Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

GST Registration: Threshold, Compulsory Cases and Procedure

Updated 11 October 2026 · Fact-checked

GST registration is the process by which a taxable person is enrolled under the CGST Act and given a 15-digit GSTIN. A person must register if aggregate turnover crosses the prescribed threshold, or if they fall in a compulsory category. To answer a question, check turnover, then category, then procedure.

Understand GST Registration

GST is a tax on supply of goods and services. To collect it and claim input tax credit, a business must first be registered. Registration gives the business a unique number, the GSTIN, and makes it a registered person.

The basic rule is that a supplier is liable to register when aggregate turnover in a financial year exceeds the threshold limit. Under Section 2(6) of the CGST Act, aggregate turnover covers outward supplies. It is the aggregate value of all taxable supplies (excluding inward supplies on which tax is payable under reverse charge), exempt supplies, exports of goods and/or services, and inter-State supplies of persons with the same PAN, computed on an all-India basis. Exempt supplies, as defined in the Act, include non-taxable supplies, so those are counted too. The figure excludes central tax, State/UT tax, integrated tax and cess. Keep taxable supplies and exempt supplies (including non-taxable supplies) as separate items in your working, and add both. The threshold depends on the supplier and the State. For suppliers of goods, the general limit is ₹40 lakh. For suppliers of services, it is ₹20 lakh. For special category States, the limits are lower. Check the latest notifications before the exam, because limits are set by notification and can change.

Some persons must register whatever their turnover. These are compulsory registration cases under Section 24 of the CGST Act. Examples are persons making inter-State taxable supplies, casual taxable persons, non-resident taxable persons, persons liable to pay tax under reverse charge, e-commerce operators who are required to collect tax at source under Section 52, and persons supplying through an e-commerce operator. A person making an inter-State taxable supply of goods must register irrespective of turnover (Section 24(i)). Several of these rules are relaxed by notification, so state them "as notified". For example, inter-State supply of services is exempted by notification from compulsory registration for suppliers whose aggregate turnover is below the threshold. Small suppliers of goods making only intra-State supplies through an e-commerce operator are also exempted up to the threshold, as notified. A person below the threshold can also register voluntarily. Once registered, the person must follow all the rules for registered persons.

The composition scheme under Section 10 is an optional, simpler scheme for small taxpayers. The taxpayer pays tax at a low fixed rate on turnover, files fewer returns, but cannot collect tax from customers or claim input tax credit. The scheme is open to eligible taxpayers, such as manufacturers, traders of goods and restaurant service providers, up to the notified turnover limit. It is barred for persons who:

make inter-State outward supplies
supply through e-commerce operators who collect tax at source
supply goods that are not leviable to tax under the Act, or notified goods such as ice cream and tobacco
supply services other than restaurant services, except that services up to 10% of turnover in the preceding financial year or ₹5 lakh, whichever is higher, are permitted

Section 10(2A) is a separate scheme for suppliers of services (and certain others), with its own conditions and its own turnover limit. Service providers who want composition use that scheme. Do not mix its conditions with those of the Section 10 scheme.

For the procedure, the applicant files an application on the common GST portal, with PAN, mobile number and email verification, in Part A, then the detailed form in Part B with documents. The officer approves it, or raises a query, within the prescribed time. The applicant receives a registration certificate with the GSTIN.

A normal person must apply within 30 days of becoming liable. If the application is made in time, registration is effective from the date the person became liable. If it is made late, it is effective from the date of grant. A casual or non-resident taxable person must apply at least 5 days before starting business. For these persons, registration is effective from the date of grant of registration or commencement of business, whichever is later, and not from the date of liability.

Key rules to remember

Structure of GSTIN: GSTIN = 2-digit State code + 10-character PAN + 1 entity number + Z + 1 check digit (15 characters); The 13th character shows how many registrations the same PAN holds in that State. The 14th is the letter Z by default.
Aggregate turnover: Aggregate turnover = taxable supplies (excluding inward supplies under reverse charge) + exempt supplies (including non-taxable supplies) + exports of goods and/or services + inter-State supplies, of persons with the same PAN on an all-India basis; excluding central tax, State/UT tax, integrated tax and cess; Computed on an all-India basis for persons with the same PAN. It covers outward supplies. Taxes and cess, and inward supplies on which tax is payable under reverse charge, are left out of the figure.
Time limit to apply: Normal person: within 30 days from the date of becoming liable. Casual/non-resident taxable person: at least 5 days before commencing business; For a normal person, registration is effective from the date of liability if applied in time (from the date of grant if applied late). For a casual or non-resident taxable person, it is effective from the date of grant of registration or commencement of business, whichever is later.
General threshold limits: Goods: ₹40 lakh; Services: ₹20 lakh (lower for special category States); Notified limits. State the limit as per current notification and mention that it is notifiable.
Separate registration: One registration per State per PAN; separate registration for each business vertical is allowed; A person with places of business in several States must register in each State.

How to solve GST Registration questions

Use this order for any question on GST registration. It keeps your answer in the provision, facts, conclusion format.

1Identify the person: supplier of goods, services or both; resident or non-resident; casual or regular.
2Check for compulsory registration first, such as inter-State taxable supply of goods (registration is needed irrespective of turnover), reverse charge, e-commerce, casual or non-resident taxable person. Note that inter-State supply of services is exempted by notification for suppliers below the threshold.
3If none applies, compute aggregate turnover using the correct inclusions and exclusions, then compare with the threshold for the supplier type and State.
4State the time limit: 30 days from liability, or 5 days before starting for casual and non-resident persons.
5If the question mentions composition, test eligibility: turnover limit, nature of supply, inter-State or e-commerce supply, and the effects of choosing it.
6Describe the procedure if asked: portal application, Part A and Part B, documents, approval, certificate and GSTIN.
7Close with a clear conclusion that names the Act (CGST Act) and states whether registration is required.

Quickest way: Compulsory first, turnover second

When to use it: Use it for short case-based questions on whether a person must register.

Scan the facts for a compulsory trigger: inter-State goods, reverse charge, casual or non-resident, e-commerce.
If a trigger exists, answer yes and skip the turnover test.
Otherwise compute aggregate turnover for the PAN and compare it with the limit.
Write the conclusion with the 30-day or 5-day deadline.

Common mistakes in GST Registration

Applying the threshold to every person
Students memorise the ₹40 lakh and ₹20 lakh limits and forget the exceptions.
Fix: Always check compulsory categories first. Threshold relief does not apply to them, unless a notification exempts the particular case.
Computing turnover for one State only
Students look at the branch figures given in the question.
Fix: Aggregate turnover is all-India for the same PAN, so add all branches and businesses.
Including GST or reverse-charge inward supplies in turnover
The words 'all supplies' make students add everything.
Fix: Exclude central tax, State/UT tax, integrated tax and cess, and inward supplies on which tax is payable under reverse charge. Do include taxable supplies, exempt supplies (which cover non-taxable supplies) and exports.
Saying a composition taxpayer can claim input tax credit
Students mix up regular and composition features.
Fix: Composition taxpayers pay tax at a fixed rate, cannot collect tax from customers and cannot claim input tax credit.
Giving the wrong deadline or effective date for casual or non-resident taxable persons
They remember only the 30-day rule and assume registration always runs from the date of liability.
Fix: These persons apply at least 5 days before commencing business, and registration is effective from the date of grant or commencement of business, whichever is later.
Treating the GSTIN as a random number
Students skip its structure.
Fix: Learn the 15-character structure: state code, PAN, entity number, Z, check digit.

Worked examples

Example 1

Ravi Traders, Pune, supplies only goods within Maharashtra. Its aggregate turnover in the year is ₹32 lakh, none of which is under reverse charge. Ravi is not an e-commerce supplier. Is he liable to register under GST?

Show the solution

Provision: under the CGST Act, a supplier is liable to register if aggregate turnover exceeds the threshold, unless a compulsory category applies.
Compulsory test: supply is intra-State, not by e-commerce, no reverse charge, not casual or non-resident. No compulsory trigger.
Turnover test: the general limit for suppliers of goods is ₹40 lakh. ₹32 lakh does not exceed ₹40 lakh.
Conclusion: registration is not mandatory.

Answer: Ravi Traders is not liable to register. He may register voluntarily, and he may consider the composition scheme if eligible.

Example 2

Meera Textiles, Surat, has aggregate turnover of ₹18 lakh and makes taxable inter-State supplies of goods to a buyer in Jaipur. Must she register? What is the time limit and what number will she receive?

Show the solution

Provision: a person making inter-State taxable supplies of goods is liable to register regardless of turnover, because inter-State supply is a compulsory category.
Facts: Meera makes inter-State taxable supply of goods, so the turnover of ₹18 lakh does not give relief.
Time limit: she must apply within 30 days from the date she becomes liable.
Procedure: file Part A on the GST portal with PAN, mobile and email, then Part B with documents. After approval, she receives a certificate.
GSTIN: a 15-character number, beginning with the State code for Gujarat, followed by her PAN, then the entity number, Z and a check digit.

Answer: Meera must register within 30 days of becoming liable, despite turnover of ₹18 lakh. She will receive a 15-character GSTIN.

Exam tips

Begin every case question by checking whether a compulsory registration ground applies, then turnover.
Write the threshold figures with the words 'as notified', since limits are set by notification.
In composition questions, list both the benefits (low rate, fewer returns) and the restrictions (no input tax credit, no tax collection).
Draw the GSTIN structure in one line, with an example, for easy marks.
End each answer with a clear one-line conclusion citing the CGST Act.

Practice questions from Various Initial Registrations and Licenses

GST Registration in other exams

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

GST Registration: frequently asked questions

What is the GST registration threshold limit?

The general limit is ₹40 lakh of aggregate turnover for suppliers of goods and ₹20 lakh for suppliers of services. Special category States have lower limits. Limits are notified, so check the current notification.

Who must register for GST irrespective of turnover?

Under Section 24, examples are persons making inter-State taxable supplies, casual taxable persons, non-resident taxable persons, those liable under reverse charge and e-commerce operators who collect tax at source. Persons supplying through e-commerce operators are also covered. An inter-State taxable supply of goods requires registration irrespective of turnover. Notifications relax some rules, for example inter-State supply of services by suppliers below the threshold, and small intra-State suppliers of goods through e-commerce operators, so state the rule as notified.

What is the difference between regular and composition scheme?

A regular taxpayer charges tax, claims input tax credit and files full returns. A composition taxpayer pays tax at a low fixed rate on turnover, files fewer returns, cannot charge tax to customers and cannot claim input tax credit. Composition is barred for inter-State outward suppliers and for those supplying through e-commerce operators who collect tax at source.

How do I register for GST online?

Go to the GST portal and fill Part A with PAN, mobile number and email, and verify them. Then fill Part B with business details and upload documents. After approval you get the certificate and GSTIN.