Direct and Indirect Taxation · Registration

Persons Liable for GST Registration and Threshold Limits

Updated 10 October 2026 · Fact-checked

Under Section 22 of the CGST Act, a supplier must register if aggregate turnover in a financial year exceeds ₹20 lakh (₹10 lakh in special category States). Section 24 overrides this limit and makes certain persons, such as inter-State suppliers and reverse charge payers, register from the first rupee of taxable supply.

Understand Persons Liable for Registration and Threshold Limits

Registration is the entry gate to GST. You cannot charge GST or claim input tax credit properly unless you are registered. The law therefore says who must register, and who must register even if they are small.

Section 22 is the general rule based on size. Every supplier is liable to register in the State or Union territory from where he makes a taxable supply, if his aggregate turnover in a financial year exceeds ₹20 lakh. Where he makes taxable supplies from a special category State, the limit is ₹10 lakh. The Act also lets the Government, on the Council's recommendation, raise the limits: a special category State limit up to ₹20 lakh, and for suppliers engaged exclusively in supply of goods, the ₹20 lakh limit up to ₹40 lakh (on request of a State, with conditions notified).

Aggregate turnover under the Explanation to Section 22 includes all supplies made by the taxable person, on his own account or on behalf of all his principals. A registered job worker's supply of goods after job work is treated as the principal's supply, and its value is not included in the job worker's aggregate turnover. The special category States are those in Article 279A(4)(g) of the Constitution, except Jammu and Kashmir, and except Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand, as the Act's Explanation states.

Section 24 begins with "Notwithstanding anything contained in sub-section (1) of section 22". So the threshold does not protect these persons. They must register whatever their turnover. The list includes persons making inter-State taxable supply, casual taxable persons, persons paying tax under reverse charge, non-resident taxable persons, persons required to deduct tax under section 51, agents, Input Service Distributors, every electronic commerce operator who is required to collect tax at source under section 52, and suppliers through such operators (other than supplies under section 9(5)).

Section 22 also covers transfers. If a registered person's business is transferred as a going concern, the transferee or successor is liable to register from the date of transfer or succession. In amalgamation or demerger under a court or Tribunal order, the transferee must register from the date the Registrar of Companies issues the certificate of incorporation giving effect to the order.

Key rules to remember

General threshold (Section 22(1)): Register if aggregate turnover in a financial year > ₹20,00,000; Applies to a supplier in States other than special category States. The test is "exceeds", so exactly ₹20 lakh does not trigger registration.
Special category State threshold: Register if aggregate turnover in a financial year > ₹10,00,000; First proviso to Section 22(1). The Government may enhance it up to ₹20 lakh on request of the State, on the Council's recommendation.
Enhanced limit for goods-only suppliers: ₹20,00,000 may be raised up to ₹40,00,000; Only for a supplier engaged exclusively in supply of goods, on a State's request and Council's recommendation, with notified conditions. Exempt interest or discount on deposits, loans or advances does not break 'exclusively goods'.
Aggregate turnover (Explanation to Section 22): Aggregate turnover includes all supplies made by the taxable person on own account and on behalf of all principals; A registered job worker's value of goods supplied after job work is excluded; it is the principal's supply.
Compulsory registration (Section 24): Listed persons must register irrespective of Section 22(1) threshold; Covers inter-State taxable supply, casual and non-resident taxable persons, reverse charge payers, section 51 deductors, agents, ISDs, e-commerce operators required to collect tax at source, and others listed.
Transfer of business (Section 22(3)): Transferee liable to register from the date of transfer or succession; For a going concern transferred by a registered taxable person.

How to solve Persons Liable for Registration and Threshold Limits questions

Use this order for any registration question. Check Section 24 first, because it removes the threshold.

1Read the facts and list each activity of the person: goods or services, inter-State or intra-State, own or as agent, online or offline.
2Check Section 24 categories one by one: inter-State taxable supply, casual or non-resident taxable person, reverse charge, section 51 deduction, agent, ISD, e-commerce operator or supplier through such operator, online services from outside India, and so on. If any applies, the person must register whatever the turnover.
3If no Section 24 case applies, decide the State: special category State or other State.
4Compute aggregate turnover for the financial year, including supplies on own account and on behalf of principals, and excluding a job worker's value of goods returned after job work.
5Compare with the limit: ₹20 lakh, ₹10 lakh for special category States, or the enhanced limit if the question says it has been notified.
6Check for transfer, succession, amalgamation or demerger under Section 22(3) and (4) and fix the date of liability.
7Conclude with the section number and reason in one line, for example liable under Section 24(i) as inter-State supplier.

Quickest way: Two-gate check

When to use it: For MCQs and short case questions where you have under two minutes.

Gate 1: scan the facts for a Section 24 trigger word such as inter-State, casual, non-resident, reverse charge, agent, e-commerce. If found, answer: must register.
Gate 2: if none, compare turnover with ₹20 lakh or ₹10 lakh and remember the word is "exceeds".
Watch for tricks: services-only versus goods-only supplier, job worker value, and whether the State is a special category State.

Common mistakes in Persons Liable for Registration and Threshold Limits

Applying the ₹20 lakh limit to an inter-State supplier.
Students remember the threshold and forget that Section 24 begins with a non-obstante clause.
Fix: Always test Section 24 first. Inter-State taxable supply means registration is compulsory from the start.
Treating turnover of exactly ₹20 lakh as requiring registration.
Students read the limit as 'up to' or 'at least'.
Fix: The Act says 'exceeds'. Turnover must be more than the limit.
Assuming all hill or north-eastern States have the ₹10 lakh limit.
The words 'special category States' sound broad.
Fix: The Explanation excludes Jammu and Kashmir and also Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from the meaning. Use the facts of the question and the State named.
Leaving out supplies made on behalf of principals from aggregate turnover.
Students count only the agent's own sales.
Fix: Aggregate turnover includes supplies on own account and on behalf of all principals.
Counting a job worker's returned goods in the job worker's turnover.
The goods physically leave the job worker's premises, so students count them as his supply.
Fix: Under the Explanation, supply after job work by a registered job worker is the principal's supply, and the value is excluded from the job worker's aggregate turnover.
Quoting a wrong date for liability after a company amalgamation.
Students use the court order date.
Fix: Under Section 22(4), the transferee is liable from the date the Registrar of Companies issues the certificate of incorporation giving effect to the order.

Worked examples

Example 1

Ravi Traders, Pune (not a special category State), supplies only goods within Maharashtra. Its aggregate turnover in the financial year is ₹18,50,000. Separately, Meena Textiles, Jaipur, has turnover of only ₹6,00,000 but regularly makes inter-State taxable supplies of goods. Examine the liability of both to register.

Show the solution

Ravi Traders: check Section 24. Supplies are intra-State and no other Section 24 category is given, so no compulsory registration.
Apply Section 22(1): the limit for a State other than a special category State is ₹20 lakh.
Aggregate turnover ₹18,50,000 does not exceed ₹20,00,000, so it is not liable.
Meena Textiles: it makes inter-State taxable supply, which falls under Section 24(i).
Section 24 applies notwithstanding Section 22(1), so the turnover of ₹6,00,000 is irrelevant.

Answer: Ravi Traders is not liable to register under Section 22(1). Meena Textiles must register compulsorily under Section 24(i).

Example 2

Sohan Enterprises, a goods-and-services supplier in Gujarat, has own supplies of ₹14,00,000 and made supplies of ₹9,00,000 on behalf of its principals in the financial year. All supplies are intra-State. Is it liable to register?

Show the solution

Check Section 24: Section 24(vii) covers persons who make taxable supply on behalf of other taxable persons as an agent or otherwise.
Since Sohan makes supplies on behalf of principals, it falls within Section 24(vii) and must register regardless of turnover.
Cross-check Section 22 also: aggregate turnover includes own supplies and supplies on behalf of all principals, so ₹14,00,000 + ₹9,00,000 = ₹23,00,000.
Gujarat is not a special category State, so the limit is ₹20,00,000.
₹23,00,000 exceeds ₹20,00,000.

Answer: Sohan Enterprises is liable to register. It is covered by Section 24(vii) as an agent, and independently its aggregate turnover of ₹23,00,000 exceeds the ₹20 lakh limit of Section 22(1).

Exam tips

In MCQs, spot the Section 24 trigger words first. Inter-State, casual, non-resident and reverse charge usually decide the answer.
Write the section number with the reason in written answers, for example 'Section 24(i)' or 'Section 22(1)'. Examiners award step marks for the correct provision.
For turnover computation, show each component line by line: own supplies, supplies for principals, and exclusions, then total.
Remember the difference in one line: Section 22 is size based and has a threshold; Section 24 is category based and has no threshold.
Do not quote enhanced limits such as ₹40 lakh unless the question says the Government has notified it for the State and the supplier is goods-only.

Practice questions from Registration

Persons Liable for Registration and Threshold Limits in other exams

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

CA FinalPersons Liable and Not Liable for Registration

Persons Liable for Registration and Threshold Limits: frequently asked questions

What is the difference between Section 22 and Section 24 of the CGST Act?

Section 22 makes a supplier liable to register when aggregate turnover exceeds the threshold. Section 24 lists persons who must register notwithstanding Section 22(1), so no threshold protects them. Inter-State suppliers and casual taxable persons are examples.

What is the GST registration threshold for goods and services?

The Act's basic limit is ₹20 lakh of aggregate turnover in a financial year, and ₹10 lakh for supplies from special category States. The Government may raise these limits by notification, for example up to ₹40 lakh for goods-only suppliers, on a State's request and Council recommendation, subject to conditions.

Does a person making inter-State supplies need registration below ₹20 lakh?

Yes. Section 24(i) requires a person making any inter-State taxable supply to register, irrespective of turnover, because it applies notwithstanding Section 22(1).

What counts as aggregate turnover for Section 22?

It includes all supplies made by the taxable person, whether on his own account or on behalf of all his principals. The value of goods supplied after job work by a registered job worker is treated as the principal's supply and is not counted in the job worker's turnover.