All assesses / dealers who are already registered under existing central excise/service tax/ vat laws – What will happen when turnover is not exceeding 20 Lakhs (or 10 Lakhs in Hill areas) – Complications and Problems
By: – Surender Gupta
Goods and Services Tax – GST
Dated:- 11-4-2017
Here, we like highlight the ambiguity between the provisions of the statute and intention of the legislature relating to Registration under the GST regime.
As we know unlike the Service Tax or Central Excise regime, in the GST regime, a person once registered, will be liable to discharge GST liability irrespective of the turnover.
Therefore, the question arises, when the turnover of a person was much below Rs. 20 lakhs (or ₹ 10 lakhs as the case may be), but since he was registered under the existing law (i.e excise, service tax or vat etc.), whether he would be eligible to avail the benefit of exemption from the GST on the basis of turnover?
As per the provisions of the Sub-Sect
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(a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24.
As per the provisions of Section 25(3), a person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily.
Therefore, a person who is registered under the existing laws (i.e. central excise, service tax, VAT etc.) is required to obtain without any option since it is not voluntary by virtue of section 22(2) as above.
However, as per the all the information and statements from the Central Government, the persons who has turnover upto 20 lakhs will be out of GST.
Therefore, it is absolute necessary that Central Government must
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shold limit of GST will have an opportunity to surrender the number obtained under provisional basis once GST comes into effect.
Dated: 11-4-2017
Reply By parimal kulkarni as =
Very true.
Further, if an assesse is surrendering his registration number, the dept is not processing the same. These assesses are also facing the issue. Hopefully, some clarification should be issued sooner than later.
Dated: 12-4-2017
Reply By A SUBRAHMANYAM as =
Prima facie the migration should be automatic and system based than asking the assessee to meddle with original pan name or aadhar card telephone links. Next, the system should migrate those persons only whose turnover was above 20 lacs, as per the periodical returns filed by the assessees hitherto. This will prove that the e-sytems of Excise, Serv Tax and VAT have been effectively functional as of now.
Complications will initially be there when there is "one India and Four Taxes, instead of one Tax." Lets hope the clouds disappea
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ngement the provisions, existing registered person is required to obtain GST registration without any option as per section 22(2)
However, Central Government must come out with a Notification u/s 23(2) of CGST to grant relief to small traders or service provides who are already registered but not willing to migrate to GST.
Dated: 13-4-2017
Reply By KASTURI SETHI as =
Yes. Sir but from the appointed day i.e.the date of enactment.
Dated: 13-4-2017
Reply By KASTURI SETHI as =
Whenever there is flaw in the law, benefit goes to the assessee. There is judgement of Supreme Court in this context. Assessees whose turnover is below ₹ 20 lakhs, should not suffer at all. Why they should apply for registration ? On being pointed out by Chief Editor, TMI, this flaw in the law would come to the notice of Board and hope flaw would be removed before 1.7.17.
Dated: 14-4-2017
Reply By MARIAPPAN GOVINDARAJAN as =
Since registration in GST regime, whose turnover is less than ₹ 20 lakh
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