Voluntary registration - beneficial or not?

Registration 195 views 5 replies

Guest

my client is a owner of small restaurant (snaks / fast food). he is not liable to pay tax under income tax because his income is below 2,50,000.

now if he registers voluntarily under GST then as per the rules he is liable to pay GST on all sale transactions. (20 lacs exemption not available once a person gets registered under GST)

So question is

Q1. whether it is beneficial to register voluntarily under GST or should he enjoy basic exemption of 2.5 lacs under income tax?

Q2. whether he is liable to pay tax under both acts? income tax and also under GST? filing of return and payment of taxes under both the acts will be hardship for him.

so should he register voluntarily or not?

Replies (5)

CA Saloni

Manager-Accounts & GST Consultant

5124 Points Joined July 2014

Income tax exemption is separate from GST exemption. Don't get confused between the two.

Registration of GST will be based on aggregate turnover.

Guest

so he has to pay tax under both the acts?

is it beneficial for him to remain unregistered then???

question remains same should he register or not? please answer

RAMESH D MODI

Proprietor

4869 Points Joined January 2010

he is not compulsorily liable to register under GST. Nor any issue with income tax in that case.If the gross receipt from all business sources is less than 20 L. there Is no need to register

CA Saloni

Manager-Accounts & GST Consultant

5124 Points Joined July 2014

Yes.. agree with Mr Ramesh..

For your clarification-GST is indirect tax and Income Tax is direct tax...

Guest

@ saloni - you are never giving a complete answer. i have asked whether it will be beneficial for him to register under GST or not? will it result in hardship for him if he register under gst? You did not answerd this part. secondly My question was whether he has to pay income tax and GST also?? then you could have stated the answer simply like "yes he has to pay taxes under both the acts." I know what is direct and what is indirect. but small businessman will have fear of paying taxes.

if some one is confused then the person who has knowledge should state answers clearly step by step. its a kind request that give simple answers to the questions. I consider you as an expert in this field.

thx for your reply, but your answers are really short and not step by step, did not solved my querry.

@ Ramesh - thanks, your answer was beneficial.

I have asked some other person, so i come to know that, GST liability starts from rupee 1 if a person registers himself. If a small grossary merchant having income of less than 2 lacs registers voluntarily then it will be really hardship for him to file monthly returns and taxes.