Mandatory GST Registration for Businesses: Threshold Limits and Requirements

Understanding the threshold limits for GST (Goods and Services Tax) registration is crucial for businesses across India. The mandatory registration requirements vary based on the type of business, the turnover, and the region. This article provides an in-depth look at the threshold limits and the businesses that are required to register for GST.

Threshold Limits for GST Registration

The threshold limit for GST registration in India varies based on the type of business and the state. For goods, the threshold limit is:

Rs. 40 lakh for normal category states Rs. 20 lakh for special category states

For services, the threshold limit is:

Rs. 20 lakh for normal category states Rs. 10 lakh for special category states

It is important to note that there are special category states that have opted for different threshold limits. For example, Jammu and Kashmir and Assam have a threshold limit of Rs. 40 lakh for goods, while Puducherry has opted for a threshold limit of Rs. 20 lakh for goods.

Businesses Required to Get GST Registration

E-commerce Entities

Businesses operating through e-commerce platforms are required to take GST registration before applying for trading through these portals. There is no specific turnover limit for e-commerce entities.

On-line Businesses in Specific States

In certain states, the threshold limit for on-line business turnover is different. For example, for services, the limit is Rs. 20 lakh in normal category states and Rs. 40 lakh in eastern states. Similarly, for goods, the limit is Rs. 40 lakh in normal category states and Rs. 20 lakh in eastern states. Certain states have increased the limit for goods and services to Rs. 40 lakh.

Who is Liable to Get GST Registration?

Business entities are required to get GST registration under the following conditions:

Any business whose aggregate turnover exceeds the prescribed threshold limit. Any person who is registered under earlier laws such as service tax, VAT, etc. A person making inter-state supply of goods or services or both. Casual Taxable Persons. Non-resident Taxable Persons. Agents of the supplier. A business being transferred to someone or when a business is de-merged. Persons paying tax under Reverse Charge Mechanism (RCM). E-commerce operators or aggregators.

GST registration is mandatory for businesses engaging in the supply of goods irrespective of the state, with a threshold limit of Rs. 40 lakh for normal category states and Rs. 20 lakh for special category states. For services, the threshold limit is Rs. 20 lakh in normal category states and Rs. 10 lakh in special category states.

Conclusion

Understanding the threshold limits for GST registration and the entities required to register is essential for businesses to comply with the Indian tax laws. Whether it's goods or services, the threshold limits are designed to ensure that businesses of all sizes are covered under the GST regime.

For more information on GST, please refer to the latest guidelines and policies from the government of India or consult with a tax professional.