Registration

[Pradeep Singhi]

If Bank Interest Income is 18,00,000/- and Rent Income is 6,00,000/-. Is GST Registration Required as the total income is crossing 20L Threshold? Do we have to pay tax on 6,00,000/- Rent Income as Gross T/O 24L Exempted T/O 18L --> As Exemption Noft. 12/2017 CGST(R) entry#27 exempts 'services by way of extending deposits so far the consideration is represented by way of interest.'

[KASTURI SETHI]

Bank interest income on what account ? Pl.reply.

[Pradeep Singhi]

As Exemption Noft. 12/2017 CGST(R) entry#27 exempts "services by way of extending deposits so far the consideration is represented by way of interest."

Since an entry is there in exemption notification which may classify bank deposits, can it not be said that the said turnover is taxable however exempted vide 12/2017. If it was not there in exemption notification it could have been assumed as Non-GST supply?

[KASTURI SETHI]

All types of interest are not includible in the aggregate value for computation of threshold exemption limit for registration under GST Act.

[Pradeep Singhi]

Any provision backing this view?

Thank you and greatly appreciate your prompt replies.

[KASTURI SETHI]

Dear Sh.Pradeep Singh Ji,

I have gone through your views expressed above. Still I am of the view that interest earned on account of non-GST business is not required to be included into the aggregate turnover to arrive at the threshold exemption limit. Everything is not always clear in law. It is implied that non-GST business has nothing to do with the jurisdiction of GST. If you obtain registration on the basis of above, you will commence paying GST from Re.One and will be entitled to ITC. You will pay GST on ₹ 4 lakhs (24,00,000 -20,00,000). What I think there must not be revenue loss, after all, rules and regulations or procedures are framed to protect revenue.

When we talk of various definitions such as consideration,exempt supply, aggregate turnover and exempt notifications, all point to the the jurisdiction of GST. Any item which is out of scope for GST network, cannot be dragged into GST network forcibly.

Still if you have any doubt, you may seek advance ruling on this issue.

[Alkesh Jani]

Sir,

In this regards, the definition of service is given at Section 2 (102) of CGST/SGST Act, which means anything other than goods, money and securities, but includes exchange of currency from one form to another or denomination, for which separate consideration is charged.

The term “goods” have been defined at Section 2(52) of CGST/SGST Act, and as per the definition, ‘goods’ means all kind of movable property other than money and securities

Based on above, I am of the view that, the interest income (in form of money) is neither supply of goods or supply of services for individuals, moreover, it should be for business or furtherance of business. I also agree with the views of our expert Sh. Kasturiji.

With Regards,

[DR.MARIAPPAN GOVINDARAJAN]

The interest received is not in the course of business. So it will not be included the transaction value.

AI Summary

GST aggregate turnover exclusion of interest income means registration is triggered by taxable supplies only, not passive interest. Interest income from bank deposits is not a supply of goods or services for GST purposes and is excluded from aggregate turnover when computing the registration threshold; only supplies within GST scope (taxable or exempt as per notifications) should be counted, and an advance ruling is advised if doubt persists.