, and new registration rules took effect on 1 November 2026. This guide brings them together.
What is the GST registration limit in 2026?
The limit is ₹40 lakh of aggregate turnover in a financial year for a business that supplies only goods, and ₹20 lakh for a business that supplies services or a mix of goods and services. Registration becomes compulsory once turnover exceeds the limit, so a business at exactly ₹40 lakh is still within it.
| Type of supplier | Most states and UTs | Lower-limit states |
|---|---|---|
| Goods only | ₹40 lakh | ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand |
| Services only | ₹20 lakh | ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura |
| Goods and services together | ₹20 lakh | ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura |
The ₹20 lakh figure comes from section 22(1) itself. The ₹40 lakh figure for goods comes from Notification No. 10/2019-Central Tax dated 7 March 2019, which exempts suppliers of goods up to ₹40 lakh from registration with effect from 1 April 2019. The state-wise figures above are the ones CBIC's Directorate General of Taxpayer Services gives in its official flyer, Registration under GST Law.
Delhi, Haryana, Uttar Pradesh and the other states not named in the table use the ₹40 lakh and ₹20 lakh limits. For Delhi-specific steps, see our GST registration service.
Why do some states have a lower limit?
Section 22(1) sets a lower limit of ₹10 lakh for "special category States". After the 2018 amendment to the Act, that term covers only Manipur, Mizoram, Nagaland and Tripura, because the explanation to section 22 excludes Jammu and Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from the constitutional list.
When the GST Council created the ₹40 lakh limit for goods at its 32nd meeting, it let each state choose between ₹40 lakh and ₹20 lakh (PIB, 10 January 2019). Ten states kept ₹20 lakh, and Notification 10/2019 excludes intra-state suppliers in those states from the ₹40 lakh exemption. CBIC's 2026 FAQ still advises applicants to "verify the applicable threshold limit for your State or Union territory" before applying.
How is aggregate turnover worked out?
Aggregate turnover is the total value of all your taxable supplies, exempt supplies, exports and inter-state supplies, for all businesses under the same PAN across India. Section 2(6) of the CGST Act excludes the GST itself (central, state, UT and integrated tax and cess) and the value of purchases on which you pay tax under reverse charge.
Three points catch people out:
- It is PAN-wide and all-India. A proprietor with a shop in Delhi and a consultancy in Noida adds both together, even if each is small on its own.
- Exempt supplies and exports count. Sales of exempt goods or services and zero-rated exports are part of the total, even though no GST is charged on them.
- Agents and job workers. Explanation (i) to section 22 includes supplies an agent makes on behalf of its principals. Explanation (ii) excludes from a registered job worker's turnover the goods it returns to the principal after job work; those are treated as the principal's supplies.
For example, a trader in Haryana who sells ₹30 lakh of taxable goods and ₹12 lakh of exempt goods in a year has an aggregate turnover of ₹42 lakh and has crossed the ₹40 lakh limit, even though the taxable sales alone are below it.
Does the ₹40 lakh limit apply to every goods supplier?
No. The ₹40 lakh exemption covers only a person engaged exclusively in supplying goods. If you also supply any taxable service, the ₹20 lakh limit applies to your whole turnover. Notification 10/2019, as amended by Notifications 03/2022 and 15/2022, also leaves out suppliers of these goods, who fall back to the ₹20 lakh limit:
| Goods | Tariff heading |
|---|---|
| Ice cream and other edible ice | 2105 00 00 |
| Pan masala | 2106 90 20 |
| Tobacco and manufactured tobacco substitutes | Chapter 24 |
| Fly ash bricks, fly ash aggregates and fly ash blocks | 6815 |
| Bricks of fossil meals or similar siliceous earths | 6901 00 10 |
| Building bricks | 6904 10 00 |
| Earthen or roofing tiles | 6905 10 00 |
One relaxation helps traders who keep money in the bank or lend to others: the explanation to the third proviso of section 22(1) says a person is still treated as engaged exclusively in supplying goods even if they earn interest or discount on deposits, loans or advances.
Who must register for GST whatever their turnover?
Section 24 lists the categories that must register even below the limit. CBIC repeats the same list in Q.3 of the Circular 257 FAQs:
- Persons making any inter-state taxable supply
- Casual taxable persons making taxable supplies
- Persons liable to pay tax under reverse charge
- Persons required to pay tax under section 9(5) (e-commerce operators for notified services)
- Non-resident taxable persons making taxable supplies
- Persons required to deduct tax at source under section 51
- Persons supplying on behalf of other taxable persons, as agent or otherwise
- Input Service Distributors
- Persons supplying goods or services through an e-commerce operator that collects tax at source under section 52
- Every e-commerce operator required to collect tax at source
- Suppliers of online information and database access or retrieval (OIDAR) services from outside India to unregistered persons in India
- Any other person notified by the Government on the Council's recommendation
Casual taxable persons and non-resident taxable persons must apply at least five days before they start business (proviso to section 25(1)).
Which compulsory cases have been relaxed by notification?
Several groups in the section 24 list have been given back the turnover limit by exemption notifications. CBIC's flyer and Circular 257 both note that a person exempted by notification need not register.
| Who | Relief | Source |
|---|---|---|
| Service providers billing clients in other states | No registration up to ₹20 lakh aggregate turnover (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura) | Notification 10/2017-Integrated Tax, as amended by 03/2019-Integrated Tax |
| Inter-state suppliers of specified handicraft goods | No compulsory registration until the threshold is crossed | Notification 03/2018-Integrated Tax |
| Service providers selling through an e-commerce operator | Threshold applies (₹20 lakh, or ₹10 lakh in special category states) | Notification 65/2017-Central Tax |
| Goods sellers on e-commerce platforms within one state | No registration below the threshold, with an enrolment number instead | Notification 34/2023-Central Tax, from 1 October 2023 |
| Suppliers whose entire output is taxed under reverse charge | No registration, except dealers in certain scrap from 1 November 2026 | Notification 5/2017-Central Tax, as amended by 06/2026-Central Tax |
The e-commerce exemption for goods sellers has strict conditions. The seller must not make any inter-state supply of goods, must sell through operators in only one state, must declare their PAN, place of business and state on the GST portal, and must get an enrolment number before making any sale through the platform. The enrolment number stops being valid once the seller takes regular registration.
What changed in GST registration from 1 November 2026?
Three changes matter for businesses near the limit:
- Scrap dealers lose the reverse charge exemption. Notification 06/2026-Central Tax rewrote the proviso to Notification 5/2017, so dealers in used cooking oil, plastic scrap, tyre scrap, metal scrap (Chapters 72 to 81) and electrical and electronic waste must register once they cross the threshold, even though their registered buyers now pay GST under reverse charge. Our GST reverse charge list explains the buyer's side.
- Online sellers can register in other states through a marketplace warehouse. New rule 14B of the CGST Rules, inserted by Notification No. 05/2026-Central Tax, lets a person registered in a home state take registration in another state where it has no physical presence by declaring the warehouse of an e-commerce operator that collects TCS as its principal place of business. The seller must supply goods through that operator, its output tax on supplies to registered persons in that state must not exceed ₹2.5 lakh a month, and the operator must consent within seven working days. The GST Council recommended this at its 57th meeting on 8 October 2026.
- A fixed document list. Circular 257/03/2026-GST sets out the documents for each type of business and premises and bars officers from asking for papers outside that list. Our article on CBIC's GST registration guidelines covers it in detail.
The turnover limits themselves did not change.
When must I apply after crossing the limit?
Within 30 days of the date you become liable to register, in every state or union territory from which you make taxable supplies (section 25(1)). Liability arises on the day your aggregate turnover for the financial year crosses the limit, so watch the running total during the year, not only at year end. Apply in Form GST REG-01 on gst.gov.in. Registration is state-wise, so a business supplying from Delhi and Maharashtra needs two GSTINs on the same PAN.
What if I do not register when I should?
Tax is still payable on taxable supplies made from the date you became liable, with interest, and you cannot collect it from customers after the event. Section 122(1)(xi) also makes a person who "is liable to be registered under this Act but fails to obtain registration" liable to a penalty of ₹10,000 or the amount of tax evaded, whichever is higher.
Should a small business register voluntarily?
Often yes, if most customers are registered businesses that want input tax credit, or if you plan to sell across states. Section 25(3) allows voluntary registration, but once registered you must follow every GST rule, including filing returns even in months with no sales and, where it applies, the GSTR-9 annual return.
Small businesses that will not pass on more than ₹2.5 lakh of input tax credit a month to registered buyers can opt for the simplified scheme under rule 14A of the CGST Rules, in force since 1 November 2025. Registration under it is granted automatically within three working days of the application, according to Q.8 of the Circular 257 FAQs. A business can later withdraw from rule 14A in Form GST REG-32 if it needs to pass on more credit.
Who does not need GST registration at all?
Section 23(1) excludes two groups even if their turnover is large: a person engaged exclusively in supplying goods or services that are not taxable or are wholly exempt, and an agriculturist, to the extent of supplying produce from cultivating land. A business that supplies even one taxable item is no longer "exclusively" exempt and has to apply the normal limit to its aggregate turnover.
Frequently asked questions
Is the GST registration limit ₹20 lakh or ₹40 lakh?
Both, depending on what you supply. A business that supplies only goods can turn over up to ₹40 lakh a year without registering in most states. A business that supplies services, or both goods and services, must register once aggregate turnover crosses ₹20 lakh. The goods limit is ₹20 lakh in ten states, and the services limit is ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura.
Which states have a ₹20 lakh GST limit for goods?
Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. Notification No. 10/2019-Central Tax excludes intra-state suppliers in these states from the ₹40 lakh exemption, because they chose the lower limit when the GST Council offered states the option in January 2019. All other states and union territories use ₹40 lakh for goods-only suppliers.
What is the GST registration limit for service providers?
₹20 lakh of aggregate turnover in a financial year, or ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. The ₹40 lakh limit is only for businesses that supply goods exclusively. Consultants, agencies, freelancers, contractors and other service businesses register once they cross ₹20 lakh, or earlier if they fall into one of the compulsory categories in section 24, such as supplying on behalf of another taxable person as an agent.
What is the GST threshold for a business selling both goods and services?
₹20 lakh, or ₹10 lakh in the four special category states. The ₹40 lakh exemption in Notification 10/2019 applies only to a person "engaged in exclusive supply of goods". If a shop also earns from repairs, installation or any other taxable service, the whole aggregate turnover is tested against the ₹20 lakh limit, not just the service income.
Does the GST threshold apply to each shop or to the whole PAN?
To the whole PAN. Aggregate turnover under section 2(6) of the CGST Act adds together the supplies of all businesses with the same PAN across India. A proprietor running two shops in different cities, or a trading business and a consultancy, must combine them. Once the total crosses the limit, each state from which taxable supplies are made needs its own registration.
Are exempt sales counted in the GST turnover limit?
Yes. Aggregate turnover includes exempt supplies as well as taxable supplies, exports and inter-state supplies. So a business that sells mostly exempt goods with a small taxable line can still cross the limit. Only a person who supplies exclusively non-taxable or wholly exempt goods or services is outside registration altogether under section 23(1)(a).
Does bank interest stop a trader from using the ₹40 lakh limit?
No. The explanation added to section 22(1) by the Finance (No. 2) Act, 2019 says a person is still engaged exclusively in supplying goods even if they also make exempt supplies of services by way of deposits, loans or advances, where the consideration is interest or discount. A trader earning interest on fixed deposits or loans can therefore keep the ₹40 lakh limit.
Is GST registration compulsory for inter-state sale of goods?
Yes, generally. Section 24(i) requires anyone making an inter-state taxable supply to register whatever their turnover, and for goods that rule still applies. The main exception is for specified handicraft goods, whose suppliers keep the threshold under Notification 03/2018-Integrated Tax. Small online sellers can now also use rule 14B to register in other states through a marketplace warehouse.
Can a service provider bill clients in other states without GST registration?
Yes, while aggregate turnover stays within ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura). Notification No. 10/2017-Integrated Tax, as amended in 2019, exempts persons making inter-state supplies of taxable services from registration up to that limit. Job workers are covered too, except for work on jewellery and goldsmiths' or silversmiths' wares.
What is a GST enrolment number for e-commerce sellers?
It is a number issued on the GST portal to a small seller who sells goods through e-commerce platforms without GST registration under Notification 34/2023-Central Tax. The seller declares their PAN, business address and state, sells only within that one state, makes no inter-state supplies, and stays under the registration limit. The enrolment number lapses once regular registration is granted.
What is rule 14B of the CGST Rules?
Rule 14B, in force from 1 November 2026, lets a seller already registered in its home state obtain registration in another state where it has no physical presence by declaring an e-commerce operator's warehouse there as its principal place of business. Output tax on supplies to registered persons must stay within ₹2.5 lakh a month, and the operator must consent within seven working days.
Do I need GST registration if all my supplies are under reverse charge?
Usually not. Notification 5/2017-Central Tax exempts a person from registration if all their supplies are taxed under reverse charge in the recipient's hands. From 1 November 2026, Notification 06/2026-Central Tax takes dealers in used cooking oil, plastic scrap, tyre scrap, metal scrap and e-waste out of that exemption, so they must register once they cross the threshold.
Do farmers need GST registration for selling their crop?
No, to the extent of produce from their own cultivation. Section 23(1)(b) says an agriculturist is not liable to register for supplies of produce out of cultivation of land. The CGST Act defines an agriculturist as an individual or Hindu Undivided Family who cultivates land by their own labour, family labour, or servants or hired labour under their or a family member's personal supervision. Trading in others' produce is outside this relief.
Within how many days must I apply after crossing the GST limit?
Within 30 days of becoming liable to register, under section 25(1) of the CGST Act. Liability arises when aggregate turnover for the financial year crosses the limit, so the clock starts from that day. Casual taxable persons and non-resident taxable persons have a stricter rule: they must apply at least five days before they start doing business in the state.
What is the penalty under section 122 for not registering under GST?
A person who is liable to register but fails to do so faces a penalty of ₹10,000 or an amount equal to the tax evaded, whichever is higher, under section 122(1)(xi). The tax on supplies made since registration became due is payable as well, with interest, and it usually cannot be recovered from customers once the sale is complete.
Can I cancel GST registration if turnover falls below the limit?
You can apply in Form GST REG-16 when you are no longer liable to be registered under section 22 or 24, which section 29(1)(c) of the CGST Act lists as a ground for cancellation. File all pending returns and pay all dues first. A person who registered voluntarily under section 25(3) should check the current text of section 29 before applying, as the grounds for them differ.
Do brick and tile makers get the ₹40 lakh GST limit?
No. From 1 April 2022, Notification 03/2022-Central Tax added fly ash bricks and blocks, bricks of fossil meals, building bricks and earthen or roofing tiles to the list of goods excluded from the ₹40 lakh exemption. Suppliers of these goods, like suppliers of ice cream, pan masala and tobacco, must register once turnover crosses ₹20 lakh.
