Think of Section 22 as the entry gate to GST. Before worrying about rates or Input Tax Credit, you need to answer one question first: Am I required to register at all? That's what this section settles.
The Basic Rule — ₹20 Lakh Threshold. If your aggregate turnover crosses ₹20 lakh in a financial year, you must register for GST in every state from which you make taxable supplies. Aggregate turnover isn't just your taxable sales — it's the PAN-India total of all supplies: taxable + exempt + zero-rated + exports, but excluding GST itself. So if Rajesh & Co. Pvt. Ltd. in Pune earns ₹16 lakh from consulting (taxable) and ₹5 lakh from interest on a fixed deposit (exempt), their aggregate turnover is ₹21 lakh — registration is mandatory. Now, a special carve-out: if a supplier deals exclusively in goods, the Government can raise this limit up to ₹40 lakh. Most states have notified this enhanced limit. But the moment you provide even a single rupee of non-exempt services, the ₹40 lakh benefit disappears and you're back to ₹20 lakh.
Special Category States — ₹10 Lakh Threshold. Certain North-Eastern states have a lower threshold of ₹10 lakh because of their smaller economic scale. For GST purposes, only Manipur, Mizoram, Nagaland, and Tripura currently attract this lower limit. (Students often include Assam, Uttarakhand, or Himachal Pradesh here — that's wrong; those states have been explicitly excluded from the GST special category list.) The Government can enhance this ₹10 lakh limit up to ₹20 lakh on state request, so watch for notifications.
Business Transfers & Corporate Restructuring. If a registered business is sold or transferred as a going concern, the new owner (transferee) must register fresh from the date of transfer — the seller's registration does not carry over. For court-ordered amalgamations or demergers, registration is required from the date the Registrar of Companies issues the incorporation certificate giving effect to the court order. One more important point: aggregate turnover includes supplies made on behalf of principals, but a job worker's turnover excludes the value of goods processed and returned — those count in the principal's turnover under Section 143.
This is asked frequently as a 4-mark scenario question — expect a fact pattern with mixed supplies and you'll need to compute aggregate turnover and determine registration liability.
Example 1 — Mixed Supplier in a General State
Ms. Priya Iyer provides digital marketing services from Bengaluru (Karnataka) and also earns interest on a business FD. FY 2025-26 figures:
| Supply Type | Amount |
|---|---|
| Taxable services (digital marketing) | ₹15,50,000 |
| Exempt services (FD interest) | ₹2,00,000 |
| Zero-rated exports | ₹4,00,000 |
Step 1 — Calculate Aggregate Turnover:
Aggregate Turnover = ₹15,50,000 + ₹2,00,000 + ₹4,00,000 = ₹21,50,000
Step 2 — Compare with threshold:
Karnataka is a general state → threshold is ₹20,00,000
₹21,50,000 > ₹20,00,000 ✓
Answer: Registration is mandatory under Section 22(1).
Note: The FD interest (exempt) is still included in aggregate turnover — a very common exam trap.
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Example 2 — Supplier in a Special Category State
Mr. Rajan sells handloom fabrics in Imphal, Manipur. FY 2025-26:
| Supply Type | Amount |
|---|---|
| Taxable goods (handloom) | ₹8,00,000 |
| Exempt goods | ₹3,00,000 |
Step 1 — Aggregate Turnover:
₹8,00,000 + ₹3,00,000 = ₹11,00,000
Step 2 — Identify applicable threshold:
Manipur = Special Category State → threshold is ₹10,00,000
₹11,00,000 > ₹10,00,000 ✓
Answer: Registration is mandatory, even though ₹11,00,000 < ₹20,00,000.
Had Mr. Rajan been in Delhi with identical turnover, NO registration would be required.
📖 Bare Act text — Section 22, CGST Act 2017
(click to expand)
(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees:
[Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified:]
[Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified:
Explanation.––For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.]
(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.
(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Explanation.––For the purposes of this section,––
(i) the expression ―aggregate turnover‖ shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;
(iii) the expression ―special category States‖ shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution [except the State of Jammu and Kashmir] [and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand.]