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GST Registration Limit

GST, known as the Good and Services Tax, should be paid by any business whose summative turnover is more than INR 40 lakhs in a fiscal year. Such companies should mandatorily register under the Good & Services Tax. 

The GST Registration limit varies in a few states in India. Having said this, the areas where the GST registration limit is set at INR 10 lakhs are for Northern Eastern and other hill states that are labelled as distinct category states. Besides, the explanation of taxable turnover has changed to aggregate turnover. 

GST is beneficial in many ways and the main uses are to enhance the proficiency of taxations, increasing economic growth. Moreover, this will lead to the establishment of a common national market.

By reading this guide on the GST registration limit, you can clear many queries related to GST, invoice, and aggregate turnover. If you are a business owner, you must know about all these basics of GST.

The limit for GST Registration – Overview of previous and new limits

Here you can get an overview of the previous threshold limits of GST registration vs. new threshold limits. 

The old threshold limits up to March 31st, 2019 was set for INR. 20 lakhs for all the normal category states and the special category states it was INR 10 lakhs per financial year. 

Whereas the new threshold limits were introduced on April 1st, 2019 and GST registration limit 40 lakh has been set for the states that come under the normal category and INR 20 lakhs for special category states. 

GST limit for registration statewide 

  • Some of the normal category states who selected the GST registration new limit of INR 40 lakhs include Kerala, Tamil Nadu, Chhattisgarh, Jharkhand, Bihar, Delhi, Andhra Pradesh, Gujarat, Haryana, Maharashtra, Goa, Punjab, Himachal Pradesh, Uttar Pradesh, Madhya Pradesh, Karnataka, Orissa, Rajasthan, West Bengal, Lakshadweep, Dadra, and Nagar Haveli, Daman and Diu, Andaman & Nicobar Island and Chandigarh. 
  • However, one state that comes under the normal category state has chosen the status quo of INR 20 lakhs and it is Telangana. 
  • Jammu and Kashmir, Ladakh, and Assam opted for the new limit of INR 40 lakhs even though they come under the special category states. 
  • A few states in the special category who selected for the new limit of INR 20 lakhs are Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarkhand, and Puducherry.

GST registration limit for services – Is it mandatory?

As of now, there has been no difference in the threshold limits for service providers. Any service provider must register under the GST if the aggregate turnover is more than INR 20 lakh for all the normal category states. Likewise, any service-related businesses whose aggregate turnover in a financial year surpasses INR 10 lakhs should also require GST registration.

Audit under GST     

The procedure of inspection of records, returns, and various other documents that are maintained by a taxable person is called the audit under GST. This GST audit turnover limit audit is conducted to authenticate the accuracy of turnover acknowledged, refund claimed, input tax credit availed and the tax paid by a business. 

Moreover, auditing can evaluate compliance with the provisions of GST. These audits can be of several kinds. Sometimes s the audit may be led by CA/ CMA, if the threshold turnover is more than INR 2 crores. For certain cases, the audit may be done by the tax authorities and for some special audits may be organized by the Assistance Commissioner after considering the nature and complexity of the case and also the interest of revenue.

How to calculate the GST turnover limit?

 If you want to calculate the aggregate turnover of your business, you must value all taxable supplies, exempt supplies, exports, and inter-state supplies and deduct the taxes, the value of inward supplies, the value of supplies taxable under reverse charge, and the value of non-taxable supplies of a person who has the same PAN card across all his business entities in India. This turnover limit for GST registration is computed for the whole financial year between April and March.

How to generate GST Number in invoice using myBillBook

Ever since the software has been introduced, most of the work related to business accounting became easier and helped create accurate details. There are different types of software for generating GST invoices or bills, and here you can see how to generate GST numbers in invoices using myBillBook. Steps to create a GST invoice are as follows:

  1. Create an Invoice

You must select the option Sales from the myBillBook dashboard. Then select Invoice. Now you must select the Branch from which the GST invoice is to be issued. If your business has only one branch, then you will not have any options to select from.

  1. Choose the Invoice Date and Payment Due Date

In myBillBook, you can easily select the date from the calendar option they have given and set the payment date as well.

  1. Select the Customer

Click on the Customer tab and select the name of the customer from the drop-down menu which is a list of customers who already added to the ledgers. If the customer name cannot be found in the drop-down list, you can click on the Add Customer button and add the details of the new customer.

  1. Verify the place of supply

The place of the customer will be automatically added according to the delivery address of the customer. You must verify the place of supply to determine the tax that is relevant to the invoice you are creating at the moment. If there is more than one address of a customer, then you can select one from the drop-down menu.

  1. Select Goods and Services Supplied

From the drop-down list, select the goods or services that you have supplied to the customer. In this section, you can also add the name of the good or services if you cannot find the item in the list. After selecting the name of the good or service, the discount, IGST, SGST, price of the item, and quantity will be automatically added. Cross-check the details and you can update the discount to calculate the final taxable value.

  1. Update any additional details

If you want to add any additional information to the GST invoice, you can do so by clicking the additional charge from the drop-down menu. You must also choose if your supply is export or local. In case, if the reverse charge is applicable, change the option to Yes.

  1. Create GST Invoice

After checking and confirming all the details entered in the invoice, click on Create Invoice. You can download the document in word and pdf format and it can be handed over to the customer in person or can email the same.

The GST number of a business enterprise will be 15 digits.

  • The first two digits of the GST number will be the state code as every state of India has been given unique numbers
  • The next 10 digits you can see is the PAN number of the company 
  • The 13th digits are added according to the total registrations done in a certain state
  • An alphabet Z is included in the GST number which will be the 14th digit
  • The last digit is assigned for the checksum digit for the use of the tax department. 

The GST number can be saved in myBillBook and it will automatically be added to each invoice you create.

FAQs on GST registration limit

  1. What is the purpose of calculating aggregate turnover in GST?

By calculating the aggregate turnover in GST, one can decide the threshold limits under the GST.

  1. What does the aggregate turnover of a business in GST consist of?

It comprises the value of all taxable supplies, exempt supplies, exports, inter-state supplies. Moreover, the value of all taxes, including the value of inward supplies, the value of supplied taxable under the reverse charge, and the value of non-taxable supplies are deducted from the first.