The minimum turnover limit for GST is the limit exceeding which it becomes mandatory for businesses to meet GST compliances. This includes GST registration, GST payment, and GST return filing. It is calculated as aggregate annual turnover which adds up the values of inward and outward taxable, tax-exempted, export, and interstate supplies. It’s taken into account every financial year.
Who is Applicable to Pay GST?
What is the GST Minimum Turnover Limit?
| Annual Aggregate Turnover Limits | Type of Business |
|---|---|
|
Above Rs.40 Lakhs |
Merchandise Business (Normal Category States) |
|
Above Rs.20 Lakhs |
Service-Based Business (Normal Category States) |
|
Above Rs.20 Lakhs |
Merchandise Business (North-eastern and Hilly States) |
|
Above Rs.10 Lakhs |
Service-Based Business (North-eastern and Hilly States) |
GST Taxpayers exempted from Minimum GST Turnover Limit
Despite prescribing a threshold limit for GST registration and compliance, the government has kept certain businesses exempt from this requirement. These businesses must mandatorily pay GST even if their turnover falls below the prescribed limits. To put in simple words, GST registration and compliance for businesses in this category is mandatory, regardless of their turnover limits. Here’s the complete list of these businesses:
- E-commerce operators/ aggregators
- Businesses selling on e-commerce platforms
- Casual Taxpayers
- Business non-resident in India
- Importers & Exporters
- Taxpayers under GST Reverse Charge Mechanism
- Taxpayers registered under the older tax regime
- Businesses engaged in Inter-state supplies of goods & services
- Service Providers providing information & online databases services (OIDAR)
What happens if Businesses Exceed the Minimum Turnover for GST?
- GST Registration
- GST Payment
- Filing GST Return
- Submitting GST Invoices and E-way Bills
- Submitting annual GST Reconciliation Bill
GST registration limits have been raised from the earlier threshold to exempt smaller businesses from the burden of GST compliance and payment. When GST started in India, merchandise businesses had to register for it if their turnover had exceeded Rs.20 lakhs, in the current regime this limit has been raised to 40 lakhs. This has been done so that small businesses can focus and reinvest in their growth instead of bearing the expenses of tax compliances. However, no changes have been made in the GST registration limits of services business, which is still Rs.20 lakhs, same as the older limit.