What is the threshold limit for compulsory registration under the GST Act ?

Under the GST regime, compulsory registration applies irrespective of turnover when a person falls within specific categories notified under Section 24 of the CGST Act, 2017. Therefore, there is no monetary threshold limit for compulsory registration. Once a person engages in any activity specified under Section 24—such as inter-State taxable supply, e-commerce operations, or liability under reverse charge—GST registration becomes mandatory, even if turnover is nil.

Legal Provision:
1. Section 22 – CGST Act, 2017 (General Threshold)

“Every supplier shall be liable to be registered… if his aggregate turnover in a financial year exceeds twenty lakh rupees…”
(₹10 lakh for special category States)

2. Section 24 – CGST Act, 2017 (Compulsory Registration)

“Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act—”

Key clauses include:

• Section 24(i): Persons making inter-State taxable supply

• Section 24(iii): Persons liable to pay tax under reverse charge

• Section 24(v): Non-resident taxable persons

• Section 24(vi): Persons required to deduct tax under Section 51 (TDS)

• Section 24(ix): Persons supplying goods/services through e-commerce operators

• Section 24(x): E-commerce operators required to collect TCS under Section 52

3. Relevant Notifications (Partial Relief)

• Notification No. 10/2017 – IGST: Exemption from compulsory registration for inter-State suppliers of services up to threshold limit.

• Notification No. 65/2017 – CT: Certain handicraft goods suppliers exempted from compulsory registration.

Analysis:
1. Conceptual Distinction: Threshold vs Compulsory Registration

A frequent misconception among taxpayers is conflating threshold registration under Section 22 with compulsory registration under Section 24. Section 24 begins with a non-obstante clause, overriding Section 22 entirely. Therefore, turnover becomes irrelevant once a person falls within Section 24.

In practical terms, even a single taxable transaction can trigger compulsory registration if it is covered under Section 24.

2. Key Categories Triggering Compulsory Registration

From a litigation and advisory standpoint, the most common triggers are:

• Inter-State taxable supply of goods:
  Unlike services, inter-State supply of goods always mandates registration, regardless of turnover. This is a frequent ground for registration cancellation disputes.

• Reverse Charge Mechanism (RCM):
  Persons liable to pay tax under Section 9(3) or 9(4) must register, even if they otherwise make exempt supplies.

• E-commerce participation:
  Sellers on platforms like Amazon, Flipkart, or Meesho must register unless specifically exempted (services up to threshold).

• TDS/TCS Deductors:
  Government departments, PSUs, and notified entities deducting TDS under Section 51 or collecting TCS under Section 52 must compulsorily register.

In my litigation practice before the Patna High Court, registration cancellations frequently arise where small traders assumed threshold exemption despite inter-State outward supplies reflected in e-way bills or GSTR-1.

3. Procedural Consequences of Non-Registration

Failure to take compulsory registration may result in:

• Best judgment assessment under Section 62

• Demand under Section 73/74

• Penalty under Section 122

• Blocking of e-way bills and bank accounts

Notably, retrospective registration and tax demand are routinely upheld where Section 24 applies.

4. No “Threshold Limit” Under Section 24

Legally and practically, there is no threshold limit for compulsory registration. Any advice suggesting a monetary ceiling under Section 24 is erroneous unless backed by a specific exemption notification.

Note for Bihar Filers:

Bihar GST authorities closely rely on e-way bill data and inter-State supply indicators while initiating cancellation or SCN proceedings. In practice, even minimal inter-State outward movement of goods from Bihar often leads to retrospective cancellation. Taxpayers must proactively evaluate Section 24 applicability before commencing supplies.

Note from the Author:
This response is for informational and educational purposes based on the GST law and judicial precedents available as of 2026. Practitioners are advised to verify the latest Notifications, Circulars, and judgments before filing or advising.

— Adv. Tabish Ahmad
Advocate, Patna High Court
LLM (Taxation), MBA (Finance)