If a proprietor has linked a personal account to his/her gst number. And ends up doing personal transactions in the account aswell, will those transactions (credit) be treated as sale and liable for taxation, what are the rules or clauses in the act that clarify about this.
5 Replies
CA Altamush Zafar
(GST Consultant)
(15971 Points)
Replied 20 July 2020
If the transaction are in nature of supply then they are taxable.
Suhail
(Inspector )
(23 Points)
Replied 20 July 2020
Kindly elaborate. How do we determine it as supply, if there are personal deposits in the account then how do we treat them.
A businessman came for cancellation of gst and he was asked to furnish bank statement by the authoroties, and bow they are saying you have shown sale(gstr1) which is less than the total amount credited in the account, its pertinent to mention that this was his personal savings account which he had linked with gstin
CA Altamush Zafar
(GST Consultant)
(15971 Points)
Replied 20 July 2020
If money is earned then there has to be some source. If the source is in nature of supplies as per section 7 then it is taxable. If it is mere transaction in money like transfer of money from one account to other without anything in return then it is not taxable.
The officer is right in taking clarification as there can be hidden supplies.
The definition of business is also very wide as compared to previous laws so a lot many thing which were not considered business before are now being considered as business.
annu Goyal
(1102 Points)
Replied 20 July 2020
If any amount credited in your account , if these entries are related with loan and interest there on then there is no GST liability otherwise Can be come under scope of supply,
You should have bifurcation of Each and every entry in your bank account, If these related with business then you make entry in there respective GSTR return.
You should have bifurcation of Each and every entry in your bank account, If these related with business then you make entry in there respective GSTR return.
CA. Chikkerur C R
(PRACTICE)
(3584 Points)
Replied 20 July 2020
No such specific rule not there . it is better to keep isolation of personal entries. other ITO has more power to reject expenses or add credit as income
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