Every one know that GST registration is required the moment you cross threshold limit of Rs. 20 lacs and Rs. 10 lacs in NE States. But the most important is the GST registration is mandatory from the day one without any threshold limit.
Every supplier required to be registered if the above threshold limit has been crossed for the supply of goods or services or both. Except when the supplier deals only in exempted goods or services exclusively. Major problem is how to compute the aggregate turnover so that it can be determine that registration under GST is required or not . when the aggregate turnover of the person exceed the threshold limit , one need to take registration . What is aggregate turnover what its include is very significant here.
“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;
To understand the aggregate turnover in detail it is mandatory to understand the exempt supplies. Without knowing the exempted supplies, aggregate turnover can not be determined.
“exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply;
What is important here is that Non taxable supply on which GST is not applicable.
Like Salary which is neither goods nor services means thereby that salary is not covered in GST as per Schedule-III, hence salary is non taxable supply.
For Example .
1. Mr. A is doctor doing and his own practice and his yearly income is Rs. 12lacs and he sit in hospital for two hours in day on salary basis and his salary is Rs. 6 lacs per annum. He has income from commercial building rent which is Rs. 4 lacs . Mr. A in this case is having income more than the threshold limit therefore apply for registration under GST and Pay GST on rent.
If you do not combine the definition of exempt supply , you can not calculate the applicability of threshold limit.
2. So Mr. A is a farmer with an annual turnover of Rs. 25 lakh. Since this income is agriculture-related, the turnover is exempt from GST. However, Mr. A also supplies plastic bags along with his crop and charges separately for this. His turnover from the sale of plastic bags is Rs. 1 lakh and we know that this transaction (sale of plastic bags) is chargeable to GST. In simple words, his taxable turnover is only Rs. 1 lakh. Going by the aggregate turn over Mr. A is required to get the registration.
The contents of this article are solely for information and knowledge and does not constitute any professional advice or recommendation. Author does not accept any liability for any loss or damage of any kind arising out of this information set out in the article and any action taken based thereon.