GST registration turnover limit: the ₹40 lakh, ₹20 lakh and ₹10 lakh thresholds, which one applies to you, and the cases where turnover does not matter at all

GST registration becomes compulsory at a turnover figure, and the figure depends on two things: whether you supply goods or services, and which state your place of business is in. There is a third layer that catches out more people than the first two together: a list of situations in section 24 where the turnover limit does not apply at all and registration is required from the first sale. This guide sets out all three, with the section or notification for each, as of September 2026.

The limits

The base rule is section 22(1): every supplier is liable to be registered in the state or UT from which they make taxable supplies once aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh in a special-category state. Notification 10/2019-Central Tax raised the figure to ₹40 lakh from 1 April 2019 for persons engaged exclusively in the supply of goods, and gave states the choice; six states and UTs chose to stay at ₹20 lakh for goods, and the four north-eastern special-category states stayed at ₹10 lakh for everything.

Three exclusions from the ₹40 lakh figure, in the notification itself: it does not apply to anyone required to register compulsorily under section 24, to anyone who opts for voluntary registration, or to suppliers of ice cream and other edible ice, pan masala, and tobacco and tobacco substitutes, who stay at ₹20 lakh.

What “aggregate turnover” means

The limit is tested against aggregate turnover as defined in section 2(6), and the definition is wider than most people assume:

• It includes taxable supplies, exempt supplies, exports (zero-rated supplies) and inter-state supplies.
• It is computed for all persons with the same PAN, on an all-India basis. A proprietor with a shop in Pune and a consultancy in Bengaluru adds both.
• It excludes the GST charged (CGST, SGST, UTGST, IGST, cess) and the value of inward supplies on which you pay tax under reverse charge.
• It is measured per financial year, April to March, not over a rolling twelve months.

The consequences: a business with ₹18 lakh of taxable sales and ₹5 lakh of exempt sales has crossed ₹20 lakh. A freelancer whose income is entirely from foreign clients has crossed it at ₹20 lakh of exports, even though those exports carry no tax. Interest on a savings account and the sale of a personal car are not supplies in the course of business and do not count.

Section 24: when the limit is zero

Section 24 lists persons who must register irrespective of turnover. The ones that matter to small businesses:

Section 23 works in the opposite direction: persons engaged exclusively in exempt or non-taxable supplies, and agriculturists supplying produce from their own cultivation, are not required to register even above the limit.

The state-by-state table

The figures below are the section 22 limits as applied in each state and UT, with the GST state code that will form the first two digits of your GSTIN. They are the same figures the SimplySetup city pages show for each address.

Ladakh, the Andaman & Nicobar Islands, Lakshadweep, and Dadra & Nagar Haveli and Daman & Diu follow the ₹40 lakh / ₹20 lakh figures, with CGST plus UTGST instead of SGST because they have no legislature.

Crossing the limit: the 30-day rule

Section 25(1) requires the application within 30 days of the date on which you become liable. If you apply within those 30 days, the registration is effective from the date the liability arose (Rule 10(2)); if you apply later, it is effective only from the date of grant (Rule 10(3)), and the tax for the gap is yours to pay without having collected it. Watch the running total from month nine or ten of the year; the limit is crossed on a specific day, and the day is what the 30 days run from.

The registration is state-wise: you register in every state from which you make taxable supplies. A business with a place of business in two states needs two GSTINs under one PAN, and a business winning a contract in a state where it has no premises needs a place of business there before it can register, which is where a virtual office in that state comes in.

Composition: a different limit for a different purpose

The composition scheme in section 10 is not a registration threshold; it is an option for registered persons to pay tax at a flat rate on turnover without input credit and with quarterly returns. It is open to manufacturers, traders and restaurants with aggregate turnover up to ₹1.5 crore in the preceding financial year (₹75 lakh in the north-eastern special-category states and Uttarakhand), and, under section 10(2A), to other service providers up to ₹50 lakh. A composition dealer cannot make inter-state outward supplies, cannot sell through an e-commerce operator that collects TCS, and cannot charge GST on the invoice.

Registering below the limit

Section 25(3) allows voluntary registration, and the reasons to take it are practical rather than legal. You can claim input tax credit on rent, software, equipment and professional fees. Corporate customers who need a GST invoice to claim their own credit often refuse to deal with an unregistered vendor. Every major marketplace requires a GSTIN to list goods outside the narrow intra-state exemption. And a GSTIN is the business identity a bank, a payment gateway and a tender portal look for. The cost is compliance: once registered you file returns for every period, including nil ones, and section 47 late fees run from the first day a return is late.

Late registration: what it costs

Tax on every taxable supply from the date the liability arose, which you can rarely recover from customers after the fact; interest under section 50 at 18% a year; a penalty under section 122(1)(xi) of ₹10,000 or the tax evaded, whichever is higher; and no input credit for the period before registration except the limited stock credit under section 18. The 30 days are generous only if you are watching the total.