Taxable Person Under GST: Section 22, 23 & 24 Explained with Examples | Complete Registration Guide

Taxable Person Under GST – Complete Guide

GST is applicable only when a taxable supply is made by a taxable person. Therefore, before understanding GST registration, every taxpayer must first understand who is considered a taxable person under the GST law.

Many businesses assume that every supplier has to register under GST. However, the law provides several situations where registration is mandatory, optional, or not required at all.

This article explains the complete concept of Taxable Person under the CGST Act with practical illustrations.

What is a Taxable Person?

According to Section 2 of the CGST Act, a Taxable Person means a person who:

• Is registered under GST, whether voluntarily or compulsorily, or
• Is liable to obtain registration under the GST Act.

Simply put,

Only a taxable person can be liable to pay GST on taxable supplies.

If a person is not liable to register and has not obtained registration, GST generally does not apply to his taxable supplies as provided under the law.

 

Registration under GST

The registration provisions are mainly covered under:

• Section 22 – Threshold-based Registration
• Section 23 – Persons Not Liable for Registration
• Section 24 – Compulsory Registration

Section 22 – Threshold-Based Registration under GST

Section 22 of the CGST Act lays down the threshold limits for GST registration. It provides relief to small businesses by exempting them from compulsory registration until their aggregate turnover exceeds the prescribed limit. Once the threshold is crossed, the person must obtain GST registration in every State or Union Territory from where taxable supplies are made.

 

What is Threshold-Based Registration?

Threshold-based registration means that a person is not required to register under GST if their aggregate turnover during a financial year remains within the prescribed limit. However, once the turnover exceeds the applicable threshold, GST registration becomes mandatory.

Example

Suppose ABC Traders in Maharashtra exclusively supplies taxable goods. During the financial year, its aggregate turnover reaches ₹42 lakh. Since the turnover exceeds the applicable threshold of ₹40 lakh, ABC Traders must obtain GST registration and start complying with GST provisions.

 

Applicable GST Registration Threshold Limits

The registration limit depends on the nature of business and the State from which taxable supplies are made.

Category of Supplier	Threshold Limit
Suppliers in Manipur, Mizoram, Nagaland and Tripura	₹10 Lakh
Suppliers in Arunachal Pradesh, Meghalaya, Sikkim, Telangana, Uttarakhand and Puducherry	₹20 Lakh
Exclusive suppliers of Goods (other eligible States/UTs)	₹40 Lakh
Exclusive suppliers of Services	₹20 Lakh
Suppliers of Goods as well as Services	₹20 Lakh

 

When the ₹40 Lakh Limit is Not Available

The higher threshold limit of ₹40 lakh is not available to suppliers dealing in certain specified goods. These include:

• Tobacco and tobacco products
• Ice cream and other edible ice
• Pan masala
• Bricks, blocks, earthen or roofing tiles (excluding wall tiles)

For these businesses, the applicable threshold remains ₹20 lakh, subject to the provisions of the GST law.

 

Interest Income Exception

Where a person is exclusively engaged in the supply of goods and also earns interest income (which is an exempt supply of service), such exempt interest income is ignored for determining eligibility for the ₹40 lakh threshold.

Example

XYZ Electronics sells electronic goods worth ₹38 lakh and earns ₹5 lakh as bank interest during the financial year.

• Turnover from goods: ₹38 lakh
• Interest income: ₹5 lakh (exempt)

For deciding the registration threshold, only the turnover from goods is considered. Therefore, XYZ Electronics remains eligible for the ₹40 lakh threshold.

 

Important Points

• Registration is required only after the aggregate turnover exceeds the applicable threshold limit.
• Registration must be obtained in every State or Union Territory from where taxable supplies are made.
• Different threshold limits apply based on the supplier's location and the nature of supplies.
• Persons covered under Section 24 (Mandatory Registration) must register irrespective of turnover.

Key Points

• Section 22 provides threshold-based GST registration for small taxpayers.
• The threshold limit may be ₹10 lakh, ₹20 lakh, or ₹40 lakh, depending on the State and nature of business.
• Exclusive suppliers of goods in eligible States can generally avail the ₹40 lakh limit.
• Suppliers of services or mixed supplies are generally subject to a ₹20 lakh threshold.
• Once the prescribed limit is crossed, GST registration becomes compulsory from the applicable date.

Section 23 – Persons Not Required to Register under GST

Section 23 of the Central Goods and Services Tax (CGST) Act specifies the categories of persons who are not required to obtain GST registration. These persons are treated as non-taxable persons for registration purposes because either their activities are outside the scope of GST registration or the Government has specifically exempted them.

Understanding Section 23 is important because not every person supplying goods or services is required to register under GST. The law provides exemptions to reduce the compliance burden on certain categories of taxpayers.

 

Who is Not Required to Register under GST?

The following categories of persons are not required to obtain GST registration under Section 23:

1. Agriculturists

An agriculturist, whether an Individual or a Hindu Undivided Family (HUF), is not required to obtain GST registration for the supply of produce arising out of the cultivation of land.

The exemption is available only for agricultural produce grown through cultivation. However, if the agriculturist carries on any separate taxable business activity, GST registration may become applicable for that business, subject to the registration provisions.

Example

Mr. Ramesh is a farmer who cultivates wheat on his own agricultural land and sells the harvested crop in the local market.

GST Registration Required?

No. Since the sale relates to agricultural produce grown through cultivation, GST registration is not required.

 

2. Persons Exclusively Supplying Exempt Goods or Services

A person who is exclusively engaged in supplying exempt goods or exempt services is not required to obtain GST registration.

This includes persons making only:

• Exempt supplies
• Nil-rated supplies
• Non-taxable supplies

Since no GST is payable on these supplies, registration is generally not required.

Example

A charitable hospital provides only healthcare services to patients.

Healthcare services are exempt from GST.

GST Registration Required?

No. Since the hospital supplies only exempt healthcare services, registration under GST is generally not required.

Another Example

A school providing education services that are exempt under GST is not required to obtain GST registration if it exclusively provides exempt educational services.

 

3. Persons Notified by the Government

The Government has the power to notify specific classes of persons who are exempt from obtaining GST registration.

Such exemptions are issued through notifications considering the nature of supplies or administrative convenience.

Example

Certain suppliers making only supplies on which tax is payable under the Reverse Charge Mechanism (RCM) may be exempted from obtaining GST registration through Government notification.

Similarly, the Government may notify additional categories of persons who are not required to register under GST from time to time.

Quick Summary

Category	GST Registration Required?
Agriculturist supplying agricultural produce	No
Person supplying only exempt goods or services	No
Person supplying only nil-rated supplies	No
Person supplying only non-taxable supplies	No
Government-notified exempt persons	No

 

Key Points

• Section 23 identifies the persons who are not required to obtain GST registration.
• Agriculturists supplying produce from cultivation are exempt from registration.
• Businesses exclusively engaged in exempt, nil-rated, or non-taxable supplies are generally outside the GST registration requirement.
• The Government may notify additional categories of persons who are exempt from registration.
• If a person subsequently becomes liable to register under the GST Act, registration must be obtained from the applicable date.

Section 24 – Mandatory Registration under GST

Section 24 of the Central Goods and Services Tax (CGST) Act specifies the categories of persons who are required to obtain GST registration compulsorily, irrespective of their aggregate turnover. Unlike Section 22, where registration depends on crossing the prescribed threshold limit, the threshold exemption is not available to persons covered under Section 24.

The purpose of mandatory registration is to ensure effective tax administration and compliance for specific categories of taxpayers who are involved in transactions requiring closer GST monitoring.

Who is Required to Obtain Mandatory GST Registration?

The following persons are required to obtain GST registration irrespective of their turnover:

Category of Person	Registration Required
Inter-State supplier of taxable goods	Yes
Casual Taxable Person (CTP)	Yes
Non-Resident Taxable Person (NRTP)	Yes
Person liable to pay tax under Reverse Charge Mechanism (RCM)	Yes
Government departments liable to deduct TDS under GST	Yes
E-Commerce Operators required to collect TCS	Yes
Supplier of online money gaming from outside India to India	Yes
Agent making taxable supplies on behalf of another taxable person (specified cases)	Yes
Other persons notified by the Government	Yes

 

1. Inter-State Supplier of Taxable Goods

A person making taxable supplies of goods from one State to another is generally required to obtain GST registration under Section 24, irrespective of turnover, unless specifically exempted by Government notifications.

Example

ABC Traders, located in Delhi, supplies electronic goods worth ₹5 lakh to customers in Maharashtra.

Since the supply is an inter-State supply of taxable goods, GST registration becomes mandatory, subject to the relaxations notified by the Government.

 

2. Casual Taxable Person (CTP)

A Casual Taxable Person is someone who occasionally undertakes taxable transactions in a State or Union Territory where they do not have a fixed place of business.

Such persons must obtain GST registration at least five days before commencing business.

Example

A handicraft seller from Rajasthan participates in a trade exhibition in Karnataka for ten days.

Since he has no fixed place of business in Karnataka, he must obtain GST registration as a Casual Taxable Person before making taxable supplies.

 

3. Non-Resident Taxable Person (NRTP)

A Non-Resident Taxable Person is an individual or business located outside India that occasionally undertakes taxable supplies in India.

They are also required to obtain GST registration before commencing business activities in India.

Example

A company incorporated in Singapore participates in an exhibition in India and sells products during the event.

The company must obtain GST registration as a Non-Resident Taxable Person.

 

4. Persons Liable to Pay Tax under Reverse Charge Mechanism (RCM)

Certain notified recipients are liable to pay GST under the Reverse Charge Mechanism instead of the supplier.

Such persons are required to obtain GST registration wherever applicable under the GST provisions.

Example

A business receiving notified services on which GST is payable under RCM must comply with the registration requirements prescribed under the Act.

 

5. Government Departments Deducting TDS

Government departments, local authorities and other notified entities that are required to deduct Tax Deducted at Source (TDS) under GST must obtain GST registration irrespective of turnover.

 

6. E-Commerce Operators Collecting TCS

Every E-Commerce Operator liable to collect Tax Collected at Source (TCS) under Section 52 of the CGST Act must obtain GST registration.

Examples of E-Commerce Operators include online marketplaces that facilitate supplies made by vendors through their digital platform.

 

7. Supplier of Online Money Gaming from Outside India

A supplier providing online money gaming services from outside India to persons located in India is required to obtain GST registration irrespective of turnover.

This provision ensures proper taxation of cross-border online gaming services.

 

8. Agents Supplying Goods or Services on Behalf of Principal

An agent making taxable supplies on behalf of another taxable person in the cases specified under Schedule I of the CGST Act is required to obtain compulsory GST registration.

Example

An authorised commission agent sells goods on behalf of a manufacturer and issues invoices in accordance with GST provisions.

The agent is required to obtain GST registration where the law so provides.

 

9. Other Notified Persons

The Central Government may notify additional categories of persons who are required to obtain compulsory GST registration.

Such notifications are issued from time to time based on administrative requirements and changes in GST law.

 

Important Relaxations

Although Section 24 provides compulsory registration in certain situations, the Government has granted relaxations for specific categories of taxpayers.

These include:

• Inter-State suppliers of services, subject to the prescribed threshold limit.
• Inter-State suppliers of handicraft goods, subject to specified conditions.
• Certain Casual Taxable Persons in notified situations.

These relaxations reduce the compliance burden for small businesses and service providers.

Practical Examples

Example 1 – Inter-State Supply of Goods

ABC Traders, registered in Delhi, supplies machinery worth ₹5 lakh to a customer in Maharashtra.

Since the transaction is an inter-State supply of taxable goods, GST registration becomes mandatory, subject to the applicable exemptions and notifications.

 

Example 2 – Inter-State Supply of Services

Mr. A provides management consultancy services to clients located in Delhi, Maharashtra and Karnataka. His total turnover is ₹12 lakh.

As an inter-State supplier of services, he may be eligible for threshold-based registration where the applicable GST provisions permit such relaxation.

E-Commerce Registration under GST

GST law contains special provisions for businesses operating through E-Commerce Operators (ECOs).

For certain notified services, the responsibility to collect and pay GST rests with the E-Commerce Operator instead of the actual service provider.

Specified Services Covered

The following services are covered under the special provisions:

• Hotel accommodation services
• Restaurant services (subject to prescribed conditions)
• Passenger transportation by radio taxi
• Passenger transportation by omni bus
• Certain miscellaneous utility services notified by the Government

In these cases, the E-Commerce Operator is liable to pay GST and must obtain compulsory registration.

The vendor's registration requirement depends on the applicable threshold limit and specific provisions of the GST law.

 

Supply of Goods Through E-Commerce Operators

Where taxable goods are supplied through an E-Commerce Operator:

• The E-Commerce Operator is required to obtain GST registration.
• The supplier of goods is liable to pay GST and comply with the registration provisions applicable to such supplies.

However, the Government has provided certain relaxations for eligible micro-level suppliers.

 

Micro-Level Goods Vendors

To encourage small businesses, GST law provides special relaxation to eligible micro-level suppliers.

Generally, a micro-level supplier is one whose turnover remains within the prescribed threshold limits.

Instead of obtaining GST registration immediately, such suppliers may initially obtain an Enrolment Number.

Conditions

• Supplies must be made only within one State.
• Inter-State supply is not permitted.
• Business should operate from a single location.
• The enrolment remains valid until GST registration is obtained.

 

Key Difference Between Section 22 and Section 24

Basis	Section 22	Section 24
Registration	Threshold-based	Mandatory
Turnover Limit	Applicable	Not Applicable
Small Business Exemption	Available	Not Available
Registration Trigger	Crossing threshold turnover	Covered under specified compulsory categories

 

Key Takeaways

• Section 24 mandates GST registration irrespective of turnover for specified categories of persons.
• Threshold exemption under Section 22 is not available to persons covered by compulsory registration provisions.
• Casual Taxable Persons, Non-Resident Taxable Persons, E-Commerce Operators, TDS deductors and persons liable under Reverse Charge Mechanism are among the major categories requiring mandatory registration.
• The Government has granted limited relaxations for certain inter-State suppliers and small businesses.
• Businesses should carefully evaluate whether they fall under Section 22 or Section 24 before determining their GST registration liability.

Key Points

• A taxable person is one who is registered or required to be registered under GST.
• Section 23 specifies persons who are not required to obtain GST registration.
• Section 24 lists categories requiring compulsory registration irrespective of turnover.
• Section 22 prescribes threshold-based registration limits.
• E-commerce operators have special registration and tax payment provisions.
• Small businesses enjoy threshold exemptions subject to specified conditions.
• Registration becomes effective from different dates depending on whether it is mandatory, threshold-based, or voluntary.

Frequently Asked Questions (FAQs)

Who is a taxable person under GST?

A taxable person is a person who is registered under GST or is legally required to obtain GST registration.

Is GST registration compulsory for every business?

No. Businesses whose turnover is below the applicable threshold and who are not covered by mandatory registration provisions may not need GST registration.

What is the threshold limit for GST registration?

Depending on the nature of supply and the State, the threshold can be ₹10 lakh, ₹20 lakh, or ₹40 lakh.

Who must obtain compulsory GST registration?

Categories such as certain inter-State suppliers, Casual Taxable Persons, Non-Resident Taxable Persons, specified E-Commerce Operators, TDS deductors, and persons liable under reverse charge are covered under compulsory registration.

Can a person obtain GST registration voluntarily?

Yes. A person may apply for voluntary registration even if not legally required, and GST registration becomes effective from the date the registration certificate is granted.