Chapter 3: Persons Not Liable for Registration (Section 23)

Under the Goods and Services Tax (GST) regime, Section 23 of the CGST Act delineates specific categories of individuals and entities that are exempt from the mandatory requirement of obtaining GST registration. This provision is instrumental in streamlining compliance for certain economic actors whose activities either fall outside the scope of taxable supplies or are explicitly excluded, thereby reducing the administrative burden on them.

Section 23(1) of the CGST Act primarily identifies two distinct categories of persons who are not obligated to register under GST:

Suppliers of Non-Taxable or Wholly Exempt Goods/Services: Any person exclusively engaged in the business of supplying goods or services, or both, that are either not liable to tax under the GST Act or are wholly exempt from tax under the GST Act or the Integrated Goods and Services Tax (IGST) Act, is not required to register. This exemption applies when the entirety of a person’s business turnover comprises solely such supplies.

Agriculturists: An agriculturist is exempt from GST registration specifically for the supply of produce originating from the cultivation of land. This exemption acknowledges the fundamental nature of agricultural activities and aims to alleviate compliance pressures on primary producers. However, it is crucial to note that if an agriculturist undertakes activities beyond the cultivation of land and the supply of its direct produce—such as trading in agricultural produce not grown by them, or engaging in processing activities that exceed defined limits—they may become liable for registration based on their aggregate turnover.

Beyond the categories explicitly outlined in Section 23(1), the Government retains the authority, acting upon the recommendations of the GST Council, to notify additional categories of persons who may be exempted from obtaining registration under the Act. This provision introduces a necessary degree of flexibility within the GST framework, enabling the government to address unique economic circumstances or to provide targeted relief to specific sectors or types of taxpayers as deemed appropriate.