Amended and updated notes on section 23 of CGST Act, 2017. Detail discussion on provisions and rules related to persons not liable for registration.
Chapter VI (Sections 22–30) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to registration. Section 23 of CGST 2017 provides for persons not liable for registration.
Recently, we have discussed in detail section 22 (Persons liable for registration) of CGST Act 2017. Today, we learn the provisions of section 23 of Central GST Act 2017.
Section 23 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. This notification was come into force from 22nd June, 2017 i.e. the commencement date of section 23 is 22-6-2017.
| Name of Act | The Central Goods and Services Tax Act 2017 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Central Board of Indirect Taxes & Customs |
| Governing body | GST Council |
| Number of Chapters | 21 |
| Number of Sections | 174 |
| You are reading: | |
| Chapter No. | VI |
| Chapter Name | Registration |
| Section No. | 23 |
| Section Name | Persons not liable for registration |
| Updated 2024 Edition | GST Law Book PDF |
Section 23 of Central GST – Persons Not liable for registration1
Section 23 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017.
Section 23(1) of CGST Act
Section 23(1): The following persons shall not be liable to registration, namely: ––
- (a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
- (b) an agriculturist, to the extent of supply of produce out of cultivation of land.
Section 23(2) of CGST Act
Section 23(2): The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.
Exemption from obtaining GST Registration
Agriculturist
As per Section 2(7) “agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land—
- (a) by own labour, or
- (b) by the labour of family, or
- (c) by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family;
GST Registration Exemption Limit for Exclusive Supply of Goods
[Notification No. 10/2019-Central Tax, G.S.R. 190(E) dated 07-03-2019 and last amended by 03/2022-Central Tax, G.S.R. 242(E) dated 31-03-2022]
In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter referred to as the “said Act”), the Central Government, on the recommendations of the Council, hereby specifies the following category of persons, as the category of persons exempt from obtaining registration under the said Act, namely,-
Any person, who is engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed forty lakh rupees, except, –
- (a) persons required to take compulsory registration under section 24 of the said Act;
- (b) persons engaged in making supplies of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table;
- (c) persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand; and
- (d) persons exercising option under the provisions of sub-section (3) of section 25, or such registered persons who intend to continue with their registration under the said Act.
| Sl. No. | Tariff item, sub-heading, heading or Chapter | Description |
|---|---|---|
| (1) | (2) | (3) |
| 1 | 2105 00 00 | Ice cream and other edible ice, whether or not containing cocoa. |
| 2 | 2106 90 20 | Pan masala |
| 3 | 24 | All goods, i.e. Tobacco and manufactured tobacco substitutes |
| [4 | 6815 | Fly ash bricks or fly ash aggregate with 90 per cent. or more fly ash content; Fly ash blocks |
| 5 | 6901 00 10 | Bricks of fossil meals or similar siliceous earths |
| 6 | 6904 10 00 | Building bricks |
| 7 | 6905 10 00 | Earthen or roofing tiles][See Foot Note-1] |
[Foot Note-1] SL. No. 4 to 7 inserted w.e.f. 1-April-2022 vide Notification No. 03/2022-Central Tax, G.S.R. 242(E) dated 31-03-2022.
Reverse Charge Basis
The CG vide Notification No. 5/2017-Central Tax, G.S.R. 607 (E) dated 19-06-2017 specified the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the CGST Act as the category of persons exempted from obtaining registration under the CGST Act 2017.
Job Workers
The CG vide Notification No. 7/2017-Integrated Tax, G.S.R. 1155(E) dated 14-09-2017 specified the job workers engaged in making inter-State supply of services to a registered person as the category of persons exempted from obtaining registration under CGST Act 2017.
Such exemption shall not apply to a job-worker:
- (a) who is liable to be registered u/s 22(1) or who opts to take registration voluntarily u/s 25(3) of the CGST Act 2017; or
- (b) who is involved in making supply of services in relation to the goods mentioned against serial number 5 in the Annexure to rule 138 of the CGST Rules, 2017.
Handicraft Goods
The CG vide Notification No. 3/2018-Integrated Tax, G.S.R. 1052(E) dated 22-10-2018 in supersession of the Notification No. 8/2017-Integrated Tax, G.S.R. 1156(E) dated 14-09-2017 except as respects things done or omitted to be done before such supersession, hereby specifies the following categories of persons (hereinafter referred to as ‘such persons’) who shall be exempted from obtaining registration under the said Act:
(i) such persons making inter-State taxable supplies of handicraft goods as defined in the “Explanation” in notification No. 21/2018 -Central Tax (Rate), dated the 26th July, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 695 (E), dated the 26th July, 2018 and falling under the Chapter, Heading, Sub-heading or Tariff item specified in column (2) of the Table contained in the said notification and the Description specified in the corresponding entry in column (3) of the Table contained in the said notification; or
(ii) such persons making inter-State taxable supplies of the products mentioned in column (2) of the Table below and the Harmonised System of Nomenclature (HSN) code mentioned in the corresponding entry in column (3) of the said Table, when made by the craftsmen predominantly by hand even though some machinery may also be used in the process:—
| Sl. No. | Products | HSN Code |
|---|---|---|
| (1) | (2) | (3) |
| 1. | Leather articles (including bags, purses, saddlery, harness, garments) | 4201, 4202, 4203 |
| 2. | Carved wood products (including boxes, inlay work, cases, casks) | 4415, 4416 |
| 3. | Carved wood products (including table and kitchenware) | 4419 |
| 4. | Carved wood products | 4420 |
| 5. | Wood turning and lacquer ware | 4421 |
| 6. | Bamboo products (decorative and utility items) | 46 |
| 7. | Grass, leaf and reed and fibre products, mats, pouches, wallets | 4601, 4602 |
| 8. | Paper mache articles | 4823 |
| 9. | Textile (handloom products), Handmade shawls, stoles and scarves | Including 50, 58, 61, 62, 63 |
| 10. | Textiles hand printing | 50, 52, 54 |
| 11. | Zari thread | 5605 |
| 12. | Carpet, rugs and durries | 57 |
| 13. | Textiles hand embroidery | 58 |
| 14. | Theatre costumes | 61, 62, 63 |
| 15. | Coir products (including mats, mattresses) | 5705, 9404 |
| 16. | Leather footwear | 6403, 6405 |
| 17. | Carved stone products (including statues, statuettes, figures of animals, writing sets, ashtray, candle stand) | 6802 |
| 18. | Stones inlay work | 68 |
| 19. | Pottery and clay products, including terracotta | 6901, 6909, 6911, 6912, 6913, 6914 |
| 20. | Metal table and kitchen ware (copper, brass ware) | 7418 |
| 21. | Metal statues, images/statues vases, urns and crosses of the type used for decoration of metals of chapters 73 and 74 | 8306 |
| 22. | Metal bidriware | 8306 |
| 23. | Musical instruments | 92 |
| 24. | Horn and bone products | 96 |
| 25. | Conch shell crafts | 96 |
| 26. | Bamboo furniture, cane/Rattan furniture | |
| 27. | Dolls and toys | 9503 |
| 28. | Folk paintings, madhubani, patchitra, Rajasthani miniature | 97 |
Provided that the aggregate value of such supplies, to be computed on all India basis, does not exceed the amount of aggregate turnover above which a supplier is liable to be registered in the State or Union territory in accordance with sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to that section.
Such persons making inter-State taxable supplies mentioned in the preceding paragraph shall be required to obtain a Permanent Account Number and generate an e-way bill in accordance with the provisions of rule 138 of the Central Goods and Services Tax Rules, 2017.
Casual Taxable Persons
The CG vide Notification No. 56/2018-Central Tax, G.S.R. 1056(E) dated 23-10-2018 in supersession of the Notification No. 32/2017-Central Tax, G.S.R. 1158(E) dated 15-09-2017 has specified the casual taxable persons who shall be exempted from obtaining registration under the said Act:-
(i) such persons making inter-State taxable supplies of handicraft goods as defined in the “Explanation” in notification No. 21/2018 -Central Tax (Rate), dated the 26th July, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.695 (E), dated the 26th July, 2018 and falling under the Chapter, Heading, Sub-heading or Tariff item specified in column (2) of the Table contained in the said notification and the Description specified in the corresponding entry in column (3) of the Table contained in the said notification; or
(ii) such persons making inter-State taxable supplies of the products mentioned in column (2) of the Table below and the Harmonised System of Nomenclature (HSN) code mentioned in the corresponding entry in column (3) of the said Table, when made by the craftsmen predominantly by hand even though some machinery may also be used in the process: —
| Sl. No. | Products | HSN Code |
|---|---|---|
| (1) | (2) | (3) |
| 1. | Leather articles (including bags, purses, saddlery, harness, garments) | 4201, 4202, 4203 |
| 2. | Carved wood products (including boxes, inlay work, cases, casks) | 4415, 4416 |
| 3. | Carved wood products (including table and kitchenware) | 4419 |
| 4. | Carved wood products | 4420 |
| 5. | Wood turning and lacquer ware | 4421 |
| 6. | Bamboo products (decorative and utility items) | 46 |
| 7. | Grass, leaf and reed and fibre products, mats, pouches, wallets | 4601, 4602 |
| 8. | Paper mache articles | 4823 |
| 9. | Textile (handloom products), Handmade shawls, stoles and scarves | including 50, 58, 61, 62, 63 |
| 10. | Textiles hand printing | 50, 52, 54 |
| 11. | Zari thread | 5605 |
| 12. | Carpet, rugs and durries | 57 |
| 13. | Textiles hand embroidery | 58 |
| 14. | Theatre costumes | 61, 62, 63 |
| 15. | Coir products (including mats, mattresses) | 5705, 9404 |
| 16. | Leather footwear | 6403, 6405 |
| 17. | Carved stone products (including statues, statuettes, figures of animals, writing sets, ashtray, candle stand) | 6802 |
| 18. | Stones inlay work | 68 |
| 19. | Pottery and clay products, including terracotta | 6901, 6909, 6911, 6912, 6913, 6914 |
| 20. | Metal table and kitchen ware (copper, brass ware) | 7418 |
| 21. | Metal statues, images/statues vases, urns and crosses of the type used for decoration of metals of chapters 73 and 74 | 8306 |
| 22. | Metal bidriware | 8306 |
| 23. | Musical instruments | 92 |
| 24. | Horn and bone products | 96 |
| 25. | Conch shell crafts | 96 |
| 26. | Bamboo furniture, cane/Rattan furniture | |
| 27. | Dolls and toys | 9503 |
| 28. | Folk paintings, madhubani, patchitra, Rajasthani miniature | 97 |
Provided that such persons are availing the benefit of notification No. 03/2018-Integrated Tax, dated the 22nd October, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1052(E), dated the 22nd October, 2018:
Provided further that the aggregate value of such supplies, to be computed on all India basis, does not exceed the amount of aggregate turnover above which a supplier is liable to be registered in the State or Union territory in accordance with sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to that section.
Such persons mentioned in the preceding paragraph shall obtain a Permanent Account Number and generate an e-way bill in accordance with the provisions of rule 138 of the Central Goods and Services Tax Rules, 2017.
Inter-State suppliers
The CG vide Notification No. 10/2017-Integrated Tax, G.S.R. 1260(E) dated 13-10-2017 specified the persons making inter-State supplies of taxable services and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of ₹20 Lakh in a financial year as the category of persons exempted from obtaining registration under the IGST Act, 2017.
Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of ₹10 Lakh in case of “special category States” as specified in the first proviso to sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to the said section.
Small Supplier of Service
The CG vide Notification No. 65/2017-Central Tax, G.S.R. 1421(E) dated 15-11-2017 as amended by Notification No. 6/2019-Central Tax, G.S.R. 66(E) dated 29-01-2019 specified the persons making supplies of services, other than supplies specified under sub-section (5) of Section 9 of the CGST Act through an electronic commerce operator who is required to collect tax at source under Section 52 of the CGST Act, and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of ₹20 lakh in a financial year, as the category of persons exempted from obtaining registration under the CGST Act:
Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of ₹10 lakh in case of “special category States” as specified in the first proviso to sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to the said section.
Read Section 22 for more detail on GST Registration and exemption limit.
- Section 23 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. ↩︎