GST Registration in 2026: Thresholds, Process and the Composition Scheme

Three sections of the CGST Act decide whether you must register

Whether your business needs a GSTIN comes down to three sections of the Central Goods and Services Tax Act, 2017:

• Section 22 — registration based on aggregate turnover crossing a threshold.
• Section 23 — persons who are exempt from registration (e.g., persons engaged exclusively in the supply of non-taxable goods or services).
• Section 24 — categories of persons who must register irrespective of turnover.

Get these three right and you have the entire registration map. The rest of this guide walks through each, the composition-scheme alternative under Section 10, and the Rule 8 application process.

Section 22 — turnover-based registration

The headline rule under Section 22 CGST Act is that every supplier with an aggregate turnover exceeding the prescribed threshold must register in the State or Union Territory from which they make the supply. Two threshold sets apply:

Goods suppliers (raised by Notification No. 10/2019-Central Tax w.e.f. 1 April 2019):

• ₹40 lakh in normal-category States and Union Territories.
• ₹20 lakh in the special-category States and UTs of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand.

Service suppliers (Section 22 as enacted):

• ₹20 lakh in normal-category States and UTs.
• ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura.

Aggregate turnover is computed on an all-India PAN basis and includes taxable supplies, exempt supplies, exports and inter-State supplies — but not the GST itself or inward supplies on which tax is paid under reverse charge.

For a Pune supplier of goods, the relevant threshold is ₹40 lakh in aggregate turnover. For a Pune service provider, it is ₹20 lakh. Crossing either makes Section 22 registration mandatory.

Section 24 — compulsory registration regardless of turnover

Section 24 CGST Act overrides the Section 22 thresholds for several categories of persons. The major ones are:

• Inter-State suppliers of taxable goods. (For inter-State supply of services, Notification 10/2017-Integrated Tax provides relief up to the Section 22 threshold; the relief does not apply to goods.)
• Casual taxable persons making taxable supplies.
• Non-resident taxable persons.
• Persons required to deduct TDS under Section 51.
• Persons making supplies through an electronic commerce operator required to collect TCS under Section 52.
• Electronic commerce operators themselves.
• Persons supplying online information and database access or retrieval (OIDAR) services from outside India to an unregistered person in India.
• Input service distributors.
• Agents supplying on behalf of other taxable persons.
• Persons liable to pay tax under reverse charge on inward supplies.

A Pune designer selling on Etsy (an inter-State e-commerce platform) to customers outside Maharashtra falls under Section 24 — registration is required from the first rupee, the ₹20 lakh service threshold does not help.

Section 23 — who is exempt from registration

A few categories under Section 23 CGST Act are not required to register:

• Persons engaged exclusively in supplying goods or services that are not liable to GST (wholly exempt, or non-taxable).
• Agriculturists to the extent of supply produced out of cultivation of land.
• Other persons or classes of persons specified by the Government.

Section 10 — the composition scheme

The composition scheme under Section 10 CGST Act is the simpler alternative for small taxpayers. Instead of filing detailed monthly returns and claiming input tax credit, eligible persons pay a small percentage of turnover and file quarterly returns.

Aggregate-turnover ceiling for composition (Section 10(1)): ₹1.5 crore in the preceding financial year (₹75 lakh for the special-category States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand). For a Pune trader, the ₹1.5 crore ceiling applies.

Composition tax rates (combined CGST + SGST):

• Manufacturers other than ineligible categories — 1% (0.5% CGST + 0.5% SGST).
• Restaurants and caterers referred to in clause (b) of paragraph 6 of Schedule II — 5% (2.5% CGST + 2.5% SGST).
• Other suppliers (traders) — 1% of turnover of taxable supplies (0.5% CGST + 0.5% SGST).

Service provider composition option (Section 10(2A)): A registered person not eligible for the main composition scheme, whose aggregate turnover in the preceding financial year did not exceed ₹50 lakh, may opt to pay tax at 6% (3% CGST + 3% SGST).

Composition is not available if you make any inter-State outward supply, supply through an e-commerce operator collecting TCS, supply non-taxable goods, are a casual or non-resident taxable person, or are a manufacturer of ice cream, pan masala, aerated water, tobacco or fly-ash bricks (notified ineligible categories).

The trade-off: composition lowers compliance and tax outflow on turnover but forfeits input tax credit and bars inter-State supply. For a Pune retailer selling locally with low input credits, composition is often cheaper. For an exporter or a B2B supplier whose customers want input tax credit, the regular scheme is essential.

Registration timeline and the Rule 8 process

Section 25 CGST Act sets the timeline:

• Apply for registration within 30 days of becoming liable under Section 22 or 24.
• A casual taxable person or non-resident taxable person must apply at least 5 days before commencement of business.

The mechanics are in Rule 8 of the CGST Rules, 2017:

1. Declare your PAN in Part A of FORM GST REG-01 on the GST portal. PAN is validated against the CBDT database, and the mobile number and email linked to PAN are verified through OTP.
2. A Temporary Reference Number (TRN) is generated. Using the TRN, complete Part B of REG-01 with business details, place of business, bank account and authorised signatory.
3. If you opt for Aadhaar authentication (the faster path), the authorised signatory and one of the promoters/partners/directors complete biometric Aadhaar authentication and photograph capture at a notified Facilitation Centre, along with verification of original documents uploaded with the application.
4. The proper officer either grants registration within the prescribed time (typically 7 working days where Aadhaar authentication is done, 30 days where it is not) or issues a clarification notice.
5. On approval, a GSTIN is generated and FORM GST REG-06 (registration certificate) is issued.

Documents typically uploaded include PAN, Aadhaar of the authorised signatory, photo, proof of place of business (electricity bill, rent agreement plus NOC), bank account proof, and constitution-of-business documents (partnership deed, Certificate of Incorporation, etc.).

Voluntary registration

A person not otherwise required to register may apply voluntarily under Section 25(3). The advantage is the ability to issue tax invoices and pass on input tax credit to customers — useful for small Pune B2B suppliers whose corporate customers insist on a GSTIN. Once voluntarily registered, the same obligations apply as for a mandatory registrant.

Multiple registrations and place of business

Section 25(2) requires registration in every State or Union Territory from which a taxable person makes taxable supply. A Pune business with a Mumbai branch needs separate Maharashtra registration covering both, but a Pune business with a Bengaluru office needs a separate Karnataka registration. Under Section 25(4) read with Notification 16/2020-Central Tax, a person may opt for multiple registrations within a single State for different business verticals if the business so chooses.

What happens if you don't register on time

Late registration attracts:

• Late fees under Section 47 for delayed returns once you do register.
• Recovery of tax for the unregistered period — supplies you made between the date you became liable and the date you registered are still taxable.
• Penalty under Section 122 — for failure to obtain registration, up to ₹10,000 or the amount of tax involved, whichever is higher.

For a Pune service business that crosses ₹20 lakh in March 2026 and registers only in July, the period April–July is exposed to Section 122 penalty plus the unrecoverable tax cost on customer invoices that did not carry GST.

Pune note: we structure your registration around the right scheme

At RDA Tax Advisory Services, Baner, GST registration is part of every new-business set-up we run. We assess whether you cross the Section 22 threshold, whether Section 24 captures you (inter-State supply or e-commerce), whether the Section 10 composition scheme genuinely saves you tax (it usually does for B2C retailers but not for B2B), and which registrations you need across States. We then file REG-01, complete the Aadhaar authentication, and have the GSTIN typically within a week. For Pune businesses approaching the threshold or planning an inter-State e-commerce launch, an early call avoids the penalty exposure that comes from registering one quarter late. Office No. 102, Snehraj Apartment, Baner, Pune 411045 · call +91 77570 45059.

Get your GST registration done right the first time

Approaching the GST threshold in Pune or launching an e-commerce / inter-State business? RDA handles the Section 22 / 24 assessment, the composition-vs-regular choice, the REG-01 application and the Aadhaar authentication end-to-end. Book a GST consultation at rdatax.in or call +91 77570 45059 — RDA Tax Advisory Services, Baner, Pune.

Verification note: Material legal positions in this article — Section 22 thresholds for goods (₹40 lakh / ₹20 lakh) and services (₹20 lakh / ₹10 lakh), the special-category state list, Section 24 compulsory-registration categories, Section 10 composition-scheme rates (1% / 5% / 6%) and ceilings (₹1.5 crore / ₹50 lakh for 10(2A)), Section 25 registration timeline, and Rule 8 PAN-plus-Aadhaar process — are sourced from the CBIC Tax Information Portal (taxinformation.cbic.gov.in) text of the CGST Act, 2017, CGST Rules, 2017 and Notification No. 10/2019-Central Tax. Confirm with your CA before structuring any specific registration.