Levy of GST on the invoice that crosses Rs.20 lakhs

If an unregistered freelancer had raised invoices for Rs.19,50,000 till now and he further raises an invoice of Rs.1,00,000, should he get registered and pay gst on this invoice?

Replies (3)
Quick Summary
This discussion explores the Goods and Services Tax (GST) implications when a freelancer's turnover exceeds the £20 lakh threshold. While registration becomes mandatory once the threshold is crossed, there's a debate on whether GST applies to the invoice that pushes the turnover over the limit. The consensus leans towards mandatory registration and paying GST from the point the threshold is exceeded, though caution is advised regarding the exact invoice applicability.

Yes, mandatorily.                       

Sir, Thankyou for replying and I respect your opinion. The law is very clear with respect to the turnover threshold for registration. So registration is mandatory. However I have a different view on the levy of GST on the invoice value of Rs.1 lakh.

As per Section 2(107), “taxable person” means a person who is registered or liable to be registered under section 22 and section 24.

And as per Section 22, Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:".

In my view, at the time of supplying services (involving value of Rs. 1 Lakh), supplier's turnover was below threshold limit u/s 22. Only when he supplied goods / services with value of Rs. 1 Lakh, supplier's turnover got above (i.e. exceeded) the threshold limit u/s 22, warranting him to get registration under GST.

In other words, at the time of making subject supply, supplier was not a taxable person u/s 2 (107). And if so, Section 9 or any other provisions of GST Act with respect to levy of GST does not come into picture at all especially where Section 9 clearly says the tax shall be paid by a "taxable person" in my view and consequently, no tax is payable under GST on entire value of Rs. 1 Lakh. The tax will be payable from the very next transaction.

I’m open to correction if I’ve misinterpreted this.

 

Yes, interpretation is correct to an extent...

The service provider is to get himself registered within one month from the date when his turnover exceeds Rs.20 lakh. He is also liable to pay tax when he crossed the threshold limit. The registered person is liable to pay tax from the date of crossing the threshold for the entire transaction after this date and not before that date.

Considering risks involved in above argument. the supplier should take practical call (including charging & paying taxes on value exceeding threshold limits). 

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