Laxmi yadav (Accountant at cms info system ltd.) (171 Points)
27 February 2018Hi,
GST registration is compulsory when turnover exceeding rs. 2500000.
And what penalty charged by commercial department when not Registered under Gst.
Because turnover excedding rs. 2500000
but it include also paid to labour contract, electrical contract.
Supoose, my one bill rs. 600000, in this i pay electricaal contracor rs. 300000 and labour contract rs. 250000, so, i get only rs. 50000. so, how paid GST on 600000 or rs. 50000
please advise.
sujith kumar dasa
(banglore)
(1496 Points)
Replied 27 February 2018
vamsi krishna
(Article Assistant)
(268 Points)
Replied 27 February 2018
Agreed with Sujith Kumar Sir.
Laxmi yadav
(Accountant at cms info system ltd.)
(171 Points)
Replied 27 February 2018
so, sir inthis case required for gst credit it is advisable to labour contractor also get gst registration as voluntary registeration
vamsi krishna
(Article Assistant)
(268 Points)
Replied 27 February 2018
Madam,
As you said in eariler reply,
Your invoice value 600,000 that is you collecting 600,000 from your customer and you paying Electical subcontractor 300,000 and to labourers 250,000.
Inother words, You purchasing some goods and services from Electrical & Labourers and same is selling to your customer by adding your profit of 50,000.
So, as a supplier of goods or services you should collect not only 600,000 from your customer but also, GST on entire amount and remit the same to Govt.
So you should collect 708,000 (600,000+18% on 600,000) (rate of tax assumed as 18%), and pay 300,000 to electrical contractor, 250000 to labourers and 108,000 to govt, remaining 50,000 is your profit.
You no need to bother about whether electrical contractor or labourers are registered or not...
Even they are registered or unregistered its doesnot matter for your Profit, it won't impact.
If you have still doubt you can Ask
Thanks
Laxmi yadav
(Accountant at cms info system ltd.)
(171 Points)
Replied 27 February 2018
Sir, my client's one question is why he paid gst.
it defined by following exmple
He take one contract as interior design.
1. He purchased material of rs. 200000 like sofa, bad, tv etc. which was used for interior
2. He hired labour for rs. 200000
3. He hired Electrical contractor for rs. 100000
4. He received customer for rs. 500000 as including gst.
5. other expense like petrol exp., vehicle maitainance incurred by that person.
So, as provided by this service definetaly his turnover exceed 2500000 per as reality they get nothing only nominal amount. that 's why i ask GST registration is compulsory.
vamsi krishna
(Article Assistant)
(268 Points)
Replied 27 February 2018
Madam,
Let me know one thing with clear example. in aforesaid example where is your profit.
Revenue (including GST)- 500,000
Expenses-
Sofa----etc-- 200,000,, Electrical 100,000 and labour @ 200,000
then where is the margin ?????
Explain with one simple hypothetical example.... am sure that.... we will assist you
Thanks
Laxmi yadav
(Accountant at cms info system ltd.)
(171 Points)
Replied 27 February 2018
I know profit margin not show inthis example.
But simple question client asked me that if he not get registration what happended with him and what is his benefit under gst.
so, plase help me regarding this question.
vamsi krishna
(Article Assistant)
(268 Points)
Replied 27 February 2018
Madam,
Who is your client here,
1) The person ultimately who getting interior service (here named as A)
2) the person who purchasing goods/services from subcontractors (electrical & Labourers) and selling as interior to his customers
3) Subcontractors (electricals and labourers)
Thanks
Laxmi yadav
(Accountant at cms info system ltd.)
(171 Points)
Replied 27 February 2018
2. interiror service provider
vamsi krishna
(Article Assistant)
(268 Points)
Replied 27 February 2018
Madam,
Your client (interior service provider)....
he purchasing goods from diiferent suppliers and selling to his client after including his profit.
if your clients total sales value exceeds 20,00,000 Rs. during a financial year, he should get himself registered with GST.
and he has to collect tax from his customers by issuing tax invoice and same remit to govt after deducting any tax paid to his suppliers.
Thanks
CAclubindia
