As per the GST Regime, businesses or business owners whose turnover exceeds more than Rs. 40 lakhs is required to register under GST as an average taxable person and Rs 10 lakhs, GST Registration Threshold Limits for Services operated in NE and hill states. The process of registration under the GST Regime is called GST registration.

It is mandatory to register under GST for almost all businesses. If the company or industry carries on business activities without registering under GST, it is considered an offence per the GST rules and heavy penalties will be levied. 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).

The GST Council has doubled the GST Exemption Limit from payment of goods and services tax (GST) to Rs 40 lakh. Earlier it was Rs. 20 lakh. Also, the exemption limit has been increased to Rs 20 lakh for the northeastern states from earlier Rs 10 lakh.

A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs must register mandatorily under Goods and Services Tax. This limit is set at Rs 10 lakhs for North Eastern and hilly states flagged as special category states. CBIC has announced an increase in the threshold for business from Rs 20 lakhs to Rs 40 lakhs, and it came into effect from April 1 2019. It takes 2 to 6 working for the GST registration online process, and we can help you complete your GST registration just in 3 easy steps. 

Considering the demands raised by MSME, the GST Council increased the threshold turnover limits of hits GST registration. This increase in the threshold turnover limits helps ease compliance under the GST regime. The states can choose to continue with the existing limits or to a higher limit. This article explains the GST Registration Threshold limits and the persons or businesses it applies to.

NEW GST REGISTRATION THRESHOLD LIMITS FOR SERVICES

Type of business or Taxpayers	Variety of Supplies or business operations	Exemption Limit Up To March 31, 2019	Exemption Limit With Effect From April 1, 2019
Normal taxpayers	Render of goods only	Threshold annual turnover of up to Rs. 20 lakhs	Threshold annual turnover increased to up to Rs. 40 lakhs
Special category states	Render of goods only	Threshold yearly turnover of up to Rs. 10 lakhs	Threshold annual turnover increased up to Rs. 20 lakhs
Normal taxpayers	Render of services only	Threshold yearly turnover of up to Rs. 20 lakhs	Threshold annual turnover of up to Rs. 20 lakhs (remains the same)
Special category states	Render of services only	Threshold yearly turnover of up to Rs. 10 lakhs	Threshold annual turnover of up to Rs. 10 lakhs (remains the same)

 

GOODS REGISTRATION THRESHOLD LIMIT

FOR NORMAL TAXPAYER

Rs. 20 lakhs of threshold limit for the supplier of goods only under the original GST regime declared by the government in July 2017. To clarify, suppliers or dealers of goods whose annual turnover of up to Rs 20 Lakhs are not required to register under the GST regime. Therefore, suppliers or dealers of goods with a threshold turnover of Rs 20 Lakhs and above must register under GST compulsorily. However, this exemption threshold annual limit has been doubled in the 32nd GST Council meeting from Rs. 20 lakhs to 40 lakhs.

Moreover, this exemption threshold limit of up to Rs 40 Lakhs is not applicable for taxpayers who are:

It is mandatory to register under Section 24 of the CGST Act

Involved in business of supply of goods such as:

1. Ice cream and other edible products related to ice, whether or not containing cocoa

1. Tobacco and tobacco manufactured substitutes

1. Pan masala
   

FOR SPECIAL CATEGORY STATES

The threshold limit under GST registration for northeastern and hilly states was Rs. 10 lakhs in the previously followed GST regime.

The Special Category States include:

1. Assam
2. Jammu and Kashmir
3. Meghalaya
4. Arunachal Pradesh
5. Manipur
6. Sikkim
7. Tripura
8. Mizoram
9. Nagaland
10. Himachal Pradesh
11. Uttarakhand
    

The threshold limit of this State has been raised from Rs. 10 lakhs to Rs. 20 lakhs for the supply of goods according to the 32nd GST Council meeting. However, the northeastern and hilly states were given an option, i.e. the businesses could either choose GST Limit Rs. 40 lakhs or Rs. 20 lakhs as the annual turnover limit for GST exemption in the case of a provider of goods.

GST REGISTRATION LIMIT FOR SERVICES

FOR NORMAL TAXPAYER

AS per the original GST structure declared by the government in July 2017, the turnover limit for services suppliers was Rs. 20 lakhs, excluding the special category states. However, this exemption limit for GST for service providers stays unchanged, i.e. Rs. 20 lakhs as declared in the 32nd GST Council Meeting.

FOR SPECIAL CATEGORY STATES

During the initial GST regime, the exemption limit for service providers in hilly and Northeastern states was Rs. 10 lakhs. However, this exemption limit stays unchanged. Thus it is Rs 10 lakhs as per the 32nd GST Council Meeting.

COMPOSITION SCHEME REGISTRATION LIMIT

The GST Registration Limit for businesses or taxpayers registered under Composition Scheme varied depending on the category of taxpayers, as follows:

FOR TRADERS AND MANUFACTURERS

As per the GST law, all the traders and manufacturers holding an annual turnover of up to Rs 1 Crore in the preceding financial year could register under GST as composition dealers. The rate of 1% GST applies to such traders and manufacturers. However, the GST Registration Limit for traders and manufacturers registered under the category of composition dealers has increased as announced in the 32nd GST Council Meeting.

Consequently, manufacturers and traders having a conglomeration annual turnover of up to Rs 1.5 Crores in the preceding financial year can register under GST as composition dealers. 

But, the GST rate of 1% applicable on such manufacturers and traders remains unchanged.

FOR RESTAURANT SERVICE ONLY

Under the GST law. Service providers, i.e. restaurant services only with an aggregate turnover of up to Rs 1 Crore in the preceding financial year, could register GST. The rate of hits & misses of Goods and services tax applicable to these kinds of service providers was 5%.

However, the GST Registration Limit for Restaurant service providers registered as composition dealers have also been raised as announced in the 32nd GST Council Meeting. Therefore Restaurant service providers holding an aggregate annual turnover of up to Rs 1.5 Crores in the predating financial year can now register under GST as composition dealers. And the rate of 5% GST as applicable on such restaurant service providers stays unchanged.

FOR OTHER SERVICE PROVIDERS

Service providers excluding restaurant-related services could not opt for a Composition dealer under the original GST structure. However, as per 32nd GST Council Meeting, a new Composition Scheme shall now be available for Mixed Suppliers or Suppliers of Services with a Tax Rate of 6% (3% CGST +3% SGST). And these service providers should hold the annual threshold turnover up to Rs 50 lakhs in the preceding Financial Year.

COMPULSORY REGISTRATION UNDER GST

The categories of taxpayers who must compulsorily register under GST. Listed below are those categories as per Section 24 of the CGST Act, 2017. Accordingly:

1. Individuals or businesses that involve the inter-state taxable supply

1. Individuals who required to pay tax under Casual taxable

1. Individuals who needed to pay tax under reverse charge

1. Individuals who are required to pay tax under sub-section (5) of section 9

1. Non-resident taxable Individuals
   

Individuals who are required to pay TDS (Tax Deducted at Source) under section 51. This is impertinent of whether separately registered under the Act or not, whether the Individuals are separately registered under the Act or not.

1. Input Service Distributor who separately registered under the Act or not.

1. Individuals make a taxable supply of services or goods on behalf of other taxable Individuals as an agent or differently.

1. Individuals supply services or goods other than supplies defined under sub-section (5) of section 9. Such supplies are done via an electronic commerce operator who is necessitated to collect tax at source as per section 52.

1. Individuals notified by the government of the recommendations of the Council.

1. All the electronic commerce operator

1. Individuals supply online information and database access or retrieval services from one place to outside India. Such services are provided to an individual other than a registered individual in India.
   

STATES ACCEPTING NEW GST REGISTRATION LIMIT

As per the 32nd meeting of the GST Council, an option has been provided to the hilly and northeastern states to select either Rs. 20 lakhs or Rs. 40 lakhs as the GST exemption turnover limit in the supplier of goods.

Therefore, the following is the status of the States adopting the various thresholds for GST registration in case of the supply of goods.

States – accepted Rs 10 Lakhs Threshold Limit	Normal States – Accepted Rs 20 Lakhs Threshold Limit	States – Accepted Rs 40 Lakhs Threshold Limit
Mizoram	Puducherry	Remaining 21 States and 5 Union Territories
Manipur	Meghalaya
Tripura	Arunachal Pradesh
Nagaland	Sikkim
	Telangana
	Uttarakhand

Currently, Delhi and Puducherry are not considered special category states for the purposes of GST structure. Therefore, there would be 31 States in which SGST + CGST would be imposed and 5 Union Territories in which UTGST + CGST would be imposed.

Importantly, as per section 24 of the CGST Act, 2017, registration of a taxpayer is mandatory but an individual who is making inter-state supplies of handicraft goods up to an aggregate turnover of Rs 20 Lakhs will come under the exemption from the registration category. However, it’s Rs 10 Lakhs for states like Manipur, Mizoram, Nagaland and Tripura.

 

 

 

Created & Posted by (Ramesh Kumar Gupta)

 

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