Section 22 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.
Section 22 of the Central Goods and Services Tax Act, 2017 is the first section of Chapter VI and answers the opening question of registration: who is liable to be registered. Sub-section (1) sets a test of aggregate turnover in a financial year; sub-sections (2), (3) and (4) deal with existing licence-holders, a business transferred as a going concern and a company merger or demerger; and the Explanation defines the terms it uses.
This article follows the CGST Act, 2017 as amended up to 31 October 2025 in the compilation consulted; notifications issued after that date should be checked.
Under section 22(1), every supplier is liable to be registered in the State or Union territory from where he makes a taxable supply if his aggregate turnover in a financial year exceeds twenty lakh rupees; for special category States the figure is ten lakh rupees. The Government may enhance these figures by notification, up to a stated ceiling. A transferee of a going concern is liable from the date of transfer, and a transferee in a merger or demerger from the date of the certificate of incorporation.
Where section 22 sits
Section 22 begins Chapter VI, "Registration" (sections 22 to 30). The persons who need not register are in section 23; those who must register whatever their turnover are in section 24. See section 23: persons not liable to register, compulsory registration under section 24 and, for how aggregate turnover is computed, aggregate turnover: what it includes. The procedure that follows liability is in section 25 and the registration rules. If you are not sure whether your turnover has made you liable, our GST registration service can check your position.
Section 22(1): the turnover test
Section 22(1) reads: "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 or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees".
Three things are worth noticing. The liability attaches to a supplier; it arises in the State or Union territory from where the taxable supply is made, so a supplier operating from several States is tested for each; and the test is that turnover "exceeds" the figure, so turnover equal to it does not create liability.
The first proviso: special category States
"Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees". The meaning of "special category States" is in clause (iii) of the Explanation, below.
The second proviso: enhancing the special category figure
The next proviso says the Government "may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified". The compilation records this proviso as inserted by section 11 of the Central Goods and Services Tax (Amendment) Act, 2018 and notified with effect from 01.02.2019.
The third proviso: suppliers engaged exclusively in goods
"Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified". The compilation records it as inserted by section 94 of the Finance (No. 2) Act, 2019 and notified under notification number 1/2020-CT dated 01.01.2020.
An Explanation to this proviso adds that a person is "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".
What the section does not print. The enhanced amounts, the States that have asked for them and the conditions are fixed by notification; none is in the material consulted. Check the notified limit that applies to your State and your kind of supply before relying on twenty lakh rupees, ten lakh rupees or forty lakh rupees.
Section 22(2): existing registrants and licence-holders
"Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day." This is a transitional provision and uses the Act's own terms, "existing law" and "appointed day". Section 22(2) states no turnover test. For the migration scheme see section 139: migration of existing taxpayers.
Section 22(3): transfer of a business as a going concern
"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." The transferee's liability does not depend on his own turnover; it starts from the date of transfer or succession.
Section 22(4): merger and demerger of companies
Sub-section (4) begins "Notwithstanding anything contained in sub-sections (1) and (3)". Where there is a 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". The date is therefore fixed by the certificate of incorporation, not by the date of the order.
The Explanation at the end of the section
| Clause | What it says |
|---|---|
| (i) | "Aggregate turnover" includes all supplies made by the taxable person, whether on his own account or on behalf of all his principals |
| (ii) | The supply of goods after completion of job work by a registered job worker is treated as the supply of goods by the principal referred to in section 143, and their value is not included in the registered job worker's aggregate turnover |
| (iii) | "Special category States" means the States specified in sub-clause (g) of clause (4) of article 279A of the Constitution, except the State of Jammu and Kashmir and the States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand |
Clause (iii) refers to the Constitution, and the compilation records parts of it as inserted by the Central Goods and Services Tax (Extension to Jammu and Kashmir) Act, 2017 and by the 2018 Amendment Act. The words are printed as quoted; the list of States in article 279A is not in the material consulted.
Which sub-section applies
| Situation | Sub-section | When liability begins |
|---|---|---|
| Supplier whose aggregate turnover in a financial year exceeds the limit | 22(1) | When the limit is exceeded, in the State or Union territory of supply |
| Registered or licensed under an existing law on the day before the appointed day | 22(2) | From the appointed day |
| Transferee or successor of a registered person's business as a going concern | 22(3) | From the date of transfer or succession |
| Transferee under a court-sanctioned amalgamation or demerger | 22(4) | From the date of the certificate of incorporation giving effect to the order |
A worked example
The names and amounts are assumed. Greenfield Stationers, an invented proprietor selling only goods, makes taxable supplies from a State that is not a special category State. In its financial year its aggregate turnover is 22,00,000 rupees, including supplies it made as an agent for two principals, which are counted under clause (i) of the Explanation. Under section 22(1), if the applicable limit is twenty lakh rupees and no notified enhancement applies, it is liable to be registered. If a notification enhances the limit for suppliers exclusively in goods, the notified figure must be applied instead.
Separately, Harbour Textiles, an invented registered person, sells its whole business to Moonrise Garments, an invented buyer, as a going concern on 1 July. Under section 22(3), Moonrise Garments is liable to be registered from that date. It does not need to cross any turnover limit first.
Need help deciding whether you must register?
The limit, the State you supply from and the way turnover is counted all affect the answer. We review your turnover and your supplies and tell you what applies. See our GST registration service.
Key takeaways
- Section 22(1): a supplier is liable where aggregate turnover in a financial year exceeds twenty lakh rupees; ten lakh rupees where he supplies from a special category State.
- The Government may enhance these figures by notification: up to twenty lakh rupees for special category States and up to forty lakh rupees for suppliers exclusively in goods. The notified limits must be checked.
- Section 22(3): the transferee of a going concern is liable from the date of transfer or succession.
- Section 22(4): in an amalgamation or demerger the transferee is liable from the date of the certificate of incorporation.
- Aggregate turnover includes supplies made on behalf of principals (Explanation (i)).
Read next
- Section 25 of the CGST Act, 2017: procedure for registration
- Section 27 of the CGST Act, 2017: casual taxable person and non-resident taxable person
- Section 23: persons not liable to register
- Compulsory registration under section 24
Disclaimer: Based on the Central Goods and Services Tax Rules, 2017 and the GST Acts as amended up to 31 October 2025 in the compilation consulted, read with the Finance Act, 2026 where this article says so, as consulted on 2 October 2026. Notifications, circulars and amendments issued after that date, the forms on the common portal and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.