Section 23 is the mirror image of section 24. It lists the persons who are outside the registration net altogether, and the Government has added more through notifications. Remember the logic: a person who is not liable to register is not a taxable person at all.
Exemptions in the Act itself
- Exclusively non-taxable or wholly exempt supplies. A petrol pump dealer supplying only petrol, or a charitable trust registered under section 12AA supplying only charitable services, need not register.
- Agriculturists, to the extent of supply of produce out of cultivation of land. An agriculturist means an individual or HUF who cultivates land by own labour, family labour, or hired labour under personal supervision. Companies and firms do not qualify.
The agriculturist relief is limited to the produce. If the same person also trades in packaged goods, that trading counts, and registration depends on the usual threshold.
Notified exemptions
| Who | Limit | Notification |
|---|---|---|
| Persons making only reverse charge supplies (not metal scrap, Chapters 72 to 81) | No limit | 5/2017-CT |
| Inter-State supplies of taxable services | Up to ₹20 lakh (₹10 lakh in Mizoram, Tripura, Manipur, Nagaland) | 10/2017-IT |
| Inter-State supplies of notified handicraft goods | Up to ₹20 lakh or ₹10 lakh; PAN and e-way bill needed | 3/2018-IT |
| Casual taxable persons supplying notified handicraft goods inter-State | Same limits and conditions | 56/2018-CT |
| Services through an e-commerce operator | Up to ₹20 lakh or ₹10 lakh | 65/2017-CT |
| Intra-State goods through an e-commerce operator | Within the section 22 threshold, one State only, enrolment number | 34/2023-CT |
From practice
Take Deshbandhu, a Punjab farmer who sold wheat from his own field and was never registered. This year he also starts trading in pre-packaged puffed rice. Wheat sales are ₹32 lakh and puffed rice ₹9 lakh, so aggregate turnover is ₹41 lakh. The relief covered the produce only; now he supplies goods that are not produce, the Punjab limit for goods is ₹40 lakh, and he must register.
The same logic runs in a company: a vendor that is exempt on one product line but sells something taxable alongside cannot rely on the exemption for the whole business.
Quick check
Why
Section 23 exempts an agriculturist to the extent of supply of produce out of cultivation of land, even for inter-State supplies and even above the threshold.
Quick check
Why
Persons making only supplies on which the recipient pays tax under section 9(3) are exempt from registration. The recipient, however, must itself register.
Exam lens
Questions pair section 23 with section 24 to test whether you notice the override. Read the facts for three triggers: a farmer’s own produce, exclusive exempt supplies, or only reverse charge supplies. If one is present, registration is not needed, whatever the turnover.
Frequently asked questions
Does a commission agent for farmers need registration?
Generally no. The principal (an agriculturist) is not a taxable person, and commission services for sale or purchase of agricultural produce are exempt. If the agent is liable to pay tax under reverse charge, it must register.
Can a person not liable to register still register?
Yes, voluntarily under section 25(3). All provisions for registered persons then apply, so tax must be paid even below the threshold.
Related reading
- Compulsory registration under section 24
- Reverse charge on services: section 9(3)
- GST registration procedure and effective date
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Note
Based on Chapter 9 (Registration) of the ICAI BoS Study Material, Intermediate Paper 3 Section B, for May 2027, September 2027 and January 2028 (law as amended up to 30.04.2026). Last reviewed 31 October 2026.