Minimum Turnover for GST Registration in India
The Goods and Services Tax (GST) system has brought uniformity in indirect taxation across India. One of the most common questions small businesses ask is: What is the minimum turnover required to register for GST? This blog explains the current GST turnover limit, when GST registration becomes mandatory, and when businesses can register voluntarily.
BOOK A FREE DEMO
GST Registration Threshold Limits (As of 2025)
1. For Businesses Supplying Goods
- ₹40 lakhs: This is the threshold for GST registration in most Indian states.
- ₹20 lakhs: For special category states like Arunachal Pradesh, Manipur, Mizoram, Meghalaya, Sikkim, Tripura, Nagaland, and Uttarakhand.
2. For Service Providers
- ₹20 lakhs: For normal states.
- ₹10 lakhs: For special category states.
These limits apply to the aggregate turnover in a financial year.
How to Calculate Aggregate Turnover
Your aggregate turnover includes:
- Taxable supplies (excluding inward supplies under reverse charge)
- Exempt supplies
- Exports of goods or services
- Inter-state supplies
It excludes:
- Taxes like CGST, SGST, IGST, UTGST, and compensation cess
- Inward supplies under reverse charge
Aggregate turnover is calculated PAN-wise across all states and business branches.
Mandatory GST Registration Irrespective of Turnover
Some businesses must register under GST even if their turnover is below the limit:
- Inter-state suppliers of goods
- Casual taxable persons
- Non-resident taxable persons
- E-commerce sellers and operators
- Businesses liable to deduct TDS/TCS under GST
- Input Service Distributors (ISD)
- Reverse charge liable businesses
Example: Selling on Amazon or Flipkart? You need GST registration from the first sale.
Voluntary GST Registration
You can register voluntarily even if your turnover is below the threshold. Benefits include:
- Eligibility to claim Input Tax Credit (ITC)
- Better business reputation
- Facilitates inter-state sales
But once registered, you must file GST returns regularly.
Composition Scheme for Small Businesses
The Composition Scheme helps reduce tax burden and compliance hassle.
| Category | Turnover Limit | Tax Rate |
|---|---|---|
| Manufacturers & Traders | Up to ₹1.5 crore (₹75 lakhs in special states) | 1% (0.5% CGST + 0.5% SGST) |
| Restaurants (non-alcohol) | Up to ₹1.5 crore | 5% (2.5% CGST + 2.5% SGST) |
| Service Providers | Up to ₹50 lakhs | 6% (3% CGST + 3% SGST) |
Note: Composition dealers cannot claim input tax credit.
Penalties for Not Registering Under GST
If you’re liable but haven’t registered:
- Penalty: 10% of tax due or ₹10,000 (whichever is higher)
- For willful evasion: Penalty up to 100% of tax due
Documents Required for GST Registration
- PAN card
- Business registration proof
- Photo and ID proof of owner/partners
- Address proof of business
- Bank statement/cancelled cheque
- Authorization letter or board resolution
- Digital Signature (for companies/LLPs)
How to Register for GST
Follow these steps:
- Go to www.gst.gov.in
- Click ‘Services’ > ‘Registration’ > ‘New Registration’
- Fill application form
- Upload documents
- Submit and track your ARN
- Once approved, receive your GSTIN
Conclusion
Knowing the GST turnover limit helps businesses stay compliant. If you’re nearing the threshold or plan to grow, registering early avoids future complications. Voluntary registration also enables better business reputation and input tax credit.
Use reliable GST accounting software to track your turnover, generate invoices, and file returns with ease.
I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike.
