GST Limits Every Startup & Business Owner Must Know in 2026: Registration, Composition, E-Invoice & More
GST limits for startups and business owners in 2026: registration threshold, composition, e-invoice, e-way bill, QRMP and 57th Council recommendations.
A founder in Kondapur crosses ₹18 lakh in invoices by August and wonders whether GST is already due. A trader in Nanakramguda sells to a customer in Bengaluru on day one and finds that the “turnover limit” does not help her at all. GST has a long list of thresholds, each triggered by a different test, and missing one costs more than the tax itself.
Registration limits
| Situation | Limit | Provision |
|---|---|---|
| Supplier of services (intra-State) | ₹20 lakh aggregate turnover | s.22 CGST Act |
| Supplier of goods only, Telangana | ₹20 lakh verify | s.22; Notification 10/2019-CT (State list) |
| Supplier of goods only, most States | ₹40 lakh | Same notification |
| Inter-State supply of goods | No limit; register from the first rupee | s.24 CGST Act |
| Inter-State services | Exempt up to ₹20 lakh if no other disqualification | Notification 10/2017-IT verify |
| Casual or non-resident taxable person; reverse-charge cases; tax deductors and collectors | No limit | ss.24, 25 |
| E-commerce sellers | Generally required to register, subject to limited exemptions verify | s.24 |
Aggregate turnover is computed PAN-wise across India, and includes exempt supplies and exports but excludes taxes. A person with a services proprietorship and a goods business under one PAN must test both together. Our GST registration and filing page explains the process.
Composition scheme
Eligible goods suppliers with turnover up to ₹1.5 crore can pay tax at 1% of turnover (manufacturers and traders) or 5% (restaurants), and service providers with turnover up to ₹50 lakh at 6% under the separate service composition option verify. The price: no input tax credit, no inter-State outward supply, no sales through e-commerce operators, and no tax collection from customers. Annual return GSTR-4 and quarterly CMP-08 apply. For a business that buys heavily from registered suppliers, composition is rarely worth it.
E-invoicing and e-way bill
- E-invoice: mandatory for a registered person whose aggregate turnover exceeded ₹5 crore in any year from 2017-18 (Notification 10/2023-CT). Taxpayers with ₹10 crore or more are reported to be required to report invoices within 30 days of the invoice date verify.
- E-way bill: required for movement of goods with a consignment value above ₹50,000 (Rule 138 CGST Rules), with certain exceptions and State-specific rules for intra-State movement verify.
- Consequence of default: an invoice without an IRN where required may be treated as not issued, and the buyer’s ITC may be questioned.
Returns and audit limits
| Item | Limit | Note |
|---|---|---|
| QRMP (quarterly return, monthly payment) | Up to ₹5 crore turnover | Invoice Furnishing Facility for B2B invoices |
| Annual return GSTR-9 | Optional below ₹2 crore turnover | Check the notification for each year verify |
| Reconciliation statement GSTR-9C | Above ₹5 crore turnover | Self-certified |
| Late fee, GSTR-1 and GSTR-3B | ₹50 a day (₹20 if nil), capped by turnover tier | s.47; see our penalties guide |
Cash and ITC limits
- Rule 86B: where taxable turnover (excluding exempt and zero-rated) exceeds ₹50 lakh in a month, at least 1% of output tax must be paid in cash, with exceptions for taxpayers who paid substantial income tax or received sizeable refunds verify.
- ITC time limit (s.16(4)): up to 30 November following the financial year, or the date of filing the annual return, whichever is earlier.
- ITC matching: credit is limited to what appears in GSTR-2B for the period, so supplier non-filing directly blocks your credit.
- TDS (s.51): 2% deduction by notified government entities on contract payments above ₹2.5 lakh verify.
What the 57th GST Council recommended on limits and compliance
- Late fee waiver: no late fee under s.39(1) for taxpayers up to ₹5 crore prior-year turnover if the return is filed by the end of the due month.
- E-invoicing to extend to reverse-charge supplies from unregistered persons and import of services, for turnover of ₹5 crore and above.
- Registration cancellation: auto-acceptance in defined cases where ITC passed on never exceeded ₹2.5 lakh in any month.
- Small e-commerce sellers with no physical presence in a State: operator’s warehouse as place of business under proposed rule 14B.
- Show cause notices: a minimum ₹10,000 tax for notices under ss.73, 74 and 74A.
Dates are not reported for most of these. Keep working to the current limits until the law is amended. Our note on the 57th Council highlights tracks notifications.
Hyderabad context
IT services firms in Hitech City and Gachibowli typically cross ₹20 lakh quickly and, if they export, sit under the zero-rated regime. Traders and manufacturers in the Telangana goods bracket should note that their threshold is lower than the national headline. Start-ups selling on marketplaces register from day one. Rate changes from the 2025 reform are covered in our GST 2.0 note.
Why work with ComplianceKart
Limits interact: crossing one often triggers another, such as e-invoicing following a turnover jump or Rule 86B following a good quarter. ComplianceKart is a boutique practice bringing CAs, CSs and advocates under one roof, like a multi-speciality hospital where the person who spots the symptom and the one who treats it work together. We map the limits to your numbers and keep you ahead of them. We make no promise on tax outcomes.
Frequently asked questions
What is the GST registration limit in Telangana?
₹20 lakh of aggregate turnover for services, and ₹20 lakh for goods suppliers in Telangana under the State list in Notification 10/2019-CT. Inter-State supply of goods requires registration at any turnover verify.
Do I need GST registration if I sell only services to other States?
Inter-State service providers are exempt from registration up to ₹20 lakh aggregate turnover, subject to other conditions such as not supplying through an e-commerce operator or under reverse charge.
Who must issue e-invoices?
Registered persons whose aggregate turnover exceeded ₹5 crore in any year from 2017-18, other than excluded classes. Check the notification for exclusions.
What is the composition scheme turnover limit?
₹1.5 crore for goods suppliers and ₹50 lakh for service providers under the service composition option verify. No ITC is allowed.
When is an e-way bill required?
For movement of goods with a consignment value above ₹50,000, subject to exceptions and State rules for intra-State movement.
What did the 57th GST Council recommend for small taxpayers?
A late fee waiver under s.39(1) up to ₹5 crore turnover if the return is filed by the end of the due month, and automatic acceptance of certain registration cancellations. These need legal amendments before applying.
Have you crossed a GST limit?
Share your turnover, States of supply and goods or services. We will tell you which thresholds apply.
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Disclaimer. This article is general information on Indian law as at 20 October 2026 and is not advice on any specific case. Items marked verify should be checked against the current official text before reliance. Contact: team@compliancekart.com · 9959536391 · compliancekart.com.
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