Goods and Services Tax (GST) is growing strict day by day and there is still confusion prevailing in the mind of individuals that can we be exempted from registration under this Act. Section 23 of CGST Act, 2017 requires few person who shall not be liable to get themselves under the Act.

The basic that everyone knows in regards to GST Registration is that the person is liable for registration if the Aggregate turnover exceeds Rs. 20 Lakhs. The limit is Rs. 10 Lakhs for special category of States except Jammu and Kashmir.

Eleven states are conferred with the status of special category, as prescribed by the Government. These are:

  • Arunachal Pradesh
  • Assam
  • Jammu and Kashmir
  • Manipur
  • Meghalaya
  • Mizoram
  • Nagaland
  • Sikkim
  • Tripura
  • Himachal Pradesh
  • Uttarakhand

What is Aggregate Turnover?

Aggregate Turnover means Aggregate Value of all outward taxable supplies, exempt supplies, export, inter-state stock transfer taken on all India Basis and excludes GST. It means if a turnover of person comprise of Exempt Supply of amount greater that 20 Lakhs he shall be liable to registration. But this is not so.

Section 23 says a person engaged exclusively in business of supply of Goods or Services that are not liable to tax or is wholly exempt from tax are not required to get themselves registered under GST, notwithstanding the amount of turnover.Β  Due to this a dealer dealing only in Books or Doctor providing Health services are not required to register under GST.

Taking another example, a person is engaged in the business of Books. He had a turnover of Rs. 25 Lakhs. He need not get himself Registered. Later, he sold Crayons for Rs. 20. He became liable for GST registration as his Aggregate Turnover crossed 20 Lakhs and he is not exclusively engage on sale of exempt goods/ services.

Section 23 also exempts agriculturist to the extent of produce out of cultivation of Land. Not anyone having Land can claim himself to be an Agriculturist since agriculturist is strictly defined as an individual or HUF who undertakes cultivation on own labour or by labour of family or by servant under supervision of family or self.

Taking another example of an individual advocate, he is never liable to pay GST as his service is always covered in the Reverse Charge Mechanism. As per Section 23 if the person is engaged in supply of goods or services the total tax on which is to be paid by recipient is not required to get himself registered under GST. The logic that can be given is the avoidance of duplication of compliances.