GST Registration: When Is It Mandatory and What Are the Thresholds

Every business supplying goods or services in India must evaluate whether GST registration is required. The obligation depends on your aggregate turnover and the nature of your supply.

TURNOVER-BASED THRESHOLDS
The basic threshold for GST registration under Section 22 of the CGST Act is Rs 20 lakh of aggregate annual turnover for service providers. For persons engaged exclusively in supply of goods, the threshold is Rs 40 lakh in most states, as notified under Notification 10/2019-Central Tax.

Some states and union territories have lower thresholds as notified by the government. The specific list of states with reduced thresholds differs between goods and services. Always check the latest notifications on the CBIC website for the threshold applicable in your state.

WHAT IS AGGREGATE TURNOVER
Aggregate turnover under Section 2(6) of the CGST Act means the total value of all taxable supplies, exempt supplies, exports, and inter-state supplies of a person having the same PAN. It excludes the value of inward supplies on which tax is paid under reverse charge, and excludes GST taxes (CGST, SGST, IGST, cess) themselves.

MANDATORY REGISTRATION REGARDLESS OF TURNOVER
Under Section 24 of the CGST Act, certain persons must register regardless of turnover. Key categories include:
- Persons making inter-state taxable supplies (subject to specific exemptions notified by the government)
- Casual taxable persons making taxable supplies
- Non-resident taxable persons
- Persons required to pay tax under reverse charge
- Persons required to deduct TDS under Section 51
- Persons required to collect TCS under Section 52
- Input Service Distributors
- Every electronic commerce operator
- Persons supplying goods or services through e-commerce operators (subject to exemptions notified by the government)
- Agents making taxable supplies on behalf of other taxable persons

VOLUNTARY REGISTRATION
Even if your turnover is below the threshold, you can voluntarily register under GST. This is useful if your customers need ITC on your invoices, or if you plan to make inter-state supplies.

PRACTICAL TIP
Track your aggregate turnover from the start of the financial year. If you are approaching the threshold, apply for registration on the GST portal before crossing it.