GST Registration in 2026: Thresholds, Compulsory Cases and Why Applications Get Rejected
GST registration looks like a form-filling exercise. In practice a large share of applications receive a clarification notice, and many are rejected for avoidable reasons. Here is what to know before you apply.
Turnover thresholds
Registration is required when aggregate turnover in a financial year exceeds:
| Supplier of | Most states (incl. Uttar Pradesh) | Certain states* |
|---|---|---|
| Goods only | ₹40 lakh | ₹10 lakh – ₹20 lakh |
| Services, or goods and services | ₹20 lakh | ₹10 lakh – ₹20 lakh |
*Manipur, Mizoram, Nagaland and Tripura apply a ₹10 lakh threshold to all suppliers. Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and Uttarakhand apply ₹20 lakh to suppliers of goods. Confirm the current position for your state before relying on the higher limit.
Aggregate turnover is computed on an all-India PAN basis. It includes taxable, exempt and export supplies and inter-state transfers to your own branches, and excludes GST itself and inward supplies taxed under reverse charge.
Compulsory registration, whatever the turnover
Section 24 of the CGST Act lists cases where the threshold does not apply. The common ones are:
- Inter-state taxable supply of goods. Inter-state supply of services below the threshold is exempted from registration by notification.
- Persons liable to pay tax under reverse charge.
- Casual taxable persons and non-resident taxable persons.
- Persons supplying through an e-commerce operator that collects tax at source. Service providers below the threshold are exempt, and since October 2023 small suppliers of goods making only intra-state supplies through e-commerce operators can also operate without registration, subject to conditions.
- Persons required to deduct TDS or collect TCS under GST.
- Input service distributors.
Regular or composition?
The composition scheme suits small businesses that sell mainly to consumers. Turnover must be up to ₹1.5 crore (₹75 lakh in special category states), or up to ₹50 lakh for eligible service providers. Tax is paid at a low flat rate on turnover, with quarterly payment through CMP-08 and an annual GSTR-4.
There is a catch. A composition dealer cannot charge GST on invoices, cannot claim input tax credit and cannot make inter-state outward supplies. If your customers are registered businesses, composition makes you less attractive as a supplier.
Why applications get a REG-03 query or are rejected
- Address proof mismatch. The electricity bill or property tax receipt is in a different name from the rent agreement or consent letter, or shows a different address format.
- Unsigned or unstamped rent agreements, or a consent letter without the owner's ID.
- Photographs or signboard missing where the officer asks for a geo-tagged photograph of the premises.
- Business activity not clear, or HSN/SAC codes inconsistent with the description.
- Authorised signatory not authenticated on Aadhaar, or not properly authorised by a board resolution or partners' letter.
- Residential premises used without explaining how the business is actually run from there.
A reply to REG-03 must be filed within seven working days. Otherwise the application is rejected and you must start again.
After registration
- Display the GSTIN and the registration certificate at the place of business.
- File returns from the effective date of registration, even nil returns. Since July 2025, returns cannot be filed more than three years after their due date.
- If your aggregate turnover crosses ₹5 crore in any year from 2017-18 onwards, e-invoicing applies.
- Generate e-way bills for movement of goods above ₹50,000.
The information in this article reflects the law as on the date of publication and is for general guidance only.