The first question most new businesses ask is whether they need to register for GST at all. The answer depends on three things: what you sell, where you are, and whether you fall into one of the categories where turnover is irrelevant.
The turnover limits
| You supply | Normal category states | Special category states |
|---|---|---|
| Goods | Above Rs 40 lakh | Above Rs 20 lakh |
| Services | Above Rs 20 lakh | Above Rs 10 lakh |
The higher Rs 40 lakh limit for goods has applied since April 2019. It did not extend to services, which is the single most common misunderstanding we encounter — a consultant turning over Rs 30 lakh sometimes believes they are below the limit because they have heard "forty lakh" quoted.
Special category states include several north-eastern and hill states. If you operate in one, assume the lower figure applies and confirm before you conclude you are outside the net.
Aggregate turnover means more than you think
Aggregate turnover is computed on an all-India basis on the same PAN, and it includes taxable supplies, exempt supplies, exports and inter-state supplies. It is not just your taxable sales in one state. A business with two branches in different states adds them together.
When you must register regardless of turnover
Turnover becomes irrelevant in a number of situations. Registration is compulsory for:
- Anyone making inter-state taxable supplies
- Casual taxable persons and non-resident taxable persons
- Anyone liable to pay tax under reverse charge
- Persons required to deduct GST TDS or collect GST TCS
- Input service distributors
- Agents supplying on behalf of a principal
- E-commerce operators, and suppliers selling through them
- Providers of online information and database access services from outside India to unregistered recipients in India
- Suppliers of online money gaming from outside India
The e-commerce point catches a lot of small sellers. If you sell through a marketplace, the turnover threshold generally does not protect you. A person selling Rs 6 lakh a year through an online platform may still need to register.
Should you register voluntarily?
Registering below the threshold is allowed and is sometimes the right call. If your customers are registered businesses, they will want an invoice they can claim credit on, and an unregistered supplier can find itself quietly dropped from vendor lists. If you buy significant inputs, registration lets you claim credit on them.
Against that, registration brings a permanent monthly compliance cycle. Once you are in, returns are due whether or not you traded that month, and a nil return is still a return. Voluntary registration is a commitment, not a badge.
The practical answer
Work out your all-India aggregate turnover on your PAN, check which side of the goods or services line you fall on, then check the compulsory list. If you sell across state lines or through a marketplace, the compulsory list is usually where your answer is.