GST Registration Exemptions Under Section 23 CGST Act: How Sections 22, 23 and 24 Fit Together
This article explains who is excused from GST registration under Section 23 of the CGST Act, 2017, and how that exemption operates alongside the general registration duty in Section 22 and the compulsory registration categories in Section 24.
The point matters because registration liability is routinely tested by comparing turnover with a threshold. That shortcut ignores the nature of the supplies, the whole of the assessee's activity, and the notifications issued under Section 23(2), several of which have been amended. A wrong conclusion either way leads to avoidable exposure.
Issue
Whether a person must be registered cannot be answered from aggregate turnover alone. Three provisions have to be read in order, with the notifications issued under the third.
Governing law
Section 22: the general duty
Section 22 requires a supplier of taxable supplies to register once aggregate turnover crosses the prescribed threshold, subject to the conditions and exceptions in the Act and in notifications. Turnover limits that practitioners quote from memory (Rs 20 lakh, Rs 40 lakh and the like) are only the starting point; they do not describe the full position.
Section 24: registration irrespective of the threshold
Section 24 lists persons who must register even when the Section 22 threshold is not reached. The list includes persons making inter-State taxable supplies and, at clause (ix), persons who supply goods or services through an e-commerce operator who is required to collect tax at source.
Section 23(1): persons not liable to register
- Under
Section 23(1)(a), a person engaged exclusively in supplying goods or services, or both, that are not liable to tax or are wholly exempt from tax under the CGST Act or the IGST Act, 2017 is not liable to register. - Under
Section 23(1)(b), an agriculturist, to the extent of the supply of produce out of cultivation of land, is not liable to register. "Agriculturist" is defined inSection 2(7).