One of the most confusing topics under GST is the threshold limit for registration. Every small business owner asks the same questions:
- “Do I need a GST number?”
- “My turnover is small; do I need to register?”
- “Is the limit ₹40 lakh or ₹20 lakh?”
- “Why do some states have a ₹10 lakh limit?”
- “What if I’m selling online?”
The truth is, GST registration rules are not the same for everyone. Threshold limits depend on:
- whether you sell goods or services
- which state your business is located in
- whether your supplies are taxable or exempt
- whether you fall under compulsory registration
This blog will simplify the entire concept of GST threshold limits and give you a complete, updated, state-wise breakdown of ₹40 lakh, ₹20 lakh, and ₹10 lakh categories — with examples so you can understand where your business fits.
What Are GST Threshold Limits?
GST threshold limits refer to the minimum annual turnover after which a business becomes liable to register under GST.
These limits are set under Section 22 of the CGST Act.
There are different limits for goods and services, and some states follow different caps because of special status.
Threshold Limits for Goods (Normal Category States)
₹40 lakh turnover limit applies to most states for goods.
This means, if you sell goods, and your annual aggregate turnover is up to ₹40 lakh, you are not required to register under GST — unless compulsory registration applies.
States with ₹40 lakh limit for Goods:
- Delhi
- Haryana
- Punjab
- UP
- Rajasthan
- Gujarat
- Maharashtra
- Goa
- Karnataka
- Tamil Nadu
- West Bengal
- Bihar
- Odisha
- Assam
- Andhra Pradesh
- Telangana
- Kerala
- Madhya Pradesh
- Chhattisgarh
(and most other states)
- Applies only for suppliers of goods
- Not applicable to suppliers of services
- Not applicable for ice cream, pan masala, tobacco manufacturers
- Not applicable for inter-State goods suppliers
Threshold Limit for Goods in Special Category States (₹20 lakh)
Some states have chosen a lower limit for goods:
₹20 lakh Threshold States for Goods:
- Tamil Nadu
- Puducherry
(Though not technically “special category states”, these states opted for a lower limit.)
Threshold Limit for Goods in Special Category States (₹10 lakh)
The following special category states have a ₹10 lakh limit for goods:
- Arunachal Pradesh
- Manipur
- Mizoram
- Nagaland
- Tripura
- Meghalaya
- Sikkim
- Uttarakhand
- Himachal Pradesh
If you sell goods from any of these states, you must register if your turnover crosses ₹10 lakh.
Threshold Limit for Services (All States)
Unlike goods, the threshold for services is the same for almost every state:
₹20 lakh limit for services
(This is the default rule for most states.)
₹10 lakh limit for services (Special Category States)
- Manipur
- Mizoram
- Nagaland
- Tripura
- Arunachal Pradesh
- Meghalaya
- Sikkim
- Uttarakhand
- Himachal Pradesh
Service providers in these states must register after ₹10 lakh turnover.
Summary Table: GST Threshold Limits
| Supply Type | Normal States | Special Category States |
| Goods | ₹40 lakh | ₹10 lakh / ₹20 lakh |
| Services | ₹20 lakh | ₹10 lakh |
Important: Threshold Limit Applies Based on “Place of Business”
Your threshold limit depends on where your business is located, not where your customers are.
Example
- If you’re a shop owner in Delhi selling to Bihar, Punjab, Karnataka, etc.,
- the limit is still ₹40 lakh, because your place of business = Delhi.
Exception: Inter-State Supply of Goods (Compulsory Registration Earlier)
Earlier, every inter-state supplier of goods had to register irrespective of turnover.
BUT NOW: Small suppliers making inter-state supply of goods are exempt up to ₹40 lakh / ₹20 lakh / ₹10 lakh.
Exception:
- Ice cream
- Pan masala
- Tobacco
These businesses MUST register even at ₹1 turnover.
E-Commerce Selling Threshold Rules (Important)
For Goods:
Starting 2023, small sellers can sell goods on e-commerce platforms without GST registration if:
- their turnover is below the threshold limit
- they sell within the same state
- they meet platform compliances
For Services:
Service providers selling through e-commerce must register, irrespective of turnover (unless exempt).
Example: A tutor selling online via UrbanClap must register even if making ₹2 lakh annually.
Practical Examples for Better Understanding
Example 1: Turnover ₹35 lakh – sells goods from Delhi
- Threshold for goods in Delhi = ₹40 lakh
- No GST registration required.
Example 2: Service provider earning ₹15 lakh from Maharashtra
- Threshold for services = ₹20 lakh
- Not liable for GST registration.
Example 3: Goods supplier in Nagaland earning ₹12 lakh
- Threshold for goods in Nagaland = ₹10 lakh
- GST registration mandatory.
Example 4: Freelance designer from Manipur earning ₹11 lakh
- Threshold for services in Manipur = ₹10 lakh
- GST registration required.
Example 5: Amazon Seller with ₹4 lakh turnover
Selling goods within the same state
- No registration required (post-2023 changes)
- Selling outside the state
- Must register, regardless of turnover.
When Threshold Limits Do Not Apply (Compulsory Registration)
Section 24 overrides threshold limits.
Even if your turnover is ₹0, you MUST register if you are:
- Inter-state service supplier (except small-value exemption)
- E-commerce operator
- E-commerce seller (for services)
- Casual taxable person
- Non-resident taxable person
- Reverse charge liability
- TDS/TCS deductor
- Agent/consignment agent
- Input Service Distributor
Threshold rules do not save you from compulsory registration if you fall under these categories.
Common Myths About GST Threshold Limits
Myth 1: “My turnover is below ₹20 lakh, so GST never applies to me.”
Wrong. If you fall under compulsory registration, threshold limits don’t matter.
Myth 2: “The limit is same for goods and services.”
No — goods and services have different caps.
Myth 3: “The threshold applies for each branch separately.”
Incorrect. Threshold = PAN-wise aggregate turnover across India.
Myth 4: “Export turnover is not counted.”
Exports ARE included in aggregate turnover.
Conclusion
GST threshold limits play a huge role in deciding whether you need registration. Whether your limit is ₹40 lakh, ₹20 lakh, or ₹10 lakh depends on your state and type of supply. Once you understand this, GST compliance becomes much easier and predictable.
FAQs
1. What is the GST threshold limit for goods?
Most states have a ₹40 lakh limit, but some special category states have ₹10 lakh or ₹20 lakh limits.
2. What is the GST threshold limit for services?
₹20 lakh for most states and ₹10 lakh for special category states.
3. Does the ₹40 lakh limit apply to service providers?
No. Service providers follow ₹20 lakh or ₹10 lakh limits.
4. What is the threshold limit for e-commerce sellers?
Goods sellers get exemption up to the threshold, but service sellers must register irrespective of turnover.
5. Does threshold apply PAN-wise or state-wise?
Threshold limit applies PAN-wise, considering aggregate turnover across all states.
6. Do exports count in turnover?
Yes. Exports are included in aggregate turnover.
7. Are inter-state suppliers exempt from threshold?
Service providers get an exemption up to ₹20 lakh/₹10 lakh; goods suppliers must follow updated rules.
