Inclusion of Interest Income in Aggregate Turnover for GST Registration

The Authority held that interest received from PPF, personal loans, advances, and saving bank accounts must be included in the aggregate turnover for GST registration, despite being exempted from GST. The ruling clarified that such interest income falls under exempted services, necessitating its inclusion in the threshold calculation of Rs. 20.00 Lakh for GST registration.

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Issues:
1. Whether interest received in the form of PPF would be considered for calculating the threshold limit of Rs. 20.00 Lakh for GST registrationRs.
2. Whether interest received on personal loans and advances to family/friends would be considered for calculating the threshold limit of Rs. 20.00 Lakh for GST registrationRs.
3. Whether interest received on a saving bank account would be considered for calculating the threshold limit of Rs. 20.00 Lakh for GST registrationRs.

Analysis:

Issue 1:
The applicant contended that interest receipts from PPF, personal loans, and advances should not be considered for GST threshold calculation. The Authority reviewed the definition of "aggregate turnover" under the CGST Act, which includes all taxable supplies, exempt supplies, and inter-State supplies. Exempt supplies cover nil rated supplies, wholly exempt supplies, and non-taxable supplies. The Authority clarified that interest income falls under exempted services as per relevant notifications. Therefore, the interest received in the form of PPF is to be included in the aggregate turnover for GST registration purposes.

Issue 2:
Regarding interest received on personal loans and advances to family/friends, the Authority emphasized that the definition of "supply" under the CGST Act includes transactions made for consideration in the course or furtherance of business. However, services related to interest income are exempt from GST as per specific notifications. Hence, interest received on personal loans and advances should be considered for calculating the threshold limit of Rs. 20.00 Lakh for GST registration.

Issue 3:
The applicant argued that interest received on a saving bank account should not be aggregated for GST threshold calculation. The Authority examined the nature of supplies covered under aggregate turnover, emphasizing that supply is a taxable event for GST. Services related to interest income are exempt from GST as per notifications. Therefore, interest received on a saving bank account is to be included in the aggregate turnover for determining the threshold limit of Rs. 20.00 Lakh for GST registration.

In conclusion, the Authority ruled that interest received in the form of PPF, personal loans and advances, and saving bank accounts should be considered for calculating the threshold limit of Rs. 20.00 Lakh for GST registration. The applicant must aggregate the value of exempted interest income along with taxable supplies to determine the aggregate turnover for GST registration purposes.

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