GST Registration Limit 2026: Turnover Threshold for Goods and Services

Most small shop owners in India first hear about the GST registration limit from a supplier, a customer or a CA, usually as a single number: "you need GST after ₹40 lakh." That number is right for many shops, but not for all of them. A tailor, a mobile repair shop or a kirana store that ships one parcel to another state can need a GSTIN long before reaching ₹40 lakh, and a business in the north-east can hit its limit at half that figure.

This guide sets out the GST registration limit as it stands in 2026, explains which limit applies to you, what counts towards your turnover (and what does not), the cases where registration is compulsory at any turnover, and what happens if you register late. It ends with worked examples and a short checklist you can run through in two minutes.

What is the GST registration limit?

GST law does not require every business to register. Section 22 of the CGST Act sets a turnover threshold: a supplier must register in the state from which it makes taxable supplies once its aggregate turnover in a financial year crosses the limit. Below it, a business can trade without a GSTIN, without charging GST and without filing GST returns, unless it falls into one of the compulsory categories covered later in this guide.

The limit was originally ₹20 lakh for everyone (₹10 lakh in special category states). From 1 April 2019, Notification 10/2019 gave states the option of a higher ₹40 lakh limit for businesses that supply only goods. Most states adopted it. The limit for services stayed at ₹20 lakh.

The thresholds have not changed since then. The GST rate reform of 22 September 2025, which moved most goods to the 5% and 18% slabs, changed rates, not the registration limit.

GST registration limit at a glance

A few states chose not to adopt the ₹40 lakh limit for goods and kept ₹20 lakh. If you are close to the threshold, confirm your own state's figure on the GST portal or with your CA rather than relying on a national rule of thumb.

The ₹40 lakh limit for goods

The higher limit is the one most shopkeepers have heard of, and it is the one most often applied wrongly. It is available only when all of these are true:

1. You supply only goods. If you also earn from services, such as repairs, installation, tailoring charges, delivery charged as a separate service or rent from a part of your shop, you are no longer goods-only and the ₹20 lakh limit applies to your whole turnover.
2. All your sales are within your state. Any inter-state supply of goods makes registration compulsory regardless of turnover.
3. You do not deal in the excluded goods. These include ice cream and other edible ice, pan masala and tobacco products, among a few others listed in the notification.
4. Your state has adopted the ₹40 lakh limit. Most have; a few have not.

If one condition fails, you are back to ₹20 lakh (₹10 lakh for services in the four north-eastern states named above).

The ₹20 lakh limit for services

Service providers have a single, lower limit: ₹20 lakh in most states and ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. This covers businesses such as:

• tailors, beauty parlours and salons
• mobile, electrical and vehicle repair shops
• tuition centres and coaching classes
• photographers, event decorators and caterers
• consultants, freelancers and small agencies

The same ₹20 lakh limit applies to a business that sells both goods and services. A hardware shop that also charges for fitting and installation counts both together against the ₹20 lakh limit, not the ₹40 lakh one.

What counts in aggregate turnover

Most mistakes with the GST turnover limit come from counting the wrong figure. Aggregate turnover is a defined term, and it is wider than many shop owners expect.

What is included

• Taxable sales: everything you sell that would attract GST.
• Exempt sales: items that carry no GST, such as fresh vegetables, fresh milk or unpackaged food grains. These count towards the limit even though no tax is charged on them.
• Exports of goods and services.
• Inter-state supplies between branches with the same PAN, for example stock sent from your shop in one state to your godown in another.

What is excluded

• The GST itself: CGST, SGST, IGST and compensation cess are not part of turnover.
• Purchases taxed under reverse charge, where you as the buyer pay the tax.

It is counted on your PAN, across India

Turnover is calculated for all businesses run under the same PAN, in all states, added together. If you run a kirana shop and a separate repair counter as a proprietor under your own PAN, both count. Two shops in two states under one PAN are one turnover for this purpose.

It is counted for the financial year

The threshold applies to turnover in the financial year (April to March). You become liable on the day your running total for the year crosses the limit, not at the end of the year.

When GST registration is compulsory at any turnover

Section 24 of the CGST Act lists cases where the turnover threshold does not help you: registration is compulsory from the first rupee. The main ones are:

• Inter-state suppliers of goods. Selling or sending taxable goods to a buyer in another state requires a GSTIN. Inter-state supply of services is exempt from this rule as long as your aggregate turnover stays within the threshold.
• Casual taxable persons: businesses that supply occasionally in a state where they have no fixed place of business, such as a seller at a trade fair or exhibition.
• Non-resident taxable persons supplying in India.
• Persons liable to pay tax under reverse charge.
• E-commerce operators, and in general sellers supplying through an e-commerce operator that collects TCS. Since 1 October 2023, small suppliers of goods selling through e-commerce platforms only within their own state can do so without GST registration, subject to conditions such as enrolment on the portal. Check the current conditions with your CA before relying on this.
• Input service distributors.
• Persons required to deduct TDS or collect TCS under GST.
• Agents making taxable supplies on behalf of other registered persons.

On the other side, a business that sells only exempt goods or services, such as a fresh vegetable vendor selling nothing taxable, is not required to register regardless of turnover. An agriculturist supplying produce from their own cultivation is also outside the requirement.

Do I need GST registration? A two-minute checklist

Work through these questions in order. Stop at the first "yes" that tells you to register.

1. Do you sell goods to any buyer in another state? If yes, you need GST registration now, at any turnover.
2. Do you sell through an e-commerce platform such as an online marketplace? If yes, check the e-commerce conditions above with your CA; in many cases you need to register.
3. Do you earn anything from services, even a small amount? If yes, your limit is ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland or Tripura).
4. Do you sell ice cream, pan masala, tobacco products or other excluded goods? If yes, your limit is ₹20 lakh.
5. Has your state adopted the ₹40 lakh limit? If not, your limit is ₹20 lakh.
6. If none of the above apply, your limit is ₹40 lakh for goods.
7. Now add up your turnover for this financial year across every business on your PAN, including exempt sales, excluding GST. Is it above your limit, or will it be soon? If yes, apply within 30 days of crossing it.

Worked examples

A kirana shop with ₹32 lakh turnover

Meena runs a grocery store in Pune. She sells only goods, all to customers in Maharashtra, and none of her items are on the excluded list. Her turnover this year, including exempt items such as loose rice and fresh vegetables, is ₹32 lakh.

• Goods only, intra-state, no excluded goods: the ₹40 lakh limit applies.
• ₹32 lakh is below ₹40 lakh.
• She does not need to register yet. She should watch her monthly totals, because a good festive season could take her past ₹40 lakh before March.

A tailor with ₹22 lakh turnover

Ravi runs a tailoring shop in Coimbatore. He sells some fabric, but most of his income is stitching charges, which is a service. His turnover is ₹22 lakh.

• He supplies services, so the limit is ₹20 lakh for his whole turnover, fabric included.
• ₹22 lakh is above ₹20 lakh.
• He must register, within 30 days of the day his turnover crossed ₹20 lakh.

A shop that ships one order to another state

Imran sells spices from a shop in Kochi with a turnover of ₹12 lakh, well below any limit. A customer in Bengaluru asks him to courier a ₹6,000 order.

• Supplying taxable goods to a buyer in another state makes registration compulsory at any turnover.
• He needs a GSTIN before making that sale. If he does not want to register yet, he should limit himself to customers within Kerala.

Two businesses on one PAN

Sunita owns a stationery shop with ₹28 lakh turnover and, separately, runs a photocopying and printing counter with ₹6 lakh turnover, both as a proprietor on her own PAN.

• Turnover is counted on the PAN: ₹28 lakh + ₹6 lakh = ₹34 lakh.
• Photocopying is a service, so the ₹20 lakh limit applies to the combined figure.
• She must register, even though the stationery shop alone is under ₹40 lakh.

How to apply once you cross the limit

Registration is free and done online.

1. Go to gst.gov.in and choose Services → Registration → New Registration.
2. Fill Part A of form GST REG-01 with your PAN, mobile number and email. You receive a Temporary Reference Number (TRN) after OTP verification.
3. Log in with the TRN and complete Part B: business details, place of business, goods and services you deal in, and bank account.
4. Upload documents: PAN, Aadhaar, a photograph, proof of address of your place of business (electricity bill, rent agreement or property papers) and bank details (cancelled cheque or statement).
5. Complete Aadhaar authentication when prompted, and submit.

You receive an Application Reference Number (ARN). The GSTIN usually follows within a few working days if no clarification is needed. From the date of registration, you must issue proper tax invoices and file returns. Our guide to the GST invoice format lists everything your bills need to show.

Penalty for not registering

If you were required to register and did not, the consequences add up quickly:

• You owe the GST you should have collected on your sales from the date you became liable, even though you did not charge it to customers.
• Interest on that unpaid tax.
• A penalty of 10% of the tax due, subject to a minimum of ₹10,000.
• Where there is deliberate evasion, the penalty can be 100% of the tax due.

The 30-day window exists so that you have time to register. Use it rather than waiting for a notice.

Voluntary GST registration

You can register even if your turnover is below the limit. Some businesses choose to, for good reasons:

Benefits

• You can claim input tax credit on GST paid on your purchases.
• GST-registered business customers prefer suppliers who can give them a tax invoice so that they can claim credit themselves.
• You can sell to buyers in other states and on more e-commerce platforms.
• A GSTIN adds credibility with suppliers, banks and larger customers.

Costs

• You must charge GST on every taxable sale, which raises prices for retail customers who cannot claim credit.
• You must file returns, monthly or quarterly, even in months with no sales.
• You cannot simply stop when it suits you; cancelling a registration has its own process.

For a small shop selling mainly to households, voluntary registration often costs more than it saves. For a business that sells to other businesses or wants to sell online, it is often worth it.

Composition scheme: a simpler option after registration

If you must register but your turnover is modest, the composition scheme can reduce the burden. Traders with aggregate turnover up to ₹1.5 crore (₹75 lakh in special category states) can pay a flat 1% of turnover, file one quarterly statement and one annual return, and issue a bill of supply instead of a tax invoice. The trade-offs are real: no input tax credit, no inter-state sales and no GST shown on your bills. Our guide to the GST composition scheme explains who qualifies and when it makes sense.

After registration: what changes day to day

Registration changes how you bill and what you file:

• Every taxable sale needs a proper GST invoice with your GSTIN, the HSN code, the taxable value and the tax split. Our guide on how to calculate GST shows the arithmetic, including inclusive prices.
• You file GSTR-1 to report your sales, monthly or quarterly, and GSTR-3B to pay the tax. Our step-by-step guide covers how to file GSTR-1.
• You keep records of sales, purchases and stock for at least six years.

Billing before and after you register, with BillZap

BillZap is a free GST billing app for Android built for small shops, and it fits both sides of the threshold:

• Before you register, switch GST off and print clean bills with no tax lines.
• After you register, add your GSTIN once. It prints on every invoice, and BillZap works out CGST and SGST or IGST from the place of supply automatically.
• At the end of the month, the GSTR-1 ready export gives your accountant the sales summary they need for the return.

It works fully offline, needs no account and has no paid tier.

FAQ: GST registration limit

The bottom line

The GST registration limit is not one number. For a shop selling only goods within its state it is usually ₹40 lakh; for anyone providing services it is ₹20 lakh; in four north-eastern states it is lower still; and for anyone selling goods to another state it is zero. The figure that matters is your aggregate turnover on your PAN for the financial year, including exempt sales, measured against the limit that actually applies to you.

Check where you stand now, keep an eye on your running total as the year goes on, and apply within 30 days of crossing the line. When you do register, BillZap on Google Play can take your billing from plain receipts to full GST invoices without changing how you work at the counter. It is free and works offline with no sign-up.

This guide explains GST registration rules in plain language and is not tax advice. Thresholds and conditions can vary by state and change by notification; confirm your position with your chartered accountant or on the GST portal before relying on it.