According to the GST Regime, businesses or business owners whose turnover exceeds Rs. 40 lakhs are required to register under GST as a normal taxable person. Additionally, the GST Registration Threshold Limits for Services operated in North-Eastern (NE) and hill states are Rs. 10 lakhs. The process of registration under the GST Regime is called GST registration.
It is mandatory to register under GST for almost all businesses. If the company or business carries on business activities without registering under GST, it is considered an offence as per the GST rules and heavy penalties will be levied. There have been no changes to the threshold limits for service providers. Individuals providing services must register if their aggregate turnover exceeds Rs. 20 lakh (for normal category states) and Rs. 10 lakh (for special category states).
The GST Council has doubled the GST Exemption Limit from payment of goods and services tax (GST) to Rs 40 lakh. Earlier, it was Rs. 20 lakh. Also, for the northeastern states, the exemption limit has been increased to Rs 20 lakh from Rs 10 lakh.
A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs is required to register under the Goods and Services Tax (GST) mandatorily. This limit is set at Rs 10 lakhs for the North Eastern and hilly states, which are flagged as special category states. The CBIC has announced an increase in the threshold for business from Rs 20 lakhs to Rs 40 lakhs, which came into effect on April 1, 2019. It takes 2 to 6 working days for the GST registration online process, and we can help you complete your GST registration in just three easy steps.
Considering the demands raised by MSMEs, the GST Council increased the threshold turnover limits for GST registration. This increase in the threshold turnover limit helps to ease compliance under the GST regime. The states have the option to choose between continuing with the existing limits or increasing them to a higher limit. This article explains the GST Registration Threshold limits and the persons or businesses to which it applies. Like any other category of business, all the service providers should obtain GST registration if the entity’s aggregated annual turnover exceeds Rs. 20 lakhs per annum in most states and Rs. 10 lakhs in the Special Category States. Mandatory registration is necessary for any other person or class of individuals that the Central Government or a State Government may notify based on the GST Council’s recommendations. GST is not applicable for those assessee whose turnover is less than 20 Lakhs. Go ahead and surrender your GST registration.
New GST Registration Threshold Limits for Services
| Type of business or Taxpayers | Type of Supplies or business operations | Exemption Limit Up To March 31, 2019 | Exemption Limit With Effect From April 1, 2019 |
| Normal taxpayers | Render of goods only | Threshold annual turnover of up to Rs. 20 lakhs | The yearly turnover threshold increased to up to Rs. 40 lakhs |
| Special category states | Render of goods only | Threshold yearly turnover of up to Rs. 10 lakhs | The threshold annual turnover increased up to Rs. 20 lakhs |
| Normal taxpayers | Render of services only | Threshold yearly turnover of up to Rs. 20 lakhs | Threshold annual turnover of up to Rs. 20 lakhs (remains the same) |
| Special category states | Render of services only | Threshold yearly turnover of up to Rs. 10 lakhs | Threshold annual turnover of up to Rs. 10 lakhs (remains the same) |
Goods Registration Threshold Limit
For Normal Taxpayer
The threshold limit for the supplier of goods was Rs. 20 lakhs under the original GST regime, as declared by the government in July 2017. To make it more straightforward, suppliers or dealers of goods whose annual turnover is up to Rs 20 Lakhs are not required to register under the GST regime. Therefore, suppliers or dealers of goods with a threshold turnover of Rs 20 Lakhs and above are required to register under GST compulsorily. This exemption threshold annual limit, however, has been doubled in the 32nd GST Council meeting from Rs. 20 lakhs to 40 lakhs.
Moreover, this exemption threshold limit of up to Rs 40 Lakhs is not applicable for taxpayers who are:
It is mandatory to register under Section 24 of the CGST Act
Involved in the business of supplying goods such as:
- Ice cream and other edible products related to ice, whether or not containing cocoa
- Tobacco and tobacco-manufactured substitutes
- Pan masala
For Special Category States
The threshold limit for GST registration in northeastern and hilly states was previously Rs. 10 lakhs under the GST regime.
The Special Category States include:
- Assam
- Jammu and Kashmir
- Meghalaya
- Arunachal Pradesh
- Manipur
- Sikkim
- Tripura
- Mizoram
- Nagaland
- Himachal Pradesh
- Uttarakhand
The threshold limit for this State has been raised from Rs. 10 lakhs to Rs. 20 lakhs for the supply of goods, as per the 32nd GST Council meeting. However, the northeastern and hilly states were given an option; businesses could either choose a GST Limit of Rs. 40 lakhs or Rs. 20 lakhs as the annual turnover limit for GST exemption in the case of a provider of goods.
GST Registration Limit for Services
For Normal Taxpayer
AS per the original GST structure declared by the government in July 2017, the turnover limit for suppliers of services was Rs. 20 lakhs, excluding the special category states. However, the exemption limit for GST for service providers remains unchanged, i.e., Rs. 20 lakhs, as declared in the 32nd GST Council Meeting.
For Special Category States
During the initial GST regime, the exemption limit for service providers in hilly and Northeastern states was Rs. 10 lakhs. However, this exemption limit remains unchanged; thus, it is Rs 10 lakhs as per the 32nd GST Council Meeting.
Composition Scheme Registration Limit
The GST Registration Limit for businesses or taxpayers registered under the Composition Scheme varied depending on the category of taxpayers, as follows:
For Traders and Manufacturers
As per the GST law, all the traders and manufacturers that hold an annual turnover of up to Rs 1 Crore in the preceding financial year could register under GST as composition dealers. The rate of 1% GST is applicable to such traders and manufacturers. However, the GST Registration Limit for traders and manufacturers registered under the category of composition dealers has increased, as announced in the 32nd GST Council Meeting.
Consequently, manufacturers and traders with conglomeration annual turnovers of up to Rs 1.5 Crores in the preceding financial year can register under GST as composition dealers. However, the GST rate of 1% applicable to such manufacturers and traders remains unchanged.
For Restaurant Service Only
Under the GST law. Service providers, i.e., restaurant services only with an aggregate turnover of up to Rs 1 Crore in the preceding financial year, could register for GST. The rate of hits & misses of Goods and Services Tax applicable to these kinds of service providers was 5%.
However, the GST Registration Limit for Restaurant service providers registered as composition dealers has also been raised as announced in the 32nd GST Council Meeting. Therefore, Restaurant service providers holding an aggregate annual turnover of up to Rs 1.5 Crores in the preceding financial year can now register under GST as composition dealers. The rate of 5% GST remained applicable to such restaurant service providers’ stays, unchanged.
For other Service Providers
Service providers, excluding restaurant-related services, could not opt for a Composition dealer under the original GST structure. However, as per the 32nd GST Council Meeting, a new Composition Scheme shall now be available for Mixed Suppliers or Suppliers of Services with a Tax Rate of 6% (3% CGST +3% SGST). And these service providers should hold the threshold annual turnover of up to Rs 50 lakhs in the preceding Financial Year.
Compulsory Registration Under GST
The categories of taxpayers who must compulsorily register under GST. Listed below are those categories as per Section 24 of the CGST Act, 2017. Accordingly:
- Individuals or businesses that involve interstate taxable supply
- Individuals who are required to pay tax under the Casualty Taxable
- Individuals who needed to pay tax under the reverse charge
- Individuals who are required to pay tax under sub-section (5) of section 9
- Non-resident taxable Individuals
- Individuals who are required to pay TDS (Tax Deducted at Source) under section 51. This is impertinent of the fact that whether or not the individuals are separately registered under the Act.
- Input Service Distributor who is separately registered under the Act or not.
- Individuals making a taxable supply of services or goods on behalf of other taxable Individuals as an agent or otherwise.
- Individuals supplying services or goods other than supplies are defined under sub-section (5) of section 9. Such supplies are made by an electronic commerce operator who is required to collect tax at the source as per section 52.
- The government notifies individuals of the Council’s recommendations.
- All the electronic commerce operators
- Individuals who supply online information and database access or retrieval services from one place to outside India. Such services are provided to individuals other than registered individuals in India.
States Accepting New GST Registration Limit
As per the 32nd meeting of the GST Council, an option has been provided to the hilly and northeastern states to select either Rs. 20 lakhs or Rs. 40 lakhs as the GST exemption turnover limit in case of supplier of goods.
Therefore, the following is the status of the States adopting the various thresholds for GST registration in case of a supply of goods.
| States – accepted Rs 10 Lakhs Threshold Limit | Normal States – Accepted Rs 20 Lakhs Threshold Limit | States – Accepted Rs 40 Lakhs Threshold Limit |
| Mizoram | Puducherry | The remaining 21 States and 5 Union Territories |
| Manipur | Meghalaya | |
| Tripura | Arunachal Pradesh | |
| Nagaland | Sikkim | |
| Telangana | ||
| Uttarakhand |
Currently, Delhi and Puducherry are not considered special category states for the GST structure. Therefore, there would be 31 States in which SGST + CGST would be imposed and 5 Union Territories in which UTGST + CGST would be imposed.
Importantly, as per section 24 of the CGST Act, 2017, registration of a taxpayer is mandatory, but an individual who is making inter-state supplies of handicraft goods up to an aggregate turnover of Rs 20 Lakhs will come under the exemption from registration category. However, it’s Rs 10 Lakhs for states like Manipur, Mizoram, Nagaland, and Tripura.
Conclusion
Kanakkupillai can assist you with GST registration in India by providing comprehensive end-to-end support throughout the entire process.
We can guide you in:
- determining your eligibility for GST registration,
- help you fill out the application form correctly and
- Also, assist you in submitting the required documents.
We can also help you in resolving any issues or queries related to GST registration.
We can ensure a smooth and hassle-free GST registration process for you with a FREE FIRST CONSULTATION!!
