GST Registration Limit for Goods in 2026: The ₹40 Lakh Rule and Its Exceptions

The ₹40 lakh limit came in from 1 April 2019. States could choose whether to adopt it. Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand did not, so the lower limits apply there. If you're close to the line, confirm your state's current position before relying on ₹40 lakh.

• Anyone who also supplies services. Even a small amount of service income brings you down to ₹20 lakh. Interest earned on deposits or loans is the one exception: it doesn't count against you.
• Suppliers of ice cream and other edible ices, pan masala, and tobacco or tobacco products. They use ₹20 lakh whatever they sell.
• Anyone who must register compulsorily, as listed below.

The limit applies to aggregate turnover, which is wider than just taxable sales:

• It is counted across India for the same PAN, with all branches and states added together.
• It includes taxable sales, exempt sales (for example fresh vegetables or unbranded grains), exports and inter-state supplies.
• It excludes the GST itself, and purchases on which you pay tax under reverse charge.

Example: a trader in Bihar selling ₹30 lakh of taxable goods and ₹15 lakh of exempt goods has aggregate turnover of ₹45 lakh. That is over the ₹40 lakh limit, so registration is required, even though the taxable sales alone are under it.

• You make inter-state supplies of goods, i.e. you sell to a buyer in another state.
• You sell goods through an e-commerce platform that collects TCS. Small sellers making only intra-state sales have a limited exemption.
• You are a casual taxable person, for example selling at an exhibition in another state.
• You are liable to pay tax under reverse charge.

Once liable, you have 30 days to apply.

Registration is triggered on the day your aggregate turnover for the financial year crosses the limit, not at year end. From that point:

• Apply within 30 days. If you do, the registration takes effect from the date you became liable.
• Charge GST on sales from the date of liability. Sales made before you crossed the limit are not taxed retrospectively.
• Keep invoices for the period between becoming liable and getting the GSTIN. They are adjusted through revised tax invoices once you are registered.

Turnover is counted per financial year, starting 1 April. Once registered, you stay registered until you apply to cancel; falling back under the limit doesn't cancel the GSTIN automatically.

Registering voluntarily lets you claim input tax credit on purchases, sell to GST-registered businesses that want credit, and sell across state lines. The cost is monthly or quarterly returns.

If you do register and your turnover is under ₹1.5 crore, the composition scheme is worth a look. Traders pay just 1% of turnover and file simpler returns, but cannot charge GST to customers, claim input credit, or sell inter-state.

TaxQue can handle your GST registration and the returns that follow. For the exact steps, see how to apply for GST registration.