Tag: Section 22 CGST Act

Taxable Person under GST (2026): Who Must Register, Who is Exempt, and Special Categories

Posted on by CA Meet Dhrangadhariya

Last updated: 12 October 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • A “taxable person” is anyone registered, or required to be registered, under GST - the registration threshold itself (section 22) is separate from the list of persons who must register regardless of turnover (section 24).
  • Section 24 overrides the turnover threshold entirely for specific categories - inter-State suppliers, e-commerce operators, reverse charge taxpayers, casual and non-resident taxable persons, Input Service Distributors, and (since October 2023) overseas online money gaming suppliers.
  • Section 23, substituted by the Finance Act, 2023 and now in force, exempts exclusively exempt/non-taxable suppliers and agriculturists from registration even if Section 22 or 24 would otherwise apply to them.
  • A casual or non-resident taxable person gets a temporary registration valid for 90 days (extendable by another 90 days), and must deposit estimated tax in advance before making any taxable supply.
  • An Input Service Distributor can only distribute credit on input services, never on input goods or capital goods, to branches sharing the same PAN.

Whether a particular person or business must register for GST, and when, is governed by three sections working together - not one simple turnover test. Section 22 sets a default threshold; section 24 overrides it for specific categories regardless of turnover; and section 23 carves out exemptions that override both. Missing how these three fit together is one of the most common registration mistakes.

New to terms such as “reverse charge” or “Input Service Distributor”? See the technical terms explained in simple words further down.

What “taxable person” means

A taxable person is anyone registered, or required to be registered, under the CGST Act. “Person” here is defined broadly - individuals, a Hindu Undivided Family, a company, a partnership firm, an LLP, an association or body of individuals, a corporation or government company, a body corporate under foreign law, a co-operative society, a local authority, a trust, and any other artificial juridical person all count.

The default threshold: section 22

Under section 22, a person becomes liable to register once their aggregate turnover crosses:

Category Threshold
Most suppliers Rs 20 lakh
Exclusive goods suppliers, where a State has notified the higher limit Up to Rs 40 lakh
Special category States Rs 10 lakh

This is a default threshold - it does not apply to everyone, because sections 23 and 24 carve out exceptions on both sides.

Who must register no matter how small their turnover is: section 24

Section 24 overrides section 22’s threshold entirely for these categories - they must register regardless of turnover:

  • Persons making inter-State taxable supplies
  • Casual taxable persons making taxable supplies
  • Persons liable to pay tax under reverse charge
  • Persons liable under section 9(5) (specified electronic-commerce-operator supplies)
  • Non-resident taxable persons making taxable supplies
  • Persons required to deduct TDS under section 51
  • Agents making taxable supplies on behalf of other taxable persons
  • Input Service Distributors
  • Suppliers through an e-commerce operator required to collect TCS under section 52
  • Every e-commerce operator required to collect TCS under section 52
  • Suppliers of OIDAR services (online information and database access or retrieval) from outside India to an unregistered person in India
  • Overseas suppliers of online money gaming to a person in India - added with effect from 1 October 2023
  • Any other category the Government notifies on the GST Council’s recommendation

Who is exempt even if they would otherwise have to register: section 23

Section 23, as substituted by the Finance Act, 2023 and now in force, exempts two categories from registration - notwithstanding sections 22(1) and 24, meaning this exemption overrides both:

  1. Anyone exclusively supplying goods or services that are not taxable, or wholly exempt under the CGST or IGST Acts.
  2. An agriculturist, to the extent of supplying produce grown on their own cultivated land.

This settles a question that was genuinely open for a period: the amendment clarifies that these two categories need not register even if section 22 or 24 would otherwise catch them - and this is the current, operative law, not a pending proposal.

Casual taxable person

Someone who occasionally supplies goods or services in a State or Union Territory where they have no fixed place of business. Example: a consultant based in Bengaluru who takes on a short engagement in Pune, with no office there, is a casual taxable person in Pune for that engagement.

Non-resident taxable person

The same concept, applied to someone with no fixed place of business anywhere in India. A non-resident occasionally supplying goods or services into India is a non-resident taxable person.

Registration mechanics for casual and non-resident taxable persons

Under section 27:

  • The registration certificate is valid for the period stated in the application, or 90 days from the effective date, whichever is earlier.
  • It can be extended by a further period of up to 90 days, on sufficient cause shown to the proper officer.
  • An advance deposit of estimated tax must be made at the time of applying (and an additional deposit if an extension is sought) - the person cannot make any taxable supply before the certificate is actually issued.
  • The deposit sits in the electronic cash ledger and is used to pay tax as it falls due.

Input Service Distributor (ISD)

An office of a supplier that receives tax invoices for input services, and distributes the CGST, SGST or IGST credit on those services to its own branches sharing the same PAN. Only credit on input services can be distributed this way - never on input goods or capital goods.

Composition taxpayer

A person registered under the Composition Scheme (section 10) who pays a flat, low rate of tax on turnover instead of the normal rate, without charging GST to customers. See our full GST Composition Scheme guide for the current turnover limits and rates.

QRMP taxpayer

A registered person filing GSTR-3B, with aggregate turnover up to Rs 5 crore in the preceding financial year, can opt into the Quarterly Return Monthly Payment (QRMP) Scheme - filing GSTR-1 and GSTR-3B once a quarter, while still paying tax monthly through FORM PMT-06, and optionally uploading B2B invoices monthly through the Invoice Furnishing Facility (IFF).

How registration works by category

  • Registration must be applied for in every State where a person is liable, within 30 days of becoming liable.
  • Casual and non-resident taxable persons must apply at least five days before starting business.
  • Registration is PAN-based, so a PAN is a prerequisite.
  • Registration is State-wise - a separate registration is needed for each State, with an option for a separate registration per business vertical within the same State.

How CSM & Co LLP can help

Getting registration timing wrong - registering too late under section 24’s compulsory categories, or registering unnecessarily when section 23 would have exempted the business - both create avoidable compliance costs. Please reach out to our team and we will be happy to assist with registration analysis, casual and non-resident taxable person registrations, and Input Service Distributor set-up.

Technical terms explained in simple words

Term What it means
Aggregate turnover The total value of all taxable, exempt and export supplies made by a person under one PAN, across all their GST registrations, added together.
Reverse charge A situation where the recipient of a supply, not the supplier, is liable to pay GST directly to the Government.
Electronic cash ledger The online account on the GST Portal holding a taxpayer’s cash deposits, used to pay GST liabilities.
OIDAR services Online Information and Database Access or Retrieval services - a category of digital services (such as cloud services, online content, and similar) supplied over the internet with minimal human intervention.
Input Service Distributor (ISD) An office of a business that receives invoices for services used across multiple branches, and redistributes the GST credit on them to those branches.
TCS (Tax Collected at Source) Tax an e-commerce operator must collect on payments to the sellers who supply through its platform, and deposit with the Government.

Frequently asked questions

Who is a “taxable person” under GST?

Anyone who is registered, or required to be registered, under the CGST Act - this covers individuals, HUFs, companies, firms, LLPs, AOPs/BOIs, co-operative societies, local authorities, trusts, government bodies and other legal persons that carry on business in India.

At what turnover must a business register for GST?

Under section 22, Rs 20 lakh is the default threshold (Rs 10 lakh in a special category State), with a higher Rs 40 lakh limit available for suppliers dealing exclusively in goods, where the relevant State has notified it.

Who must register for GST regardless of turnover?

Under section 24, specific categories must register no matter how small their turnover is: inter-State suppliers, casual taxable persons, reverse charge taxpayers, persons liable under section 9(5), non-resident taxable persons, TDS deductors, agents making supplies on another’s behalf, Input Service Distributors, e-commerce operators required to collect tax at source and those supplying through them, suppliers of online information and database access or retrieval (OIDAR) services from outside India, and, since 1 October 2023, overseas suppliers of online money gaming.

Who is exempt from GST registration even if they cross the threshold?

Under section 23, as substituted by the Finance Act, 2023 (now in force), a person dealing exclusively in exempt or non-taxable goods or services, and an agriculturist supplying only produce from their own cultivated land, are not liable to register - this exemption overrides sections 22 and 24 for these two categories.

What is a casual taxable person, and how long does their registration last?

Someone who occasionally supplies goods or services in a State or Union Territory where they have no fixed place of business. Under section 27, their registration is valid for 90 days from the effective date (or a shorter period they specify), extendable by a further 90 days, and they must deposit estimated tax in advance before the certificate is issued.

What can an Input Service Distributor distribute credit for?

Only input services - never input goods or capital goods. An ISD is an office of a supplier that receives tax invoices for input services and redistributes the CGST, SGST or IGST credit on them to branches sharing the same PAN.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

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GST vs Income Tax (2026): Direct Tax vs Indirect Tax, Registration Thresholds and Return Filing Compared

Posted on by CA Meet Dhrangadhariya

Last updated: 10 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • GST is an indirect tax on the supply of goods and services, governed by the CGST Act, 2017; income tax is a direct tax on a person’s income, governed by the Income-tax Act, 2025 (Tax Year 2026-27 onward).
  • GST registration is compulsory once aggregate turnover crosses Rs 20 lakh (Rs 40 lakh for an exclusive goods supplier in States that have notified the higher limit), or Rs 10 lakh in a special category State - this is a one-time registration, not an annual filing.
  • Income tax applies to every person who earns income above the basic exemption limit - Rs 4 lakh a year under the new, default tax regime for 2026-27 - and the return is filed once a year for the whole year’s income.
  • GST can be collected at multiple points of a supply chain, with credit flowing between them; income tax is a personal, non-transferable liability that cannot be passed on to anyone else.
  • A single business routinely deals with both: GST on what it sells and buys, income tax on what it earns as profit - they are not alternatives to each other.

GST and income tax are both taxes a business or individual deals with in India, but they tax completely different things, under completely different laws, and neither one substitutes for the other. Confusing the two - thinking GST registration covers income tax, or that filing an income tax return means GST is taken care of - is a common and costly mistake.

New to terms such as “aggregate turnover” or “basic exemption limit”? See the technical terms explained in simple words further down.

The core difference: direct tax vs indirect tax

GST Income Tax
Type of tax Indirect Direct
What it taxes Supply of goods and services A person’s income
Who ultimately bears it The final consumer The person who earned the income
Can the burden be shifted? Yes - it is built into the price charged to the buyer No - it cannot be transferred to anyone else
Governing law CGST Act, 2017 (plus SGST, UTGST and IGST Acts) Income-tax Act, 2025
Collected by Central and State/UT Governments jointly Central Government only

An indirect tax is collected by a registered supplier from the buyer, and deposited with the Government - the supplier is only a collection agent in substance, since the cost sits in the price the buyer pays. A direct tax is paid straight by the person who earns the income, with no one else in between.

When GST registration becomes compulsory

Under section 22 of the CGST Act, 2017 (Persons liable for registration):

Category Threshold (aggregate turnover in a financial year)
Most suppliers (not in a special category State) Rs 20 lakh
Supplier dealing exclusively in goods, in a State that has notified the higher limit Up to Rs 40 lakh
Special category States Rs 10 lakh (may be raised up to Rs 20 lakh if that State requests it)

Crossing this threshold means registering once, not filing anything annually by itself - GST compliance (returns, payments) follows from being registered, the same way income tax compliance follows from earning taxable income.

When income tax becomes payable

Income tax applies to anyone - individuals, HUFs, firms, companies and more - whose income exceeds the applicable exemption limit for the Tax Year. The current figures, under the new (default) tax regime for Tax Year 2026-27, are:

New regime (default) Old regime (optional)
Basic exemption (nil-tax slab) Up to Rs 4 lakh Up to Rs 2.5 lakh
Effective tax-free income (after rebate) Up to Rs 12 lakh, for most individuals No equivalent rebate at that level

See our full guide to Income Tax for Tax Year 2026-27 for the complete slab table and special rates.

How return filing differs

GST Income Tax
Who files A GST-registered person or business Anyone whose income exceeds the exemption limit, or who otherwise must file
How often Monthly, quarterly or annually, depending on the return and the taxpayer’s scheme Once a year, for the whole financial year
What is reported Outward and inward supplies, tax collected and paid, input tax credit Total income from all heads, deductions, tax computed
Where filed GST Portal Income Tax e-filing portal

GST’s filing cadence is much tighter because it tracks transactions as they happen through the year, while an income tax return is a once-a-year summary of total income.

Why a business usually deals with both

A GST-registered business is almost always also an income tax assessee, because the two taxes apply to different things happening in the same business:

  • GST applies to every taxable sale the business makes, and it can claim credit for the GST it paid on its own purchases.
  • Income tax applies separately to the profit the business actually makes after all its expenses - GST paid or collected does not itself form part of taxable income or a deductible expense (it passes through the electronic credit ledger, not the profit and loss account).

A shopkeeper below the GST threshold may still owe income tax on their profit. A business well above the GST threshold may, in a loss-making year, owe no income tax at all. The two run on entirely separate rules.

How CSM & Co LLP can help

Many small businesses either register for GST too late, because they did not track aggregate turnover against the section 22 threshold, or assume GST compliance covers their income tax obligation, which it never does. Please reach out to our team and we will be happy to assist with GST registration, GST return filing, and income tax return filing, so neither obligation is missed.

Technical terms explained in simple words

Term What it means
Aggregate turnover The total value of all taxable, exempt and export supplies made by a person under one PAN, across all their GST registrations, added together - the figure checked against the section 22 threshold.
Basic exemption limit The slice of total income on which income tax is charged at a nil rate, before the first taxable slab begins.
Special category State A State listed under Article 279A(4)(g) of the Constitution (mostly the North-Eastern States, plus Himachal Pradesh, Sikkim and Uttarakhand), given a lower GST registration threshold.
Input tax credit The GST already paid on a business’s own purchases, which it can subtract from the GST it owes on its own sales.
Rebate under section 87A A deduction straight from the income tax payable (not from income) that can bring the tax to nil for a total income up to a set limit.
Assessee The legal term under the Income-tax Act for any person liable to pay income tax, or in respect of whom any proceeding under the Act has been taken.

Frequently asked questions

Is GST a direct tax or an indirect tax?

Indirect. GST is levied on the supply of goods and services, and the person who actually bears the cost (the final consumer) is not the one who deposits it with the Government - the registered supplier collects and deposits it on the consumer’s behalf.

Is income tax a direct tax or an indirect tax?

Direct. Income tax is levied straight on the income of the person who earns it, and that person pays it themselves - the liability cannot be shifted to anyone else.

At what turnover does a business have to register for GST?

Under section 22 of the CGST Act, registration becomes compulsory once aggregate turnover in a financial year exceeds Rs 20 lakh for most suppliers, or Rs 10 lakh in a special category State. States can notify a higher Rs 40 lakh limit specifically for a supplier dealing exclusively in goods.

At what income does a person have to pay income tax?

Under the new tax regime (the default from Tax Year 2026-27), income up to Rs 4 lakh is taxed at nil, and a rebate under section 87A brings the effective tax-free limit to Rs 12 lakh of total income for most individuals. The old regime, if chosen, has a basic exemption of Rs 2.5 lakh.

How often is GST paid and filed, compared to income tax?

GST liability is typically paid and reported monthly or quarterly through GST returns (GSTR-1, GSTR-3B and others), depending on the taxpayer’s turnover and scheme. Income tax is computed and reported once a year, for the full financial year, in an income tax return.

Can the same business be liable for both GST and income tax?

Yes, and almost every GST-registered business is. GST applies to what the business supplies (its sales), and income tax applies separately to what the business earns as profit after expenses - they tax two different things and neither replaces the other.

Official sources

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

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