Who Needs GST Registration? Threshold Limits Explained (2026)

By the ComplyKart Expert Team · Last reviewed October 2026

You must register for GST once your aggregate turnover crosses ₹40 lakh (if you supply goods) or ₹20 lakh (if you supply services) in a financial year — in normal category states. In special category states (the north-eastern states, Himachal Pradesh, and Uttarakhand), the limits are lower: ₹20 lakh for goods and ₹10 lakh for services. Cross the limit and registration becomes mandatory within 30 days.

But turnover isn't the whole story. Several categories of businesses must register regardless of turnover — inter-state suppliers of goods, e-commerce sellers, and casual taxable persons among them. And some businesses register voluntarily even below the threshold, because the benefits outweigh the compliance cost. Here's the full picture.

The Threshold Table (FY 2026)

Note: If you supply both goods and services, or you make inter-state supplies of services, the lower ₹20 lakh (or ₹10 lakh) limit generally applies. When in doubt, work to the lower number — it's the safer reading.

What Counts as "Aggregate Turnover"?

This is where people miscalculate. Aggregate turnover isn't just your sales — under Section 2(6) of the CGST Act, it's the pan-India total of:

• Taxable supplies (what you sell)
• Exempt supplies
• Exports
• Inter-state supplies between your own branches

...all under the same PAN, for the financial year. It excludes inward supplies on which you pay reverse charge, and it excludes taxes themselves (CGST, SGST, IGST).

The trap: a business with ₹35 lakh in taxable sales plus ₹8 lakh in exempt supplies has ₹43 lakh aggregate turnover — over the ₹40 lakh goods threshold. Exempt doesn't mean excluded.

Who Must Register Regardless of Turnover (Section 24)

These categories need GST registration from rupee one — turnover doesn't matter:

• Inter-state suppliers of goods — sell goods from Delhi to a customer in Mumbai, and you need GSTIN even at ₹1 lakh turnover. (Note: inter-state service providers get the normal threshold exemption up to ₹20/₹10 lakh.)
• E-commerce sellers — selling through Amazon, Flipkart, or your own website with online payment collection generally requires registration. Small intra-state goods sellers below the threshold may be exempt under recent notifications, but check before assuming.
• Casual taxable persons — exhibition stalls, seasonal sellers, pop-up vendors operating in a state where they have no fixed establishment.
• Non-resident taxable persons — foreign businesses making taxable supplies in India.
• Reverse charge recipients — if you're liable to pay tax under reverse charge (e.g., certain legal, transport, or import services).
• Input Service Distributors (ISD) — head offices distributing input tax credit to branches.
• TDS/TCS deductors under GST — government bodies, PSUs, and e-commerce operators who must deduct or collect tax at source.
• Agents and brokers — commission agents, auctioneers, and clearing agents making supplies on behalf of others.

Voluntary Registration: Should You Register Below the Threshold?

You're allowed to register even if the law doesn't require it. Here's how to think about it:

Reasons to register voluntarily

• Input Tax Credit (ITC). The big one. Without GSTIN, the GST you pay on purchases is a dead cost. With it, you claim it back. If your inputs carry significant GST, voluntary registration often pays for itself.
• B2B credibility. Corporate buyers prefer (and often require) GST-registered vendors — they need your GSTIN to claim their own ITC.
• E-commerce access. Most marketplaces require a GSTIN to list, regardless of turnover.
• Inter-state freedom. Registration removes the friction of inter-state goods supply.

Reasons to wait

• Compliance cost. Registration means monthly or quarterly returns (GSTR-1, GSTR-3B), e-invoicing if you cross ₹5 crore later, and reconciliation work. For a tiny B2C business with no ITC to claim, that's pure overhead.
• Pricing. You must charge GST on top of your prices (or absorb it). If your customers are price-sensitive end consumers who can't claim ITC, registration makes you costlier than unregistered competitors.
• It's sticky. Once registered, you can't just stop filing because turnover dipped — cancellation has its own process.

Rule of thumb: if you sell mainly to businesses (B2B), register early — the ITC math and buyer expectations favour it. If you sell small-ticket items to consumers (B2C) with thin margins, wait until you genuinely approach the threshold.

What Happens If You Don't Register When You Should?

• Tax + penalty: 10% of tax due (minimum ₹10,000), or 100% of tax due in cases of deliberate evasion, under Section 122 of the CGST Act.
• No ITC for the unregistered period — that money is gone.
• Officers can register you compulsorily — and backdate the liability.

The GST portal also flags potential non-registrants using third-party data (bank transactions, e-commerce records, income tax filings). "Nobody will notice" is a shrinking bet.

Quick Decision Flowchart

1. Are you in a Section 24 mandatory category? (inter-state goods, e-commerce, casual/non-resident, RCM, TDS/TCS) → Register now.
2. Is your aggregate turnover above the threshold for your state and supply type? → Register within 30 days of crossing.
3. Below threshold but B2B-heavy or planning e-commerce? → Consider voluntary registration.
4. Below threshold, B2C, thin margins? → Monitor turnover monthly; register when you approach the limit.

Sources: CGST Act, 2017 — Sections 2(6), 22, 24, 122; CBIC notifications on threshold limits; GST Common Portal (gst.gov.in).