Tax on Second Hand Goods

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my Client's running mobile shops in malls where he buys and sells second hand mobile goods. He charges GST only on the difference between the Selling Price and Purchase price but he is not getting any bills on the purchases from the individual vendors. (As per rule 32(5) of GST Rules)

Further, for the fin. year 2017-18 he was reaches the turnover around 10 Crores(i.e Sales) and declares entire turnover in the trading and profit & loss account as sales under the Income tax act.

Whereas under the GST return he had declared the value as per the said rule only 2 crores (Sales - Purchases from individual).

Now, my query is that, which turnover should i show as turnover in the GSTR-9C. (₹ 10 Crore or 2 Crore)

Please advice me. Thanks in Advance.

[KASTURI SETHI]

In my view, as per definition of turnover under CGST Act, ₹ 2 Crores should be reflected in GSTR -9C return. GST is indirect tax whereas Income Tax is direct tax. Hence turnover in both cannot be compared. It would not match. In such a situation, matching is not mandatory.

[Ganeshan Kalyani]

Income tax is on the net income arrived at by considering all income and deducting allowable expenditure from the income. Here reconciliation will have to be prepared to match the sales revenue shown in income tax vs outward supply arrived for GST.

[Ganeshan Kalyani]

Please read as "shown in income tax working "

[MUKUND THAKKAR]

which figures are u showing as a Purchase?

AI Summary

GST turnover reporting: declare margin based taxable value under the margin scheme and reconcile with income tax sales. For second hand goods supplied under the margin scheme (rule 32(5)), the GST turnover for GSTR 9C should reflect the taxable value computed as the difference between selling and purchase price where purchase invoices from individuals are absent; GST turnover differs from income tax sales and therefore a reconciliation schedule should be prepared to reconcile full sales declared for income tax with outward supplies declared for GST.