Section 22 – Persons liable for registration

Section 22 (1)

Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods, if his aggregate turnover in a financial year exceeds Rs. 40 Lakh. The Limit is Rs. 20 Lakh for the supplier of services only.

Provided that where such person makes taxable supplies of goods from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds Rs. 20 Lakh. The Limit is Rs. 10 Lakh for the supplier of services in the special category states.

Earlier the limit was Rs. 20 Lakh for the supplier supplying goods or services or both from states other than special category states and Rs. 10 Lakh for the supplier supplying the goods or services or both from the special category states. The limit for supplying goods was increased to Rs. 40 Lakh for supplying goods from states other than special category and to Rs. 20 Lakh for supply from special category states w.e.f. 01st April 2019 through Finance Act 2019 using the power to enhance the limit as provided in the proviso to section 22 of the CGST Act, 2017. There was no change for the supply of services in both the category.

Explanation.––For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.”.

Meaning of Aggregate Turnover

The aggregate turnover will be taken as mentioned in the section 2(6) of the CGST Act, 2017 which is as below:-

"aggregate turnover" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Explanations

The expression "aggregate turnover" shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;

The supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;

Section 22(2)

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day. Appointed day is defined in Section 2(10) of the CGST Act, 2017 as the day as on which the provisions of this act shall come into force.

Section 22(3)

Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.

Section 22(4)

Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

Persons not liable for registration.

Section 23 deals with the persons who are not liable to be registered under this Act.

Section 23(1)

1. 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;
2. An agriculturist, to the extent of supply of produce out of cultivation of land.

The Govt. vide notification no. 28/2023 dt. 31.07.2023 have amended sub section 2 of Section 23 as 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.]

Compulsory registration –Section 24

Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––