In Re Shree Sawai Manoharlal Rathi (GST AAR Gujarat)
Interest on PPF, Personal Loan And Advances Given To Family/Friends, Saving Bank Account To Be Included In Aggregate Turnover For GST Registration
In the case of Sawai Manoharlal Rathi, the Gujarat Authority for Advance Ruling has held that interest income from PPF, interest income from personal loan and advances given to family/friends and interest income from saving bank account to be included in aggregate turnover for GST registration.
FULL TEXT OF AAR JUDGMENT
The applicant has submitted that he is an individual having not engaged in any business. His receipts are only from savings, personal loans and advances and deposits, which are reflected in the Income Tax Returns.
2. The applicant has further submitted that his estimated receipts for the F.Y. 2018-19 is likely to be totally Rs.20,12,000/-, which includes,(i) Rent receipts: 9,84,000/-, (ii) Bank interest: Rs.3,000/-, (iii) Interest on PPF deposit:Rs.2,76,000/- and (iv) Interest on Personal Loans and Advances: Rs.7,49,000/-.
3. The applicant further submitted that their interpretation of law is that if interest is received on loans and advances, deposits and savings Bank account by an individual person, who is not engaged in any such business and who is not a money lender, then such Interest Receipts is not a Supply and does not attracts GST, as the same is neither “In the course of Business“nor “In the furtherance of Business”.
4. The applicant further submitted that he relies on the definition of “Scope of Supply” given under Section 7 of the CGST Act, 2017, which clearly states that the receipts should be “In the course or furtherance of Business”.
5. The applicant further submitted that the receipts from personal loans and advances, deposits and Bank Interest are not covered under “Business” as per the definition of “Business” given under Section 2(17) of the CGST Act, 2017.
6. In view of the above, the applicant further submitted that for the purpose of calculating the threshold limit of Rs.20.00 Lakh for obtaining registration under GST law, such interest receipts are not required to be aggregated.
7. In light of the above backdrops, the applicant is seeking an advance ruling in respect of the following questions:
1. Whether Interest received in form of PPF would be considered for the purpose of calculating the threshold limit of Rs.20.00 Lakh for registration under GST Law?
2. Whether Interest received on Personal Loans and Advanced to family/friends would be considered for the purpose of calculating the threshold limit of Rs.20.00 Lakh for registration under GST Law?
3. Whether Interest received on Saving Bank Account would be considered for the purpose of calculating the threshold limit of Rs.20.00 Lakh for registration under GST Law?
8. At the time of personal hearing, the Authorised Representative of the applicant reiterated the facts as stated in the Application and mentioned herein above.
DISCUSSION & FINDINGS:
9. We have considered the submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing.
10. In this case, a moot point is to be decided as to whether interest received on deposit in Public Provident Fund (PPF), Personal Loans 86 Advances to family/friends and deposit in Saving Bank Accounts, would be considered for the purpose of calculating the threshold limit of Rs.20.00 Lakh for registration under GST Law?
11. “Aggregate Turnover” is relevant to a person to determine the threshold limit to obtain registration under the Act (supply of Services or (goods and services both): Rs.20 Lakh (Rs.10 Lakh in case of supplies effected from special category states).
12. Section 2(6) of the Central Goods & Services Tax Act, 2017 defines the term “aggregate turnover” as under:
“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.”
12.1 We find that the “aggregate turnover” is an all-encompassing term covering all the supplies effected by a person having the same PAN. It specifically excludes:
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