What is the GST limit for small business?

Posté 2025-02-07 10:39:09

Goods and Services Tax (GST) is a mandatory tax system in India, applicable to businesses based on their annual turnover. However, small businesses enjoy a threshold exemption limit, allowing them to operate without GST registration in Coimbatore if their revenue falls below a certain level. With online GST registration in Coimbatore, small businesses can easily comply with tax regulations if required.

GST Exemption Limit for Small Businesses

The GST registration limit varies based on business type and location.

1. For Goods Suppliers (Traders & Manufacturers)

₹40 lakh – If operating in regular states like Tamil Nadu, Karnataka, Maharashtra, etc.
₹20 lakh – If located in special category states like Himachal Pradesh, Uttarakhand, and the North-Eastern states.

2. For Service Providers

₹20 lakh – For businesses in normal states.
₹10 lakh – For businesses in special category states.

If a business’s annual turnover remains below these thresholds, GST registration in Coimbatore online is not mandatory unless it falls under specific GST requirements.

Who Must Register for GST Regardless of Turnover?

Even if a business is below the GST exemption limit, certain businesses must register for GST under specific conditions:

1. Interstate Business Transactions

Businesses supplying goods or services across state borders must register under GST, regardless of turnover.

2. E-commerce Sellers

Businesses selling on platforms like Amazon, Flipkart, or their own e-commerce websites must register for GST.

3. Casual Taxable Persons

Individuals who occasionally supply goods or services in different states must obtain GST registration.

4. Businesses Under Reverse Charge Mechanism (RCM)

If a business falls under RCM, where the recipient must pay GST instead of the supplier, GST registration is required.

5. Voluntary GST Registration

Small businesses may opt for online GST registration in Coimbatore voluntarily to avail of input tax credit benefits and gain credibility.

Composition Scheme for Small Businesses

The Composition Scheme allows small businesses to pay GST at a lower fixed rate without filing monthly returns. It is beneficial for businesses with turnover:

₹1.5 crore or below for goods suppliers (₹75 lakh for special category states).
₹50 lakh or below for service providers.

Under this scheme:

Traders & manufacturers pay 1% GST
Restaurants pay 5% GST
Service providers pay 6% GST

However, businesses in the Composition Scheme cannot claim input tax credit (ITC).

Conclusion

The GST registration limit for small businesses depends on their turnover and type of business. While businesses below ₹40 lakh (for goods) and ₹20 lakh (for services) are generally exempt, those involved in interstate trade, e-commerce, or RCM must register. With GST registration in Coimbatore online, small businesses can easily comply with GST rules and operate legally. If unsure, consulting experts for GST registration in Coimbatore can ensure hassle-free compliance.