Indirect Tax Laws · Registration

Persons Liable and Not Liable for Registration under GST

Updated 5 October 2026 · Fact-checked

A supplier must register under CGST if aggregate turnover in a financial year crosses the threshold, or if they fall in a compulsory category whatever their turnover. Check the nature of supplies, the state, the aggregate turnover and the compulsory list, then check the exemptions. Persons making only exempt supplies, and certain agriculturists, need not register.

Understand Persons Liable and Not Liable for Registration

Registration is the entry point to GST. Without it, you cannot charge tax, collect it or claim input tax credit. The law therefore asks who is big enough, or risky enough, to be brought into the system.

The first test is aggregate turnover. It is calculated on a PAN-India basis, for all persons with the same PAN. It includes taxable supplies, exempt supplies, exports and inter-state supplies. It excludes central tax, state tax, integrated tax, UTGST and cess, and it excludes inward supplies on which you pay tax under reverse charge. A person whose aggregate turnover exceeds the threshold in a financial year becomes liable to register. The statutory limit is ₹20 lakh, or ₹10 lakh in special category states. For suppliers of services in special category states, the limit stays at ₹10 lakh. Notifications give a higher limit of ₹40 lakh for suppliers making only intra-state supplies of goods. That ₹40 lakh limit is lowered to ₹20 lakh in certain notified states, which include some special category states as well as Puducherry and Telangana. Always check the notified list for the state in the question.

The second test is the nature of the person and the supply. Some persons must register from the first rupee of supply, however small the turnover. Examples are casual taxable persons, non-resident taxable persons, input service distributors, e-commerce operators who collect tax at source, and persons deducting tax at source. Recipients liable to pay tax under reverse charge are also on this list, but notified exemptions may apply to them (see below).

A person making an inter-state taxable supply of goods must register irrespective of turnover (s.24(i)). There is no turnover-based relief for inter-state supply of goods. The notified exemption (Notification 10/2017-Integrated Tax) covers only inter-state supplies of services by a person whose aggregate turnover is within the threshold. Even that relief does not apply to the other compulsory categories.

Reverse charge needs care. A recipient who is liable to pay tax under reverse charge on inward supplies (s.9(3) or s.9(4)) falls in the compulsory list (s.24(iii)). This is subject to notified exemptions. For example, Notification 5/2017-Central Tax relieves a recipient from registration where the inward supplies are intra-state and the recipient's aggregate turnover is within the threshold. Read the facts and the notification terms given in the question. A supplier whose supplies are all taxable only in the hands of the recipient under reverse charge is not liable to register.

The third test is the exclusions. A person who makes only supplies that are wholly exempt or not taxable, or whose entire supplies are taxable only on reverse charge in the recipient's hands, is not liable to register. An agriculturist who supplies only produce from cultivation of land is also not liable.

In exams, work in order. Fix the person, add up the aggregate turnover correctly, apply the right limit, then run the compulsory list (with any notified exemption) and the exclusions. Registration is state-wise, so a business with branches in many states registers in each state where it makes taxable supplies.

Key rules to remember

Aggregate turnover: Taxable supplies + exempt supplies + exports + inter-state supplies (all-India, same PAN) − taxes − inward supplies on reverse charge; Include exempt supplies and exports. Exclude all GST taxes and cess. Exclude inward supplies on which you pay tax under reverse charge. Sum across all registrations under the same PAN.
General threshold: Aggregate turnover > ₹20 lakh (₹10 lakh in special category states) → liable; The test is 'exceeds'. Turnover exactly equal to the limit does not trigger liability. For suppliers of services in special category states the limit is ₹10 lakh.
Goods-only suppliers: Notified higher limit of ₹40 lakh for intra-state supplies of goods only; ₹20 lakh in notified states; The ₹20 lakh limit applies in notified states, which include some special category states as well as Puducherry and Telangana. Certain goods, such as ice cream, pan masala and tobacco, are excluded from this relief. Inter-state supply of goods is not covered; it needs registration under s.24(i). Check the notification terms given in the question.
Inter-state supplies: Inter-state supply of goods → compulsory registration (s.24(i)), whatever the turnover. Inter-state supply of services → exempt from registration up to the threshold (Notification 10/2017-Integrated Tax); The relief is for services only. It does not cover casual taxable persons, non-resident taxable persons, e-commerce operators and similar compulsory categories.
Compulsory registration categories: Inter-state supplier of goods | inter-state supplier of services above the threshold | casual taxable person | non-resident taxable person | recipient liable to pay tax under reverse charge, s.9(3)/9(4) (s.24(iii)), unless a notified exemption applies (e.g. Notification 5/2017-Central Tax for intra-state inward supplies where aggregate turnover is within the threshold) | ISD | TDS deductor | TCS e-commerce operator | notified e-commerce operator liable under 9(5) | OIDAR supplier from outside India to unregistered persons | agent | other notified persons; These do not depend on turnover, except where a notification gives relief. Learn this as a list. For reverse charge, the recipient who pays the tax is in the list, subject to notified exemptions; the supplier whose supplies are all taxed on reverse charge does not register.
Persons not liable: Only exempt/non-taxable supplies | supplier whose supplies are all taxable only on reverse charge in the recipient's hands | agriculturist selling own produce; These are exclusions from the liability to register, not mere reliefs from tax.

How to solve Persons Liable and Not Liable for Registration questions

Use the same sequence for every question, whether it is an MCQ or a descriptive case.

1Identify the person, the state and the type of supply: goods only, services only or both. Note whether the supplies are intra-state or inter-state.
2Compute aggregate turnover. Add taxable, exempt and export supplies for all registrations with the same PAN. Remove GST taxes, and remove inward supplies on reverse charge.
3Pick the correct threshold: ₹20 lakh or ₹10 lakh for special category states, or the notified higher limit for suppliers of goods only who make intra-state supplies. Check the state and the goods against the notification.
4Check whether any compulsory registration category applies, which makes turnover irrelevant. Scan the facts for words like casual, non-resident, reverse charge, e-commerce, ISD, TDS, and inter-state supply of goods.
5Apply the exclusions: only exempt or non-taxable supplies, supplies all taxable on reverse charge in the recipient's hands, and agriculturists.
6State the conclusion in provision-facts-conclusion form, and give the date or trigger point if the question asks when registration is needed.

Quickest way: Four-gate screen

When to use it: Use this for MCQs and for short parts of descriptive answers when time is limited.

Gate 1: Any compulsory category in the facts (including inter-state supply of goods)? If yes, the person must register, unless a notified exemption in the facts applies (for example, a reverse charge recipient covered by a notification). Stop.
Gate 2: Only exempt, nil-rated, non-taxable or reverse charge supplies by the supplier, or agricultural produce? If yes, not liable. Stop.
Gate 3: Compute aggregate turnover including exempt and exports. Exclude GST and reverse charge inwards.
Gate 4: Compare with the right limit for the state and the nature of supply. Liable only if turnover exceeds it.

Common mistakes in Persons Liable and Not Liable for Registration

Leaving out exempt supplies and exports while computing aggregate turnover.
Students confuse aggregate turnover with taxable turnover.
Fix: Always include exempt supplies and exports. Exclude only taxes, cess and inward reverse charge supplies.
Applying the threshold state by state instead of on a PAN-India basis.
Registration is state-wise, so students assume turnover is also tested state-wise.
Fix: Add up turnover across all states and all registrations with the same PAN, then compare with the limit.
Treating a casual taxable person or non-resident taxable person as exempt because of low turnover.
Students apply the general threshold to everyone.
Fix: Compulsory categories must register regardless of turnover. Check them first.
Using ₹40 lakh for a supplier of goods and services, for inter-state supplies of goods, or for restricted goods such as ice cream, pan masala and tobacco.
Students memorise the number and drop its conditions.
Fix: The higher limit is for intra-state supplies by suppliers of goods only, with notified exceptions. Read the conditions.
Registering a person who supplies only exempt goods, or whose supplies are all taxed under reverse charge in the recipient's hands.
Students look at turnover only and ignore the nature of the supplies.
Fix: Persons making only exempt, non-taxable or reverse charge supplies are not liable to register, whatever their turnover.
Saying turnover equal to the limit triggers registration.
Careless reading of the word 'exceeds'.
Fix: Liability arises only when turnover is more than the limit.

Worked examples

Example 1

Ravi, a trader in a non-special-category state, supplies only goods, and all his supplies are within his state. In the financial year he makes taxable supplies of ₹30,00,000, supplies exempt goods worth ₹6,00,000 and supplies nil-rated goods worth ₹5,00,000. Total CGST and SGST charged is ₹1,80,000, and this is not part of the amounts above. Is Ravi liable to register? Assume the goods are not ice cream, pan masala or tobacco, and the ₹40 lakh limit for intra-state supplies by goods-only suppliers applies.

Show the solution

Identify the person: a supplier of goods only, intra-state only, in a non-special category state, with no compulsory category in the facts.
Compute aggregate turnover: ₹30,00,000 + ₹6,00,000 + ₹5,00,000 = ₹41,00,000. The ₹1,80,000 tax is already excluded.
Compare with the limit: ₹41,00,000 is more than ₹40,00,000.
Conclude: the limit is crossed because exempt and nil-rated supplies count towards aggregate turnover.

Answer: Ravi is liable to register because his aggregate turnover of ₹41,00,000 exceeds ₹40,00,000.

Example 2

Meera, a consultant based in Delhi, provides only services. She supplies services worth ₹14,00,000 to clients in Delhi and ₹4,00,000 to clients in other states. She also receives legal services of ₹3,00,000 from an advocate in Delhi on which she pays tax under reverse charge. As a reverse charge recipient she falls in s.24(iii), but assume she is covered by Notification 5/2017-Central Tax, because the inward supply is intra-state and her aggregate turnover is within the threshold. She is not in any other compulsory category, and the notified exemption for inter-state supplies of services up to the threshold applies. Is she liable to register? Would your answer change if she were based in a special category state with a ₹10 lakh limit?

Show the solution

Identify the person: a service provider, with intra-state and inter-state supplies of services, and a reverse charge liability on the advocate's services.
Compute aggregate turnover: ₹14,00,000 + ₹4,00,000 = ₹18,00,000. Inward reverse charge services of ₹3,00,000 are excluded.
Delhi: the limit for services is ₹20,00,000. ₹18,00,000 does not exceed it. Her inter-state supplies of services are within the notified exemption, and the reverse charge on the intra-state inward supply does not force registration because the notification covers her.
Special category state: the limit is ₹10,00,000. ₹18,00,000 exceeds it, so she would be liable on turnover alone. The reverse charge notification would not help, since her turnover is above the threshold.
Conclude on both scenarios.

Answer: In Delhi, Meera is not liable because aggregate turnover of ₹18,00,000 does not exceed ₹20,00,000, and the notified exemptions cover her inter-state supplies and her reverse charge liability. In a special category state with a ₹10 lakh limit, she would be liable.

Exam tips

Write the aggregate turnover working in numbers. Examiners give marks for the correct inclusions and exclusions even when the final answer is wrong.
Scan the case for compulsory-category keywords such as casual, non-resident, reverse charge, e-commerce, ISD and TDS, and for inter-state supply of goods, before doing any arithmetic. For a reverse charge recipient, also check whether a notified exemption applies to the facts.
In MCQs, watch for traps: exempt supplies hidden in the figures, reverse charge inwards added by mistake, and goods versus services limits.
Where the question gives a state, check whether it is a special category state and use the correct limit. For goods-only suppliers, check whether the state is in the notified list with a ₹20 lakh limit.
Close each descriptive answer with a one-line conclusion: liable or not liable, and the reason.

Practice questions from Registration

Persons Liable and Not Liable for Registration in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA IntermediatePersons Liable for Registration and Threshold Limits

Persons Liable and Not Liable for Registration: frequently asked questions

Who is liable to register under GST?

A supplier whose aggregate turnover in a financial year exceeds the applicable threshold must register. Certain persons, such as casual taxable persons, non-resident taxable persons, inter-state suppliers of goods and recipients liable to pay tax under reverse charge, must register regardless of turnover. Notified exemptions can relieve some of these, such as certain reverse charge recipients, so always check the exemptions and exclusions as well.

What is the registration threshold for special category states?

The statutory limit is ₹10 lakh instead of ₹20 lakh, and it applies to suppliers of services. For goods-only suppliers, the notified ₹40 lakh limit is lowered to ₹20 lakh in certain notified states, including some special category states, Puducherry and Telangana. Read the question for the state and check the notified limit.

Who is not liable to register under the CGST Act?

A person who makes only exempt or non-taxable supplies, or only supplies on which the recipient pays tax under reverse charge, is not liable. An agriculturist supplying only produce from cultivation of land is also not liable.

Does aggregate turnover include exempt supplies and exports?

Yes. Aggregate turnover includes taxable supplies, exempt supplies, exports and inter-state supplies of all registrations under the same PAN. It excludes GST taxes, cess and inward supplies on reverse charge.