How Much GST Would Be Charged When Turnover Exceeds 20 Lakh Rupees?
When your businessrsquo;s turnover exceeds 20 lakh rupees, you become liable to get registered under the Goods and Services Tax (GST) regime. This registration is not only crucial for compliance but also impacts how GST is charged on your supplies. Let's explore the intricacies of this process and how GST is calculated when your turnover exceeds the specified limit.
Registration Requirement and Transition Period
According to Section 22 of the CGST Act, 2017, if your aggregate turnover exceeds 20 lakh rupees in a financial year, you are liable to register under the GST regime. However, this rule is subject to further conditions as mentioned in Sections 23 and 24 of the Act.
Liability to Register
Liability to register arises only when your turnover exceeds 20 lakh rupees within the financial year. If you have not registered within the stipulated period and your turnover exceeds 20 lakh rupees, you are still liable to charge GST on the goods and services supplied in excess of 20 lakh rupees. However, if you registered before surpassing the 20-lakh limit, you should start charging GST on all supplies immediately.
Composition Scheme and Simplified GST Levy
If you opt for the Composition Scheme under Section 10 of the Act, the tax rates change. Under the Composition Scheme, GST is levied on the total turnover instead of each supply. This means that if you choose the composition scheme, you pay GST on the total amount you receive, rather than separately for each bill.
Exemptions and Special Cases
It's important to note that the 10 lakh rupee exemption for service tax that was earlier applicable does not apply in GST. After registration, you must charge GST on all your supplies irrespective of their value.
Post-Registration Taxability
After you have registered, the taxability of your outward supplies depends on the goods and services. You will need to refer to the rates prescribed against their HSN/SAC codes to determine the appropriate GST rate. You are also required to file valid GST returns to know your tax obligations.
Zero-Rating and Exemptions
If you supply goods to Special Economic Zones (SEZ) or export goods out of India, you can go for zero-rating of supply, which means no tax is applicable on these supplies.
Professional Assistance
Given the complexities involved, it is highly recommended to appoint a GST Practitioner to ensure compliance and navigate through the various intricacies of GST registration and charge calculation.
Key Takeaways:
The threshold for GST registration is 20 lakh rupees in a financial year. If your turnover exceeds 20 lakh rupees, you are liable to charge GST on all supplies. The Composition Scheme allows you to levy GST on the total turnover instead of each supply. After registration, you must charge GST on all supplies, irrespective of their value.