GST registration becomes mandatory when a person crosses the prescribed turnover threshold or falls under a compulsory registration category. The threshold depends mainly on whether the business supplies goods, services, or both, and the State or Union Territory from which the supply is made.
1. GST Registration Threshold
Section 22 of the CGST Act provides the basic turnover-based registration requirement.
| Nature of Supply | Normal Threshold |
|---|---|
| Exclusively supplying goods | More than ₹40 lakh* |
| Supplying services | More than ₹20 lakh** |
| Supplying both goods and services | Generally more than ₹20 lakh |
| Specified States/UTs | Lower limits apply |
*The ₹40 lakh threshold is available only to eligible persons engaged exclusively in the supply of goods under Notification No. 10/2019-Central Tax.
For suppliers of goods, the threshold is ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.
**For services, the threshold is ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. A mixed supplier in these States should therefore not automatically apply the ₹20 lakh limit.
The enhanced ₹40 lakh limit is also not available to specified suppliers covered by Notification No. 10/2019-Central Tax, including suppliers of notified goods such as ice cream and other edible ice, pan masala, and tobacco/manufactured tobacco substitutes.
What is Aggregate Turnover?
Section 2(6) calculates aggregate turnover PAN-wise on an all-India basis.
It covers the value of outward:
- taxable supplies;
- exempt supplies;
- exports; and
- inter-State supplies of persons having the same PAN.
GST and cess are excluded. Inward supplies on which tax is payable under reverse charge are also excluded.
Example: A business has turnover of ₹24 lakh in West Bengal and ₹19 lakh in Odisha under the same PAN. Its aggregate turnover is ₹43 lakh for checking the registration threshold.
2. Compulsory Registration under Section 24
Turnover is not the only test. Registration can be compulsory even below the normal threshold unless a specific exemption applies.
Main Categories
| Situation | Provision |
|---|---|
| Persons making inter-State taxable supplies | Section 24(i) |
| Casual taxable persons making taxable supply | Section 24(ii) |
| Persons required to pay tax under reverse charge | Section 24(iii) |
| Persons required to pay tax under Section 9(5) | Section 24(iv) |
| Non-resident taxable persons making taxable supply | Section 24(v) |
| GST-TDS deductors | Section 24(vi) |
| Agents supplying on behalf of another taxable person | Section 24(vii) |
| Input Service Distributors | Section 24(viii) |
| Suppliers through an e-commerce operator required to collect TCS under Section 52, subject to the statutory exceptions | Section 24(ix) |
| Every electronic commerce operator | Section 24(x) |
| Specified OIDAR suppliers located outside India | Section 24(xi) |
| Other notified persons/classes | Section 24(xii) |
Inter-State Goods vs Services
For inter-State taxable supply of goods, Section 24(i) generally requires registration even where turnover is below the normal threshold.
Specific notified exemptions exist, including threshold-based relief for certain inter-State supplies of handicraft goods.
For inter-State taxable services, Notification No. 10/2017-Integrated Tax provides threshold-based registration relief to eligible service providers.
E-commerce supplies have separate rules and exemptions. Selling through an online marketplace does not, by itself, mean that GST registration is required from the first sale.
3. Who is Not Required to Register?
Under Section 23, a person exclusively supplying goods or services that are wholly exempt or not liable to GST is not required to register.
An agriculturist is also not required to register to the extent of supply of produce arising from cultivation of land.
The Government can also exempt specified categories from registration through notification.
4. Voluntary GST Registration
Section 25(3) allows a person to take GST registration even before crossing the turnover threshold.
This can be useful for a B2B business where customers expect GST invoices and eligible input tax credit. Once voluntarily registered, the taxpayer must follow the normal GST compliance requirements.
Registration vs Composition Scheme
GST registration and the Composition Scheme are different.
Composition under Section 10 is an optional scheme for eligible registered taxpayers. A composition taxpayer cannot claim input tax credit, and restrictions apply to inter-State outward supplies and certain other transactions.
5. One PAN, Different States
GST registration is State/UT-specific.
If a business is liable for registration in both West Bengal and Odisha, separate GST registrations are required even though the PAN is the same.
The registration threshold, however, is tested using aggregate turnover across India for that PAN.
6. Documents Required for GST Registration
Documents depend on the constitution of the business and the nature of the premises. Common requirements include:
- PAN and Aadhaar details;
- photograph and details of proprietor, partners or directors;
- partnership deed, incorporation document or other constitution proof;
- proof of principal place of business;
- rent/lease agreement or consent letter, where required;
- supporting ownership/address document; and
- authorisation for the authorised signatory.
Document mismatches are a common reason for clarification.
Example: If the rent agreement states “12A Park Street” but the electricity bill states “12 Park Street”, the officer may ask the applicant to establish that both documents relate to the same premises.
For family-owned premises, an electricity bill in the property owner’s name alone may not be enough. A consent letter and ownership supporting document may also be required.
7. GST Registration Process
A normal taxpayer applies through FORM GST REG-01 under Rule 8.
Enter the legal name exactly as recorded against the PAN.
Enter the business constitution, promoter/partner, authorised signatory, place-of-business and goods/services details.
Check names and addresses before submission.
The verification route depends on Aadhaar authentication and the registration process applicable to the applicant.
An Application Reference Number (ARN) is generated.
If clarification is required, REG-03 is issued. The applicant must furnish the reply in REG-04 within 7 working days from receipt of the notice. Rejection is communicated through REG-05. On approval, the registration certificate is issued in REG-06.
Where the conditions for deemed approval are satisfied and the officer does not act within the specified time, the application may be deemed approved.
Practical tip: Select the correct HSN/SAC details for the principal goods or services so that the registration particulars match the actual business activity.
Faster Registration under Rule 9A
From 1 November 2025, Rule 9A provides electronic registration for eligible low-risk applicants based on data analysis and risk parameters.
Eligible applications can be granted electronically within 3 working days.
Applications requiring clarification, biometric verification or physical verification continue through the respective verification process.
8. When Should You Apply?
A person becoming liable under Section 22 or Section 24 must apply within 30 days from the date the liability arises.
Casual Taxable Person
A casual taxable person must apply at least 5 days before commencing business and make an advance deposit of the estimated tax liability.
The application is made through the Rule 8 registration framework, with the advance-tax requirement arising under Section 27.
Non-Resident Taxable Person
A non-resident taxable person must also apply at least 5 days before commencing business.
Registration is made in FORM GST REG-09 under Rule 13, together with the advance tax deposit required under Section 27.
For both casual and non-resident taxable persons, registration normally remains valid for the period specified in the application or 90 days from the effective date, whichever is earlier. A further extension of up to 90 days may be allowed.
9. Bank Account Details – Rule 10A
Bank account details need not necessarily be furnished with the initial REG-01 application.
They must be furnished within 30 days from the grant of registration or before furnishing outward supply details in GSTR-1/IFF, whichever is earlier .
10. Simplified Registration under Rule 14A
Rule 14A provides an optional simplified registration route for eligible small taxpayers.
A person whose estimated monthly output tax liability on supplies made to registered persons does not exceed ₹2.5 lakh may opt for this route, subject to the conditions of Rule 14A.
Aadhaar authentication is mandatory, and only one Rule 14A registration can be obtained for the same PAN in the same State/UT.
₹2.5 lakh is not a turnover threshold. It is the monthly output-tax-liability ceiling for opting for Rule 14A.
11. GSTIN Structure
A GSTIN contains 15 characters. Under Rule 10, its statutory structure is:
12. What if Registration is Not Taken?
Section 122(1)(xi) covers failure to obtain registration where a person was legally required to register.
The penalty under Section 122(1) is ₹10,000 or an amount equivalent to the tax evaded, whichever is higher .
This is separate from the tax liability and interest under Section 50. Determination of unpaid or short-paid tax is dealt with under Sections 73/74 for the periods governed by those provisions and Section 74A where applicable.
Delayed registration can also create problems with tax invoices and input tax credit. If the liability is discovered months later, the business may have to meet an old GST liability from its own funds.
Quick Legal Reference
| Topic | Provision |
|---|---|
| Aggregate turnover | Section 2(6) |
| Composition Scheme | Section 10 |
| Turnover-based registration | Section 22 |
| Persons not liable for registration | Section 23 |
| Compulsory registration | Section 24 |
| Registration procedure / 30-day limit | Section 25 |
| Voluntary registration | Section 25(3) |
| Casual taxable person | Section 27 read with Rule 8 |
| Non-resident taxable person | Section 27 read with Rule 13 |
| Registration application | Rule 8 – REG-01 |
| Verification / clarification | Rule 9 – REG-03, REG-04 & REG-05 |
| Risk-based electronic registration | Rule 9A |
| Registration certificate / GSTIN | Rule 10 – REG-06 |
| Bank account details | Rule 10A |
| Simplified registration | Rule 14A |
| Failure to obtain registration | Section 122(1)(xi) |
| Interest | Section 50 |
Frequently Asked Questions
Yes. A residential premises can be used as the principal place of business if the applicant has documents showing the right to use the premises.
For example, where the property belongs to a parent, ownership proof together with an appropriate consent letter may be required.
No Government fee is charged for filing a normal GST registration application on the GST Portal. Professional fees may be charged separately if assistance is taken.
Yes. Section 25(3) permits voluntary registration. Once registered, the taxpayer must follow the GST compliance requirements that apply to the registration.
No. The ₹40 lakh threshold is for eligible persons engaged exclusively in the supply of goods. Service providers normally fall under the ₹20 lakh/₹10 lakh threshold framework.
No. The ₹40 lakh threshold is linked to persons engaged exclusively in the supply of goods. A mixed supplier cannot use it merely because most of its turnover comes from goods.
As a general rule, no. Inter-State taxable supply of goods attracts compulsory registration under Section 24(i). Specific notified exemptions must be checked separately.
No fixed expiry period applies to normal GST registration. Casual taxable persons and non-resident taxable persons have separate validity rules, normally up to 90 days with provision for extension.
Disclaimer: This article is for general informational purposes only. GST provisions, rules and notifications may change from time to time. Professional advice should be obtained based on the facts of each case.
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