Persons not liable to obtain GST registration (Section 23 of CGST Act 2017)

Persons not liable to obtain gst registration:(sec23 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 sec23 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

a) by own labour

b) by the labour of family

c) 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 intra state 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 to gst  registration which are 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  on  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 sec 22(1) of cgst act.