A business must register for GST once its turnover crosses a limit set by law, or from the first sale in some cases. Registration gives you a GSTIN, the right to charge GST and claim input tax credit, and the duty to file returns. Many small businesses also register before they have to, because their buyers want tax invoices.
01The turnover limits
| Business | Limit in most states | Lower limit |
|---|---|---|
| Supplies only goods | ₹40 lakh | ₹20 lakh, or ₹10 lakh, in the states listed below |
| Supplies services, or goods and services | ₹20 lakh | ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura |
The ₹40 lakh limit for goods comes from Notification 10/2019-Central Tax, in force from 1 April 2019. When it was issued, it did not apply to intra-state suppliers in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. It also does not apply to suppliers of ice cream, pan masala and tobacco products. Check your state's position as of the date you are deciding, because states can change their choice.
02How aggregate turnover is counted
Aggregate turnover is the total value, for the financial year, of:
- taxable sales,
- exempt sales,
- exports of goods and services,
- inter-state supplies, including stock sent to your own branches in other states,
for all GSTINs and places of business on the same PAN, across India.
It does not include GST itself, or purchases on which you pay tax under reverse charge.
Examples
| Business | Turnover | Register? |
|---|---|---|
| A Varanasi kirana selling only goods within Uttar Pradesh | ₹35 lakh | Not yet. The ₹40 lakh limit applies. |
| A Varanasi tailoring shop that stitches clothes, a service | ₹24 lakh | Yes. Services cross the ₹20 lakh limit. |
| A Pune freelance developer billing US clients | ₹22 lakh, all exports | Yes. Exports count towards the limit. |
| A Surat saree maker selling ₹12 lakh within Gujarat and ₹3 lakh to a Kolkata dealer | ₹15 lakh | Yes. Inter-state sale of goods needs registration from the first rupee. |
03When you must register whatever your turnover
Section 24 lists cases where the turnover limit does not apply. The common ones:
- Inter-state sales of goods
- Any sale of goods to another state. Service providers making inter-state supplies are exempted from this until they cross the turnover limit.
- Casual taxable persons
- , such as traders who set up stalls at an exhibition in another state.
- Persons liable to pay tax under reverse charge
- Sellers on e-commerce platforms
- that collect tax at source. Since 1 October 2023, small sellers making only intra-state supplies of goods through such platforms can sell without registration, subject to conditions. Small service providers selling through platforms are also exempted up to the limit.
- E-commerce operators
- themselves.
- Persons who deduct TDS or collect TCS under GST
- , such as government departments.
- Input Service Distributors
- Non-resident taxable persons
- , and suppliers of online services from outside India to Indian consumers.
04Who does not need to register
- Businesses supplying only exempt goods or services, such as fresh vegetables or unbranded grain.
- Agriculturists selling produce from their own cultivation.
- Those below the limit who are not in any section 24 case.
05Voluntary registration
You can register even below the limit. Reasons owners give:
- Registered buyers, such as factories and contractors, want a tax invoice so they can claim credit.
- Large buyers and government tenders ask for a GSTIN.
- You want to sell on platforms that require one.
- You want credit on GST paid on your own purchases.
Once registered voluntarily, you follow all the rules: invoices, returns and tax on every taxable sale.
06How to apply
- Gather documents. PAN of the business, Aadhaar of the proprietor, partners or directors, photographs, proof of the place of business such as an electricity bill or rent agreement, and bank account details.
- Apply on the GST portal in Form REG-01. You first get a temporary reference number by verifying your mobile and email.
- Authenticate with Aadhaar. In some states, applicants are asked to visit a GST Suvidha Kendra for photograph and biometric verification.
- Respond to any query from the officer within the time given.
- Receive your GSTIN and the registration certificate in REG-06.
Apply within 30 days of becoming liable. Registration then takes effect from the date you became liable.
07Reading your GSTIN
A GSTIN has 15 characters. The first two are the state code, such as 24 for Gujarat or 27 for Maharashtra. The next ten are your PAN. The thirteenth shows how many registrations you have in that state, the fourteenth is usually Z, and the last is a check character.
08After registration
You choose between the regular scheme, with monthly or quarterly returns, and the composition scheme if you qualify. Display your GSTIN at your place of business and print it on every invoice.
09Cancelling a registration
If your business closes, is sold, or your turnover falls below the limit and you no longer want to be registered, you can apply to cancel in Form REG-16. You keep filing returns until the cancellation order. Within three months of the order, you file a final return in GSTR-10 and pay tax on the credit in your closing stock and capital goods, as the law requires. Registration can also be cancelled by the officer, for example when returns are not filed for a continuous period set by the rules.
This guide is general information as of October 2026 and does not amount to tax advice.
MatruOS needs no GSTIN or Udyam number to sign up, so you can set up your registers before you register.