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GST Registration Threshold Limits Increased

Updated on:  

08 min read

The GST Council, on considering the demands raised by MSME, increased the threshold limits for GST registration. These changes were proposed in the 32nd GST Council meeting held on 10th January 2019. It was subsequently notified by the CBIC. It helps to ease compliance under GST.  

The states have an option to opt for a higher limit or continue with the existing limits. This article explains the earlier threshold limits, new limits, their effective date of applicability and the persons to whom it applies.

Latest updates on GST Registration

28th May 2021
Due date to file application for revocation of cancellation of registration falling between 15th April 2021 up to 29th June 2021 is 30th June 2021.

1st May 2021
The time limit to take actions, reply or pass orders as given under Rule 9 of the CGST Rules, 2017 that falls between 1st May 2021 and 31st May 2021 has been extended up to 15th June 2021.

5th March 2021
The Search ARN Functionality for Registration, post-TRN Login has been enhanced for the taxpayers.

31st January 2021
1. Persons applying for Registration in Form GST REG-01 as SEZ unit and SEZ developer would now be required to provide the validity period, as per Letter of Approval (LOA)/Letter of Permission (LOP).
2. A functionality has been provided to registrants to upload the copy of Notification issued by MEA /State while applying for Registration on GST Portal in Form GST REG-13.
3. Aadhaar Authentication for one Promoter and Primary authorized signatory has been implemented on the portal for existing taxpayers.

31st December 2020
1. For Taxpayers applying for new registration and opting for Aadhaar Authentication, the authentication would now be required to be done only for one Primary Authorized Signatory and one Promoter/Partner, instead of all.
2. A person registered as a GST Practitioner can now file an application for cancellation of their Registration, in Form GST PCT-06
3. While applying for a new Registration application, the taxpayers will now be shown some additional details related to the same PAN, in a table.
4. Immediately after initiation of GSTIN cancellation, the status of GSTIN for which cancellation is initiated will be shown as “Suspended” on the GST Portal.
5. Taxpayers can select the jurisdiction of CBIC and states/UTs on the basis of PIN code

20th August 2020
An option is given for Aadhaar authentication while obtaining the GST registration. The rules are amended with effect from 21st August 2020 as follows:
1. In case the aadhaar authentication is opted for, it must be completed while submitting the application. The date of application is earlier of the date of aadhaar authentication or fifteen days from the submission of the application in Part B of Form GST REG-01.
2. For the rest of the applicants, physical verification of place of business will be carried out, including document verification, as the case may be, with permission.
3. Cases of deemed approval have also been listed.

Click here to know more about aadhaar authentication.

27th June 2020
The time limit for completion or compliance has been further extended to 31st August 2020, where the time limit falls between the period from 20th March 2020 to 30th August 2020. But it does not include cases where a person needs to obtain GST registration under section 25 (Normal registration) and 27 (Registration as a casual taxable person/ non-resident taxable person) of the CGST Act.

3rd April 2020
The time limit for completion or compliance has been extended to 30th June 2020, where the time limit falls between the period from 20th March 2020 to 29th June 2020. It does not include cases where a person needs to obtain GST registration under section 25 (Normal registration) and 27 (Registration as a casual taxable person/ non-resident taxable person) of the CGST Act.

Overview of earlier limits, new limits and the date of applicability

Aggregate TurnoverRegistration RequiredApplicability
Earlier Limits – For the sale of Goods/Providing Services
Exceeds Rs.20 lakhYes – For Normal Category StatesUp to 31st March 2019
Exceeds Rs.10 lakhYes – For Special Category StatesUp to 31st March 2019
New Limits – For Sale of Goods
Exceeds Rs.40 lakhYes – For Normal Category StatesFrom 1st April 2019
Exceeds Rs.20 lakhYes – For Special Category StatesFrom 1st April 2019
New Limits – For Providing Services
There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).

States who opted for the new limit

An option was provided to the states to opt for the new limits or continue the earlier ones (status quo).

Normal Category States/UT who opted for a new limit of Rs.40 lakhNormal Category States who choose status quoSpecial Category States/UT who opted for new limit of Rs.40 lakhSpecial Category States/UT who opted for new limit of Rs.20 lakh
Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and ChandigarhTelanganaJammu and Kashmir, Ladakh and AssamPuducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand

Note 1: Two hilly states J&K and Assam have also opted to raise the limit to Rs.40 lakh. These two states had the option to remain under lower threshold limits as they fall under the Special Category States. Even previously when these two states had the option to charge GST only on aggregate turnover exceeding Rs.10 lakh, they had opted for a higher threshold limit of Rs.20 lakh.   

Note 2: Kerala can now charge ‘calamity cess’ up to 1% on all intra-state supply of goods and services to cope up with natural calamities faced by the state last year.

Financial Year to reckon the aggregate turnover

Aggregate turnover for the current financial year (for instance, in the above case, FY 2019-2020) is considered for applicability of new threshold limits. Every supplier whose aggregate turnover in the current financial year exceeds the threshold limits will have to get registered under GST. However, certain category of persons are required to compulsorily get registered under GST:

  • Interstate suppliers
  • Casual Taxable persons
  • Persons taxable under the reverse charge basis
  • Non-resident taxable persons
  • Persons required to deduct TDS under GST
  • Persons required to deduct TCS under GST
  • Input Service Distributors
  • Persons making a sale on behalf of someone else whether as an Agent or Principal.
  • Every e-commerce operator providing a platform to suppliers to make supply through it.
  • Suppliers who supply goods through e-commerce operators who are liable to collect tax at source.
  • Online Service Providers providing service from outside India to a non-registered person in India.

Changes in the threshold limits to opt into the Composition Scheme

  • Changes in the composition scheme: The threshold of annual turnover for composition scheme was  increased to Rs.1.5 crore from 1st April 2019. The taxpayers registered under the scheme have to pay tax quarterly and file returns annually from 1st April 2019. The limit remains unchanged at Rs.75 lakh for North Eastern states & Uttarakhand.  The limit also applies to restaurants (not serving alcoholic beverages).
  • Composition scheme was made available to service providers: New scheme introduces a fixed tax rate of 6% with 3% CGST and 3% SGST. Independent service providers, as well as mixed suppliers of goods and services with an annual turnover of up to Rs.50 lakh in the preceding financial year can opt for this scheme.
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