Registration under GST

[mathur ramachandran]

I had submitted the following query earlier:'My client has income of 18 Lakhs by way of supply of services and has agricultural income of 19 lakhs in FY 17-18 (period 1.7.17 to 31.3.18). He has not taken registration.Is he liable to take registration under GST. and if yes, what will be his GST liability for the FY 17-18 and what are the other consequences?' Iam informed that for the purpose determining the turnover limit for taking GST registration, the exempted agricultural income also has to be considered.. Is this correct?

[KASTURI SETHI]

This is misinterpretation. It is not the intention of Govt. to disallow threshold exemption by clubbing the exempted turnover. Your client is required to apply for registration when he crosses turnover of 20 lakhs of taxable services.If you have any doubt, you should opt for filing application with AAR.

[Shilpi Jain]

The 20 lakh exemption is in respect of the aggregate turnover which is defined in section 2(6) of the CGST Act, 2017. As per the definition the limit of 20 lakhs will have to be seen by including the exempted turnover as well. Hence the aggregate turnover has exceeded the said limit and thereby GST would be liable on the services provided.

So registration is required once the turnover limit crosses ₹ 20 lakhs (including the agricultural income). The amount of liability can be ascertained by looking at the accounting entries i.e. say if the service income is earned entirely before the 20 lakh limit is crossed then no GST liability would exist but registration would be required.

There could be penalty for non-compliance which could be up to ₹ 25,000/- and interest if any tax liability exists.

[Ganeshan Kalyani]

Pls refer issue id 115276 wherein Sri Kasturi Sir has given a detailed reply on the same subject. Thanks.

AI Summary

GST Registration Debate: Does Agricultural Income Count Toward the 20 Lakh Exemption Threshold? A query was raised regarding a client's GST registration requirement for FY 17-18, with a service income of 18 lakhs and agricultural income of 19 lakhs. One response clarified that the 20 lakh exemption threshold applies to taxable services, not including exempted agricultural income, suggesting registration is needed only when taxable turnover exceeds 20 lakhs. Another response stated that the aggregate turnover, including exempt income, must be considered, thus exceeding the threshold and necessitating GST registration. Potential penalties for non-compliance were mentioned. A third reply referenced a previous detailed discussion on the topic.