Applicability of Threshold Exemption
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 10-12-2018 Last Reply Date:- 14-2-2019 Goods and Services Tax – GST
Got 17 Replies
GST
XYZ is having turnover in the financial year 18 – 19 above ₹ 20 Lacs and therefore paying GST. In the year 19 -20, he will be continuing to pay GST and if his turnover will be below ₹ 20 Lacs, will he be exempted from paying GST and claim refund of GST already paid in 19 -20 or otherwise how it works?
Reply By Ganeshan Kalyani:
The Reply:
The threshold limit is applicable to register under GST Act. In the year of registration the tax shall be applied on the turnover in excess of the exemption limit. In the second year onward the tax is to be charged from the first supply itself.
Reply By KASTURI SETHI:
The Reply:
Dear Sir,
The issue is to be examined deeply. The word, 'preceding ' before 'year' is missing in Section 22 of CGST Act, 2017. The word, 'preceding&
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By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
In my view there is no provision for cancelling the registration when the aggregate turnover reduces below the threshold limit.
Reply By KASTURI SETHI:
The Reply:
Dr.Govindarajan Sir,
I agree with you to the extent that there is no provision for cancellation of registration because of reduction turnover below threshold limit.
In pre-GST era, there was a word,"Preceding" financial year in every small scale exemption notification of Service Tax. Now in GST regime, "preceding" is missing and replaced by "a financial year'. What is impact of this ? Will you please offer your views ?
Thanks & regards.
K.L.SETHI
Reply By DR.MARIAPPAN GOVINDARAJAN:
The Reply:
I agree with you. The GST council is to bring clarification in this regard to avoid such confusions.
Reply By Ganeshan Kalyani:
The Reply:
In my view, by the word a financial year it means the turnover of the current year also shall be considered in cas
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tion has to be taken on crossing 20 lakhs, but tax has to be paid on full 21 lakhs.
When contacted Helpdesk, they also said tax to be paid on 21 lakhs.
But I dont find any logic in paying tax on full 21 lakhs when any registration is not required upto 20 lakhs in FY1718.
Experts view awaited.
Regards,
Siva
Reply By kollengode venkitaraman:
The Reply:
THIS QUESTION IS VERY RELEVANT. SEC 22. PRESCRIBES THE TURNOVER LIMIT FOR REGISTRATION. BUT I COULD NOT FIND ANY SECTION WHICH GRANTS THE BASIC EXEMPTION OF RS.20 LAKHS. IN KERALA VALUE ADDED TAX ACT SEC.6 PROVIDES THE BASIC EXEMPTION LIMIT AND A PERSON BECOMES LIABLE TO PAY TAX, ONCE THIS LIMIT IS EXCEEDED. SUCH A PROVISION IS ABSENT IN CGST ACT. IS IT ACCIDENTAL OR PURPOSEFUL? AS SIVA OPINES, ONE LI LIABLE TO PAY GST WITHOUT ANY EXEMPTION!
Reply By KASTURI SETHI:
The Reply:
See Board's Flyer No.1. Any person is required to apply for registration when that person is liable to pay tax. You are liable to pay tax after crossing
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