Taxation · Registration

Persons Liable for Registration and Threshold Limits under GST

Updated 5 October 2026

Under Section 22 of the CGST Act, a supplier must register if aggregate turnover in a financial year exceeds the threshold for their state and type of supply. Add taxable, exempt, export and inter-State supplies on a PAN-wide, all-India basis. Exclude taxes, cess and inward supplies on which you pay RCM. Then compare with the limit.

Understand Persons Liable for Registration and Threshold Limits

GST is levied on supply. Not every supplier must register. Small suppliers are kept outside the system by a threshold limit. Once turnover crosses the limit, registration becomes compulsory.

Section 22 says a supplier is liable to register in the state or Union territory from where the supply is made, if aggregate turnover in a financial year exceeds the specified limit. The limit depends on two things: what you supply and where you operate.

Section 22(1) itself prescribes ₹20 lakh for all suppliers, whether of goods or services, and ₹10 lakh in special category states. Notification No. 10/2019-Central Tax (as amended) raises the limit to ₹40 lakh for suppliers of goods only, except in the states listed in it.

The limits are:

Goods only: ₹40 lakh under Notification No. 10/2019-Central Tax (as amended). The notification does not apply in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. There the ₹40 lakh limit does not apply and the goods limit stays at ₹20 lakh. Although Assam, Jammu and Kashmir and Himachal Pradesh are special category states, they have the ₹40 lakh limit for goods.
Services, or both goods and services: ₹20 lakh in most states. In the special category states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand, the limit is ₹10 lakh. Although Assam, Jammu and Kashmir and Himachal Pradesh are special category states, they have the ₹20 lakh limit for services.

The ₹40 lakh limit is only for suppliers of goods only. A supplier who supplies any services along with goods uses the services limit. In every question, follow the state and facts given.

Aggregate turnover is wider than normal turnover. Under Section 2(6), it is the aggregate value of all taxable supplies (excluding inward supplies on which tax is payable by the recipient under RCM), exempt supplies, exports and inter-State supplies of persons having the same PAN, computed on an all-India basis. It excludes CGST, SGST, UTGST, IGST and cess.

A point on reverse charge (RCM): Section 2(6) expressly excludes the value of inward supplies on which tax is payable under RCM by you as the recipient. They are never added to your aggregate turnover.

Some persons must register regardless of turnover, such as inter-State suppliers of taxable services and casual taxable persons. These are covered under compulsory registration. Here, focus on the turnover-based liability and how to compute turnover.

Key rules to remember

Liability to register (Section 22): Register if aggregate turnover in a financial year > threshold limit; The test is 'exceeds'. Turnover exactly equal to the limit does not trigger registration.
Standard threshold limits: Goods only: ₹40 lakh | Services or goods and services: ₹20 lakh; Section 22(1) prescribes ₹20 lakh for all suppliers (₹10 lakh in special category states). Notification No. 10/2019-Central Tax (as amended) raises the limit to ₹40 lakh for suppliers of goods only, except in the states listed in it. A mixed supplier of goods and services uses the services limit. Some states have lower limits, given below. Check the state named in the question.
State-specific limits: Goods only: ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand | Services or goods and services: ₹10 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand; Use only where the question names one of these states. Although Assam, Jammu and Kashmir and Himachal Pradesh are special category states, they use ₹40 lakh for goods and ₹20 lakh for services. Puducherry and Telangana use ₹20 lakh for services. Follow the facts given in the question.
Aggregate turnover: All taxable supplies (excluding inward supplies on which you pay tax under RCM) + exempt supplies + exports + inter-State supplies (same PAN, all India), excluding CGST, SGST, UTGST, IGST and cess; Section 2(6) excludes the taxes and cess above and the value of inward supplies on which you pay tax under RCM, so never add your own inward supplies. Do not deduct input costs.
Time of liability: Liable from the date aggregate turnover crosses the limit; Apply for registration within 30 days of becoming liable. If you apply within 30 days, registration is effective from the date you became liable.

How to solve Persons Liable for Registration and Threshold Limits questions

Use this method for any question asking whether a person must register under GST because of turnover.

1Identify the person and the PAN. Group all businesses held under the same PAN across India.
2Identify the nature of supply: goods only, services only, or both. Note the state, as some states have lower limits.
3List all supplies: taxable, exempt, nil-rated, zero-rated (exports) and inter-State supplies.
4Remove the taxes: CGST, SGST, UTGST, IGST and cess. Do not add any inward supplies. Section 2(6) excludes inward supplies on which you pay tax under RCM.
5Add up to find aggregate turnover for the financial year and compare it with the relevant limit.
6State the conclusion clearly: liable or not liable, and from when, with the Section 22 basis.

Quickest way: Threshold check in under a minute

When to use it: Use in MCQs and short written parts where figures are given and you need only the registration conclusion.

Underline the state, nature of supplies and PAN in the question.
Pick the limit: ₹40 lakh for goods only, ₹20 lakh for services or mixed supplies. If the state is Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura or Uttarakhand, the services and mixed limit is ₹10 lakh. For goods only, the limit is ₹20 lakh in those states and also in Puducherry and Telangana. Use the facts given in the question.
Add all taxable, exempt, export and inter-State supplies. Exclude GST charged. Do not add inward supplies, including those on which you pay RCM.
Compare with the limit. Exactly equal means not liable.
For written answers use three lines: provision (Section 22), facts with computation, conclusion. This earns step marks.

Common mistakes in Persons Liable for Registration and Threshold Limits

Leaving exempt supplies and exports out of aggregate turnover.
Students think only taxable supplies matter for GST.
Fix: Remember the definition includes taxable, exempt and export supplies. Add them all.
Treating turnover equal to the limit as liable.
Students read the limit as 'at least'.
Fix: The law says 'exceeds'. Registration is needed only when turnover is more than the limit.
Computing turnover separately for each business of the same owner.
Each business may have a separate registration or books.
Fix: Aggregate turnover is PAN-based and all-India. Combine all businesses under one PAN.
Deducting purchases or expenses from turnover, or adding inward supplies.
Confusion with profit computation, or with the RCM liability on purchases.
Fix: Turnover is the value of supplies, excluding the taxes charged. Never add inward supplies, even those on which you pay RCM. Section 2(6) excludes them.
Using the wrong limit for mixed suppliers.
Students apply ₹40 lakh whenever goods are involved.
Fix: The ₹40 lakh limit under Notification No. 10/2019-Central Tax is for goods-only suppliers. If services are also supplied, use the services limit: ₹20 lakh, or ₹10 lakh in the special category states named in the question.

Worked examples

Example 1

Mr. Rao, a sole proprietor in Maharashtra, supplies only goods. In a financial year his taxable supplies are ₹28,00,000, exempt supplies ₹6,00,000 and exports ₹7,00,000 (all values exclude GST). He also paid tax of ₹1,50,000 under RCM on inward supplies he received. Is he liable to register under Section 22?

Show the solution

Maharashtra has the standard limit and Mr. Rao supplies goods only, so the limit is ₹40 lakh.
Aggregate turnover = taxable ₹28,00,000 + exempt ₹6,00,000 + exports ₹7,00,000 = ₹41,00,000.
The ₹1,50,000 is tax Mr. Rao paid under RCM on his own inward supplies. Section 2(6) excludes inward supplies on which he pays tax under RCM, so they are never added to aggregate turnover and no adjustment is made.
Compare: ₹41,00,000 exceeds ₹40,00,000.

Answer: Mr. Rao's aggregate turnover is ₹41,00,000, which exceeds ₹40 lakh. He is liable to register under Section 22.

Example 2

Ms. Devi has two proprietary businesses under one PAN in a normal category state. Business A supplies services worth ₹12,00,000 and Business B supplies only services worth ₹7,00,000 in a financial year. Both values exclude GST. Is she liable to register?

Show the solution

Both businesses are under the same PAN, so turnover is combined.
Aggregate turnover = ₹12,00,000 + ₹7,00,000 = ₹19,00,000.
She supplies services, so the limit is ₹20 lakh in a normal category state.
Compare: ₹19,00,000 does not exceed ₹20,00,000.

Answer: Aggregate turnover is ₹19,00,000, which does not exceed ₹20 lakh. Ms. Devi is not liable to register on turnover grounds, unless another provision makes registration compulsory.

Exam tips

Always write the aggregate turnover computation line by line, even when the answer is obvious. It earns step marks.
In MCQs, read for traps: GST included in figures, inward supplies or RCM purchases, exempt supplies and a second business under the same PAN.
Write 'Section 22 of the CGST Act, 2017' in your conclusion and state the limit you applied.
Check the nature of supply and state before choosing the limit.
If the question mentions inter-State services or casual taxable persons, say turnover limit does not help and link to compulsory registration.

Practice questions from Registration

Persons Liable for Registration and Threshold Limits: frequently asked questions

What is the GST registration limit for goods and services?

Section 22(1) prescribes ₹20 lakh of aggregate turnover in a financial year for all suppliers, whether of goods or services (₹10 lakh in special category states). Notification No. 10/2019-Central Tax (as amended) raises the limit to ₹40 lakh for suppliers of goods only, except in the states listed in it. A supplier of services, or of both goods and services, uses ₹20 lakh in most states. Registration is required only when turnover exceeds the limit.

What is the registration limit for special category and other states with lower limits?

For goods-only suppliers, the limit stays at ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. For services or mixed supplies, the limit is ₹10 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. Although Assam, Jammu and Kashmir and Himachal Pradesh are special category states, they have ₹40 lakh for goods and ₹20 lakh for services. In an exam, follow the state given in the question.

What does aggregate turnover include under GST?

It is the aggregate value of all taxable supplies, exempt supplies, exports and inter-State supplies of persons with the same PAN, computed on an all-India basis. It excludes CGST, SGST, UTGST, IGST and cess. Section 2(6) also excludes inward supplies on which you pay tax under reverse charge, so never add them.

Within how many days must I apply after crossing the limit?

You must apply within 30 days from the date you become liable to register. Liability starts on the date aggregate turnover crosses the limit. If you apply within the 30 days, registration is effective from the date you became liable.