There is a person who wants to know whether he is required to get GST registration or not. In his case, he exclusively deals in goods and his aggregate turnover is also below 40 lakh rupees but he earns Saving Bank interest or say F.D. Interest. He wants to know whether interest earned by him will be considered for calculating his aggregate turnover for GST registration?
Plz..Reply with Suitable Notification or Circular!
17 Replies
Durga Prasad
(97 Points)
Replied 20 April 2020
I think savings bank interest or fd interest are not taken while calculating aggregate turnover
CA Naveen Chand
(Chartered Accountant)
(12729 Points)
Replied 20 April 2020
INTEREST INCOME shall NOT be considered for the aggregate turnover for the COMPOSITION DEALERS and for determining of eligibility for composition .
and for others it shall be included .
Rajkumar Patel
(602 Points)
Replied 20 April 2020
Interest income shall be considered to calculate Aggregate turnovers for Registration as it is exempt income. such interest i.e. exempt income shall be excluded while calculating aggregate turnover for composition supplies.
sabyasachi mukherjee
(27579 Points)
Replied 20 April 2020
@ khater
you have business income and income from fixed deposit.
interest income is exempted upto a maximum of rs.10000 as per sec 80tta.
you have to disclose in itr :4
you have business income and income from fixed deposit.
interest income is exempted upto a maximum of rs.10000 as per sec 80tta.
you have to disclose in itr :4
ANAND KHATER
(78 Points)
Replied 20 April 2020
@ mukherjee
My query is relating to GST law and I didn't ask it from Income Tax Perspective
My query is relating to GST law and I didn't ask it from Income Tax Perspective
Vinay Srivastava
(24 Points)
Replied 20 April 2020
There is not required for gst in your side be claim....
Shivam RC
(Student)
(23683 Points)
Replied 20 April 2020
MEGA EXEMPTION NOTIFICATION :
As per Notification No. 12/2017 - Central Tax ( Rate ), dated 28.06.2017 read with Section 11 of the CGST Act 2017, "INTEREST INCOME ( whether from Savings Bank A/c or Fixed Deposit ) is 'EXEMPTED' from GST".
DEFINITION OF AGGREGATE TURNOVER :
As per the Provision of Section 2(6) of the CGST Act 2017 - "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 RCM basis ), exempt supplies, export 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 CGST, SGST, UTGST, IGST and Cess.
Hence, by analysing the definition of Aggregate Turnover, we see that EXEMPT SUPPLY should also be taken into consideration while computing your Aggregate Turnover. So Savings & FD Interest income should also be included in your Turnover inorder to compute your Threshold limit of Rs. 40 lakhs.
Therefore, if your Aggregate Turnover after adding the Interest Income does not exceeds Rs. 40 lakhs ( since you said that you are dealing in EXCLUSIVE SUPPLY OF GOODS ) , then there is no need to take GST Registration.
Regards
Shivam RC.
As per Notification No. 12/2017 - Central Tax ( Rate ), dated 28.06.2017 read with Section 11 of the CGST Act 2017, "INTEREST INCOME ( whether from Savings Bank A/c or Fixed Deposit ) is 'EXEMPTED' from GST".
DEFINITION OF AGGREGATE TURNOVER :
As per the Provision of Section 2(6) of the CGST Act 2017 - "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 RCM basis ), exempt supplies, export 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 CGST, SGST, UTGST, IGST and Cess.
Hence, by analysing the definition of Aggregate Turnover, we see that EXEMPT SUPPLY should also be taken into consideration while computing your Aggregate Turnover. So Savings & FD Interest income should also be included in your Turnover inorder to compute your Threshold limit of Rs. 40 lakhs.
Therefore, if your Aggregate Turnover after adding the Interest Income does not exceeds Rs. 40 lakhs ( since you said that you are dealing in EXCLUSIVE SUPPLY OF GOODS ) , then there is no need to take GST Registration.
Regards
Shivam RC.
ANAND KHATER
(78 Points)
Replied 20 April 2020
@ Shivam RC
But interest income is supply of service. Though it may Rs 1 will Disqualify from benefit of 40 lakh turnover limit. Is It??
But interest income is supply of service. Though it may Rs 1 will Disqualify from benefit of 40 lakh turnover limit. Is It??
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 20 April 2020
Dear Anand
As per Explanation under 3rd proviso of Section 22 of CGST Act , you qualify for Exclusively Supply of Goods even if you engaged in exempted supply of services by way of extending deposit , loans or Advances.
And To compute threshold limit (40 lac) , the Exempted supply is need to be computed to determine the aggregate Turnover.
Note : As per Explanation under section 10 of CGST Act to compute aggregate turnover for composition scheme for registration , the interest income need not be included.
As per Explanation under 3rd proviso of Section 22 of CGST Act , you qualify for Exclusively Supply of Goods even if you engaged in exempted supply of services by way of extending deposit , loans or Advances.
And To compute threshold limit (40 lac) , the Exempted supply is need to be computed to determine the aggregate Turnover.
Note : As per Explanation under section 10 of CGST Act to compute aggregate turnover for composition scheme for registration , the interest income need not be included.
ANAND KHATER
(78 Points)
Replied 20 April 2020
@ Pankaj Rawat
Whether Earning Saving Bank interest or FD interest treated as supply of service?? If yes, Will That Person Disqualifies for threshold limit of Rs. 40 lakhs as he will not be dealing in exclusively in supply of goods??
Whether Earning Saving Bank interest or FD interest treated as supply of service?? If yes, Will That Person Disqualifies for threshold limit of Rs. 40 lakhs as he will not be dealing in exclusively in supply of goods??
Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 20 April 2020
Yes it's supply Services, And already replied :
Threshold limit 40 lac = Aggregate Turnover (Supply of Goods + FD,SB Interest.)
But even he is engaged in supply of Services (FD, SB Interest ) do not disqualify for exclusively supply of goods.
For Eg: A person is engaged in supply of Goods for Rs. 38 lac & Interest income is 1 lac , his aggregate turnover will be 39 lac & even though he is engaged in supply of Services (FD interest) is eligible for Registration under exclusive supply of Goods.
There are 3 parts :
Exclusive Supply Goods:
Threshold Limit 40 lac:
Aggregate Turnover:
Note : Any supply of services other than FD, SB Interest is not eligible for threshold limit of 40 lac (under exclusive supply of Goods)
Threshold limit 40 lac = Aggregate Turnover (Supply of Goods + FD,SB Interest.)
But even he is engaged in supply of Services (FD, SB Interest ) do not disqualify for exclusively supply of goods.
For Eg: A person is engaged in supply of Goods for Rs. 38 lac & Interest income is 1 lac , his aggregate turnover will be 39 lac & even though he is engaged in supply of Services (FD interest) is eligible for Registration under exclusive supply of Goods.
There are 3 parts :
Exclusive Supply Goods:
Threshold Limit 40 lac:
Aggregate Turnover:
Note : Any supply of services other than FD, SB Interest is not eligible for threshold limit of 40 lac (under exclusive supply of Goods)
Shivam RC
(Student)
(23683 Points)
Replied 20 April 2020
@ Anand Sir,
I agree that Interest Income is treated as Supply of Services. But you are dealing in EXCLUSIVE SUPPLY OF GOODS ( as per your query ). Hence your Turnover threshold limit of GST Registration is Rs. 40 lakhs. The Interest is just an Income for you. You are not the Supplier of Services. You are just a Recipient. Bank is the Supplier of Services. So don't get confused Sir. Since it is an Exempt Supply, we have to add it while computing our AT.
Your Aggregate Turnover threshold limit will still be Rs. 40 lakhs ( as notified by Government vide Notification No. 10/2019 - Central Tax, dated 07.03.2020 ) provided you are dealing in "EXCLUSIVE SUPPLY OF GOODS".
Understood Anand Sir ???
Sorry for late reply...
I agree that Interest Income is treated as Supply of Services. But you are dealing in EXCLUSIVE SUPPLY OF GOODS ( as per your query ). Hence your Turnover threshold limit of GST Registration is Rs. 40 lakhs. The Interest is just an Income for you. You are not the Supplier of Services. You are just a Recipient. Bank is the Supplier of Services. So don't get confused Sir. Since it is an Exempt Supply, we have to add it while computing our AT.
Your Aggregate Turnover threshold limit will still be Rs. 40 lakhs ( as notified by Government vide Notification No. 10/2019 - Central Tax, dated 07.03.2020 ) provided you are dealing in "EXCLUSIVE SUPPLY OF GOODS".
Understood Anand Sir ???
Sorry for late reply...
sabyasachi mukherjee
(27579 Points)
Replied 20 April 2020
Bank interest does not fall within the definition of service as defined in CGST ACT.
Vaibhav
(student)
(27 Points)
Replied 20 April 2020
As @ Shivam RC said, Yes, interest income is an exempt supply and therefore it's a supply of service.
But if you read for the 'supply' in the act, "Supply is defined to include all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It also includes the importation of services for a consideration whether or not in the course or furtherance of business." As per the definition, supply has two main components
1. Consideration
2. should be in the course or furtherance of business.
In my opinion, as this person is exclusively engaged in supply of goods, saving account interest income earned by him, is in his personal capacity and not in the course or furtherance of business.
So, as per the meaning of supply given in the Act, for this person, saving interest income is Not "Supply".
As this is not 'supply' for him, there is no question of him engaged in the supply of services.
This my personal opinion, so please correct me if I'm wrong.
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