The Finance Ministry said on Thursday said that traders would not be able to avail of threshold exemption of Rs 20 lakh turnover, if they have inter-state supplies. It also clarified that the traders supplying goods to other states will need to register under the Goods and Services Tax (GST) even if their turnover is below Rs 20 lakh.
“A trader dealing only in exempted goods or where his turnover is below Rs 20 lakh in the financial year, but not engaged in inter-state supplies, is not required to register under GST. Rs 20 lakh registration limit is only for intra-state traders. Threshold exemption is only for traders who are trading within the State,” Revenue Secretary Hasmukh Adhia said while speaking at the ‘GST-Ki-Master Class’ held for traders, tax practitioners and all officers of the Central Board of Excise and Customs and State governments.
“The traders, who have turnover below Rs 20 lakh and supply goods and services within the State, can also go for voluntary registration to avail input tax credit. But once registered, the traders will have to pay taxes on all supplies, even if turnover is less than Rs 20 lakh,” Adhia said, adding that even if there were no transactions in a certain month, return would have to be filed once registration was done.
The Revenue Secretary also said since registration is PAN-based, only one GST registration number can be allotted against one PAN. “Even if the supplies were made inter-state, the Composition Scheme of Rs 75 lakh threshold would apply on the combined turnover,” he clirified.
Traders who have below Rs 75 lakh turnover will have to pay 1 per cent tax, manufacturers will have to pay 2 per cent while restaurants businesses below Rs 75 lakh turnover will have to pay 5 per cent if they opt to go for the Composition Scheme under the GST.
On being questioned about the additional 30 per cent entertainment tax being levied in Tamil Nadu apart from the GST rate, Adhia said that was the prerogative of the state and nothing could be done about it.
Under the GST, State governments are authorised to levy a parallel tax for the benefit of local bodies. “The taxes under GST will be taken care of by the GST Council. But other taxes, which are out of the purview, are under State governments. They have the right to increase or decrease the tax that the State Government will decide. Can’t do anything in that,” Adhia said.
Petroleum products, electricity, stamp duty, registration charges and vehicle tax remain outside the GST.