Boost for SMEs: Increase in GST Registration Limit

Goods and Services Tax Regime and GST Registration Limit:

The Government of India introduced the Goods and Services Tax Regime in India to remove the previous taxation system that was complex and lengthy. GST is considered as one of the main taxation reforms in India since its independence. Goods and Services Tax has replaced the older indirect taxes like Value Added Tax, Sales Tax, Excise Duties, Entertainment Tax, etc. It came into effect through the 101st Amendment in the Constitution of India on 1st July, 2017.

GST Registration: The GST Regime has provided with a solution to make taxpayers and the companies or businesses more GST compliant. All the taxpayers have to get Registration under GST.  After registering themselves the taxpayers receive a unique Goods and Services Tax Identification Number (GSTIN) which will help them at all levels of GST processes and return filings. GST Registration has its own share of benefits in a diverse country like India with so many taxpayers which make it even more important.

GST Registration Limit

GST Registration: Recent Updates in Threshold limits

The Government of India recently increased the threshold amount limit for the taxpayers and companies to register themselves under GST. These limits will be effective from 1st April, 2019 and will give boost to the Small and Medium Enterprises (SMEs). The new threshold limits for GST Registration are as below:

  • For the sale of any goods for states in Normal category: The limit for merchants dealing in sale of goods was Rs. 20 Lakhs, which is now being increased to Rs. 40 Lakhs.
  • For the sale of goods for states in Special category: The threshold limit for special category states like Northeastern states was Rs. 10 Lakh earlier, which is now increased to Rs. 20 Lakhs for GST Registration.
  • For providing services in both Normal and Special Category States: The threshold amount for GST Registration in case of providing the Services was Rs. 20 Lakhs and Rs. 10 Lakh previously; which has not been changed for the service providers and remains same.

Advantages of increasing threshold limit for GST Registration:

Increasing the threshold limit was a very important step in the whole GST Registration Online process. The advantages of increasing it are as follows:

  • The Small and Medium Enterprises (SMEs) will get exemptions on limit at higher rates.
  • It will help them from refraining unnecessary collection of taxes.
  • It will help in easing of filing of returns.
  • Taxpayers who are under the threshold amount will be able to be benefited from the Composition Scheme under GST.

States opting for the new threshold limit for GST Registration:

  • Normal category states i.e. Chhattisgarh, Delhi, Bihar, Maharashtra, Tamil Nadu, Andhra Pradesh, Gujarat, Haryana, Jharkhand, Goa, Punjab, Uttar Pradesh, J&K, Assam, Odisha, West Bengal, Himachal Pradesh, Karnataka, Madhya Pradesh and Rajasthan have opted for the new threshold limits.
  • Special category states i.e. Uttrakhand, Manipur, Puducherry, Meghalaya, Mizoram, Tripura, Sikkim, Nagaland and Arunachal Pradesh have also opted for this new turnover limit for GST Registration.
  • Telangana has opted for a special quo status.
  • Kerala has also opted for a special quo status and also this state can charge 1% calamity charges on all goods and services being supplied intra-state for coping any calamity like the one faced by Kerala in the year 2018.
Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or