Definition
GST Registration Threshold
The GST registration threshold is the annual turnover above which a business must register for GST, with different limits for goods, services and special-category states.
A business whose aggregate turnover crosses the GST registration threshold in a year must register and start charging GST. The threshold differs for suppliers of goods versus services and is lower for certain special-category states, reflecting their smaller economic base.
Some categories — such as those making inter-state supplies, e-commerce operators and those liable under reverse charge — must register regardless of turnover. Voluntary registration below the threshold is also allowed, often so a business can pass on and claim input tax credit.
Related terms
- Composition Scheme (GST)The composition scheme lets small businesses pay GST at a low flat rate on turnover, with simpler compliance, in exchange for giving up input tax credit.
- Reverse Charge Mechanism (RCM)Under the reverse charge mechanism, the recipient of a supply, rather than the supplier, is liable to pay GST to the government.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.