GST on two businesses

Yes. 18%

GST Rule 86B Explained
Copilot
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You
Sent by you:
Rule 86(b)interest ?
Copilot
Sent by Copilot:
Certainly! Rule 86B under the Goods and Services Tax (GST) regime imposes restrictions on the utilization of Input Tax Credit (ITC) available in the electronic credit ledger for discharging output tax liability. Here are the key points:

Applicability:
Registered persons whose taxable value of supply (excluding exempt and zero-rated supplies) in a month exceeds Rs. 50 lakh are subject to this rule1.
The rule aims to prevent misuse of ITC and curb tax evasion.
Restriction:
Such registered persons can utilize ITC to discharge their output tax liability only up to 99% of the total liability.
The remaining 1% of the output tax liability must be paid in cash using the e-cash ledger2.
Example:
Suppose a taxpayer’s taxable turnover during a month is Rs. 1,00,00,000, and the applicable tax rate is 18%.
Input tax credit after considering other rules (e.g., Rule 36(4)) is Rs. 20,00,000.
Under the pre-amendment scenario, the supplier could pay the full liability of Rs. 18,00,000 using ITC from the e-credit ledger.
However, post-amendment, utilization from the e-credit ledger is restricted to a maximum of 99% of the output tax liability (i.e., Rs. 17,82,000).
The remaining Rs. 18,000 must be paid in cash using the e-cash ledger2.
Remember that this restriction applies specifically to the payment of output tax. Utilizing ITC to discharge Reverse Charge Mechanism (RCM) liability is not allowed at all2. If you have any further questions, feel free to ask! 😊

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You
Sent by you:
Currently my firm is in GST composition scheme.My father is the sole proprietor to the firm.we are filing the GST returns for every 3 months.

I want to takeover the firm from next financial year.What are the steps I have to take to change the GST no with my PAN card without disturbing the stock flow & regular retail(B-B) business transactions.

What's the best possible way for smoother transition.Please give your suggestions.
Copilot
Sent by Copilot:
Certainly! Transitioning the GST registration from your father to yourself as the new proprietor involves a few steps. Let’s break it down:

Update Authorized Signatory:
First, ensure that you are authorized as the new signatory for the GST registration. You’ll need to update the authorized signatory details.
Obtain a Board Resolution that officially authorizes your appointment as the new signatory1.
The outgoing signatory should submit a Letter of Resignation, specifying the effective date of resignation and any necessary handover details1.
The incoming signatory (you) must provide a Consent Letter, expressing your willingness to assume the responsibilities1.
Submit KYC Documents (such as Aadhar card, PAN card, and address proof) for verification1.
Update PAN Card Details:
While you cannot change the PAN number associated with the existing GST registration, you can update the details related to the authorized signatory.
Provide your PAN card details to update the GST records with the new authorized signatory information1.
Amend GST Registration Certificate:
Apply for an amendment to the GST registration certificate, incorporating the details of the new authorized signatory.
This ensures accurate identification of tax-related transactions under your name1.
Smooth Transition:
To avoid disruptions in stock flow and business transactions:
Coordinate with your father to ensure a seamless handover.
Update all relevant records, including invoices, purchase orders, and contracts, with your details.
Inform suppliers, customers, and other stakeholders about the transition.
Continuously monitor the transition process to address any issues promptly.
Remember that while you can’t change the existing GST number (GSTIN), you can effectively manage the transition by updating the authorized signatory details and ensuring proper communication. Seek professional advice if needed, and best wishes for a successful transition! 😊21.

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You
Sent by you:
for the last financial year I have filed gst nil return.can I file annual return showing sales.So that I can show gst turnover in income tax filing.pls reply thanks in advance.
Copilot
Sent by Copilot:
Certainly! If you filed a nil GST return for the last financial year, you can still file an annual return to show your sales turnover. Here’s how:

File Annual Return (GSTR-9):
The annual return (GSTR-9) summarizes your entire GST activity for the financial year.
Include details of your sales (both taxable and exempted) in this return.
Report the total turnover (including both taxable and non-taxable supplies) in the relevant sections.
GST Turnover in Income Tax Filing:
When filing your income tax return (ITR), you can mention the GST turnover as part of your business income.
Ensure consistency between the GST turnover reported in GSTR-9 and the turnover mentioned in your ITR.
This helps align your GST records with your income tax declarations.
Remember to maintain accurate records and consult a tax professional if needed. Best wishes for your income tax filing! 😊.

You
Sent by you:
I have 2 different business having each 30 and 35 lac revenue annually , both work at separate shops



But I had one GST since long and didn't changed that to 2 seperate because previously GST exemption was 20 lac so no meaning to separate



But now if I take GST for both separately than it come below exemption limit .

So should I cancel this GST number for existing business and both comes under exemption.

So what should I do?
Copilot
Sent by Copilot:
Certainly! Let’s address your situation regarding the GST registration for your two separate businesses. Here are the steps you can consider:

Current Scenario:
You currently have a single GST registration for both businesses.
The combined annual revenue from both businesses is below the exemption limit.
Options:
You have a few options:
Continue with Single GST Registration:
You can keep the existing GST registration and continue operating both businesses under the same GSTIN.
This approach maintains simplicity and avoids the need for separate registrations.
Separate GST Registrations:
You can apply for separate GST registrations for each business.
This would involve obtaining a new GSTIN for each business.
Each business would then have its own compliance requirements and separate records.
Note that separate registrations may be beneficial if you plan to expand or if the businesses have different compliance needs.
Considerations:
Here are some factors to consider:
Compliance Ease:
A single GST registration is administratively simpler, especially if the businesses are closely related.
Separate registrations mean maintaining distinct records and filing separate returns.
Business Independence:
If the businesses operate independently (different locations, different products/services), separate registrations might be more appropriate.
Future Growth:
Consider whether you anticipate significant growth in either business.
Separate registrations allow flexibility for expansion.
Cancellation of Existing GSTIN:
If you decide to go with separate registrations, you can cancel the existing GSTIN for both businesses.
Ensure that you comply with the cancellation process and update your records accordingly.
Professional Advice:
Consult a tax professional or GST expert to evaluate your specific situation.
They can provide personalized advice based on your business needs, compliance requirements, and long-term goals.
Remember that maintaining compliance and making informed decisions are crucial. Choose the option that aligns best with your business objectives. 😊1234.

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You
Sent by you:
One of my client established a firm in his wife name and took a voluntary GST registration, last year the firm has no sale hence nil gst return was filed now his wife also takes home tuition classes with nominal fees and students and that was shown as income in her ITR. Do we have to charge gst in tuition income also?
Copilot
Sent by Copilot:
Certainly! Let’s address the GST implications for tuition income received by your client’s wife from home tuition classes:

GST on Tuition Income:
Services provided by coaching centers, tuitions, and private tutorials do not fall under the approved vocational education courses or those approved by the government under the law.
As a result, tuition income is taxable at the standard GST rate of 18%.
However, GST will be charged only if the total turnover from tuition services exceeds the threshold limit in a financial year, requiring them to obtain a GST registration12.
Therefore, your client’s wife should charge GST on the tuition income if her turnover exceeds the threshold limit.