☐ Has business activity been categorised? ☐ Has sub-s. (1)(a) exclusivity test been applied? ☐ Has 'entirely' non-taxable / wholly exempt been verified? ☐ Has any partial taxable component been ruled out? ☐ For agriculturist, has s. 2(7)…
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☐ Has business activity been categorised? ☐ Has sub-s. (1)(a) exclusivity test been applied? ☐ Has 'entirely' non-taxable / wholly exempt been verified? ☐ Has any partial taxable component been ruled out? ☐ For agriculturist, has s. 2(7)…
Section 23 exclusion claim — checklist (19 items)
Section 23 exclusion claim — checklist (19 items)
☐ Has business activity been categorised?
☐ Has sub-s. (1)(a) exclusivity test been applied?
☐ Has 'entirely' non-taxable / wholly exempt been verified?
☐ Has any partial taxable component been ruled out?
☐ For agriculturist, has s. 2(7) qualification been verified?
☐ For agricultural produce, has sub-s. (1)(b) been applied?
☐ Has Notification 5/2017-CT applicability been checked?
☐ Has Notification 65/2017-CT applicability been checked?
☐ Has mixed-activity segregation been done?
☐ If excluded, has documentary trail been built?
☐ If not excluded, has s. 22 threshold framework been applied?
☐ Has voluntary registration consideration been made for B2B?
☐ Has Dilip Kumar strict-construction been applied?
☐ Has s. 24 compulsory registration override been considered?
☐ For ambiguous matters, has AAR been considered?
☐ Has Mohit Minerals constitutional framework been applied?
☐ Has Mafatlal procedural-fairness framework been observed?
☐ Has Vatika prospective-operation been applied?
☐ Has the file been reviewed for audit-defensibility?
Worked examples — five live scenarios
Example 1 — Exclusive alcohol retailer
Facts: Retailer supplies only alcohol for human consumption. Aggregate turnover Rs. 1 cr.
Analysis: Alcohol for human consumption is non-taxable supply (constitutional carve-out under Article 366(12A)). Exclusively non-taxable — sub-s. (1)(a). Not liable for registration despite high turnover.
Result: Excluded under sub-s. (1)(a).
Example 2 — Mixed alcohol + non-alcoholic beverages
Facts: Bar serves alcohol + non-alcoholic beverages. Aggregate Rs. 25 lakh.
Analysis: Mixed activity — alcohol non-taxable; non-alcoholic beverages taxable. Sub-s. (1)(a) 'exclusively' fails. s. 22 framework applies. Rs. 25 lakh exceeds Rs. 20 lakh threshold. Registration required.
Result: Mixed activity. Registration required.
Example 3 — Agriculturist with diversified business
Facts: Farmer cultivates land (produce Rs. 15 lakh) + runs small shop (Rs. 8 lakh).
Analysis: Agricultural produce supply exempted under sub-s. (1)(b). Shop activity taxable. Aggregate Rs. 23 lakh exceeds Rs. 20 lakh — shop activity triggers registration. Registration for shop; agricultural produce excluded.
Result: Partial exclusion + partial registration.
Example 4 — Advocate (RCM-only)
Facts: Advocate's entire practice is legal services to business entities. RCM by recipients under Notification 13/2017-CT(R).
Analysis: Notification 5/2017-CT — exclusively-RCM supplier. Exempted from registration regardless of turnover. Practitioner discipline — verify all clients are business entities (not individuals).
Result: Excluded under Notification 5/2017-CT.
Example 5 — Cab driver through aggregator
Facts: Cab driver operates through Ola / Uber. Total fare collection Rs. 10 lakh. Aggregator pays tax under s. 9(5).
Analysis: Notification 65/2017-CT — service supplier through ECO with s. 9(5) liability. Cab driver exempted from registration up to specified threshold.
Result: Excluded under Notification 65/2017-CT.
Planning and litigation strategy
Litigation defence
Cross-references