GST Registration Threshold Guide: Who Must Register and When
Comprehensive guide to GST registration thresholds for regular taxpayers, composition scheme, e-commerce operators, and casual taxable persons — with special rules for North-Eastern states.
GST Registration — The Basics
GST registration is mandatory under the Goods and Services Tax Act 2017 (CGST Act + respective SGST Acts) for businesses that cross specified aggregate turnover thresholds during a financial year. Registration must happen within 30 days of crossing the threshold.
Aggregate Turnover Thresholds
| Taxpayer Type | Services | Goods | Special Category States |
|---|---|---|---|
| Regular taxpayer | ₹20,00,000 | ₹40,00,000 | ₹10,00,000 |
| Composition scheme | ₹1,50,00,000 | ₹1,50,00,000 | ₹75,00,000 |
Special category states (lower thresholds): Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, and Puducherry.
Aggregate turnover is computed on a PAN-India basis — it includes the value of taxable supplies, exempt supplies, exports, and inter-state supplies. It excludes taxes (CGST, SGST, IGST), inward supplies on which reverse charge applies, and non-taxable supplies.
Mandatory Registration (Regardless of Turnover)
Certain categories MUST register irrespective of turnover:
- E-commerce operators — marketplaces like Amazon/Flipkart seller accounts (§9(5) supplies)
- Casual taxable persons — businesses operating in a state where they are not normally taxable
- Non-resident taxable persons — foreign businesses making taxable supplies in India
- Persons liable to pay under Reverse Charge Mechanism (RCM) — receiving specified services from unregistered suppliers
- Input Service Distributors (ISDs) — for distributing ITC across branches
- Suppliers making inter-state taxable supplies of goods (no threshold exemption)
- Businesses recovering tax under §51 (TDS) or §52 (TCS)
Composition Scheme — Who Can Opt?
Businesses with aggregate turnover ≤ ₹1.5 crore (₹75L for special category states) may opt for the Composition Scheme:
- Goods dealers: 1% tax (0.5% CGST + 0.5% SGST)
- Manufacturers (other than notified goods): 2% (1+1%)
- Restaurants not serving alcohol: 5% (2.5+2.5%)
- Service providers + mixed (QRMP/Composition for services): 6% (3+3%) for turnover ≤ ₹50L
Restrictions: No input tax credit, no inter-state supplies, no e-commerce sales, must display "Composition taxable person" on invoice.
Exports — Zero Rating and Registration
Exporters of goods/services are zero-rated under Section 16 of the IGST Act — meaning 0% GST applies and they can claim ITC refunds. However, exporters must be GST-registered to:
- Receive LUT (Letter of Undertaking) for zero-rated exports without paying IGST upfront
- File GSTR-1/3B for tracking and refund claims
Voluntary Registration
Any business may voluntarily register for GST even if below the threshold — useful for claiming ITC on inputs and for B2B credibility.
Penalty for Non-Registration
Failure to obtain mandatory registration: penalty of ₹10,000 or 10% of tax due, whichever is higher (§122 CGST Act). For deliberate evasion, penalty can be 100% of the tax.
Note: Thresholds are effective as of FY 2026-27. The government may revise thresholds via notification — always verify the current limit before determining registration obligation.
