Gst registration - technical and important
This query is : Resolved
27 June 2017
Ms. Sweet is a business woman engaged in trading of Potato & Onion.
At present, Purchases are made from outside state without any liability of sales tax and sales are made in cash without any liability of tax incurred.
P.Y. Turnover is Rs.6 crores
Since potato & Onion are exempted under GST too, she doesn't took any registration under GST.
Transportation cost are incurred for the above mentioned vegetable arriving in trucks.
GTA services are liable to GST under reverse Charge Mechanism if the service receiver is registered.
Now the following doubt arises: -
1) Whether Ms. Sweet is required to get registered under GST?
2) If she is not liable to get registered under GST for trading business, Whether it is proper in law to assume that no reverse charge mechanism is attracted and thus no GST Registration (as GTA Service Receiver) and no GST liability arises thereon for transport cost incurred??
At present, Purchases are made from outside state without any liability of sales tax and sales are made in cash without any liability of tax incurred.
P.Y. Turnover is Rs.6 crores
Since potato & Onion are exempted under GST too, she doesn't took any registration under GST.
Transportation cost are incurred for the above mentioned vegetable arriving in trucks.
GTA services are liable to GST under reverse Charge Mechanism if the service receiver is registered.
Now the following doubt arises: -
1) Whether Ms. Sweet is required to get registered under GST?
2) If she is not liable to get registered under GST for trading business, Whether it is proper in law to assume that no reverse charge mechanism is attracted and thus no GST Registration (as GTA Service Receiver) and no GST liability arises thereon for transport cost incurred??
CA. Vinodh Kothari
(Expert)
27 June 2017
If aggregate turnover is more than Rs.20L then registration is compulsory. Aggregate turnover includes exempted sales. Ms. Sweet is liable to register under GST.
Under GST if Ms. Sweet is liable to Reverse Charge for Transport Charges. There is no exemption limit for reverse charge.
VK
Under GST if Ms. Sweet is liable to Reverse Charge for Transport Charges. There is no exemption limit for reverse charge.
VK
28 June 2017
Thank you so much Sir for your reply.
I think that you totally ignored the fact that Supply of Potato & Onion are Zero Rated.
Actually the Advocate of the Client has told him that she need not register under GST because supply of Potato and Onion are exempted supplies.
Also please clarify that whether transport of Potato & Onion is exempted from GST? Is it Agriculural Produce within the meaning of CGST Act??
I think that you totally ignored the fact that Supply of Potato & Onion are Zero Rated.
Actually the Advocate of the Client has told him that she need not register under GST because supply of Potato and Onion are exempted supplies.
Also please clarify that whether transport of Potato & Onion is exempted from GST? Is it Agriculural Produce within the meaning of CGST Act??
CA. Vinodh Kothari
(Expert)
28 June 2017
Registration is not required if Ms.Sweet deals only in exempted goods. But registration is required because of Freight Charges she is going to pay which is liable under Reverse Charges for GTA. There is no separate exemption for Reverse Charge on transportation of agricultural product under GST as on now.,
CA. Vinodh Kothari
(Expert)
28 June 2017
Registration is not required if Ms.Sweet deals only in exempted goods. But registration is required because of Freight Charges she is going to pay which is liable under Reverse Charges for GTA. There is no separate exemption for Reverse Charge on transportation of agricultural product under GST as on now.,
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