GST Registration Applicability — Detailed Guide

GST registration is primarily governed by Sections 22, 23, 24 and 25 of the CGST Act, 2017, read with the relevant notifications. The important point is that crossing the turnover threshold is not the only test—certain persons are required to register even below the threshold.

1. Registration based on turnover — Section 22

For a person making taxable supplies, registration generally becomes mandatory when the aggregate turnover in a financial year exceeds the applicable threshold.

Nature of supplyGeneral thresholdCertain specified StatesExclusive supplier of goods₹40 lakh₹20 lakhSupplier of services / goods + services₹20 lakh₹10 lakh in specified special-category States

The ₹40 lakh threshold for an exclusive supplier of goods was introduced through Notification No. 10/2019-Central Tax, subject to conditions/exceptions.

For Delhi, the commonly applicable threshold is:

• Goods only: ₹40 lakh
• Services: ₹20 lakh
• Goods + services: ₹20 lakh

2. What is "Aggregate Turnover"?

Aggregate turnover is calculated PAN-wise on an all-India basis.

It generally includes:

• Taxable supplies
• Exempt supplies
• Zero-rated supplies
• Inter-State supplies
• Supplies made on behalf of principals

It excludes:

• GST/IGST/CGST/SGST/UTGST charged
• Inward supplies on which tax is payable under reverse charge

Therefore, ₹20 lakh/₹40 lakh is not simply the taxable turnover. Exempt and zero-rated supplies can also affect the aggregate-turnover calculation.

Example:
A person has:

• Taxable sales: ₹18 lakh
• Exempt sales: ₹5 lakh

Aggregate turnover = ₹23 lakh.

Therefore, the person cannot simply say that taxable turnover is below ₹20 lakh.

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3. Persons compulsorily required to register — Section 24

Even if turnover is below the threshold, registration can be compulsory in specified cases.

Important categories include:

A. Inter-State taxable supply

Historically, Section 24 required persons making inter-State taxable supplies to register. However, various exemptions have subsequently been notified, particularly for certain small service suppliers and specified categories.

Therefore, it is necessary to examine the nature of supply and applicable notification, rather than applying Section 24 mechanically. CBIC has specifically clarified exemptions for certain service suppliers below the threshold.

B. Casual taxable person

A person occasionally undertaking taxable supplies in a State/UT where he has no fixed place of business may fall under the casual taxable person provisions.

C. Non-resident taxable person

A non-resident making taxable supplies in India may be required to obtain GST registration irrespective of the normal threshold.

D. Person liable under Reverse Charge

Persons required to pay GST under specified reverse-charge provisions may have compulsory registration implications under Section 24.

However, the specific reverse-charge notification and applicable exemption/threshold must be checked for the particular transaction.

E. E-commerce operators

E-commerce operators falling within the statutory TCS provisions have separate registration requirements.

This is different from every seller selling through an e-commerce platform. Small suppliers can have specific exemptions depending upon the nature of their supplies and the applicable notification.

F. Persons required to deduct TDS under GST

A person required to deduct GST-TDS under Section 51 requires registration as a TDS deductor.

G. Input Service Distributor (ISD)

An entity required to distribute eligible input-service credit as an Input Service Distributor has separate registration requirements.

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4. Persons NOT liable for registration — Section 23

Section 23 is equally important.

A person is generally not liable to registration where he is:

1. Exclusively supplying exempt/non-taxable goods or services

If 100% of the supplies are exempt or non-taxable, registration is generally not required merely because turnover exceeds ₹20 lakh/₹40 lakh.

Example:

Exempt agricultural products = ₹80 lakh
Taxable supplies = Nil

Generally, GST registration is not required merely because turnover is ₹80 lakh.

2. Agriculturist

An agriculturist is not liable for registration to the extent of supply of produce out of cultivation of land.

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5. Inter-State purchase does NOT by itself require GST registration

This is an important practical point.

A person having turnover below the applicable threshold can generally purchase goods/services from another State without GST registration, subject to the nature of the transaction and any applicable reverse-charge provisions.

For example:

Delhi trader:

• Purchases goods from Haryana: ₹10 lakh
• Sells goods within Delhi: ₹15 lakh
• No inter-State outward taxable supply

The mere fact that purchases are from Haryana does not automatically make GST registration compulsory. CBIC's FAQ also recognizes this distinction.

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6. Export of goods/services

Export is a zero-rated supply, not an exempt supply.

Therefore, the position is different from a person dealing exclusively in exempt goods.

For example:

Export services = ₹15 lakh
Domestic taxable services = Nil

Registration requirements and the ability to claim zero-rated benefits/refund need to be considered. CBIC's FAQ states that registration is required for exporters seeking the relevant GST refund benefits.

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7. Voluntary GST registration

A person whose turnover is below the compulsory-registration threshold can voluntarily obtain GST registration.

But once voluntarily registered, the person is treated as a registered taxable person and normal GST compliance applies. CBIC specifically confirms that a voluntarily registered person is liable to GST from supplies made after registration.

Therefore, voluntary registration should not be taken merely for obtaining a GSTIN without considering the compliance burden.

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8. One PAN — multiple States

GST registration is State-wise, whereas aggregate turnover is generally calculated PAN-wise on an all-India basis.

Example:

StateTurnoverDelhi₹15 lakhHaryana₹10 lakhUttar Pradesh₹8 lakhTotal PAN-wise₹33 lakh

The aggregate turnover is ₹33 lakh.

The person cannot generally calculate the threshold separately by ignoring turnover in the other States.

CBIC also explains that a PAN holder may have separate GST registrations in different States/UTs.

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9. Multiple businesses in the same State

Generally, one PAN holder has one GST registration in a State, although separate registrations can be available/possible for multiple places of business subject to the applicable provisions and conditions.

For example, a Delhi company may have:

• Head office — Delhi
• Warehouse — Delhi
• Branch — Delhi

A separate GST registration is not automatically required merely because there are multiple premises.

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10. When should registration application be filed?

Once liability to registration arises, a normal taxpayer should apply within 30 days from the date on which the liability arises.

If the application is filed within the prescribed 30-day period, the registration can generally be effective from the date on which liability arose. If application is delayed, the effective date can be the date of grant of registration.

Example

Turnover crosses the applicable threshold on 10 September.

The person should apply within the prescribed period, i.e. generally by 10 October.

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11. Special point — goods trader vs service provider

This distinction is very important.

Case 1 — Exclusive goods trader

Delhi trader:

Annual turnover = ₹35 lakh

If he satisfies the conditions for the ₹40 lakh goods threshold and no compulsory-registration provision applies:

➡️ Generally GST registration is not mandatory.

Case 2 — Service provider

Delhi consultant:

Annual turnover = ₹18 lakh

➡️ Generally registration is not mandatory, assuming no compulsory-registration category applies.

Case 3 — Goods + services

Delhi person:

Goods = ₹15 lakh
Services = ₹10 lakh
Total = ₹25 lakh

➡️ Since the person is not exclusively supplying goods, the ₹40 lakh exclusive-goods threshold cannot simply be applied. The ₹20 lakh threshold generally becomes relevant.

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12. Composition scheme is different from registration

Do not confuse:

GST registration threshold
with
Composition scheme turnover limit.

A person may first determine whether registration is compulsory and then determine whether he is eligible to opt for composition.

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Practical decision tree

You can use this sequence for almost every GST-registration case:

Step 1 — Is there a "supply" under GST?

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Step 2 — Is the supply taxable, exempt, or non-taxable?

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Step 3 — Calculate PAN-wise aggregate turnover

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Step 4 — Determine whether the person is exclusively supplying goods

↓

Step 5 — Apply ₹40 lakh / ₹20 lakh / applicable State threshold

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Step 6 — Even if below threshold, check Section 24 compulsory-registration categories

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Step 7 — Check Section 23 exclusions/exemptions

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Step 8 — If liable, apply for GST registration within the prescribed time

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Key sections to check

ProvisionSubjectSection 22Registration based on turnoverSection 23Persons not liable for registrationSection 24Compulsory registrationSection 25Procedure for registrationSection 2(6)Aggregate turnoverRule 8Application for registrationRule 9Grant of registration

The official CBIC material and GST Portal guidance should be used for the particular transaction because exemptions and notifications under Section 24 can change the result.