Section 23 of CGST Act Explained: GST Registration Not Required for These Persons (2025 Update)

Section 23 of the CGST Act, 2017 outlines the categories of persons who are not liable to obtain GST registration, such as those exclusively dealing in exempt or non-taxable supplies and agriculturists supplying produce from land cultivation.

Additionally, under Section 23(2), the government, based on GST Council recommendations, may exempt specific categories through notifications—this includes small e-commerce suppliers, reverse charge dealers, job workers, handicraft artisans, casual taxable persons, and small inter-State service providers, subject to certain conditions. AUBSP emphasizes that understanding these exemptions is crucial for businesses to ensure compliance while avoiding unnecessary registration burdens.

GST Section 23: Persons Not Liable for Registration under CGST Act, 2017

The Goods and Services Tax (GST) framework under the CGST Act, 2017, mandates registration for most suppliers. However, not all persons are required to obtain GST registration. Section 23 of the CGST Act specifically provides for such exemptions. This article thoroughly explains the categories of persons who are not liable for GST registration and the legal provisions and government notifications that govern these exemptions.

Understanding Section 23: Who is Exempt?

Section 23(1): General Exemptions

Section 23(1) of the CGST Act identifies two broad categories of persons who are not required to register under GST:

1. Exempt Suppliers
   Individuals or entities engaged exclusively in the supply of goods or services which are:
   • Not liable to tax, or
   • Wholly exempt from tax under CGST or IGST.
2. Agriculturists
   An agriculturist, to the extent of supply of produce from cultivation of land, is exempt from registration.

Section 23(2): Power to Notify Additional Exemptions

Section 23(2) empowers the government to exempt additional categories of persons from GST registration through notifications, subject to conditions and recommendations by the GST Council.

Important Notifications Issued Under Section 23(2)

AUBSP brings you a comprehensive table of critical notifications issued under Section 23(2) over the years:

Exemption Notification Summary

Notification Timeline Table

Conditions for Exempted Categories

The following are common conditions for exemption under various notifications:

• Must not exceed turnover threshold under Section 22(1).
• Must possess a PAN under the Income Tax Act.
• Cannot make inter-State supply, unless specifically allowed.
• May need to generate e-way bills as per CGST Rules.
• In some cases, must obtain an enrolment number via the common portal.

Special Focus: Handicraft and Casual Taxable Persons

Under Notification No. 3/2018 and 56/2018, suppliers of handicraft goods and casual taxable persons dealing in handmade products enjoy exemption, provided:

• Their aggregate turnover is below registration threshold.
• They comply with PAN and e-way bill requirements.
• The products fall under specific HSN codes for handicrafts (see Annexure).

AUBSP’s Expert Advice

AUBSP recommends that businesses carefully assess their eligibility under Section 23 before deciding not to register under GST. Non-compliance due to misinterpretation may lead to penalties and backdated tax liability.

If you are:

• A small trader selling on e-commerce platforms,
• A craftsman dealing in handmade goods,
• A job-worker operating inter-State, or
• Providing services under the RCM mechanism,

you may fall under the exemptions—but only if you meet all conditions stated in the relevant notifications.

Conclusion

Section 23 of the CGST Act serves as a vital relief mechanism for small, marginal, or exempt category suppliers by eliminating the burden of registration. Through continuous updates and notifications, the government has ensured that this relief remains relevant and inclusive.

AUBSP has simplified these complex provisions to help taxpayers understand their rights and obligations better. For professional guidance or more updates, always refer to reliable platforms like AUBSP.com for the latest GST compliance insights.

FAQs on Section 23 of CGST Act 2017

Who is exempted from GST registration under Section 23 of the CGST Act?
Persons engaged exclusively in exempt or non-taxable supplies and agriculturists (for their cultivated produce) are exempted under Section 23(1).

What is the significance of Section 23(2) in GST?
Section 23(2) empowers the government to issue notifications, based on GST Council recommendations, exempting certain categories from registration.

Do agriculturists need GST registration?
No, agriculturists supplying produce out of cultivation of land are not required to register under GST.

Are persons making only exempt supplies required to register under GST?
No, if a person deals only in wholly exempt or non-taxable supplies, they are not liable to register under GST as per Section 23(1)(a).

Can the government notify more exempted persons under GST?
Yes, under Section 23(2), the government can notify additional categories for exemption through official notifications.

Is GST registration required for small e-commerce sellers?
No, if certain conditions are met (e.g., intra-State supply only, turnover below threshold), they are exempted via Notification No. 34/2023-CT.

What are the conditions for exemption of e-commerce sellers under Notification 34/2023?
They must not make inter-State supplies, operate only in one state, declare PAN and business address on the GST portal, and receive an enrolment number.

Can a person with reverse charge supplies avoid registration?
Yes, if all their supplies fall under reverse charge liability for the recipient (except scrap dealers), they are exempted (Notification No. 5/2017-CT as amended).

Are job workers required to register under GST?
Not always. Job workers making inter-State supplies to registered persons are exempt unless dealing with specified goods or voluntarily registering.

Are inter-State suppliers of handicrafts exempt from GST registration?
Yes, subject to turnover limits and conditions like PAN and e-way bill generation, as per Notification No. 3/2018-IT and 56/2018-CT.

What are handicraft goods under GST exemption?
These include hand-made or hand-crafted items like leather goods, wood carvings, textiles, and pottery, listed under relevant HSN codes in notifications.

What is the exemption limit for inter-State service providers under GST?
Providers with turnover up to ₹20 lakh (₹10 lakh for special category states) are exempt via Notification No. 10/2017-IT.

Are casual taxable persons supplying handicrafts exempt from GST registration?
Yes, provided their turnover remains below the limit and they comply with PAN and e-way bill requirements.

Is a PAN required even if a person is exempt from registration?
Yes, in most exemption cases like e-commerce and handicrafts, PAN is mandatory for validation and enrolment.

Can a person obtain voluntary GST registration even if exempted?
Yes, Section 25(3) allows any person, even if exempt, to obtain voluntary registration under GST.

Do exempt persons under Section 23 need to file GST returns?
No, if they are not registered due to exemption, they are not required to file GST returns.

Will the enrolment number under Notification 34/2023 continue after GST registration?
No, once GST registration is obtained under Section 25, the enrolment number becomes invalid.

Is registration exemption applicable to those supplying through multiple states?
No, many exemptions, including for e-commerce sellers, are limited to supply within one state only.

Do these exemptions apply automatically?
No, eligibility must be evaluated against notification conditions, and declarations must be made on the common GST portal where required.

Why should businesses consult the latest GST notifications?
Because exemptions are conditional and subject to periodic updates. AUBSP always advises checking the latest government notifications before acting.

How does AUBSP help in understanding GST exemptions?
AUBSP provides expert, simplified, and authentic explanations of GST laws, helping taxpayers comply confidently and avoid registration where legally exempt.