Chapter VI - Registration
Section 23
Section 23: Persons not liable for registration
Section 23 excludes people whose business consists exclusively of non-taxable or wholly exempt supplies, and an agriculturist to the extent of produce from cultivation. It also permits notified registration exemptions.
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Need advice on Section 23?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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.
(2) Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24, the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.
Introduction
The word ‘exclusively’ matters: adding taxable supplies can change the conclusion. The 2023 substitution of subsection (2), deemed effective from 1 July 2017, gives notified exempt categories priority over sections 22(1) and 24, subject to notification conditions.
Key takeaways
Wholly exempt or non-taxable business
A person exclusively supplying goods or services outside tax or wholly exempt under CGST/IGST is not liable under subsection (1)(a).
Agriculturist exclusion is limited
An agriculturist is excluded to the extent of supply of produce out of cultivation of land, not automatically for every separate activity.
Notified classes need the actual notification
Subsection (2) can exempt a category despite section 22(1) or 24, but its conditions and restrictions control.
Test exclusive supply character
List every outward supply and determine whether all are non-taxable or wholly exempt. A mixed portfolio needs a fresh registration test under sections 22–24.
Agriculturist and produce
Identify whether the person is an agriculturist and whether the specific supply is produce from cultivation of land. The statutory exclusion is scoped to that supply.
Apply notified category exemptions
Locate any government notification made on Council recommendation under subsection (2), its effective period and conditions. Do not infer an exemption simply because another business has similar turnover.
Practical checklist
Do
- Maintain an outward-supply classification list.
- Check the exact notification for any claimed category exemption.
Avoid
- Assume a partly taxable business is exclusively exempt.
- Treat an agriculturist's unrelated trading activity as automatically excluded.
Frequently asked questions
Does section 24 always override section 23?
Subsection 23(2) expressly operates notwithstanding section 24 for a category exempted by notification, subject to that notification's conditions.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026