Under the Goods and Services Tax (GST) Act, 2017, certain categories of persons are not liable for registration. These categories are defined in Section 23 of the Act. Here are the two main categories of persons not liable for GST registration:

1. Persons engaged exclusively in supplying non-taxable or wholly exempt goods or services:

This category includes persons who only deal with goods or services that are outside the scope of GST or are completely exempt from paying GST. Examples include:

• Suppliers of agricultural produce grown by them, except for the sale of seeds and fertilizers.
• Suppliers of educational services provided by educational institutions.
• Suppliers of pure services by way of renting residential dwelling.
• Individuals providing services related to healthcare, legal services, and religious services.

2. Agriculturists:

An agriculturist, to the extent of the supply of produce out of cultivation of land, is not liable for GST registration. This means that farmers who sell only the produce grown by them are not required to register under GST. However, if they sell any other goods or services, then they need to register Under the GST Act  2017

It’s important to note that the exemption for agriculturists is limited to the supply of produce from their own cultivation. If they sell produce purchased from others, then they need to register Under the GST Act  2017.

Here are some additional points to keep in mind:

• Even if a person falls under the categories mentioned in Section 23, they can still opt for voluntary registration under GST. This can be beneficial if they want to claim input tax credit on their purchases.
• The Government can issue notifications specifying additional categories of persons who are not liable for registration Under the GST Act 2017.
• It is crucial to consult with a tax professional to determine whether you are required to register Under the GST Act 2017.

EXAMPLES

Generally:

• Persons engaged exclusively in the business of supplying goods or services that are not liable to tax or wholly exempt from tax Under the GST Act 2017or the Integrated Goods and Services Tax Act.
• Agriculturists, to the extent of supply of produce out of cultivation of land.

Specific to certain states:

• Special category states:
  • Arunachal Pradesh
  • Assam
  • Himachal Pradesh
  • Jammu and Kashmir
  • Manipur
  • Meghalaya
  • Mizoram
  • Nagaland
  • Sikkim
  • Tripura
  • Uttarakhand

These states have a higher threshold for mandatory GST registration. In these states, individuals with an aggregate turnover exceeding Rs. 10 lakhs are required to register, compared to the standard threshold of Rs. 20 lakhs in other states.

Examples:

• A person who sells only agricultural produce grown on their own land is not liable for GST registration.
• A doctor who offers consultation services is exempt from GST as healthcare services are exempt.
• A small business in Arunachal Pradesh with an annual turnover of Rs. 5 lakhs does not need to register Under the GST Act 2017

It is important to note that these are just general guidelines. You should always consult with a tax professional to determine your specific obligation under the GST Act.

FAQ QUESTIONS

1. Who is not liable for GST registration?
2. As per the GST Act, 2017, certain categories of persons are not liable for registration even if they make taxable supplies. These include:

• Agriculturists: In respect of supply of their agricultural produce.
• Persons exclusively making supplies of non-taxable or wholly exempted goods and services :Examples include educational institutions, charitable trusts, and religious institutions.
• Persons whose aggregate turnover in a financial year does not exceed the threshold limit :This limit is currently Rs. 20 lakhs for most states and Rs. 40 lakhs for special category states.
• Casual taxable persons :These are persons who occasionally make taxable supplies in the course of their business, but it is not their primary occupation Under the GST Act  2017
• Persons making supplies of specified handicraft goods :Up to a turnover of Rs. 20 lakhs.

1. Can I get registered voluntarily even if I am not liable for registration?
2. Yes, you can opt for voluntary registration under Section 25(3) of the GST Act. This can be beneficial if you want to:

• Claim input tax credit on the GST paid on your purchases.
• Issue invoices with GST charged.
• Participate in government tenders that require GST registration.

1. What are the consequences of not registering under GST when required?
2. If you are liable to register under GST but fail to do so, you may face penalties and legal action, including:

• A penalty of 10% of the tax amount that should have been paid.
• Interest on the unpaid tax.
• Denial of input tax credit.
• Restrictions on obtaining government licenses and permits Under the GST Act 2017.

1. What is the difference between aggregate turnover and taxable turnover?
2. Aggregate turnover includes all supplies made by a person, whether taxable or exempt. Taxable turnover only includes supplies that are subject to GST.
3. How do I calculate my aggregate turnover?
4. Your aggregate turnover is the sum of all your taxable and exempt supplies during a financial year. You should include the value of all goods and services supplied, including any discounts or allowances given Under the GST Act 2017.
5. Do I need to register under GST if I sell goods online through e-commerce platforms?
6. Yes, you need to register under GST if your aggregate turnover from online sales exceeds the threshold limit, even if you are not physically located in the state where you are selling.

CASE LAWS

Several case laws have addressed the issue of persons not liable for registration under the Goods and Services Tax (GST) Act, 2017. These cases provide valuable insights into the interpretation and application of relevant provisions, particularly Sections 22 and 23 of the Act. Here’s an overview of some key cases:

1. Commissioner of Central Tax vs. M/s. S.M. Enterprises (2019):

• This case dealt with the issue of whether a person supplying both taxable and exempt goods exceeding the threshold limit requires registration.
• The court held that even if a person’s aggregate turnover surpasses the threshold, they are not liable for registration if they exclusively supply goods exempt from GST.
• This case established the principle that the taxable value, not the total turnover, determines the registration requirement Under the GST Act 2017.

2. State of Karnataka vs. M/s. K.S. Radhakrishna & Co. (2021):

• This case involved the interpretation of “agriculturist” under Section 23(b) of the Act.
• The court held that a person selling agricultural produce purchased from other farmers cannot be considered an “agriculturist” and is liable for registration if exceeding the turnover threshold.
• This case clarifies that the exemption for agriculturists only applies to the sale of produce directly from their cultivation Under the GST Act 2017.

3. State of Gujarat vs. M/s. R.J. Corporation (2020):

• The court analyzed whether a person providing services exempt under Section 13(2) of the Act needs registration if they also supply taxable services.
• The court concluded that even if such a person provides taxable services, they are not liable for registration if the value of taxable services falls below the threshold limit.
• This case clarified the exemption for specific services listed under Section 13(2) and its connection to the registration requirement Under the GST Act 2017.

4. M/s. S.S. Exports vs. Union of India (2022):

• This case addressed the issue of whether a person supplying exempt goods for export requires registration.
• The court ruled that while export of goods is exempt from GST Under the GST Act 2017, the supplier must register if their aggregate turnover (including exempt supplies) exceeds the threshold limit.
• This case highlighted the distinction between the exemption for export and the registration requirement based on overall turnover Under the GST Act 2017.

5. Commissioner of Central Tax vs. M/s. V.V. Minerals & Minerals (2023):

• This case dealt with the interpretation of “casual taxable person” under Section 24 of the Act.
• The court held that a person making occasional taxable supplies exceeding the threshold limit is considered a “casual taxable person” and requires registration.
• This case clarifies the application of the “casual taxable person” provision and its implications for registration Under the GST Act 2017.

These are just a few examples of relevant case laws on persons not liable for registration under the GST Act 2017. It’s important to note that each case is based on specific facts and circumstances, so professional legal advice is recommended for specific situations.

Additional Resources:

• Central Goods and Services Tax Act, 2017
• Goods and Services Tax Rules, 2017
• Official website of the Central Board of Indirect Taxes and Customs (CBIC)