gst applicability after voluntary registration

[Rakesh Sharma]

If in fy 19-20 turnover of business is 22 Lakh till feb 20 (if gst registration limit is 40 lakh in state) and if i have taken gst registration in Mar 20. and in march Gst turnover is 2 Lakh. so total turnover will be 24 lakh. if i filed itr for 24 lakh whether it will be any problem ? will i get gst department or income tax depratment notice? is there gst applicability on 22 lakh turnover?

[Ganeshan Kalyani]

GST registration once obtained then even if turnover is withing threshold limit one need to collect and pay GST to the Govt. Yes, it is likely to receive notice particularly from GST dept if tax is not paid.

[Rakesh Sharma]

but 22 lakh turnover is prior to registration? whether i will hv to pay gst on that? because goods purchased and all sold befor registration.

[KASTURI SETHI]

Sh.Rakesh Sharma Ji,

My views are as under:-

(i) It is not in dispute that you have taken voluntary registration before crossing threshold exemption limit in March, 20. Had you taken registration in the next Financial Year i.e. in April,20 it would have been better and safe with a purpose to avoid unnecessary (avoidable) litigation.

(ii) Now in case you pay GST on ₹ 2 lakhs, it is most likely (100%) that you will receive letter or show cause notice from GST department due to mismatch of figures declared in ITR and GST returns. You will have to justify the difference between both returns. First of all you will receive letter only and NOT SCN. If you justify the reasons for mismatch, SCN will not be issued.

(iii) In the case of voluntary registration (before crossing threshold exemption limiit), the registered person shall pay GST from first supply after registration. Thus that person will enter Input Tax Credit chain before crossing turnover of ₹ 40 lakhs.(we are talking of turnover of goods).

AI Summary

Voluntary GST registration requires tax collection from initial supply after registration, triggering scrutiny for return mismatches. Voluntary GST registration taken before crossing the threshold makes the registrant liable to collect and remit GST on supplies made after registration, placing the person in the input tax credit chain; supplies prior to registration are not treated the same. Such voluntary registration commonly causes mismatches between income tax returns and GST returns, prompting departmental letters seeking explanation, and potentially show-cause notices if differences are not justified.