GST registration turnover limit in India — when does it become mandatory?
GST registration is mandatory once aggregate annual turnover crosses Rs 40 lakh for a business supplying goods (Rs 20 lakh in special category states), or Rs 20 lakh for a business supplying services (Rs 10 lakh in special category states). Certain categories — interstate suppliers, e-commerce sellers, and businesses under reverse charge — must register regardless of turnover.
The standard turnover thresholds
For suppliers of goods, registration is mandatory once aggregate turnover in a financial year exceeds Rs 40 lakh (Rs 20 lakh in special category states like the northeastern states, Himachal Pradesh, and Uttarakhand). For suppliers of services, the threshold is Rs 20 lakh (Rs 10 lakh in special category states).
A business supplying both goods and services follows the services threshold if the value of services exceeds a de minimis limit set out in the relevant notification — in practice, most mixed businesses should check with a CA on which threshold applies to their specific revenue mix.
What counts toward 'aggregate turnover'
Aggregate turnover is computed on an all-India, PAN-wide basis — it includes taxable supplies, exempt supplies, exports, and interstate supplies of all business verticals operating under the same PAN, even if they are registered separately in different states. It excludes taxes charged under GST itself and inward supplies taxed under reverse charge.
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Talk to a CA →Mandatory registration regardless of turnover
Certain categories must register irrespective of turnover: businesses making interstate taxable supplies, casual taxable persons, non-resident taxable persons, persons required to pay tax under reverse charge, e-commerce operators, persons supplying through an e-commerce operator (with limited exceptions for certain services), and input service distributors.
This is the most commonly missed rule — a small business selling through an online marketplace, even with turnover well below Rs 40 lakh, is still required to register for GST because it supplies through an e-commerce operator.
Voluntary registration below the threshold
A business below the mandatory threshold can still register voluntarily. Common reasons include wanting to claim input tax credit, needing a GSTIN to transact with larger corporate clients who require it, or planning to expand into interstate or e-commerce sales in the near future.
Consequences of crossing the threshold without registering
Operating without registration once the threshold is crossed exposes the business to a penalty of Rs 10,000 or the amount of tax evaded, whichever is higher, plus the tax liability itself with interest, computed retroactively from the date the threshold was crossed — not from the date the department detects the lapse.
Do I need GST registration if I sell through Amazon or Flipkart, even with low turnover?
Yes. Anyone supplying goods or services through an e-commerce operator like Amazon or Flipkart is required to register for GST regardless of turnover — the standard Rs 40 lakh / Rs 20 lakh threshold does not apply to e-commerce sellers of goods. A small number of specified services sold through e-commerce operators have separate, narrower exemptions, so it's worth confirming your specific category with a CA.
This article is for general information only. For your specific situation, consult a practicing CA.
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