Government Registration Under GST, and When It Is Not Needed

Government Registration Under GST explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

A government body can end up in one of four positions: no registration, a TAN-based deductor registration, an ordinary PAN-based registration, or both at once. Which one depends on two independent questions — what it supplies, and what it pays for.

Section 22 makes a government department or local authority liable to register if it makes taxable supplies and crosses the threshold. Section 23 relieves a body engaged exclusively in non-supplies, Schedule III activities or exempt supplies, and Notification No. 5/2017-Central Tax relieves one whose entire outward supply bears tax under section 9(3) in the recipient's hands — except a metal scrap supplier, since Notification No. 24/2024-Central Tax dated 09.10.2024. Section 24(vi) compels registration of anyone required to deduct tax under section 51, and the proviso to section 25(6) lets that registration be taken on a TAN instead of a PAN, in FORM GST REG-07 under rule 12.

Section 22 — when a department is an ordinary taxpayer

"Government departments and local authorities come under the definition of 'person' and are liable to registration if they are engaged in taxable supply of goods or services and cross the threshold limit."

The Handbook's example: "Services by Ministry of Railways, Department of Post etc. are liable to GST under forward charge basis and thereby liable for GST registration as a taxpayer."

Those two are the obvious cases because they are exclusions (a) from entry 6 of the exemption notification and from entry 5 of the reverse charge notification — so their services are neither exempt nor shifted to the recipient. Entry 6 and its four exclusions →

And the converse: "where activities performed are only as a public authority (sovereign functions) and which are outside scope of GST, no registration required for those activities."

Section 23 and the reverse-charge relief

Section 23 relieves a person "engaged exclusively in the business of supplying goods or services or both that is not liable to tax or is wholly exempt." So a body dealing only in Schedule III activities, notified non-supplies, or exempt supplies need not register.

And Notification No. 5/2017-Central Tax dated 19.06.2017 relieves persons "who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient under section 9(3)."

The Handbook draws the practical conclusion: since services by Government or a local authority to a business entity are largely under reverse charge, "there might be cases where even though the threshold limit of such local authorities or departments may have exceeded, still may not be required to take registration as a taxpayer."

Two situations break that relief, and both are worth flagging.

Renting to an unregistered person. Under entry 5A of Notification No. 13/2017-CT(R), reverse charge applies only where the tenant is registered. "when such services are supplied to any unregistered person, the supplier being government departments will be liable to pay tax under forward charge basis and thereby liable to registration (subject to section 22 threshold limits)."

Metal scrap. "although the tax on the supply of metal scrap, falling under Chapters 72 to 81… is payable by the recipient under RCM, above exemption from registration is not applicable in said case. Thus, any person exclusively engaged in the supply of metal scrap will not be exempted from registration" — the relief having been withdrawn by Notification No. 24/2024-Central Tax dated 09.10.2024. Registration follows on crossing the ordinary threshold — the Handbook notes ₹40 lakh for goods in most States, ₹20 lakh or ₹10 lakh in special category States.

Section 24(vi) — the deductor registration

Section 24(vi) requires persons who must deduct tax under section 51 to take compulsory registration, "whether or not separately registered under this Act."

No threshold applies, and a separate registration is required even if the body already holds one as a supplier.

The scope widened in October 2024. "Notification No. 25/2024-Central Tax dated 09.10.2024, effective from 10.10.2024, has expanded the scope of TDS under section 51… by bringing metal scrap transactions within its ambit and extending applicability to registered persons beyond the traditionally notified Government Departments and agencies; accordingly, any person who becomes liable to deduct TDS pursuant to this notification is required to obtain compulsory registration under section 24(vi)."

So section 24(vi) now reaches ordinary businesses, not only public bodies. TDS on metal scrap →

Registering on a TAN instead of a PAN

Section 25(6) requires a PAN for registration. Its proviso allows a person required to deduct tax under section 51 to have, in lieu of a PAN, a Tax Deduction and Collection Account Number (TAN).

The Handbook's conclusion: "if Government departments and local bodies are not making any taxable supply… they are required to register only as a deductor of tax at source on the basis of TAN/PAN." Where they do make taxable supplies, "the registration shall be obtained on the basis of PAN."

Rule 12 prescribes the procedure — an application in FORM GST REG-07, electronically, signed or verified through EVC, through the common portal or a Facilitation Centre.

Registering where there is no presence. A person applying to deduct or collect tax under section 51 or section 52 in a State or UT where he has no physical presence shall "mention the name of the State or Union territory in PART A… and mention the name of the State or Union territory in PART B thereof in which the principal place of business is located, which may be different."

Grant and cancellation. REG-06 issues after verification, normally within three working days. Where the proper officer is satisfied — on the registrant's own written request, or on enquiry or other proceedings — that the person is no longer liable to deduct or collect, he may cancel the registration, communicating it in FORM GST REG-08, following the rule 22 procedure.

And a portal detail for scrap buyers. Per a GSTN advisory on REG-07 dated 22 October 2024, such taxpayers must select "Others" in Part B of Table 2 under "Constitution of Business", which opens a text box in which they must enter "Metal Scrap Dealers" — a mandatory field for anyone selecting "Others".

Two relaxations, and one that does not apply

Aadhaar authentication does not apply. Section 25(6D) allows the Government to notify persons to whom sub-sections (6A), (6B) and (6C) do not apply. By Notification No. 17/2020-CT dated 23.03.2020 w.e.f. 01.04.2020, superseded by Notification No. 03/2021-Central Tax dated 23.02.2021, the exempted list includes: a person who is not a citizen of India; a Department or establishment of a State or Central Government; a local authority; a statutory body; a Public Sector Undertaking; and a person applying for a UIN under section 25(9).

But the bank-details relaxation does not apply. Rule 10A ordinarily lets a taxpayer furnish bank account details after registration — within 30 days of grant or the due date for furnishing outward supply details, whichever is earlier. "However, it is important to note that, this relaxation is not available for those who have been granted registration as TDS deductor / TCS collector under rule 12 or suo-motu registration under rule 16. They are mandatorily required to furnish the bank account details at the time of filing the application."

Key takeaways

• A government body registers under section 22 only if it makes taxable supplies above the threshold — Railways and the Department of Posts being the standard examples.
• Section 23 and Notification No. 5/2017-CT relieve bodies supplying only exempt, non-supply or wholly reverse-charge items.
• Renting to an unregistered person is forward charge and can trigger registration.
• Metal scrap suppliers lost the reverse-charge registration relief — Notification No. 24/2024-CT.
• Section 24(vi) compels a deductor registration with no threshold, separately from any supplier registration — and now reaches ordinary businesses buying metal scrap.
• The proviso to section 25(6) permits registration on a TAN; rule 12 and FORM GST REG-07 apply, with REG-06 normally in three working days and cancellation in REG-08.
• PART A / PART B of REG-07 handles a State with no physical presence.
• Aadhaar authentication is not required of government bodies; the rule 10A bank-details relaxation is not available to deductors.

Read next

• Section 51: Who Must Deduct TDS, and the ₹2.5 Lakh Threshold
• TDS on Metal Scrap: Clause (d) and the Council History
• Entry 6 and Its Four Exclusions: Services by Government

Disclaimer: Positions stated as on 5 September 2026, based on sections 22, 23, 24, 25 and 51 of the CGST Act, 2017, rules 10A, 12, 16 and 22 of the CGST Rules, 2017, and Notification Nos. 5/2017, 17/2020, 03/2021, 24/2024 and 25/2024-Central Tax, with the GSTN advisory on REG-07 dated 22 October 2024, as reproduced in the ICAI Handbook on Government Supplies under GST (Including TDS Provisions), updated to 15 April 2026.