# GST Registration Threshold in 2026: ₹20L vs ₹40L vs ₹10L — Which Limit Applies to Your Business Three different thresholds. Multiple special category states. One PAN-level aggregation rule that trips up everyone who treats their states as separate businesses. And a set of mandatory registration situations that apply regardless of any threshold. If you are operating a business in India in 2026 and not sure whether you need to register for GST, this is the authoritative guide. --- ## The Legal Foundation: Section 22 of the CGST Act Section 22 of the Central Goods and Services Tax Act, 2017 is the starting point. It provides that a person is **liable to register for GST when their aggregate turnover in a financial year exceeds the prescribed threshold**. The Central Government, on the recommendation of the GST Council, prescribes the threshold through notifications. --- ## The Three Thresholds: Which Applies to You ### ₹40 Lakh — Goods Suppliers in Normal States With effect from **1 April 2019** (via Notification No. 10/2019-CT), the threshold for suppliers of **goods** was raised to ₹40 lakh in the Normal States. This ₹40 lakh limit applies to you if: - You supply **goods** (manufacturing, trading, e-commerce of physical products) - You are located in a normal state (Delhi, Maharashtra, Karnataka, Tamil Nadu, Gujarat, Rajasthan, UP, West Bengal, etc.) - Your aggregate turnover (all supplies across all your businesses under the same PAN) does not exceed ₹40 lakh in the FY ### ₹20 Lakh — Services Suppliers and Mixed Suppliers in Normal States If you supply **services** (or a mix of goods and services where the principal supply is services), the threshold remains **₹20 lakh** in Normal States. This also applies to: - Suppliers located in Manipur, Mizoram, Nagaland, and Tripura — for **all** suppliers (goods or services), the limit is ₹20 lakh in these four states ### ₹10 Lakh — Special Category States for Services The following states have a threshold of **₹10 lakh for service suppliers**: - Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana, Uttarakhand Goods suppliers in these states have the ₹20 lakh threshold. **State-wise threshold table:** | State / UT | Goods threshold | Services threshold | |---|---|---| | Most Normal States | ₹40 lakh | ₹20 lakh | | Manipur, Mizoram, Nagaland, Tripura | ₹20 lakh | ₹20 lakh | | Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana, Uttarakhand | ₹20 lakh | ₹10 lakh | | Jammu & Kashmir | ₹40 lakh | ₹20 lakh | --- ## "Aggregate Turnover" — The Definition That Changes Everything Most businesses get this wrong. Aggregate turnover under Section 2(6) means the total value of: - All **taxable supplies** (goods and services) - All **exempt supplies** (fresh vegetables, milk, educational services below threshold) - All **exports** (zero-rated, not nil-rated) - All **inter-state supplies** of the same person across all business verticals **Computed on a PAN-level basis** — meaning if you run a textile business in Mumbai and a consulting practice in Bengaluru under the same PAN, both businesses' turnover is counted together for the threshold. **What is NOT included in aggregate turnover:** - Inward supplies on which you pay tax under reverse charge (Section 9(3)/(4)) - Taxes (CGST, SGST, IGST, cess) themselves **The exempt supply trap**: A common mistake is to count only taxable turnover. If you also sell agricultural produce (exempt), the exempt turnover must be added. Combined, you may be well above the threshold. **The multi-state PAN trap**: If you have outlets in three states and each outlet has ₹15L in goods turnover, your aggregate turnover is ₹45L — above the ₹40L threshold. You are liable to register in **each state** where you have a fixed place of business. --- ## GSTIN Per State: Threshold Is PAN-Level, Registration Is State-Level The aggregate turnover threshold is assessed at the **PAN level** (all businesses, all states together). But once you cross the threshold, you must obtain a **separate GSTIN for each state** where you have a place of business. Each state's GSTIN is a distinct registration. You file separate GSTR-1 and GSTR-3B for each GSTIN. --- ## Compulsory Registration Under Section 24: No Threshold Applies Section 24 of the CGST Act lists categories of persons who must register for GST **regardless of turnover**. If you fall in any of these, there is no ₹40L, ₹20L, or ₹10L protection: 1. **Inter-state taxable supply**: If you supply goods or services across state borders and the supply is taxable, you must register. Even ₹1 of inter-state taxable supply triggers mandatory registration. 2. **E-commerce operators under Section 52**: Platforms like Amazon, Flipkart, Swiggy, Zomato must register in every state of operation. 3. **Persons supplying through e-commerce platforms**: Suppliers who sell on such platforms are required to register regardless of turnover. 4. **Persons liable to deduct TDS under Section 51**: Government entities, government companies, local authorities, PSUs. 5. **Non-resident taxable persons**: A foreign person who makes taxable supplies in India must register. 6. **Casual taxable persons**: If you travel to a state where you have no fixed business place and make taxable supplies there (e.g., an exhibitor at a trade fair), you must register as a casual taxable person in that state. --- ## Voluntary Registration: Why You Might Want to Register Below Threshold You can register for GST voluntarily even if your turnover is below the threshold. Benefits: - **Input tax credit from Day 1**: You recover the GST you paid on purchases, raw materials, and services - **Supplier qualification**: Many B2B buyers only deal with GST-registered vendors - **Export refunds**: Zero-rated exports allow you to claim refund of ITC — only possible with registration --- ## Composition Scheme: Simplified Compliance for Small Businesses If you are eligible and registered, you can opt for the Composition Scheme under Section 10: - **Goods suppliers**: Turnover ≤ ₹1.5 crore (₹75 lakh for special category states) - **Service suppliers (under Notification 2/2019-CT)**: Turnover ≤ ₹50 lakh, pay 6% (3% CGST + 3% SGST) - **Restaurant services**: Flat 5% (2.5% CGST + 2.5% SGST), no ITC **Composition dealers cannot**: collect GST from customers, claim ITC, or make inter-state supplies. --- ## FAQ **Q: I supply both goods and services. Which threshold applies to me?** In practice, the ₹20 lakh threshold for services is the safer number to use if you provide a significant component of services. **Q: I export software services from Bengaluru. My turnover is ₹30L. Do I need to register?** Yes. Export of services is treated as inter-state supply under Section 7(5)(a) of the IGST Act. Inter-state suppliers must register under Section 24 regardless of turnover. **Q: I have a small shop in Telangana and only sell goods. What's my threshold?** Telangana is a special category state. For goods suppliers, the threshold is ₹20 lakh (not ₹40L). **Q: My business has been running for 6 months and my actual turnover is ₹18L. When do I need to register?** The threshold under Section 22 is based on aggregate turnover **in a financial year**. You must apply for registration **within 30 days of crossing the threshold in the actual FY**. --- ## Start Right, Stay Compliant For a registration eligibility check or to handle your GST registration, composition scheme election, or voluntary registration, reach out at **harunraaj.com/contact**. *Harun Raaj & Associates | NRI Tax Specialists* --- ## See Also - [GSTR-3B vs GSTR-1 Mismatch Notices: Why They're Issued, How to Reconcile, and the Penalty Exposure](https://www.harunraaj.com/blog/gstr-3b-gstr-1-mismatch-reconciliation-notices) - [Input Tax Credit Blocked Under Section 17(5): The Complete List With the Cases That Catch Businesses Off Guard](https://www.harunraaj.com/blog/itc-blocked-gst-section-17-5-complete-list) - [RoDTEP Rate Chart 2025-26 for Indian Exporters — Scheme Guide, Eligible Categories & How to Claim](https://www.harunraaj.com/blog/rodtep-rate-chart-exporters-india-2025-26) Canonical: https://www.harunraaj.com/blog/gst-registration-threshold-2026-which-limit-applies