goods and service tax

Published on 5 April 2025

Understanding GST Registration Requirements and Changes for 2025

Understanding Goods and Services Tax (GST)

Goods and Services Tax (GST) is India’s comprehensive indirect tax imposed on the supply of goods and services. This multi-stage, destination-based tax has replaced numerous prior taxes, including Value Added Tax (VAT), service tax, and excise duty. Although GST is collected at various stages of the supply chain, the ultimate tax burden is placed upon the consumer.

GST Registration Thresholds (2025)

Businesses are required to register under GST when their aggregate turnover surpasses specific thresholds outlined below:

CategoryGoods ThresholdServices Threshold
Normal States/UTs₹40 lakh₹20 lakh
Special Category States₹20 lakh*₹10 lakh

*Note: States like Assam, Jammu & Kashmir, and Ladakh, classified as special category states, have adopted a higher turnover threshold of ₹40 lakh for goods.

States/UTs with ₹40 Lakh Threshold for Goods:

The following states/UTs maintain the ₹40 lakh registration threshold for goods:

  • Kerala
  • Chhattisgarh
  • Jharkhand
  • Delhi
  • Bihar
  • Maharashtra
  • Andhra Pradesh
  • Gujarat
  • Haryana
  • Goa
  • Punjab
  • Uttar Pradesh
  • Himachal Pradesh
  • Karnataka
  • Madhya Pradesh
  • Odisha
  • Rajasthan
  • Tamil Nadu
  • West Bengal
  • Lakshadweep
  • Dadra and Nagar Haveli and Daman and Diu
  • Andaman and Nicobar Islands
  • Chandigarh
  • Assam
  • Jammu & Kashmir
  • Ladakh

States/UTs with ₹20 Lakh Threshold for Goods:

These states/UTs apply the ₹20 lakh threshold for goods:

  • Puducherry
  • Meghalaya
  • Mizoram
  • Tripura
  • Manipur
  • Sikkim
  • Nagaland
  • Arunachal Pradesh
  • Uttarakhand

Additionally, Telangana has retained the ₹20 lakh threshold for goods as a normal state.

Compulsory GST Registration (Regardless of Turnover)

Certain entities must register for GST irrespective of their turnover, including:

  • Those supplying goods inter-state (inter-state service suppliers below the threshold are exempt)
  • Casual taxable persons
  • Non-resident taxable persons
  • Individuals required to deduct Tax Deducted at Source (TDS) or Tax Collected at Source (TCS)
  • Persons liable under the reverse charge mechanism
  • E-commerce operators or those supplying through e-commerce platforms
  • Input Service Distributors (ISD)
  • Agents or principals acting on behalf of others

Recent GST Regulatory Changes (2025)

Mandatory ISD Registration

Effective April 1, 2025, businesses with multiple GSTINs under a single PAN must register as ISD to manage the allocation of input tax credit across their branches.

Multi-Factor Authentication (MFA)

From April 1, 2025, MFA will be mandatory for all users accessing the GST portal, significantly improving security measures.

Streamlined Registration Process

The Central Board of Indirect Taxes and Customs (CBIC) has issued new guidelines (April 2025) that impose a stricter adherence to the documentation requirements listed in FORM GST REG-01. This aims to minimize delays and reduce arbitrary inquiries.

Biometric and Aadhaar Authentication

New applicants may be required to undergo Aadhaar and biometric verification processes.

Additional Information

Composition Scheme

Small businesses may opt for a composition scheme with a turnover limit of ₹1.5 crore (₹75 lakh for special category states). This scheme allows them to pay tax at a reduced rate while simplifying compliance obligations.

Voluntary Registration

Entities below the registration threshold have the option to register voluntarily. This can help them claim input tax credit and bolster their credibility in the market.

Turnover Calculation

Aggregate turnover is calculated as the total supplies made by an entity across India, excluding GST as well as inward supplies on which tax is paid via the reverse charge mechanism.

Frequently Asked Questions (FAQs)

Q: What is the GST registration limit for goods and services in 2025?
A: The limits are ₹40 lakh for goods and ₹20 lakh for services in most states, with lower limits designated for special category states.

Q: Who must register for GST regardless of turnover?
A: Registration is mandatory for inter-state suppliers of goods, casual and non-resident taxable persons, entities liable under the reverse charge mechanism, e-commerce operators, ISDs, and agents/principals.

Q: What are the latest compliance updates for GST in 2025?
A: Recent updates include mandatory ISD registration, the introduction of MFA for portal access, and a streamlined registration process requiring strict adherence to documentation.

Key Takeaways

  • GST registration is essential for businesses exceeding defined turnover thresholds, with reduced limits for special category states.
  • Certain categories of businesses are required to register irrespective of their turnover.
  • Recent regulatory changes emphasize mandatory ISD registration and enhanced security measures for the GST portal.
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