GST Registration Thresholds: ₹40, ₹20 and ₹10 Lakh

GST Registration Thresholds explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

There is no single threshold. There are three, and the applicable one turns on what you supply, where you supply from, and whether you fall into one of several disqualifying categories.

Section 22(1) sets the base at ₹20 lakh, with ₹10 lakh for special category States. Notification No. 10/2019-Central Tax dated 07.03.2019, issued under the proviso to s.22(1), raised the limit to ₹40 lakh for a person engaged exclusively in the supply of goods — subject to conditions. A supplier of services, or of goods and services together, remains at ₹20 lakh (or ₹10 lakh). And section 24 overrides all of them for thirteen categories of compulsory registration.

The three limits

Special category States for this purpose, following the amendments and the States that opted in or out, are broadly the North-Eastern States, Sikkim, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, Ladakh and Puducherry — but the position has been altered by individual State exercises of the option under the provisos to s.22 and by Notification No. 10/2019. Verify the current position for the specific State before relying on a figure.

The conditions on the ₹40 lakh limit

Notification No. 10/2019-CT exempts from registration a person engaged exclusively in the supply of goods whose aggregate turnover in the financial year does not exceed ₹40 lakh — except:

(a) persons required to take compulsory registration under s.24;

(b) persons engaged in making supplies of — ice cream and other edible ice whether or not containing cocoa; pan masala; all goods of Chapter 24 (tobacco and manufactured tobacco substitutes); and, following later amendments, fly ash bricks, building bricks, roofing tiles and similar goods where the special composition scheme applies;

(c) persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand — these States either did not adopt the higher limit or adopted a lower one;

(d) persons exercising the option under s.25(3) — voluntary registration — or persons already registered who continue to remain registered.

Condition (b) is the one businesses miss. A trader who deals in any of the listed goods loses the ₹40 lakh limit entirely and drops to ₹20 lakh, even if those goods are a small part of the business.

"Exclusively" means exclusively

The higher limit applies to a person engaged exclusively in the supply of goods.

A goods trader who earns even a small amount of service income — commission, freight recovered as a separate supply, a rental receipt, an interest-bearing loan given to a related party — is not exclusively supplying goods, and drops to ₹20 lakh.

There is one important qualification. An explanation to the notification provides that a person supplying exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount is to be treated as engaged exclusively in the supply of goods.

So bank interest income does not break exclusivity. Rental income does.

Section 24 overrides everything

Thirteen categories must register irrespective of turnover:

inter-State taxable suppliers; casual taxable persons; persons liable under reverse charge; e-commerce operators liable under s.9(5); non-resident taxable persons; persons required to deduct tax under s.51; agents supplying on behalf of others; Input Service Distributors; persons supplying through an e-commerce operator required to collect TCS; e-commerce operators; OIDAR suppliers to unregistered persons in India; persons supplying online money gaming from outside India; and such other persons as the Government may notify.

Two relaxations are worth knowing:

Inter-State supply of services. Notification No. 10/2017-Integrated Tax exempts a person making inter-State supplies of services from compulsory registration where aggregate turnover is below the threshold. So a consultant in one State serving clients in another is not compulsorily registrable on that ground alone.

Supply of goods through an e-commerce operator. Notification No. 34/2023-CT dated 31.07.2023 waived compulsory registration for persons supplying goods through an ECO where turnover is below the threshold, subject to conditions — including having a PAN, declaring the principal place of business, and not making inter-State supplies.

Compulsory registration in 13 cases →

Practical notes

• Determine the applicable limit first, then monitor against it. Businesses often monitor against ₹40 lakh without checking whether they qualify.
• Test exclusivity annually. A single service invoice changes the limit.
• Check the State list. Several States sit outside the ₹40 lakh notification.
• Check the goods list. Ice cream, pan masala, tobacco and specified bricks disqualify.
• Section 24 is checked before the threshold, not after.
• Once liable, s.25(1) allows thirty days to apply — and applying within that window is a condition for s.18(1)(a) credit on opening stock. Section 18(1): ITC on stock at registration →

Key takeaways

• ₹40 lakh for exclusively-goods suppliers meeting conditions; ₹20 lakh otherwise; ₹10 lakh in special category States for services.
• Ice cream, pan masala, tobacco and specified bricks disqualify a supplier from ₹40 lakh.
• Several States do not offer the ₹40 lakh limit.
• "Exclusively goods" is broken by any service income — except interest on deposits, loans or advances.
• Section 24 overrides all thresholds for thirteen categories.
• Inter-State services and goods through an ECO have notified relaxations from compulsory registration.

Read next

• Aggregate Turnover: The Five Things It Includes
• Compulsory GST Registration: 13 Cases Under Section 24
• Who Must Register: Threshold Limits and Exemptions
• Section 18(1): Claiming ITC on Stock When You Register

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition) and the ICAI Handbook on Registration under GST (November 2025). Verify the current threshold notification for the specific State and goods before relying on it.