New Delhi, June 23 (SocialNews.XYZ) The value of exempted income sources, like interest on PPF, savings bank account and loans given to family and friends, will be included along with taxable supplies while calculating the threshold limit for obtaining GST registration.
The Authority for Advance Ruling (AAR) Gujarat bench has made this ruling which is likely to be challenged in courts. These income categories are exempt from tax.
Under the Goods and Services Tax law, businesses and individuals are required to obtain GST registration if their aggregate turnover is Rs 20 lakh or more.
A person not in any business, had filed an application before the Gujarat bench of AAR asking whether interest received from savings bank, PPF and loans and advances to family would be considered for the purpose of calculating threshold limit of Rs 20 lakh for registration under GST law.
He disclosed in the application that his total receipts in 2018-19 fiscal were about Rs 20.12 lakh, including rent receipt of Rs 9.84 lakh, while the remaining was interest on bank, PPF deposits and from personal loans extended to friends and family.
The AAR, while ruling that interest income would be included for calculating registration threshold, said that the applicant is required to consider the value of both taxable supply i.e. "renting of immovable property" and exempted supply of service provided by way of extending deposits, loans or advances for which interest income was
earned to arrive at "aggregate turnover" to determine the GST threshold.
"We conclude that the applicant is required to aggregate the value of exempted interest income earned by way of extending deposits in PPF & Bank Saving accounts and loans and advances given to his family/friends along with the value of the taxable supply i.e. "Renting of immovable property" for the purpose of calculating the threshold limit of Rs 20 Lakh for obtaining registration under GST law," the AAR said.
This would imply that retired senior citizens, home makers would need to take GST registration.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz