What is the Minimum Turnover for GST?

24 February 2025

Are you planning to apply for GST registration? 

Did  you know how much you need to pay as a GST?

Well for registration, you should first compute your turnover and then see how much you need to pay as Goods and Services Tax (GST). 

Definition of GST

The GST is an acronym of Goods and Services Tax, which is an indirect tax. Earlier, multiple states and centre had diverse taxes, which were all replaced with it in India. Now, its registration is necessary for those business ventures that meet a certain turnover threshold. 

So! What’s that threshold or minimum turnover that makes it necessary to register for GST? You will find its answer here.   

GST Registration: Who Needs to Register?

As aforesaid, GST registration is necessary for those whose annual turnover exceeds a certain limit. The government has already defined this limit, which varies on the basis of business types and locations. There are also some cases where it can be required, no matter what your turnover is. 

Let’s discover everything about it. 

Minimum Turnover for GST Registration

The threshold of this registration is based on the type of businesses and services or goods they offer.  

1. Threshold Limit for Normal Category States

As the limits of turnover for GST registration differ in most states, let’s disclose : 

• For Goods: The corporate entity whose annual turnover exceeds ₹40 lakhs must register for it. 
• For Services: Those who are indulged in providing services and their turnover exceeds ₹20 lakhs must get it. 

2. Threshold Limit for Special Category States

In states like Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand, this limit cuts down for businesses.  

• For Goods: It’s ₹20 lakhs. 
• For Services: ₹10 lakhs is the threshold.  

3. GST Registration for E-commerce Businesses

Businesses that are into e-commerce, must get enrolled under the GST law, no matter what their turnover is. All in all, it applies to all online sellers or resellers like Amazon, Flipkart, and Zomato. 

4. Mandatory Registration Irrespective of Turnover

There are a few more businesses that are eligible to register under GST, irrespective of their turnover. These ventures can be the following: 

• Those who sells outside their home state (inter-state suppliers) 
• Businesses that are temporarily running in a different state (casual taxable people)
• Input service distributors
• Non-resident or NRI taxable persons
• Businesses involved in reverse charge mechanism transactions

Voluntary GST Registration

It is not necessary that the turnover limit is applicable on those who earn as per defined limits. Some businesses can also voluntarily register for it. This type of registration is beneficial because they win the right to claim Input Tax Credit (ITC) and also, earn utmost good faith in the market. 

Consequences of Not Registering Under GST

Corporate entities that fail to proceed with GST registration may have to face penalties and legal consequences, which are given below: 

• Penalty for Non-Registration: A 10% of the tax due or ₹10,000, whichever is higher is levied as a fine on businesses that have not registered under the GST and their turnover limit exceeds the predefined criteria.
• Higher Tax Burden: Those willing to claim input tax credit on their purchases would see an increase in their tax burden.  

Benefits of GST Registration

• Legitimate Business Recognition: For those who are registered can legally engage in inter-state trade. 
• Input Tax Credit: The registered companies or businesses can leverage the benefits of ITC on GST paid on purchases, which reduces their tax liability. 
• Better Compliance and Growth: The registered businesses can focus on scaling their projects and involve in government tenders. 

Conclusion

Understanding the minimum turnover for GST registration is crucial for businesses to comply with tax laws and avoid penalties. If your business turnover exceeds the prescribed limit, registering under GST is mandatory. Even if your turnover is below the threshold, voluntary GST registration can offer advantages like input tax credit and better market credibility. Always stay updated on GST regulations to ensure compliance and business growth.