How-to · GST
GST registration threshold: ₹20 lakh in the Act, ₹40 lakh by exemption, and the cases with no threshold at all
Section 22 of the CGST Act sets ₹20 lakh, with ₹10 lakh for special category States. Notification 10/2019 exempts an exclusive goods supplier up to ₹40 lakh with exclusions. Section 24 overrides all of it for inter-State supply, reverse charge, casual and non-resident persons and more.
In this guide
Section 22 of the CGST Act makes a supplier liable to register once aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh in special category States. A separate exemption notification lifts that to ₹40 lakh for a supplier engaged exclusively in goods, with named exclusions. Section 24 overrides the threshold entirely for cases such as inter-State supply, reverse charge liability, casual and non-resident taxable persons.
The figure the Act actually sets
Section 22(1) makes every supplier liable to be registered in the State or Union territory, other than special category States, from where a taxable supply is made, once aggregate turnover in a financial year exceeds ₹20 lakh. The first proviso puts special category States at ₹10 lakh.
Two later provisos let the Government move those numbers. One permits raising the special category figure from ₹10 lakh to as much as ₹20 lakh at a State's request. The other permits raising ₹20 lakh to as much as ₹40 lakh for a supplier engaged exclusively in the supply of goods, subject to notified conditions and limitations.
Where ₹40 lakh comes from
The ₹40 lakh number is not in the operative words of section 22. Notification 10/2019-Central Tax, issued under section 23(2), exempts a person engaged in exclusive supply of goods whose aggregate turnover in the financial year does not exceed ₹40 lakh from obtaining registration, and then names who does not get it.
| Excluded | Effect |
|---|---|
| Persons required to register compulsorily under section 24 | No threshold applies at all |
| Suppliers of ice cream and other edible ice, pan masala, and tobacco and manufactured tobacco substitutes | Back to the section 22 figure |
| Persons making intra-State supplies in the States named in the notification, and Puducherry | Back to the section 22 figure |
| Persons opting for voluntary registration, or continuing an existing registration | Registered by choice, exemption irrelevant |
The words that matter are "exclusive supply of goods". A supplier with any taxable service revenue is outside the notification. The proviso to section 22 carries one narrow allowance: a person still counts as engaged exclusively in goods even where the only service is an exempt supply by way of extending deposits, loans or advances where the consideration is interest or discount.
A service provider therefore works to ₹20 lakh, or ₹10 lakh in a special category State. There is no ₹40 lakh figure for services.
The cases with no threshold at all
Section 24 opens by overriding section 22(1). Where a person falls in its list, registration is required whatever the turnover is. The recurring entries:
- Making any inter-State taxable supply.
- A casual taxable person, or a non-resident taxable person, making taxable supply.
- A person required to pay tax under reverse charge, or under section 9(5).
- A person required to deduct tax under section 51, whether or not separately registered.
- A person making taxable supply on behalf of another taxable person, as agent or otherwise.
- An Input Service Distributor, whether or not separately registered.
- A supplier through an e-commerce operator required to collect tax under section 52, and the operator itself.
- A supplier of online information and database access or retrieval services from outside India to a person in India, and a supplier of online money gaming from outside India.
What goes into aggregate turnover
The Explanation to section 22 settles two arguments that come up every year.
- Aggregate turnover includes supplies made by the person on their own account and supplies made on behalf of all their principals. An agent cannot exclude principal-side volume.
- Where a registered job worker supplies goods after job work, that supply is treated as the principal's under section 143 and is excluded from the job worker's aggregate turnover.
The Explanation also defines special category States by reference to the Constitution, and then removes several States from that list for this purpose. Read the current text rather than a remembered list, because that carve-out has been amended.
Liability is tested from the State where the taxable supply is made, but aggregate turnover itself is an all-India figure for the person. Two branches in two States do not get two thresholds.
How to confirm on official pages
- Read section 22 on CBIC for the ₹20 lakh and ₹10 lakh figures and the enabling provisos.
- Read Notification 10/2019-Central Tax before relying on ₹40 lakh, and check the State list and the goods table in it.
- Read section 24 and confirm you are not in it before applying any threshold at all.
State-level notifications can differ, because the ₹40 lakh option was left to States. Check the State notification as well as the central one.
Where Complied AI fits
The thresholds sit in the Act and a notification. What moves is a State exercising or withdrawing an option, or a change to the excluded-goods table. CBIC and GST updates on Complied AI keep those documents next to section 22, so the answer you give a client is the one currently in force.
Practical checks
Common questions
Is the GST registration limit ₹20 lakh or ₹40 lakh?
Section 22(1) of the CGST Act says ₹20 lakh, and ₹10 lakh for a supplier making taxable supplies from a special category State. The ₹40 lakh figure is an exemption from obtaining registration granted by notification for a person engaged in exclusive supply of goods, and it carries exclusions. A service provider does not get the ₹40 lakh figure.
Who is left out of the ₹40 lakh goods exemption?
Notification 10/2019-Central Tax excludes anyone required to register compulsorily, suppliers of ice cream and other edible ice, pan masala and tobacco, persons making intra-State supplies in a named list of States and Puducherry, and persons who opt for voluntary registration or want to keep an existing registration.
Does an inter-State supplier get any threshold?
No. Section 24 opens with a non-obstante clause against section 22(1), and its first entry is a person making any inter-State taxable supply. Turnover is irrelevant in that case, as it is for a casual taxable person, a non-resident taxable person and a person liable to pay tax under reverse charge.
Is turnover computed State by State?
Liability under section 22 is tested in the State or Union territory from where the taxable supply is made, but aggregate turnover is a single all-India figure for the person. The Explanation to section 22 also puts supplies made on behalf of principals into that figure, and takes post-job-work supplies out of the job worker's turnover.
Publication method
How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 20 August 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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