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Persons not liable to obtain GST registration: (Sec 23 of CGST act)

Before discussing the provisions of sec 23 of cgst act we have to discuss sec 22

Sec22 says that Every Supplier who makes taxable supply of goods or services or both if his aggregate turnover exceeds 20 Lakhs shall be liable to be registered under the gst act.

However, if a person located in special category states the turnover is reduced to 10 lakhs.

However, as per Sec 23 of CGST, the following persons are not required to obtain GST registration if he engaged exclusively the following supplies:

a) Persons engaged exclusively in supplying goods/services/both not liable to tax. (or)

Eg:X is a trader and he is trading 100% in alcohol for human consumption. His turnover is 2 crores. Therefore X is not liable to obtain registration as per sec23(1)(a)

b) Persons engaged exclusively in supplying goods/services/both which are wholly exempt from tax. (or)

c) Agriculturist to the extent of supply of produce out of cultivation of land.

Agriculturist is defined in sec2(7) of CGST act.

Agriculturist means individual or HUF who undertakes the cultivation of land

  • by own labour
  • by the labour of family
  • by servants on wages payable in cash or kind or hired labour under personnel supervision or personal supervision of any member of the family.

According to my interpretation while computing aggregate turnover ‘intrastate supply of goods agricultural produce grown out of cultivation of land by family members shall not be included because they used the wording ‘to the extent of’

Eg.MR.A has an intrastate supply of agricultural produce(own effort) Rs.15 Lakhs, Intrastate supply of exempt goods Rs.10Lakhs,& taxable supplies is Rs.5 Lakhs. He is not supposed to take GST registration because turnover does not exceed 20lakhs i.e 10 plus 5 =15 lakhs. while computing aggregate turnover ‘intrastate supply of goods agricultural produce grown out of cultivation of land by family members shall not be included

d) Specified category of persons notified by the government

Following notifications was clarified by CBIC categories of persons not liable GST registration which is as follows:

1. Notification No. 5/2017 - Central Tax dated 19.06.2017 regarding exemption from registration to persons engaged only in making taxable supplies where total tax is liable to be paid ona reverse charge basis

2. Notification No. 32/2017 38/2017 - Central Tax dated 15.09.2017 (amended by Notification No. Central Tax dated 13.10.2017) regarding exemption from registration to a casual taxable person making taxable supplies of handicraft goods.

3. Notification No. 65/2017 Central Tax dated 15.11.2017 regarding exemption from compulsory registration to suppliers of services through an ecommerce platform

4. Notification No.7/2017@IT dated 14.11.2017 regarding exemption for job worker engaged in making interstate supply of job work services except jewelers business.

5. Notification No.8/2017@IT dated 14.09.2017 regarding exemption from registration to a person making interState taxable supplies of handicraft goods.

6. Notification No.10/2017 Integrated Tax dated 13.10.2017 regarding exemption from to persons making interstate supplies of taxable services not exceeding 20 lakhs is exempt from obtaining registration.

7. Notification No.56/2018-Central Tax, dt. 23-10-2018 Seeks to supersede Notification No. 32/2017-Central Tax, dated 15.09.2017 (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.

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

Note: Above notifications has applicable only provided their aggregate turnover does not exceed threshold limit which was prescribed in sec22(1) of CGST act.


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