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Interest On PPF, Savings Account To Be Included To Calculate GST Registration Threshold: AAR

By Staff
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While calculating the threshold limit for obtaining GST registration to include the value of exempted income, like interest on PPF, savings bank account and loans given to family/friends, along with taxable supplies, the Authority for Advance Ruling (AAR) has said.

 

Interest On PPF, Savings A/c To Be Added To Calculate GST Registration Threshold

Under the Goods and Services Tax law, businesses and individuals are required to obtain GST registration if their aggregate turnover is Rs 20 lakh or more.

The ruling comes after an individual, not engaged in any business, had filed an application before the Gujarat bench of AAR asking whether interest received from savings bank, PPF and loans and advances to family would be considered for the purpose of calculating threshold limit of Rs 20 lakh for registration under GST law.

This would mean those not earning in business income, including to homemakers, retired persons and freelancers would also be forced to seek GST registration.

The individual who had filed the above said application had disclosed that his total receipts in the financial year 2018-19 were about Rs 20.12 lakh, including rent receipt of Rs 9.84 lakh, while the remaining was interest on bank, PPF deposits and from personal loans extended to friends/family.

The Gujarat AAR, while ruling that interest income would be included for calculating registration threshold, said that the applicant is required to consider the value of both taxable supply i.e. "renting of immovable property" and exempted supply of service provided by way of extending deposits, loans or advances for which he earned interest income, to arrive at "aggregate turnover" to determine the threshold limit for the purpose of obtaining registration under the GST Act.

Read more about: ppf interest income gst
Story first published: Thursday, June 18, 2020, 22:16 [IST]
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