What is the minimum turnover for GST?
What is the minimum turnover for GST?
The Goods and Services Tax (GST) is an indirect tax system introduced in India in 2017. It functions as a single tax on the supply of goods and services from the manufacturing sector to the consumer level. The GST Council, which is a body consisting of the finance ministers of all the states, determines the tax rate and other related issues. According to recent amendments by the Central Government, the minimum turnover for GST in India has been set at Rs. 40 Lakhs. This article talks about the minimum turnover limit for GST Registration in detail.
Which activities are subject to taxation under GST?
Activities such as the supply of goods and services, sale of goods and services for the purpose of advancing commerce and import of commodities into India are subject to taxation under GST.
Which activities are exempted from GST registration?
These activities are not required to be registered for GST:
- supplying goods or services that are not taxable
- supply of goods or services by unregistered persons to registered individuals
- providing goods or services through an unregistered e-commerce operator.
What is the minimum turnover limit for GST registration?
Companies with a yearly turnover of more than Rs. 40 Lakhs (for goods) and Rs.20 lakhs (for services) are required to register for GST and pay taxes on their taxable goods and services. Businesses with a yearly turnover of less than Rs. 40 Lakhs are not required to register for GST, but can choose to register for GST voluntarily. This is beneficial for businesses as it enables them to avail of input tax credit and other benefits.
It should be noted that the minimum turnover for GST in India is different for some special category states. These special category states have a minimum threshold limit of Rs. 20 Lakhs (for the supply of goods) and Rs. 10 lakhs (for the supply of services). These special category states include Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim.
The GST Council has also recommended that all businesses with a turnover of more than Rs. 40 Lakhs should register for GST, irrespective of their state of registration.
The minimum turnover for GST in India in 2023 is likely to remain the same, i.e. Rs. 40 Lakhs. This is expected to provide some relief to small businesses and enable them to avail of the benefits of GST. It is also likely to enable the government to collect taxes from all businesses, irrespective of their size.
