GST registration becomes compulsory once your aggregate turnover crosses ₹40 lakh if you supply only goods, or ₹20 lakh if you supply services (or a mix of goods and services). In four special category states — Mizoram, Tripura, Manipur and Nagaland — these limits drop to ₹20 lakh and ₹10 lakh respectively. A separate list of ten states and union territories never adopted the higher ₹40 lakh goods limit and stays at ₹20 lakh.
Turnover thresholds are only half the picture. Section 24 of the CGST Act lists cases — inter-state supply of goods, e-commerce sellers, reverse-charge liability, casual taxable persons and others — where registration is compulsory the moment you start that activity, irrespective of how small your turnover is.
The basic threshold: ₹20 lakh, raised to ₹40 lakh for goods
Section 22(1) of the CGST Act sets the default registration threshold at ₹20 lakh of aggregate turnover in a financial year, for any state or union territory (other than special category states).
Section 22(1) was later amended to add a proviso letting the Government, at a State's request and on the GST Council's recommendation, raise this limit up to ₹40 lakh for persons engaged exclusively in the supply of goods — but that proviso only came into force on 1 January 2020. The ₹40 lakh benefit that exclusive goods suppliers have actually used since 1 April 2019 was granted earlier and separately, as a registration exemption under Section 23(2) of the CGST Act (the power to exempt categories of persons from registration), not as a Section 22 threshold increase.
CGST Act 2017, Section 22(1) and its proviso (proviso in force from 1 January 2020).
Goods vs services: why the split exists
Notification No. 10/2019-Central Tax, dated 7 March 2019, exempted persons whose aggregate turnover does not exceed ₹40 lakh from registration — but only if they are engaged exclusively in the supply of goods, with effect from 1 April 2019.
The word "exclusively" is the trap. The moment you supply even one taxable service alongside your goods — including a mixed or composite supply that has a service component — the ₹40 lakh exemption does not apply and you fall back to the ₹20 lakh threshold. The notification also carves out three categories of goods that get no benefit from the higher limit at all: ice cream and similar edible ice (tariff heading 2105 00 00), pan masala (2106 90 20), and all tobacco and manufactured tobacco substitutes (Chapter 24) — suppliers of these must register once turnover crosses ₹20 lakh (₹10 lakh in the four special category states), goods-only or not.
| Category of supplier | Registration threshold (normal states) |
|---|---|
| Exclusively goods (excluding ice cream, pan masala, tobacco) | ₹40 lakh |
| Services, or any mix of goods and services | ₹20 lakh |
| Ice cream, pan masala or tobacco products (any state) | ₹20 lakh — the ₹40 lakh limit does not apply |
Notification No. 10/2019-Central Tax, dated 7 March 2019, issued under Section 23(2) of the CGST Act.
Special category states and the states that stayed at ₹20 lakh
Two different lists matter here, and they are not the same list — this is where most guides go wrong.
First, "special category states" for Section 22 purposes. The Explanation to Section 22 defines this term by reference to Article 279A(4)(g) of the Constitution, but the CGST (Amendment) Act, 2018, effective 1 February 2019, narrowed the list specifically for registration thresholds. After that amendment, only Mizoram, Tripura, Manipur and Nagaland count as special category states for Section 22 — their threshold is ₹10 lakh for services and ₹20 lakh for goods. Jammu and Kashmir is expressly excluded from the special-category definition for this purpose. Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand were removed from this special-category list by the same amendment, so they now sit at the normal ₹20 lakh services threshold.
Second, a separate list of states and union territories that opted out of the higher ₹40 lakh goods threshold under Notification No. 10/2019-Central Tax. Ten of them — Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand — never adopted the ₹40 lakh limit, so a goods-only supplier there registers once turnover crosses ₹20 lakh, not ₹40 lakh. Telangana and Puducherry are on this list even though they are not special category states at all — their exclusion is a separate state-government opt-out, not a special-category rule.
| State group | Services threshold | Goods-only threshold |
|---|---|---|
| Mizoram, Tripura, Manipur, Nagaland | ₹10 lakh | ₹20 lakh |
| Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry, Telangana | ₹20 lakh | ₹20 lakh (opted out of ₹40 lakh) |
| All other states/UTs | ₹20 lakh | ₹40 lakh |
CGST (Amendment) Act 2018 (effective 1 February 2019), amending the Explanation to Section 22; Notification No. 10/2019-Central Tax dated 7 March 2019.
Compulsory registration cases that ignore turnover entirely
Section 24 opens with a non-obstante clause — "notwithstanding anything contained in sub-section (1) of section 22" — meaning every category listed here must register the moment the activity starts, even at ₹1 of turnover. There is one commonly missed carve-out: Notification No. 10/2017-Integrated Tax, dated 13 October 2017, exempts a person making only inter-state supplies of taxable services (not goods) from registration as long as aggregate turnover stays within the normal Section 22 threshold. Inter-state supply of goods gets no such exemption.
- Persons making any inter-state taxable supply of goods
- Casual taxable persons making taxable supply
- Persons liable to pay tax under reverse charge
- Electronic commerce operators who are liable to pay tax under Section 9(5)
- Non-resident taxable persons making taxable supply
- Persons required to deduct tax at source under Section 51
- Agents making taxable supply on behalf of other taxable persons
- Input Service Distributors
- Persons who supply through an e-commerce operator required to collect tax at source under Section 52
- Every e-commerce operator required to collect tax at source under Section 52
- Suppliers of online information and database access or retrieval (OIDAR) services from outside India to an unregistered person in India
- Suppliers of online money gaming from outside India to a person in India (added with effect from 1 October 2023)
- Any other person notified by the Government on the GST Council's recommendation
CGST Act 2017, Section 24; inter-state services exemption per Notification No. 10/2017-Integrated Tax, dated 13 October 2017.
What counts as "aggregate turnover" for the threshold
The threshold is measured against "aggregate turnover" as defined in Section 2(6) of the CGST Act — not just taxable sales. It is the sum of all taxable supplies, exempt supplies, exports, and inter-state supplies made by persons with the same PAN, computed on an all-India basis, excluding the value of inward supplies taxed under reverse charge and excluding CGST, SGST/UTGST, IGST and cess.
Two practical consequences follow. First, exempt and export turnover count toward the threshold even though no GST is charged on them — a business with ₹15 lakh of taxable sales and ₹10 lakh of exempt sales has crossed ₹20 lakh and must register. Second, the test is applied PAN-wide across all your branches and states put together, not state by state or branch by branch.
CGST Act 2017, Section 2(6). Once registered, the recurring filings are GSTR-1 and GSTR-3B, and you can estimate a delay with our GST late fee calculator.
Primary sources
The dates and fees on this page are read off the statute and CBIC’s own notifications, not copied from other guides. You can check every one of them:
- Central Goods and Services Tax Act, 2017 — sections 47 (late fee) and 50 (interest)
- CBIC — GST notifications and circulars
- CBIC — GST portal
- GST portal (gst.gov.in) — where the return is actually filed
Verified against the CGST Act, 2017, the notifications cited above and CBIC circulars as of August 2026. Your exact position depends on your entity and any notifications or circulars issued since — we confirm it for you, and always recommend checking the official CBIC / GST portal. CapEasy is a private consultancy and is not affiliated with any government authority. This page is a guide, not legal advice.