Section 23 – Persons not liable for registration

- February 05, 2026

Section 23 of CGST Act, 2017 – Persons Not Liable for Registration

Updated on: February 2026 (as amended and applicable till date)
Prepared by: Yours Tax Consultant

1. Bare Act Text – Section 23

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):
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.

2. Objective of Section 23

Section 23 provides statutory exemption from GST registration to certain classes of persons, even if their turnover exceeds the threshold limit under Section 22.

This provision avoids unnecessary compliance burden where GST levy itself does not arise.

3. Persons Making Only Exempt or Non-Taxable Supplies – Section 23(1)(a)

A person is not required to obtain GST registration if he is:

Engaged exclusively in exempt supplies, or
Engaged exclusively in non-taxable supplies

Important:
The word “exclusively” is critical. If even a single taxable supply is made, Section 23 benefit is lost.

Examples:

Educational institutions supplying exempt education services only
Hospitals providing only exempt healthcare services
Sale of alcoholic liquor for human consumption

4. Meaning of Exempt and Non-Taxable Supplies

Exempt Supply:
Supplies which are taxable but exempted by notification issued under Section 11.

Non-Taxable Supply:
Supplies which are outside the scope of GST, such as:

Alcoholic liquor for human consumption
Petroleum products (till notified)

5. Agriculturists – Section 23(1)(b)

An agriculturist is not liable for registration to the extent of supply of produce out of cultivation of land.

As per Section 2(7), agriculturist means an individual or Hindu Undivided Family who undertakes cultivation of land by own labour or family labour.

This exemption:

Applies irrespective of turnover
Is limited strictly to agricultural produce

If the agriculturist undertakes any taxable activity other than agricultural produce, registration provisions may apply.

6. Exemption by Government Notification – Section 23(2)

Under Section 23(2), the Government may notify specific categories of persons who are exempt from registration.

Examples (as notified till date):

Persons making inter-State supply of taxable services up to threshold limit
Persons supplying services through e-commerce operators within threshold

Such exemptions are subject to conditions specified in notifications.

7. Section 23 vs Section 22 vs Section 24

Section	Scope
Section 22	Persons liable for registration based on turnover
Section 23	Persons not liable for registration
Section 24	Compulsory registration irrespective of turnover

If Section 24 applies, Section 23 exemption is overridden.

8. Section 23 Read with Relevant CGST Rules

Rule 8 – Application for registration (where applicable)

Though Section 23 exempts registration, persons may opt for voluntary registration under Section 25.

9. Common Practical Issues

Assuming exemption despite making taxable supplies
Mixing exempt and taxable supplies without registration
Wrong understanding of agriculturist exemption
Ignoring notification-based exemptions and conditions

10. Related Provisions

11. Professional Tip

Do not rely blindly on Section 23. Even a single taxable supply or applicability of Section 24 can trigger compulsory registration with retrospective liability.

Disclaimer: This article is prepared based on the CGST Act, CGST Rules, notifications and prevailing legal position as applicable till date. Future amendments or judicial pronouncements may require revision.

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