GST registration threshold

The general limits

The ₹40 lakh limit for goods is optional for states, and a few chose the lower limit. It also does not apply to manufacturers of certain notified goods such as ice cream, pan masala and tobacco products. Check your state's limit on gst.gov.in before deciding.

How aggregate turnover is counted

Aggregate turnover includes, for all registrations under your PAN across India:

• taxable sales of goods and services,
• exempt and nil-rated supplies,
• exports,
• inter-state supplies, including stock transfers between your own branches in different states.

It excludes GST itself, and inward supplies on which you pay tax under reverse charge. It is counted on a financial-year basis.

Worked example. A Jaipur grocery trader in a year sells packaged, taxable items worth ₹28 lakh and fresh vegetables (exempt) worth ₹9 lakh. Aggregate turnover: ₹37 lakh, below ₹40 lakh, so no registration is needed if Rajasthan follows the ₹40 lakh limit for goods. If the same trader also earns ₹1 lakh a year from home delivery charges billed separately as a service, the business is no longer exclusively supplying goods, the ₹20 lakh limit applies, and registration is required.

When registration is compulsory regardless of turnover

• Inter-state supply of goods. Selling goods to a buyer in another state requires registration from the first such sale. Services suppliers making inter-state supplies are exempt up to the threshold.
• Selling through e-commerce platforms that collect tax at source. Relaxations exist for service providers and, with conditions, small intra-state goods sellers; check current rules.
• Casual taxable persons, such as traders at an exhibition in another state.
• Persons liable to pay tax under reverse charge.
• Non-resident taxable persons, input service distributors, agents supplying on behalf of others, and those required to deduct or collect tax at source under GST.

Anyone below the limit may also register voluntarily, for example to give buyers input tax credit.

When and how to apply

1. Apply within 30 days of becoming liable. If turnover crosses ₹40 lakh on 15 November, apply by 15 December.
2. On the GST portal, fill Part A of the application with PAN, mobile and email, verified by OTP.
3. Fill Part B with business details, place of business proof, bank account, partners or directors, and authorised signatory.
4. Complete Aadhaar authentication when asked; otherwise a physical verification may be required.
5. Track the application number. On approval you receive your GSTIN and certificate.

Choose between normal registration and the composition scheme at this stage if you are eligible.

Should you register voluntarily?

Reasons to register: your buyers are businesses who want credit; you buy a lot of taxable inputs and want to claim credit; you plan to sell across states or online; large customers insist on a GSTIN.

Reasons to wait: you sell mostly to consumers, margins are thin, and the cost of monthly compliance is high relative to turnover.

Once registered, you must file returns every period even if turnover stays below the limit, until you cancel the registration.

This is general information, not tax advice.

Watching turnover during the year

The limit is crossed on a particular day, not at year end, so a growing business should check its running turnover every month. A simple method: keep a cumulative total of all sales from 1 April, including exempt items, for every branch under the PAN. When it reaches about 80% of your limit, prepare the documents for registration: PAN, Aadhaar of the proprietor or partners, address proof for the shop or godown, a cancelled cheque or bank statement, and a photograph. Then you can apply the day you need to, instead of losing a fortnight collecting papers while the 30-day clock runs.

Also note that a business taking over another business, or getting a transfer on succession, may need to register from the date of transfer, whatever its turnover.

Common mistakes

• Ignoring exempt sales when counting turnover.
• Counting only one branch when the PAN has businesses in several states.
• Making one inter-state sale of goods without registering.
• Collecting "GST" on bills before getting a GSTIN.

After registration: books that match

Once registered, monthly returns depend on clean books. If you keep accounts in TallyPrime, Cashflow OS gives a phone and web view of sales, purchases and outstanding, and prepares GSTR-1 and GSTR-3B views from the Tally data with JSON download for the portal. Registration and filing are done on the GST portal.