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written by | April 25, 2022

Increased GST Registration Threshold Limits

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Table of Content


Businesses or business owners with a turnover of over ₹40 lakhs need to register as regular taxable persons under the GST regime. GST registration is registering for GST, and almost all businesses must register for GST. If a firm or company operates without registering for GST, it is subject to hefty fines. There is no change in the thresholds for service providers. If your annual revenue surpasses ₹20 lakhs, you must know all the details about the GST. Read the entire article and get information and details about the GST registration limits.

Did you know?

Once you register for the GST, after completing the registration, you will get a GST Identification Number called the GSTIN.

GST Registration Threshold Limits Increased

Those companies or company owners with a taxable turnover of more than ₹40 lakhs must register as regular taxable persons under the GST registration limits. On the other hand, those with a taxable turnover of under ₹10 lakhs must register as particular taxable persons. You can accomplish the threshold limit for GST registration through the GST registration process.

The vast majority of enterprises must register for GST. When businesses that violate the GST legislation, such as those that do not register for GST before conducting business, face stiff fines. The threshold limit for GST registration service providers has remained constant. A person must register if their annual income exceeds ₹20 lakhs or ₹10 lakhs.

The GST council revised the minimal threshold for GST registration in response to MSME concerns. This has simplified the process of complying with the GST. States have the option of increasing the restrictions or maintaining the present ones. The GST registration limit is a predetermined sum to avoid paying taxes. The GST council enhanced the exempted amount from payment of GST to ₹40 lakhs, and a few years ago, it was ₹20 lakhs. In addition, the council increased the northeastern states' exemption maximum from ₹10 lakhs to ₹20 lakhs.

Also Read: How To Calculate Aggregate Turnover For GST Registration

Overview of Earlier Limits, New Limits and the Date of Applicability

The term "aggregate turnover" is essential when evaluating whether or not you need to register for GST. In popular terms, turnover refers to the value of a company over time. The taxable value of goods supplied, exempt goods and services provided, export of goods and supply within a state make up a turnover in GST. As a result, GST turnover includes supplies of goods or services, GST-exempt supplies and exports.

Turnover for GST Registration

A company with more than ₹20 lakhs must register under the Goods and Services Tax. For North Eastern and hilly states designated as certain states, the GST registration turnover limit is at ₹10 lakhs. The CBIC announced a rise in the business threshold from ₹20 lakhs to ₹40 lakhs, effective from April 1, 2019. Usually, the GST registration online process takes 2 to 6 working days.

Aggregate Turnover limit for GST registration

Registration Required

Applicability

Limits in Place Previously – For the Sale of Goods/Providing Services

Exceeds 20 lakhs

Yes – For the Normal States

Up to 31st March 2019

Exceeds 10 lakhs

Yes – For the Special States

Up to 31st March 2019

New Limits – For Sale of Goods

Exceeds 40 lakhs

Yes – For the Normal States

From 1st April 2019

Exceeds 20 lakhs

Yes – For the Special States

From 1st April 2019
 

The service provider threshold limit for GST registration has remained unchanged. If a person's turnover limit for GST registration reaches ₹20 lakhs or ₹10 lakhs, they must register.

States Who Opted for the New Limit

For the time being, the GST does not treat Delhi or Puducherry as category states. Due to the new tax structure, there will be an increase in taxes in 31 states and five union territories.

Section 24 of the CGST Act, 2017 states that a taxpayer registration is necessary. However, a person who makes inter-state deliveries of handicraft items with an aggregated turnover limit for GST registration of ₹20 lakhs shall be exempt from registration. However, the GST registration turnover maximum is ₹10 lakhs for states like Manipur, Mizoram, Nagaland and Tripura.

Two states have decided to stay under the reduced GST constraints since they are the Special States. The two hilly states are J&K and Assam. In addition, these states have opted to raise the GST turnover ceiling to ₹40 lakhs. Even though these two states had the option of imposing GST on aggregate turnover surpassing ₹10 lakhs, they chose a higher GST registration turnover limit threshold of ₹20 lakhs.

In response to the devastating natural disasters that struck Kerala last year, the state has the percent to impose a 1% 'calamity cess' on all intra-state supplies of goods. This would aid the state's efforts to stabilise the economy.

Financial Year to Reckon the Aggregate Turnover

The government uses the total revenue for the current fiscal year (in this case, FY 2019-2020) to evaluate if additional threshold limits apply. GST registration is mandatory for all service providers whose current financial year's total revenue exceeds the threshold limits.

On the other hand, taxpayers who fall into the following categories are automatically obliged for GST. Because their organisation crossed the GST threshold, they should register. Those who don't need to do so are

  • Businesses or individuals who make taxable supplies across state lines.
  • Those who are liable to pay tax under the Casual Taxable Income Act.
  • Individuals who are obligated to pay tax under the reverse charge provision.
  • Individuals must pay tax under section 9 sub-section (5).
  • Non-resident taxable individuals.
  • Those subject to TDS (Tax Deducted at Source) under section 51. Whether or not the individuals separately register under the Act is irrelevant.
  • Whether or not the input service distributor separately registers under the Act.
  • Individuals who, as an agent or otherwise, provide taxable service GST items on behalf of other taxable individuals.
  • Individuals who provide services or don't supply items as in section 9's subsection (5). Providers make such transactions through an electronic commerce operator required to collect tax at the point of sale under section 52.
  • People who the government has notified about the council's recommendations.
  • Every e-commerce service provider.
  • People who provide internet information, database access or retrieval services from one location to another outside India. In India, firms offer such services to individuals who are not registered.

Also Read: Know All About Documents Checklist for GST Registration for Businesses

Changes in the Threshold Limits to Opt into the Composition Scheme

The composition scheme changed on April 1, 2019. The council enhanced the yearly turnover criteria for the composition program to ₹1.5 crores. From April 1, 2019, people registered under this scheme must pay taxes quarterly and complete annual returns. The GST turnover limit for registration for North-Eastern states and Uttarakhand remains at ₹75 lakhs.

The council alloted service providers with the following composition scheme:

The new plan created a predetermined tax rate of 6 percent for taxpayers who are only service providers, including 3 percent CGST and 3 percent SGST. Previously, the program did not offer a composition plan to service providers. Service providers and suppliers of products and services with a turnover of ₹50 lakhs in the preceding financial year are eligible for this scheme.

Conclusion

In India, registration under the GST is subject to a cap on the number of exemptions claimed each year. A person who has a yearly taxable turnover more than the exemption level will be required to register with the GST. This is called a GST registration limit or a GST threshold, depending on the jurisdiction. Because of the periodic changes in the law, there has been a slew of questions about the GST level. 
Do you have issues with payment management and GST? Install the Khatabook App, a friend-in-need and one-stop solution for all issues related to income-tax or GST filing, employee management and more. Try it today!

FAQs

Q: Is it necessary for me to pay both GST and income tax?

Ans:

If your annual turnover exceeds ₹40 lakhs, you must register. If a person's yearly income exceeds ₹2.5 lakhs, they must pay income tax.

Q: What is the formula for calculating a GST return?

Ans:

Multiply the income tax amount with the GST rate to calculate GST. If you use CGST and SGST, the CGST amounts are equal to half of the total GST amount. For instance, the GST included value is ₹525, and the GST rate is 5%.

Q: Is it possible for a salaried individual to apply as per the GST turnover threshold?

Ans:

Unless and until you are a dealer, you cannot claim ITC as a paid professional. If the salaried individual is also a business owner, the GST credit will be applied to the output tax due.

Q: What is the minimum turnover for GST registration?

Ans:

A company with annual revenue of more than ₹20 lakhs must register under the Goods and Services Tax. For North Eastern and hilly states designated as special states, the maximum is ₹10 lakhs.

Q: What is the GST turnover threshold 2020 income limit?

Ans:

Your adjusted net family income must be below a certain level to qualify for the GST/HST credit. The 2020 tax year varies from ₹36 lakhs to ₹47 lakhs, depending on your marital status and the number of children.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.