What is the minimum limit for GST registration?
What is the minimum limit for GST registration?
In India, businesses with an annual turnover of more than Rs. 40 lakhs (Rs. 20 lakhs for businesses in some special category states) are required to register for GST. The GST Council raised the minimum threshold for GST registration from 20 lakhs to 40 lakhs (from Rs.10 lakhs to Rs.20 lakhs for special category states) in consideration of MSMEs’ concerns, thereby relieving many small businesses from paying GST.
However, certain businesses, such as those engaged in e-commerce or selling goods across state borders, are required to register for GST regardless of their turnover. It is important to check the GST laws and regulations in a specific region to determine the minimum limit for registration.
Which activities are eligible for taxation under GST?
The following activities are considered taxable under GST.
- Supply of goods and services
- Sale of goods and services for the purpose of advancing commerce
- Import of commodities into India
Refer to our article to learn more about the eligibility criteria for GST registration.
Which activities are exempted from GST registration?
The following items are exempted from GST in accordance with the recent GST registration laws:
- Supply of goods or services not liable to tax.
- Supply of goods or services by an unregistered individual to a registered individual.
- Supply of goods or services by an unregistered e-commerce operator.
What falls within the GST criterion of aggregate turnover?
Aggregate turnover is the total revenue generated by all companies registered under the same PAN.
The following makes the total of profits generated:
- Taxable purchases
- Exemption sales
- Exports
Total turnover does not include:
- Value of sales tax
- Value of purchases subject to RCM taxation (reverse charge mechanism).
The minimum limit for GST registration
- The minimum threshold limit for GST (Goods and Services Tax) registration in India depends on the type of business and its location.
- For businesses operating in most states, the threshold limit for GST registration is an annual turnover of Rs. 40 lakhs (for the supply of goods) and Rs. 20 lakhs (for the supply of services).
However, for businesses operating in special category states such as Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim, the threshold limit for GST registration is an annual turnover of Rs. 20 lakhs (for the supply of goods) and Rs. 10 lakhs (for the supply of services).
However, the northeastern and hilly states were given a choice, allowing businesses to select between a GST ceiling of Rs. 20 lakhs or Rs. 40 lakhs as the annual turnover threshold for GST exemption in case of providers of goods.
Note- Businesses may voluntarily register for GST even if their turnover is below the threshold limit. This can help them take advantage of certain benefits and simplify their tax compliance.
IndiaFilings can assist you in getting your GST registration quickly and easily.
