Do you need GST registration to sell currency notes?

The ₹20 lakh threshold — what counts toward it

The ₹20 lakh threshold is calculated on aggregate annual turnover — the total value of all taxable supplies in a financial year, measured from 1 April to 31 March. Every rupee of sales value counts toward this threshold, not just profit. A dealer who sells 100 notes at an average of ₹3,000 each has ₹3 lakh of turnover — well below threshold. A dealer who sells 20 notes at ₹1,20,000 each has ₹24 lakh of turnover — above threshold, registration mandatory.

For a collector who sells only occasionally — a few notes per year, total sales well below ₹20 lakh — GST registration is not required. The legal obligation simply does not arise. For an active dealer who crosses the threshold, registration is mandatory from the date on which the threshold is exceeded.

What GST registration requires you to do

A GST-registered dealer must: collect GST on each sale at the applicable rate (5% for numismatic coins under HSN 9705; 12% for numismatic notes under HSN 4907); issue a tax invoice complying with GST Rules 2017 for each sale; maintain transaction records; file GST returns (typically monthly or quarterly depending on turnover); and remit collected GST to the government. Non-compliance after registration is more serious than non-registration below the threshold — it can result in penalties, interest, and prosecution.

The 5% vs 12% distinction — critical for mixed inventory

The GST rate for numismatic items is not uniform. Numismatic coins — those classified under HSN 9705 as collector pieces of numismatic interest — attract 5% GST following the GST Council's June 2017 rate reduction. Numismatic banknotes and historical paper currency — classified under HSN 4907 (banknotes, postage stamps, first-day covers) or Chapter 49 — attract 12% GST as historical paper items.

A dealer selling both coins and notes must apply different GST rates to different items on the same invoice. Applying 5% to banknote sales — because coins attract 5% — is a GST compliance error. A conservative dealer handling significant banknote turnover should seek an Advance Ruling from the GST Authority for Advance Ruling in their state, since the classification of collectible banknotes under HSN 4907 versus other chapters can be debated.

The Section 269ST cash transaction limit

Separate from GST, Section 269ST of the Income Tax Act prohibits any person from receiving ₹2 lakh or more in cash from a single person in a single day, in respect of a single transaction or relating to one event or occasion. The penalty is equal to the full amount of the prohibited cash receipt. A dealer who accepts ₹3 lakh in cash for a single note is in violation regardless of whether the transaction is genuine.

Laws & authorities referenced in this chapter

CGST Act 2017 — §22 (registration threshold — ₹20 lakh aggregate annual turnover)

CGST Act 2017 — §8 (composite supply — rate follows principal supply)

GST Council decision, June 2017 — numismatic coins reduced to 5% under HSN 9705

HSN 4907 — numismatic banknotes and historical paper currency at 12%

Income Tax Act 1961 — §269ST (cash transaction limit — ₹2 lakh; penalty = full amount)

RBANMS Educational Institution v. B. Gunashekar — Supreme Court, 16 April 2025 — courts must report §269ST violations to IT officers