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Exemption limit of service tax for professionals in gst

Ritesh (Asst.Mgr.) (164 Points)

28 September 2016

As declared by the FM,threshold limit in GST is Rs.20 Lakh.(10 Lakh for Northeastern and Hill states) My query is : 1.This limit is applicable to small Traders. 2..Whether professionals like Doctors,Architects,CAs etc. are liable to pay service tax,if the gross receipts from their profession is below Rs.20 Lakh? 3.Please clarify me the exemption limit of Service Tax for Professionals under new GST law. Thanks & Regards

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26 Replies

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 28 September 2016

The basic exemption limit of Rs. 20 lakhs set out would be applicable to all service providers, traders or manufacturers. Once the law is in place it would be final.

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 28 September 2016

The basic exemption limit of Rs. 20 lakhs set out would be applicable to all service providers, traders or manufacturers. Once the law is in place it would be final.

Ritesh (Asst.Mgr.) (164 Points)
Replied 28 September 2016

Thanx for your Clarification.

SSG (1936 Points)
Replied 01 October 2016

Threshold turnover limit for registration shall not be applicable to the persons making any Inter-State taxable supply. If an audit firm is providing service to a client in another state, then is it mandatory for audit firm to register under GST? Please advise.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 01 October 2016

The total value includes boith interstate and intra state supplies. Maybe SSG confused with compostion scheme where there is a restriction on inter state transaction.

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SSG (1936 Points)
Replied 02 October 2016

So does this mean, that for supply of goods/services upto Rs. 20 lacs, registration is not required, irrespective of the supply being intra-state or inter state.

As, per my understanding of the MGL:-

As per para 1of Schedule III of the MGL, "Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds [Rs nine lakh]"

As per paragraph 5 in Schedule III of MGL, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit:
a) persons making any inter-State taxable supply.

In the GST Council meeting few days back, it has been recommended to rasie the limit from Rs. 9 lakhs to Rs. 20 lakhs.

Sir, please guide me, if I am wrong.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 07 October 2016

Dear SSG,

I stand corrected. You are right. The small service provider exemption is not available to those doing interstate supply. I had though that this is an aberation but I understand the philosopy of Govt is that of one who can do interstate trade would not be eligible.

Similarly compistion restriction for interstate supply has been put in place. Incidentally compostion option maybe only available to traders and not for services. Works contract has been deemed to be aservice.

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SSG (1936 Points)
Replied 13 October 2016

So now service providers will have to take registration under GST, if they are making interstate supply of services, irrespective of the amount of turnover.

GST Pitara (gstpitara.org) (280 Points)
Replied 18 October 2016

/experts/modify_message.asp?entry_id=1109800

Also,

Yes, threshold turnover limit for registration does not apply to the persons making any Inter-State taxable supply and if an audit firm is providing service to a client in another state, then the audit firm will be required to take registration under GST.

CA Amrita Chattopadhyay (Audit & Assurance) (13459 Points)
Replied 19 October 2016

Does it mean that any person who is doing inter state supply of services will have to be registered irrespective of the revenue. But in case of service where the opinion / information / report can be sent through internet across the boundaries how can the same be ascertained?

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SSG (1936 Points)
Replied 19 October 2016

Yes, unlike in present service tax regime, every person who is doing inter state supply of services will have to get registration under GST, irrespective of the turnover.

SSG (1936 Points)
Replied 19 October 2016

In case of services where the opinion / information / report can be sent through internet, the place of recipient of service will be the determining factor.

SSG (1936 Points)
Replied 19 October 2016

A case where services are being provided to a branch with in the state, but payment is being made by the head office, registered outside the state. Whether this will taken as inter state supply of service?

Further if we are providing services/supplying goods, outside India, with overall turnover within Rs. Twenty Lacs, is registration under GST required?

Sunil Kumar (Indirect Taxation ) (1246 Points)
Replied 24 October 2016

It is important to note that section 3 & 3A of Draft IGST Act, pointed two things which are, the location of supplier and the place of supply. To determine whether the transaction is Interstate supply or Intra State Supply only above two points require to check. It has nothing to do with the payment mechanism. Therefore, since in above case the place of supply and the location of supplier are in same state, transaction would be called as Intra state supply and not an Inter State supply.

Further if we are providing services/supplying goods, outside India, with overall turnover within Rs. Twenty Lacs, is registration under GST required?

I am also keen to know whether registration is mandatory in this case or not. I tried alot to find the solution but no such provision in the draft law, which mandate to above assesse register.

But according to my undersanding of law, registraion should be must. If registration is not mandatory how such assessee would get the refund of its Input.

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