Section 23 takes some people out of registration altogether, and lets the Government exempt others by notification — a power the Finance Act, 2023 made retrospectively capable of overriding the compulsory-registration list in section 24.
Key points
- Under section 23(1) of the CGST Act, 2017 a person engaged exclusively in supplies that are not taxable or are wholly exempt, and an agriculturist supplying produce from cultivation of land, need not register.
- Section 23(2), as substituted by the Finance Act, 2023 with effect from 01.07.2017, lets the Government exempt categories of persons from registration notwithstanding sections 22(1) and 24.
- Notified exemptions include persons making only reverse-charge supplies and, within the turnover threshold, service providers supplying through e-commerce operators and inter-State suppliers of specified services.
The provisions
23(1)–(2)Persons not liable to register
Statutory text
(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.
1[(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.]
* Enforced w.e.f. 22nd June, 2017.
1. Substituted (w.e.f. 1st July, 2017) by s. 140 of The Finance Act 2023 (No. 8 of 2023) for "The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.".
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- Does a farmer need GST registration?
- Not to the extent of supplying produce from cultivation of land (section 23(1)(b) CGST).
- Does a person supplying only exempt goods need GST registration?
- No, if engaged exclusively in non-taxable or wholly exempt supplies (section 23(1)(a)).
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Clause (a) of sub-section (1) covers only those who supply nothing taxable; a single taxable supply brings them back within section 22. Clause (b) covers agriculturists (section 2(7)) only to the extent of produce from cultivation.
Sub-section (2) originally allowed exemption only of persons otherwise liable under section 22. Notifications had in fact exempted persons who would fall within section 24 — such as service providers supplying through e-commerce operators below the threshold. The Finance Act, 2023 substituted sub-section (2) with retrospective effect from 01.07.2017 so that exemptions can override section 24 as well as section 22(1), validating those notifications.