GST Registration Limit 2025 - Threshold, Rules & Applicability
GST registration limit determines whether a business must register under the Goods and Services Tax regime. Understanding these limits is essential for compliance and avoiding penalties. This blog explains the latest thresholds, rules, and procedures for GST registration in India.
What is the GST Registration Limit?
GST registration limit refers to the turnover threshold beyond which businesses must register under GST. It ensures tax compliance and proper collection of GST on supplies. Businesses exceeding this limit must obtain GST registration to avoid penalties and maintain legal operations.
Updated GST Registration Turnover Limits for 2025
The GST Council has set different turnover limits for goods and services across normal and special category states. Below is a summary of the latest thresholds:
| Category | Normal States | Special Category States |
| Goods | ₹40 lakh | ₹20 lakh |
| Services | ₹20 lakh | ₹10 lakh |
State-wise GST Registration Threshold Limits
Normal category states include Maharashtra, Karnataka, Tamil Nadu, Gujarat, and others. Special category states include North-Eastern states and hill states such as Himachal Pradesh and Uttarakhand. These states have opted for lower thresholds to support small businesses.
Who Must Register for GST Compulsorily Regardless of Turnover?
- Interstate suppliers of goods and services
- Casual taxable persons
- Non-resident taxable persons
- E-commerce operators
- Persons liable under reverse charge mechanism
- Input service distributors
How to Calculate GST Registration Threshold Limit?
Aggregate turnover includes taxable supplies, exempt supplies, exports, and interstate supplies. For example, if a business has ₹25 lakh in taxable supplies and ₹5 lakh in exempt supplies, the aggregate turnover is ₹30 lakh, which exceeds the service threshold in normal states.
Changes in GST Registration Limits for Composition Scheme
- ₹1.5 crore for goods in normal states
- ₹75 lakh for goods in special category states
- ₹50 lakh for service providers
Benefits of Voluntary GST Registration Below Threshold Limit
- Eligibility to claim input tax credit
- Improved business credibility
- Ease in dealing with GST-compliant buyers
Additionally, voluntary GST registration strengthens compliance and transparency, which lenders value when assessing Business Loans. Registered businesses can present GST returns as proof of turnover and financial discipline, improving creditworthiness. Access to input tax credit enhances cash flow, reducing working capital strain and supporting timely loan repayments. Additionally, GST registration signals operational maturity, making businesses more attractive for funding.
Also Read: What is Business Loan: Complete Guide
Penalties and Consequences of Non-Registration When Threshold Crossed
- Penalty of 10% of tax due or ₹10,000, whichever is higher
- Interest on unpaid tax
- Risk of legal action and compliance notices
How to Apply for GST Registration?
- Visit the GST portal and click on 'New Registration'
- Fill in business details and upload documents
- Verify using OTP and submit application
- Track status using ARN (Application Reference Number)
Also Read: Can GST Registration Online: A Complete Guide
Final Thoughts
The GST registration threshold limit determines whether a business must register under the Goods and Services Tax regime based on its annual turnover. Voluntary registration below this limit can benefit businesses seeking loans because lenders often review GST compliance and returns to assess financial discipline and turnover authenticity. Registered businesses can present GST filings as credible proof of revenue, improving creditworthiness and chances of loan approval. This transparency also signals operational maturity, which strengthens trust with financial institutions.
Apply now for a Business Loan.
FAQs
Q.1. Can a business cancel GST registration if turnover falls below the limit?
A. Yes, businesses can apply for cancellation if turnover drops below the threshold, subject to clearance of liabilities.
Q.2. Is GST registration mandatory for e-commerce sellers regardless of turnover?
A. Yes, e-commerce operators must register irrespective of turnover.
Q.3. How often does the GST Council review or revise turnover limits?
A. The GST Council reviews limits periodically based on economic conditions and compliance needs.
Q.4. Can non-resident taxable persons be exempt from registration?
A. No, non-resident taxable persons must register before making supplies in India.
Q.5. What documents should I keep ready to avoid delays during GST registration?
A. PAN, business address proof, bank details, and identity documents of promoters.
Q.6. Does voluntary GST registration require the same compliance as mandatory registration?
A. Yes, voluntary registrants must follow all GST compliance requirements including filing returns.
Disclaimer:
The content presented on this page, including images and factual information, is intended solely as a summary derived from publicly available sources. GHFL/GFL (“Company”) does not claim ownership of such information, nor does it represent that the Companies have exclusive knowledge of the same. While efforts are made to ensure accuracy, there may be inadvertent errors, omissions, or delays in updating the content. Users are strongly encouraged to independently verify all information and seek expert advice where necessary. Any decisions made based on this content are solely at the discretion and responsibility of the user. Godrej Capital and its affiliates assume no responsibility for any loss or damage that may result from the use of or reliance on the information provided herein.
Connect with Our Customer Support Team
Customer Support
