TaxTMI 
TaxTMI 
GST Registration Query........
X X X X Extracts X X X X
X X X X Extracts X X X X
....ST Registration Query........<br> Query (Issue) Started By: - milan bamal Dated:- 4-7-2026 Last Reply Date:- 7-7-2026 Goods and Services Tax - GST<br>Got 14 Replies<br>GST<br>Individual Case The rental income from the commercial property is Rs. 19 lakh per year. Apart from this, also earn around Rs. 5 lakh in interest from fixed deposits (FDs). So, will have to obtain a GST registration or not????? Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, As per Sec. 2(6) of the CGST Act, "Aggregate turnover" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess. Your taxable income from the supply of service that is rental income is Rs. 19-00 lakhs, and the exempted turnover of interest income is Rs. 5-00 lakhs. So, the threshold limit of Rs. 20-00 lakhs (under supply of service) has been crossed. So, it is necessary to obtain the GST registration from the respective state. The tax rate is 18%. Reply By Sadanand Bulbule: The Reply: GST Registration - FD Interest and Aggregate Turnover Issue Whether interest earned on fixed deposits should be included while calculating "aggregate turnover" for GST registration ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under Section 22. Facts : An individual earns: Rs. 19 lakh from renting commercial property, and Rs. 5 lakh as interest from fixed deposits. Question is whether both amounts should be added for deciding GST registration limit. Understanding the law : GST registration is required only when a person is making a "supply" of goods or services. So, the key question is not "income earned", but " is there a supply? What happens in a fixed deposit? The person deposits money with a bank. The bank uses that money and pays interest. The bank is the one providing a financial service. The depositor is not providing any service to the bank. So, the depositor is not making any supply under GST law. Also, a "deposit" is specifically exclu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded from the definition of "consideration" in Section 2(31), unless it is linked to a supply. Legal reasoning: The GST system works only when: there is a supply, and there is a person making that supply. Since FD interest does not come from any supply made by the depositor, treating it as part of "aggregate turnover" stretches the law beyond its basic structure. Only "consideration" arising from a supply should normally count for GST registration threshold. Conclusion: Fixed deposit interest earned by a person is not linked to any supply made by him, and therefore there is a strong legal basis to say it should not be included in aggregate turnover. Accordingly, in this case, only Rs. 19 lakh rental income should be considered, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd GST registration is not required if threshold is not otherwise crossed. Final note :This interpretation is grounded in the basic GST principle that tax and registration arise only from "supply", not from every form of income. Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Mandatory to obtain registration if rental income is Rs.19 lakhs p a with interest income? Positively NO. Interest is not 'Supply' as pointed by the respected expert and hence registration is not mandatory. Still in doubt? You may obtain AAR. Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, Both replies in sl. No. 2 and 3 are correct. The interest income is not linked to supply and hence cannot be a turnover added to the regul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar taxable income. So, in this case, taking GST registration is not required. In my reply at (1), the view of the exempted turnover was misconceived. Reply By KASTURI SETHI: The Reply: Here the element of , "supply" is absent. So there is no question of inclusion of interest income into the aggregate turnover to arrive at threshold limit. Since there is no room for any doubt or confusion, so this issue is not fit for taking shelter of AAR. Well read, well interpreted, well analyzed and concluded by Sh. Sadanand Bulbule, Sir It is pertinent to add that when we deposit any amount into the bank we receive service from the bank and do not provide service to the bank. Reply By Sadanand Bulbule: The Reply: Respected Experts ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Much obliged for acknowledgement of my short reply. Reply By VIPUL JHAVERI: The Reply: sometimes so much simple and easy to accept logics may not be same with legal lenses while dwelling into this interesting side way topic, my interaction with AI, yields answers baffling this belief and also supported with some AAR pronounced- i am sharing this, just to be aware on other possibilities pronounced and boldly replied by expert at answer 1--- Why It Still Counts • Section 2(47), CGST Act: "Exempt supply" includes supplies attracting nil rate or wholly exempt. • Section 2(6), CGST Act: "Aggregate turnover" includes exempt supplies. • So, even though interest is exempt, it is still a "supply" ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for turnover calculation. • If it were a pure "transaction in money" (like transferring cash), it would be outside GST and not counted. But FD interest is specifically notified as exempt supply, not excluded supply. CBIC Clarifications • CBIC FAQs on Banking & Financial Services (2017) clarified: "Interest income on deposits is an exempt supply and will be included in aggregate turnover for registration." • Several advance rulings (e.g., In re: Jalaram Feeds, Gujarat AAR) have held that exempt interest income must be included in turnover for threshold purposes. Reply By Sadanand Bulbule: The Reply: Dear Vipul ji This is only a "discussion forum" and not an examination. Secondly to answer ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a query, it does not require any "boldness", but clear and clean understanog of the essential principles governing the " SUPPLY ", the heart and soul of the GST regime. Rest all provisions are peripheral. Even the Supreme Court judgements are not infallible. Then what about AAR & departmental instructions/clarification? Every authority including the Apex Court is strctly bound by the GST Statute and not by his/her/its perception. Finally the querist has to take a call or consult super experts. Reply By VENU K: The Reply: Section 2(6) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) defines 'aggregate turnover' to include the value of all taxable supplies and exempt supplies. The key question is whether the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... interest income, being an exempt supply, must be added to the rental income for calculating the registration threshold. Services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest is an exempt supply as per GST. The aggregate turnover for GST registration purposes must include both the rental income from commercial property (a taxable service) and the interest income from deposits (an exempt service). Judicial precedents, such as Shree Sawai Manoharlal Rathi, In re 2020 (6) TMI 449 - AUTHORITY FOR ADVANCE RULING, GUJARAT and Anil Kumar Agrawal 2020 (5) TMI 221 - AUTHORITY FOR ADVANCE RULING, KARNATAKA, consistently affirm that exempt interest income is to be included in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 'aggregate turnover' for determining registration liability. The Authority for Advance Ruling (AAR), Gujarat, in the case of Shree Sawai Manoharlal Rathi, In re 2020 (6) TMI 449 - AUTHORITY FOR ADVANCE RULING, GUJARAT, directly addressed a similar scenario. The applicant's estimated receipts included rent from immovable property, bank interest, interest on PPF deposits, and interest on personal loans and advances. The AAR explicitly held that for the purpose of calculating the threshold limit of Rs. 20 lakhs for obtaining GST registration, the value of both the taxable supply (renting of immovable property) and the exempted supply of service (interest income earned from deposits, PPF, and loans/advances) must be aggregated.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... This ruling is highly relevant as it mirrors the factual matrix of your case, confirming that interest on deposits, despite being exempt, must be included in the aggregate turnover. Explanation to Section 22(1) says: For the purpose of this subsection, a person shall be considered to be engaged in supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far the consideration is represented by way of interest or discount. The way GST law considers deposit is evident from the above:- As an exempt Supply. The Act of someone placing a deposit with someone else for consideration is a supply under GST Law. So in my opinion Registration may be required Reply By S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....adanand Bulbule: The Reply: If the concept of "supply" is removed from the CGST Act, what remains is merely a statutory skeleton without life or movement. "Supply" under Section 7 is the beating heart and thinking brain of the GST regime, because every other provision - whether relating to levy, (Section 9), taxable supply (Section 2(107), exempt supply (Section 2(47), valuation (Section 15), registration (Section 22), or input tax credit (Section 16) - derives its meaning and operational force from the existence of a supply of goods or services. Without "supply", the machinery of GST loses both its foundation and its very reason to function. Here is a hypothetical counter-query: A person earns Rs. 19 lakhs interest on his fixed dep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....osits and also earns Rs. 2 lakhs as rental income per annuam (Total Rs. 21 lakhs). Is he liable for registration under the CGST Act? If yes, then qoute relevant "statutory provisions". Thanking in advance... Experts to throw flood light. Reply By Sadanand Bulbule: The Reply: GST regime is to be experienced on real time basis and not just to be believed to reap its best benefits. Reply By KASTURI SETHI: The Reply: (i) FAQs have no statutory force. Advance Rulings have only persuasive value and not precedential value. (ii) 'Consideration' and 'Supply' both are different concepts. (iii) Consideration has no legs to stand without supply. (iv) Consideration (here interest income) itself cannot be called supply for an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y purpose. Reply By Sadanand Bulbule: The Reply: Plz have a look at the following definition: Section 2(31) of the CGST Act- (31) "consideration" in relation to the supply of goods or services or both includes-- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; Reply By Shilpi Jain: The Reply: GST registration to be taken since the interest income is part of the exempt services notification. So aggregate turnover exceeds Rs. 20L<br> Discussion Forum - Knowledge Sharing ....