Registration for exempted supply

This query is : Resolved

ANKIT JAIN (Querist)
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26 November 2019 As per GST laws if i am selling completed building/land then this is deemed as exempted supply although it is not even a supply but deemed as exempted. Now suppose i am selling a land of 2 crore and its SDV is 45 lakh means it crossed my limit of registration and also i had a very small shop having turnover of 5lakh during a year.

In the above example aggregate turnover will be rs.50 lakh.

Now considering above facts will i need to take registration in GST?

If yes, will this not amount to hardship to a small trader?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 November 2019 No, take registration only if taxable turnover exceed limit.

ANKIT JAIN

ANKIT JAIN (Querist)
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27 November 2019 Thank You Sir for reply,

Sir, As per section 22 of GST Act any person making "taxable supply", if his "aggregate turnover" exceeds prescribed limit then he is required to take registration mean if person is making "exclusive exempted supply" then only he is not required to take registration.

In other words if any person making a single rupee of taxable supply and if his aggregate turnover exceeds prescribed limit then required to take registration.

Aggregate turnover covers all taxable, non taxable and exempted supply which means in my example aggregate t/o is 50 lakh and required reg.

I hope i am able to clear my point.

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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20 July 2025 Yes, you are absolutely right in your understanding, and your interpretation is legally sound.

Let me break it down and clarify the situation:

🔍 Facts Recap:

You are:
Selling land worth ₹2 crore (which is not a supply under GST)
Running a shop with taxable turnover of ₹5 lakh
So your aggregate turnover = ₹2.05 crore
The taxable turnover = ₹5 lakh
📘 Legal Interpretation:

✅ As per Section 22 of the CGST Act:
A person is required to register under GST if his aggregate turnover exceeds ₹20 lakh (₹10 lakh for special category states) and he is making taxable supplies.
📌 "Aggregate turnover" includes:
Taxable supplies
Exempt supplies
Exports
Inter-state supplies
...but excludes taxes under GST and inward supplies on which tax is paid under RCM.
🧾 Application to Your Case:

Land sale is:
Neither a supply nor a taxable/exempt supply under GST (Schedule III of CGST Act).
However, some interpret land/building post-completion certificate as exempt supply, which is fine.
So if treated as exempt supply, it will be included in aggregate turnover.
Your aggregate turnover = ₹2 crore (land) + ₹5 lakh (shop) = ₹2.05 crore
You're making taxable supply of ₹5 lakh (shop)
Hence, as per Section 22, you are liable to register under GST, even though your taxable turnover is only ₹5 lakh.
🙋‍♂️ Is It Harsh? Yes.

This does lead to hardship for small traders like you:

Just ₹5 lakh of taxable business
But large non-taxable/exempt supply forces you to register and comply with GST
Unfortunately, that is how the law is currently framed.

💡 Practical Workaround:

If your land sale is treated strictly as a Schedule III activity (i.e., neither supply of goods nor services), it should not be part of aggregate turnover.

👉 In that case:

Only ₹5 lakh taxable turnover = No need to register
But if treated as exempt supply (as some authorities do for post-OC building/land sales), then it does get added to aggregate turnover.

✅ Conclusion:

Yes, you need GST registration because:
You have aggregate turnover > ₹20 lakh
And you are making taxable supply (even if only ₹5 lakh)
Unless you can establish that land sale is excluded under Schedule III, and not part of aggregate turnover — which is legally arguable.

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