The challenge at hand for businesses is to adapt to the new GST regime by understanding its various nuances. We at SGA, understand and analyse the GST implications applicable to your business activity and conduct an impact analysis. A comprehensive report and possible alternatives are suggested for the most beneficial tax position for your business.
The introduction of Goods & Services Tax (GST) in India effective July 1,2017 has been the most important change in the country’s Indirect Tax structure.
Many business transactions or arrangements lend themselves to alternative tax treatment due to ambiguities in law, in procedures, contradictory judicial precedents and the like. A position that seems prima facie most beneficial may turn out to be without legal merit on deeper evaluation. Through systematic questioning about the nature of the problem and the solution requirements, we make an informed decision regarding the recommendation to employ for your business. An overall action plan for a systematic decision-making process is presented by us.
Every person whose aggregate turnover from Supply of Goods or Services or both in a financial year exceeds INR 20 lakhs* (see note below) has to mandatorily register under Goods & Service Tax. This limit is set at INR 10 lakhs for North Eastern and hilly states flagged as special category states.
*Note : The basic limit beyond which obtaining registration becomes mandatory is increased from INR 20 lacs to INR 40 lacs for certain categories of persons, who are engaged in exclusive supply of goods vide notification No. 10/2019-Central Tax, dated 07.03.2019
Therefore, in case a person in supplying goods but also earns a nominal amount of service income (whether taxable or not) such as commission income, or interest income say from bank (which is exempt), then such person shall be liable to take registration above INR 20 lacs and not INR 40 lacs.
Every registered person must get its accounts audited by a Chartered Accountant / Cost Accountant if the aggregate turnover during FY exceeds INR 2 Crores from sale of goods or services.
Calculation of turnover shall be PAN (Permanent Account Number ) based i.e. all sale of goods/ services shall be taken for computing the limit of INR 2 Crores.
As per the GST Act, due date of audit and annual return is specified as 31st December of subsequent fiscal year and in case of failure in complying with the same then as per act no specific penalty is prescribed. So it will be covered under the head of general penalty of Rs. 25000.