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Question

The assessee is having interest income as follows :
1) saving bank interest 5,000
2) FDR interest 25,00,000
3) Int from parties 3,00,000 apart from above he also earns commission of rs. 18,00,000/-. Whether he is liable to take GST registration and charge GST on commission.

Answer

Section 22 of CGST Act requires registration of a person when aggregate turnover in a financial year exceeds Rs. 20 lakhs.

The aggregate turnover is defined in Section 2(6) of CGST Act as follows:

'aggregate turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Aggregate turnover in your case exceeds Rs. 20 Lakhs i.e. Rs 46,05,000/- (5000+2500000+300000+1800000). So you are required to take registration in GST and charge GST on commission income.

However interest income is exempted vide Notification No. 12/2017-Central Tax (Rate) s.no. 27 reproduced below:

Heading 9971

Services by way of'

(a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services);

(b) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers.

Nil

So far as GST on interest from parties is concerned, it will be determined on the type of transaction for which interest is charged from parties i.e. if it is covered under above notification then it is exempt otherwise taxable under GST. (Reply dt.17/10/2018)