{"id":25599,"date":"2021-02-07T11:30:57","date_gmt":"2021-02-07T06:00:57","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=25599"},"modified":"2021-02-06T16:23:32","modified_gmt":"2021-02-06T10:53:32","slug":"section-23-of-the-cgst-act-2017","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/","title":{"rendered":"A Complete Outlook on Section 23 of the CGST Act 2017"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Section 23 of CGST Act 2017 talks about the non-applicability of GST on the taxpayers. This blog would provide a briefing about the statutory provisions cited under the said Act.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Statutory_Provision_under_Section_231_a_of_CGST_Act\" >Statutory\nProvision under Section 23(1) (a) of CGST Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Analysis_of_Provision\" >Analysis\nof Provision<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Who_is_Agriculturist_as_per_Section_27_of_CGST_Act\" >Who is\nAgriculturist as per Section 2(7) of CGST Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Why_Nature_of_Activity_Plays_a_Crucial_Role_in_GST_Applicability\" >Why Nature of Activity Plays\na Crucial Role in GST Applicability?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Notification_Released_By_the_CBIC_for_Grant_of_Exemption_to_Other_Categories_of_Persons\" >Notification Released By the\nCBIC for Grant of Exemption to Other Categories of Persons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/section-23-of-the-cgst-act-2017\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Statutory_Provision_under_Section_231_a_of_CGST_Act\"><\/span>Statutory\nProvision under Section 23(1) (a) of CGST Act <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any individual involved exclusively with the business of supplying goods and services or both that are exempted under this Act is not required to avail <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST registration<\/strong><\/a>. Let&#8217;s understand the above section&#8217;s notion through an example: Let&#8217;s say Mr. X is a business owner who supplies essential oils and resinoids perfumery. As per the Section 23 (1) (a), he is not liable to get registered even if his yearly revenue exceeds the maximum threshold limit i.e., Rs 20 Lakhs.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Statutory-Provision-under-Section-231-a-of-CGST-Act.png\" alt=\"Statutory Provision under Section-23(1) (a) of CGST-Act\" class=\"wp-image-25659\" width=\"547\" height=\"432\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Statutory-Provision-under-Section-231-a-of-CGST-Act.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Statutory-Provision-under-Section-231-a-of-CGST-Act-300x237.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Statutory-Provision-under-Section-231-a-of-CGST-Act-768x607.png 768w\" sizes=\"(max-width: 547px) 100vw, 547px\" \/><\/figure><\/div>\n\n\n\n<p>Section 23 of the CGST Act provides the non-applicability of GST\non exempt supplies even if the yearly revenue surpassed the limit of Rs 20\nlakhs. On the contrary, Section 22 talks otherwise as it mandates to avail\nregistration if the aggregate turnover in financial years surpasses Rs 20 Lakhs\nregardless of whether such turnover includes exempt supplies or not.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Analysis_of_Provision\"><\/span>Analysis\nof Provision<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following are the individuals who are not allowed to avail of\nGST registration under section 23 of the CGST Act, which are given below:-<\/p>\n\n\n\n<ul><li>Agriculturist;<\/li><li>Individual involved exclusively with the supply of exempted goods or services or both.<\/li><\/ul>\n\n\n\n<p>Henceforth, the aforesaid individuals don&#8217;t need to get registered under GST even if their annual income surpasses Rs 20 lakhs. Section 23 of the CGST Act overrides section 22 in this regard.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/overall-concept-of-gst-e-invoice-compliance-threshold-limit\/\">Overall Concept of GST E-Invoice Compliance Threshold Limit<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_Agriculturist_as_per_Section_27_of_CGST_Act\"><\/span>Who is\nAgriculturist as per Section 2(7) of CGST Act?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to the said Act, agriculturist is referred to a person\nor HUF who is directly engaged with the farming activities and undertakes such\ntasks via&nbsp;<\/p>\n\n\n\n<ul><li>Own labor, or<\/li><li>Labour of family, or<\/li><li>Servants on wages or supervision of any family member<\/li><\/ul>\n\n\n\n<p>Therefore, an agriculturist is not entitled to avail GST\nregistration only to the extent of the supply of produce reaped through land\ncultivation. If an agriculture supplies product other than the product linked\nwith land cultivation, he would not deem fit within the provision of section 22\nand might have to avail registration w.r.t such supplies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Nature_of_Activity_Plays_a_Crucial_Role_in_GST_Applicability\"><\/span>Why Nature of Activity Plays\na Crucial Role in GST Applicability?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is essential to consider the nature of activities performed\nby the agriculturist. If the process differs from the term\n&#8220;cultivation,&#8221; it would be treated outside the scope of this\nexclusion from registration. That means any further processing of the primary\nproduce will continue not to avail this exclusion.<\/p>\n\n\n\n<p>The activity of land cultivation does include pisciculture on\ninland water bodies or animal rearing. Technically, the produce from land is\ntermed &#8220;cultivation of land\u201d. For example, a harvesting paddy is a form of\ncultivation, but the production of wheat is not.&nbsp;<\/p>\n\n\n\n<p>It&#8217;s worth noting that the exclusion from the requisite to get\nregistered doesn&#8217;t lead to a tax collection on agri-produce. Section 9(3) of\nthe CGST Act &amp; Section and sections 5(3) of the IGST Act provides certain\nproducts (such as almond) on which tax is payable under reverse charge\nmechanism by the recipient of goods when such goods are purchased from an\nagriculturist.<\/p>\n\n\n\n<p>Therefore, the exemption from GST registration depends on the\nstatus of the supplier rather than the commodity. Apparently, if the good&#8217;s\nsupplier is not an agriculturist, he would have to register as per section 22\nif his turnover crossed the &#8216;exemption threshold.&#8217;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Exclusively Involved with the Exempt Supplies<\/h3>\n\n\n\n<p>The term exclusive indicates involving only those supplies which\nare exempted. Henceforth, if a supplier is supplying taxable &amp; exempted\ngoods or services, this provision would not be applied and the supplier has to\nobtain registration under Section 22.<\/p>\n\n\n\n<p>It objectively allows any individual whose entire supply\ncontains supplies to be exempted from availing registration. The taxpayer\nshould pay attention while validating the premise of the entire supply. The\nexempted supplies&#8217; valuation should be done along with the taxable supplies to\ncheck if the annual turnover has surpassed the exemption threshold u\/s 22 for\nattracting registration.<\/p>\n\n\n\n<p>This leads to another query- whether registration is needed in case an individual is involved exclusively with supplying non-taxable goods or service and incurs some expenses cited in Section 9(3) for addressing tax liabilities under reverse charge basis. In view of Section 23 (2) of the CGST Act, India&#8217;s <em><strong>government<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Government\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>, in association with the GST council, can roll out notifications for the grant of exemption to other categories of persons. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Notification_Released_By_the_CBIC_for_Grant_of_Exemption_to_Other_Categories_of_Persons\"><\/span>Notification Released By the\nCBIC for Grant of Exemption to Other Categories of Persons<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following notification has been made publicly available by\nthe CBIC in the past few years regarding the grant of exemption to other\ncategories of persons.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 5\/2017-CT Issued on 19-June-2017<\/h3>\n\n\n\n<p>Individuals who are making supplies of non-exempted goods or\nservices or both, where the tax is applicable on the recipient of goods or\nservice under RCM, are exempt from obtaining GST registration.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 10\/2017-IT issued on 13-Oct-2017<\/h3>\n\n\n\n<p>This notification is related to the interstate supply of non-exempted services- the GST registration does not apply to the class of supplier dealing with inter-state supplies of services whose total turnover falls under the range of Rs 20\/10 lakhs.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 65\/2017-CT issued on 15-Nov-2017 <\/h3>\n\n\n\n<p>This notification is for the taxpayer supplying service via an online operator. The notification provides that the taxpayer who supplies services via e-commerce operator is not liable to obtain GST registration if their aggregate turnover falls under the range of Rs 20 lakhs\/annum (Rs 10 lakhs in other specified states).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 3\/2018-IT issued on 22-Oct-2018 <\/h3>\n\n\n\n<p>This particular notification paid attention to the interstate supply of handicraft goods. As per the said notification, the supplier of the handicraft goods making inter-state supplied are excluded from the requirement of obtaining GST registration.<\/p>\n\n\n\n<p>They are also not liable for general registration for conducting inter-state supply where they possess a fixed establishment. However, they are under the legal obligation to obtain Income Tax PAN and to generate e-way bill.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 32\/2017-CT issued on 15-Sep-2017<\/h3>\n\n\n\n<p>Through this notification, the government had mandated the generation of e-way even if the consignment&#8217;s value falls under Rs 50,000 if the supply of handicraft goods took place on an inter-state basis.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Notification No. 10\/2019-IT issued on 07.March.2019<\/h3>\n\n\n\n<p>A taxpayer involved with the exclusive supply of goods &amp; whose total annual turnover does not surpass Rs 40 lakh is not required to secure the GST registration.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 23 of the CGST Act has emerged as a savior for the\ngreater percentage of individuals who reap income through immense hardship.\nThis section aims to enable the struggling strata of society to flourish with a\nminimum of tax obligations that largely act as a major roadblock for their\ndevelopment. <\/p>\n\n\n\n<p>Connect with&nbsp;<a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> professional to get additional and precise information on the Section 23 of the CGST Act. You can use different mode of communication to get in touch with our professional. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/post-gst-implementation-scenario-in-india\/\">An Comparison of Post-GST Implementation Scenario in India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Section 23 of CGST Act 2017 talks about the non-applicability of GST on the taxpayers. This blog would provide a briefing about the statutory provisions cited under the said Act. Statutory Provision under Section 23(1) (a) of CGST Act Any individual involved exclusively with the business of supplying goods and services or both that [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":25661,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[1511],"acf":{"service_id":"96"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":5750,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25599"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=25599"}],"version-history":[{"count":19,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25599\/revisions"}],"predecessor-version":[{"id":25663,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25599\/revisions\/25663"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/25661"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=25599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=25599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=25599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}