GST Registration: Who Needs It and the Turnover Thresholds (2026-27)

The turnover thresholds

The starting point is your annual aggregate turnover, and the threshold depends on whether you supply goods or services, and on your state:

Cross the applicable limit in a financial year, and GST registration becomes mandatory. The service threshold has been steady since GST began; the higher ₹40 lakh goods limit came in from April 2019. Special-category states (certain north-eastern and hill states) use the lower figures, though a few, such as Jammu and Kashmir and Assam, have opted for the higher ₹40 lakh limit.

How aggregate turnover is computed

The word that trips people up is aggregate. Turnover is not measured per state or per business, it is totalled across India under a single PAN. So if you run businesses in more than one state under the same PAN, all their supplies are added together to test the threshold, even though the registration itself is state-specific.

Aggregate turnover includes more than just your taxable sales. It covers taxable supplies, exempt supplies, exports, and inter-state supplies, all under the same PAN. This matters because a business can cross the threshold on total turnover even if its purely taxable sales look modest.

The catch in the ₹40 lakh goods limit

The ₹40 lakh threshold for goods sounds generous, but it comes with conditions, and if you fail any of them, your limit drops back to ₹20 lakh (or ₹10 lakh in special-category states). The higher limit does not apply if you:

• Make inter-state supplies of goods.
• Deal in restricted goods such as ice cream, pan masala or tobacco products.
• Are in a state that has not opted for the ₹40 lakh threshold.

And for mixed suppliers, those who sell both goods and services, the assessment generally falls back to the ₹20 lakh service threshold rather than the ₹40 lakh goods one. So the ₹40 lakh figure applies to a fairly specific case: a goods-only supplier, in an opted-in state, not selling restricted items, and not supplying inter-state.

Who must register regardless of turnover

This is the part that catches growing businesses out. Certain categories must register from their first rupee of supply, with no threshold exemption at all:

• Inter-state suppliers of goods (and, in many cases, services), the moment you supply across a state line, the threshold generally stops protecting you.
• E-commerce sellers and operators, anyone selling through an e-commerce platform, or running one, must register irrespective of turnover.
• Casual taxable persons (occasional supply in a state where you have no fixed place of business) and non-resident taxable persons.
• Those liable under reverse charge, and TDS deductors under Section 51.

Composition scheme and voluntary registration

Two related choices are worth knowing. The composition scheme lets smaller businesses pay GST at a fixed, lower rate with simpler compliance, available up to ₹1.5 crore turnover for goods suppliers, and up to ₹50 lakh for service providers and mixed suppliers. The trade-off is that composition dealers cannot claim input tax credit or make inter-state supplies.

Separately, voluntary registration is open to any business below the threshold. Businesses often choose it to claim input tax credit on their purchases, to sell to GST-registered buyers who prefer registered suppliers, and for the credibility a GSTIN brings. The cost is that once registered, voluntarily or not, you must meet all the filing and compliance obligations of a registered taxpayer.

What to do if you cross the line

If you cross the applicable threshold, or fall into a compulsory-registration category, you must obtain registration within the time limit the law prescribes, and failing to register when required attracts a penalty. Practically:

• Track your aggregate turnover across all states under your PAN, not just your headline sales.
• Reassess when you change what you do, starting inter-state supply, listing on a marketplace, or launching a new line can trigger registration even below the threshold.
• Reassess on business reorganisation, a merger or acquisition can push the combined entity over the line.
• Keep your documents ready, PAN, proof of business constitution, identity and address proof of the authorised signatory, business address proof, bank details, and a digital signature for companies and LLPs.

Getting the timing and the right registration type correct is exactly where a professional helps. Our GST compliance service handles registration end to end, and advises whether the composition scheme or voluntary registration makes sense for you.

Quick answers

What is the GST registration limit? ₹40 lakh for goods and ₹20 lakh for services in most states, lower in special-category states. Is it per state? No, aggregate turnover is totalled across India under one PAN. Who must register regardless of turnover? Inter-state suppliers, e-commerce sellers, casual and non-resident taxable persons, and a few others. Can I register voluntarily? Yes, to claim input tax credit and credibility. What is the composition scheme? A simpler, fixed-rate option up to ₹1.5 crore (goods) or ₹50 lakh (services). Need help registering? Our GST team handles it.