Regarding Gst liability

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Mr X runs a coaching institute with a turnover of £7 lakh per annum and is currently unregistered for GST. He plans to start an online clothing business with a turnover of £12 lakh per annum, for which he will register for GST. The key question is whether his GST liability will be calculated on the total turnover of £19 lakh (£12 lakh clothing + £7 lakh coaching) or just the clothing turnover. It is also being considered if forming a partnership firm for the clothing business would be more tax-efficient than registering as an individual.

Harvinder Singh

Harvinder Singh (Querist)

27 July 2022 Mr X is running coaching institute his turnover is 7 lakh p.a. but he not charging any Gst as he is unregistered person.All payment will be recived in bank account.
Now he is planning to start online clothing business (in addition to current business) and take GSTN for doing clothing business.
Now he is doing a turnover of Rs 12lac by selling clothes.

So as he is now registered under gst what will his tax liability?
On Rs 12 lac only or
On 19lac (on total turnover from registered and unregistered business i.e 12+7)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 July 2022 GST applicable on 19 lavs.

CA Puja Sharma

CA Puja Sharma (Expert)

27 July 2022 GST will apply on 19 lacs and both the businesses will be covered under GST now,

Harvinder Singh

Harvinder Singh (Querist)

27 July 2022 It's it good suggestion for Mr X to form partnership firm for this clothing business and take GST in the name of firm instead of individual name?
Or will it out more tax burden.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 July 2022 Yes, form partnership as you proposed.

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