Threshold for Registration under GST enhanced to Rs 40 Lakh w.e.f. 01.04.2019 1

In its 32nd meeting, GST Council has decided to increase the threshold limit for registration under GST laws from the erstwhile limit of Rs 20 Lakh to Rs 40 Lakh.

On 7th March 2019, CBIC has issued a notification where it has notified that such enhanced threshold limit will be applicable w.e.f. 1st April 2019. This is a big relief for small businesses especially retailers doing business at local level. In just Five Years of Modi Government, tax free limit, under indirect tax regime, has moved from 5 Lakh to 40 Lakh. Earlier, in various states/UTs, threshold  limit to get registration under VAT laws was just Rs five lakh. Due to this, there was huge black money in the system as the businessmen were not showing their business in organised market to save indirect taxes. Now, a culture to show the business in books of accounts and income tax returns will surely move-on. Further, it will also become a boosting factor to cashless economy as the limit of Rs 40 lakh is quite high for an average businessman.

In this article, we will go through this notification containing terms and conditions for such enhanced limit.

As per new rule, registration under GST is not required if Aggregate Turnover of a person does not exceed Rs forty lakh during a financial year, subject to the following conditions:-

Enhanced limit applicable for Supplier of Goods only:-

Any person, who is engaged in exclusive supply of goods can avail the benefit of enhanced limit.

It means, if such person is also supplying a portion of services too, or, he is exclusively a service provider, this notification has no impact for him.

Enhanced Limit NOT applicable where Supplier of Goods supplying following goods:-

  1. Ice cream and other edible ice, whether or not containing cocoa. (HSN Code : 2105 00 00)
  2. Pan masala (HSN Code : 2106 90 20)
  3. All goods, i.e. Tobacco and manufactured tobacco substitutes under Chapter 24 of HSN Schedule.

i.e. for suppliers supplying any or all of the above mentioned goods, threshold limit will be only Rs 20 lakh/10 lakh as earlier.

Enhanced Limit NOT applicable where Supplier of Goods engaged in intra-state supply of goods in following listed states:-

  1. Arunachal Pradesh
  2. Manipur
  3. Meghalaya
  4. Mizoram
  5. Nagaland
  6. Puducherry
  7. Sikkim
  8. Telangana
  9. Tripura
  10. Uttarakhand

Enhanced Limit NOT applicable where Supplier of Goods is required to take compulsory registration under section 24 of CGST Act 2017

Following are the situations listed under section 24 where a person is required to get registration under GST without checking threshold limit:-

  1. Persons making any inter-State taxable supply;
  2. Casual taxable persons making taxable supply;
  3. Persons who are required to pay tax under reverse charge;
  4. Person who are required to pay tax under sub-section (5) of section 9;
  5. Non-resident taxable persons making taxable supply;
  6. Persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
  7. Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
  8. Input Service Distributor, whether or not separately registered under this Act;
  9. Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; 
  10. Every electronic commerce operator who is required to collect tax at source under section 52;
  11. Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person.

Enhanced Limit NOT applicable where Supplier of Goods exercising option under the provisions of sub-section (3) of section 25, or such registered persons who intend to continue with their registration under the said Act.

Section 25 (3) of CGST Act 2017 allows registration under GST on voluntary basis even though not liable to be registered under section 22 or section 24. If a person wishes to get registration under these circumstances, there is no restriction for the same.

Read complete notification >> CGST-10/2019 dated 07 March 2019

Meaning of Aggregate Turnover:-

Aggregate Turnover means: Sum total of

  • All Taxable supplies,
  • Exempt supplies,
  • Exports of goods and/or services and
  • Inter-State supplies of a person having the same PAN

And this will be computed on all India basis of a person having the same PAN.

Aggregate turnover will not include inward supplies on which tax is to be paid under reverse charge by recipient of such supplies.


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