Section 23 of CGST Act - Persons Not Liable for Registration

Section 23 of the Central Goods and Services Tax Act, 2017 identifies persons who are not required to obtain GST registration. It covers persons exclusively supplying non-taxable or wholly exempt supplies, agriculturists to the specified extent, and categories of persons exempted from registration by Government notification.

Text and meaning of Section 23

Section 23(1): Persons not liable for GST registration

Section 23(2): Power to exempt categories from registration

The amended sub-section (2) gives an overriding effect to a valid notification issued under Section 23(2) over the general registration requirement in Section 22(1) and the compulsory registration provisions in Section 24, subject to the terms of the particular notification.

Who is covered by Section 23(1)(a)?

The exemption applies where the person is exclusively engaged in supplies that are either not liable to GST or wholly exempt under the CGST Act or IGST Act. The word "exclusively" is important. If the same person also makes taxable supplies, registration liability must be examined under the other applicable registration provisions, including the aggregate-turnover rules in Section 22 and any applicable compulsory-registration provision in Section 24.

Agriculturist under Section 23(1)(b)

An agriculturist is protected from registration to the extent of the supply of produce out of cultivation of land. Section 2(7) of the CGST Act defines an "agriculturist" as an individual or a Hindu Undivided Family who undertakes cultivation of land by own labour, by the labour of family, or 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.

Accordingly, Section 23(1)(b) is not a blanket exemption for every activity carried on by a farmer or agricultural enterprise. Other taxable activities, if any, must be examined separately under the registration provisions.

Notified exemptions under Section 23(2)

Section 23(2) enables the Government, on the recommendations of the GST Council, to exempt specified categories of persons from obtaining registration subject to conditions and restrictions. Important notifications affecting registration include the following:

• Notification No. 10/2017-Integrated Tax dated 13 October 2017: provides registration relief for specified persons making inter-State taxable supplies of services, subject to the turnover threshold and conditions stated in the notification.
• Notification No. 65/2017-Central Tax dated 15 November 2017: provides registration relief to eligible suppliers of services making supplies through an electronic commerce operator required to collect tax at source, subject to the prescribed turnover limit and conditions.
• Notification No. 34/2023-Central Tax dated 31 July 2023: exempts eligible persons supplying goods through an electronic commerce operator required to collect tax at source from obtaining registration, subject to turnover limits and detailed conditions. This measure applies from 1 October 2023.

Section 23 and the GST registration threshold

Section 23 is distinct from the turnover-based threshold in Section 22. A person falling squarely within Section 23(1) is not liable to registration for the supplies covered by that provision. Separately, Section 22 generally determines registration liability by reference to aggregate turnover, subject to the applicable threshold, State or Union territory and other statutory conditions.

For eligible suppliers of goods, the enhanced threshold can be up to Rs. 40 lakh, while lower limits apply in specified States or Union territories and in cases where the conditions for the enhanced threshold are not satisfied. For suppliers of services, the general threshold is ordinarily Rs. 20 lakh, with a lower threshold in specified States. These threshold rules should be checked together with Sections 22, 23 and 24 and the applicable notifications before deciding whether registration is required.

Effect of the Finance Act, 2023 amendment

The Finance Act, 2023 substituted Section 23(2) with retrospective effect from 1 July 2017. The substituted provision expressly begins with a non-obstante clause referring to Section 22(1) and Section 24. The practical effect is that where the Government validly exempts a category of persons under Section 23(2), the exemption can prevail over those registration provisions, but only within the scope and conditions of the notification.

Practical checklist before deciding that registration is not required

• Identify whether all supplies are non-taxable or wholly exempt.
• If claiming the agriculturist exclusion, confirm that the supply is produce out of cultivation of land and that the statutory definition of agriculturist is satisfied.
• Check aggregate turnover and the applicable threshold under Section 22.
• Check whether any compulsory-registration provision in Section 24 applies.
• If relying on a notification under Section 23(2), verify every condition and restriction in that notification.
• For supplies through an electronic commerce operator, check the current statutory and notification framework applicable to the particular type of supply.

Related CGST registration provisions

For a complete registration analysis, also see Section 22 - Persons liable for registration, Section 24 - Compulsory registration in certain cases, Section 25 - Procedure for registration, and Section 29 - Cancellation or suspension of registration.

Updated: 15 September 2026. This article is a general guide to Section 23 and should be read with the current Act, rules and applicable notifications.