The GST Council, on considering the demands raised by MSME, increased the GST registration threshold limits. These changes were proposed in the 32nd GST Council meeting held on 10th January 2019. It was subsequently notified by the CBIC. It helps to ease compliance under GST.
This article explains the GST registration threshold limits. Find out the earlier threshold limits, new GST registration limits, and the persons to whom it applies. Meanwhile, if you want to check your vendors’ or buyers’ registration status, you can use our GST search tool. Enter the GSTIN and get results in no time!
Latest updates on GST Registration
21st December 2021
From 1st January 2022, CBIC made the aadhaar authentication mandatory to apply for revocation of cancelled GST registration under the CGST Rule 23 in REG-21.
Overview of earlier limits, new limits and the date of applicability
| Aggregate Turnover | Registration Required | Applicability |
|---|---|---|
| Earlier Limits – For the sale of Goods/Providing Services | ||
| Exceeds Rs.20 lakh | Yes – For Normal Category States | Up to 31st March 2019 |
| Exceeds Rs.10 lakh | Yes – For Special Category States | Up to 31st March 2019 |
| New Limits – For Sale of Goods | ||
| Exceeds Rs.40 lakh | Yes – For Normal Category States | From 1st April 2019 |
| Exceeds Rs.20 lakh | Yes – For Special Category States | From 1st April 2019 |
| New Limits – For Providing Services | ||
| There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states). | ||
States who opted for the new limit
An option was provided to the states to opt for the new limits or continue the earlier ones (status quo).
| Normal Category States/UT who opted for a new limit of Rs.40 lakh | Normal Category States who choose status quo | Special Category States/UT who opted for new limit of Rs.40 lakh | Special Category States/UT who opted for new limit of Rs.20 lakh |
| Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh | Telangana | Jammu and Kashmir, Ladakh and Assam | Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand |
Note 1: Two hilly states J&K and Assam have also opted to raise the limit to Rs.40 lakh. These two states had the option to remain under lower threshold limits as they fall under the Special Category States. Even previously when these two states had the option to charge GST only on aggregate turnover exceeding Rs.10 lakh, they had opted for a higher threshold limit of Rs.20 lakh.
Note 2: Kerala can now charge ‘calamity cess’ up to 1% on all intra-state supply of goods and services to cope up with natural calamities faced by the state last year.
Financial Year to reckon the aggregate turnover
Aggregate turnover for the current financial year (for instance, in the above case, FY 2019-2020) is considered for applicability of new threshold limits. Every supplier whose aggregate turnover in the current financial year exceeds the threshold limits will have to get registered under GST. However, certain category of persons are required to compulsorily get registered under GST:
- Interstate suppliers
- Casual Taxable persons
- Persons taxable under the reverse charge basis
- Non-resident taxable persons
- Persons required to deduct TDS under GST
- Persons required to deduct TCS under GST
- Input Service Distributors
- Persons making a sale on behalf of someone else whether as an Agent or Principal.
- Every e-commerce operator providing a platform to suppliers to make supply through it.
- Suppliers who supply goods through e-commerce operators who are liable to collect tax at source.
- Online Service Providers providing service from outside India to a non-registered person in India.
Changes in the threshold limits to opt into the Composition Scheme
- Changes in the composition scheme: The threshold of annual turnover for composition scheme was increased to Rs.1.5 crore from 1st April 2019. The taxpayers registered under the scheme have to pay tax quarterly and file returns annually from 1st April 2019. The limit remains unchanged at Rs.75 lakh for North Eastern states & Uttarakhand. The limit also applies to restaurants (not serving alcoholic beverages).
- Composition scheme was made available to service providers: New scheme introduces a fixed tax rate of 6% with 3% CGST and 3% SGST. Independent service providers, as well as mixed suppliers of goods and services with an annual turnover of up to Rs.50 lakh in the preceding financial year can opt for this scheme.
