Quick answer: what is the GST limit for goods?
A business making exclusive supplies of goods can generally remain unregistered until its aggregate turnover exceeds ₹40 lakh in a financial year in the states and Union territories covered by the higher exemption. The limit is ₹20 lakh in six specified states/UTs, and ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. The applicable limit also depends on the product and whether a compulsory-registration rule applies.
| Place from which taxable supplies are made | General threshold for exclusive goods suppliers | Threshold for services or mixed goods-and-services suppliers |
|---|---|---|
Most states/UTs, including Maharashtra, Karnataka, Gujarat, Odisha, Bihar, Delhi and Uttar Pradesh | ₹40 lakh | ₹20 lakh |
Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand | ₹20 lakh | ₹20 lakh |
Manipur, Mizoram, Nagaland and Tripura | ₹10 lakh | ₹10 lakh |
These are general registration thresholds, not permission to ignore statutory registration obligations. Confirm the state of supply, the nature of all outward supplies and any relevant notification before applying the table. The ₹40 lakh exemption was introduced through Notification 10/2019-Central Tax , effective 1 April 2019, and is subject to later amendments and statutory exceptions.
The ₹40 lakh figure is not an all-India threshold for every goods business. It does not apply where specified goods are supplied, where the location has a lower threshold, or where compulsory registration is required unless a specific exemption provides otherwise.
Who qualifies for the ₹40 lakh exemption?
The central requirement is that the person is engaged exclusively in supplying goods, has aggregate turnover within ₹40 lakh, and does not fall within an excluded category. The exemption is under section 23(2) of the Central Goods and Services Tax Act, 2017, read with Notification 10/2019-Central Tax and its amendments.
A trader selling garments only within Odisha, for example, may ordinarily rely on the ₹40 lakh threshold if there is no other reason for compulsory registration. But the threshold is based on PAN-wise turnover across India, not the turnover of a single shop.
Does bank interest count as a service?
An exclusive goods supplier does not lose goods-only status merely because it receives exempt interest or discount from extending deposits, loans or advances. This specific exception is recognised in the explanation to section 22(1). The amounts may still require consideration when computing aggregate turnover; do not confuse the goods-only status test with the turnover calculation test.
Ordinary paid services—such as installation, repair, consultancy or transport services supplied separately—can change the applicable registration threshold. Where the business supplies both taxable goods and services, the regular ₹20 lakh or ₹10 lakh threshold generally applies instead of ₹40 lakh.
Which states have ₹20 lakh or ₹10 lakh limits?
The six places with a general ₹20 lakh threshold for goods rather than ₹40 lakh are Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand. Manipur, Mizoram, Nagaland and Tripura have the ₹10 lakh special-category threshold. Other states are ordinarily eligible for the ₹40 lakh goods-only exemption, subject to exclusions.
The classification matters because the GST Act's definition of special-category states for registration is narrower than the Constitution's broader list. For instance, Himachal Pradesh and Assam are not part of the four-state ₹10 lakh registration group. For further analysis, check section 22 of the CGST Act and the government's notification history.
Example: An exclusive goods supplier with ₹22 lakh of aggregate turnover based in Telangana should not assume the ₹40 lakh exemption. By contrast, the same turnover in Odisha, with no other registration trigger, may remain below the goods-only exemption threshold.
Goods excluded from the higher ₹40 lakh benefit
Notification 10/2019 originally excluded suppliers of ice cream and other edible ice, pan masala, and tobacco or manufactured tobacco substitutes. Later amendments added specified building-material categories, including:
- Fly ash bricks, fly ash aggregates and fly ash blocks;
- Bricks of fossil meals or similar siliceous earths;
- Building bricks; and
- Earthen or roofing tiles.
For these categories, the ₹40 lakh exemption is unavailable. Their registration obligations must be assessed under the statutory threshold and any specific rules that apply. See Notification 03/2022-Central Tax and the corresponding 2022 amendments.
How to calculate aggregate turnover for GST registration
Under section 2(6) of the CGST Act, aggregate turnover is calculated on an all-India PAN basis. It generally includes taxable outward supplies, exempt outward supplies, exports and inter-state outward supplies by persons having the same PAN.
It excludes GST and cess amounts and the value of inward supplies on which the recipient pays tax under reverse charge. It is not simply the total deposited in a current account, nor only the value of taxable sales.
| Transaction | Count in aggregate turnover? | Practical note |
|---|---|---|
Taxable sales | Yes | Include outward supplies under the same PAN |
Exempt sales | Yes | Even though GST may not be charged |
Exports | Yes | Zero-rated exports still form part of turnover |
Outward inter-state supplies | Yes | Compulsory-registration rules may additionally apply |
Purchases under reverse charge | No | Inward supplies liable to RCM are excluded |
CGST, SGST, IGST, UTGST and cess | No | Exclude tax components |
Worked example: two shops under one PAN. A trader sells ₹26 lakh of taxable goods in one shop and ₹17 lakh of exempt goods in another shop during the same financial year. Aggregate turnover is ₹43 lakh, not ₹26 lakh. If the trader otherwise qualifies for the ₹40 lakh goods-only category and makes taxable supplies, the threshold has been crossed.
Important exception: A person exclusively supplying wholly exempt or non-taxable goods may be outside registration under section 23(1), even when the combined sales value is high. The example above assumes the trader also makes taxable supplies.
When registration may be compulsory below the threshold
Section 24 lists categories requiring registration irrespective of the ordinary section 22 threshold, subject to separate statutory or notified exemptions. Common examples include:
- Inter-state taxable supplies of goods: The normal goods-only ₹40 lakh exemption does not generally cover such supplies. Some narrowly defined categories, such as notified handicraft suppliers, have separate relief subject to conditions.
- Casual taxable persons: A person temporarily making taxable supplies from a state where it lacks a fixed place of business may need registration; specified handicraft exemptions may apply.
- Persons required to pay GST under reverse charge: Registration may be required where a notified reverse-charge obligation applies. An ordinary purchase from an unregistered trader does not automatically create universal reverse-charge liability.
- Certain agents and persons making taxable supplies on behalf of others: The arrangement and statutory conditions matter.
- Specific e-commerce supplies: Follow the conditional relief described below instead of assuming that every small online seller needs a GSTIN.
If a supply falls wholly under section 23 or an applicable exemption, analyse that exemption first. Do not interpret the general compulsory-registration list without its later notifications.
Can an unregistered seller supply goods through Amazon, Flipkart or another marketplace?
In some cases, yes. Notification 34/2023-Central Tax , effective from 1 October 2023, creates a conditional exemption from mandatory registration for eligible small suppliers of goods through an e-commerce operator collecting tax at source.
Among the principal conditions, the supplier must:
- Remain within the applicable section 22(1) turnover threshold in both the preceding and current financial years;
- Make no inter-state supply of goods;
- Not sell through e-commerce operators in more than one state/UT;
- Have a valid PAN and provide the required business details through the GST portal; and
- Obtain the prescribed enrolment number before making supplies through the operator.
A platform's own eligibility, logistics and account rules may impose additional practical requirements. Check the official GST registration and enrolment portal Official ↗ and the legal notification before listing products.
GST enrolment for the e-commerce exemption is not the same as GST registration. Do not call an enrolment number a GSTIN or use it to claim input tax credit as a registered taxpayer.
Crossing the limit during the financial year
A business ordinarily becomes liable from the date its aggregate turnover exceeds the applicable threshold. Section 25(1) generally requires the application to be submitted within 30 days of becoming liable, subject to special rules for certain categories.
When an eligible application is submitted within the statutory period, registration may take effect from the date the person became liable. If the application is delayed, the effective date and invoice obligations may differ. A taxpayer who receives registration effective from an earlier date may need to issue revised invoices in accordance with the prescribed rules.
For example, if a qualifying goods trader's aggregate turnover moves from ₹39.8 lakh to ₹40.2 lakh on 15 December, the turnover threshold is crossed on 15 December, not at 31 March. The trader should assess liability and the 30-day registration deadline from that event.
Do not charge GST merely because you expect to cross the threshold later. Likewise, do not assume sales after liability arose are outside GST because the GSTIN has not yet been issued. Seek transaction-specific advice on the effective date and invoicing.
GST registration: documents and application steps
Start by determining the correct registration category and state. For an ordinary registration, the process generally involves FORM GST REG-01 on the GST Portal Official ↗, together with applicable identity, place-of-business and constitution documents.
Registration checklist
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Check turnover and exceptions
Include all outward supplies under the PAN, and check compulsory-registration conditions.
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Choose the correct state and applicant type
Registration is generally state-wise for taxable supplies made from that state.
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Prepare the prescribed documents
PAN, applicant details, business constitution and evidence of principal place of business as applicable.
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Complete REG-01
Use the official GST portal Official ↗ and complete required authentication and verification.
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Track the application
Monitor the ARN and respond within the applicable period to any valid clarification request.
Simplified GST registration under Rules 9A and 14A (2026)
The Central Goods and Services Tax (Fourth Amendment) Rules, 2025, notified through Notification 18/2025-Central Tax, introduced two registration pathways effective 1 November 2025:
- Rule 9A — risk-based electronic approval: Applications identified by the GST portal through its prescribed data analysis and risk parameters may be granted registration electronically within three working days of submission. This does not mean every application is automatically approved in three days.
- Rule 14A — optional simplified registration: A person applying under Rule 8 who assesses that the total monthly output tax liability on supplies to registered persons will not exceed ₹2.5 lakh (including applicable GST components and cess) may opt for the prescribed electronic route. Aadhaar authentication and other prescribed conditions apply. The portal's guidance provides for electronic grant within three working days from ARN generation, subject to successful authentication. Generally, no second registration under Rule 14A may be obtained under the same PAN in the same State/UT.
The ₹2.5 lakh figure is an output-tax-liability test, not a turnover threshold. Rules 9A and 14A affect the registration procedure; they do not replace the ₹40 lakh, ₹20 lakh or ₹10 lakh tests that determine whether registration is mandatory. Read the GST Council's October 2025 notification summary and the November 2025 GST portal updates .
Avoiding unnecessary document queries
CBIC Instruction 03/2025-GST Official ↗ directs officers to follow the prescribed document requirements and avoid speculative or unnecessary clarification requests. Applicants should upload the applicable evidence accurately and respond to valid FORM GST REG-03 notices within the prescribed time.
The verification procedure and approval timelines depend on the applicable route, authentication and risk parameters. An indicative processing period is not a guarantee of approval.
Voluntary registration versus composition scheme
A business below the compulsory threshold can generally choose voluntary registration under section 25(3). Once registered, normal tax, invoice, record-keeping and return obligations apply until registration is legally cancelled.
A small eligible trader may instead explore the composition levy under section 10, which has its own turnover caps and restrictions. The composition option is not the same thing as the ₹40 lakh exemption.
| Question | Remain unregistered if exempt | Regular GST registration | Composition registration, if eligible |
|---|---|---|---|
GSTIN | No | Yes | Yes |
Charge GST separately | No | Generally yes for taxable supplies | No; issue bill of supply |
Claim input tax credit | No | Subject to statutory conditions | No |
Periodic compliance | No GST returns solely due to exempt status | Returns according to category | Simplified levy and applicable statements/returns |
Inter-state taxable goods supplies | Generally not covered by ordinary threshold exemption | Permitted subject to law | Generally restricted |
Composition eligibility depends on the type of supplies and preceding-year turnover; the commonly cited ₹1.5 crore limit does not apply identically in every state or to every business model. Compare the real costs, not simply the nominal composition rate.
Common mistakes that cause GST registration problems
- Using sales from only one branch: Aggregate turnover is PAN-wise across India.
- Ignoring exempt outward sales: Exempt supplies can increase turnover even though GST is not collected on them.
- Assuming every state uses ₹40 lakh: Ten states/UTs are outside that higher benefit.
- Mixing services into a goods-only business: Even separately billed repair or installation services may affect the threshold.
- Overlooking special goods: Ice cream, pan masala, tobacco and specified building materials require a separate check.
- Assuming online sales always require immediate GST registration: An enrolment-based intra-state relief may be available, but only if every condition is met.
- Using the ₹40 lakh limit for a composition decision: Registration exemption and composition eligibility serve different purposes.
- Missing the 30-day deadline: Record the date on which the applicable limit was exceeded.
Practical checklist before applying
- ○ Identify all supply locations and PAN-linked businesses.
- ○ Confirm whether supplies are goods-only, services-only or mixed.
- ○ Check the correct state threshold and excluded products.
- ○ Add taxable, exempt, export and inter-state outward turnover.
- ○ Review any section 24 compulsory-registration requirement and specific relief.
- ○ Check special rules if selling through a marketplace.
- ○ Calculate the date on which the relevant threshold was crossed.
- ○ Gather the documents required by REG-01.
- ○ Keep supporting turnover records and invoices.
Conclusion
For most exclusive suppliers of goods, ₹40 lakh is the key GST registration threshold—but it is not universal. The correct answer depends on where taxable supplies are made, what is sold, whether other services are supplied, and whether a compulsory-registration provision or exemption applies. Calculate turnover across the entire PAN and check the law before relying on an exemption.
For help with eligibility and documents, see TaxQue's GST registration service. The official GST Portal Official ↗ remains the authoritative place to apply and track your registration.
Official sources and references
- CGST Act, 2017 — registration provisions Official ↗: sections 2(6), 22, 23, 24 and 25.
- Notification 10/2019-Central Tax : ₹40 lakh exemption for eligible exclusive goods suppliers.
- Notification 03/2022-Central Tax : amendments concerning specified bricks and related goods.
- Notification 34/2023-Central Tax : conditional e-commerce registration exemption.
- Notification 18/2025-Central Tax — GST Council official notification summary : Rules 9A and 14A effective 1 November 2025.
- CBIC Instruction 03/2025-GST Official ↗: prescribed registration documents and clarification practices.
- GST portal — normal taxpayer registration guide Official ↗: application guidance.
- GST Council — notifications and updates : distinguish Council recommendations from effective notifications.
Regulatory position researched on 27 October 2026. This Guide provides general information and does not replace professional advice for a specific supply or jurisdiction.
