Few GST concerns

Question

Few GST concerns

Hi,
Before I begin, I have a disclaimer. I have no accounting background, so please do kindly explain as if you are giving your explanation to a school kid. Thanks.

My Case:
I am running a Spoken English training center ( startup ) in Kerala. We just started 1 year ago and till date our annual turn over is less than 5 lakhs. However, since I expected an increase in our turn over (surpassing 9 Lakhs threshold of service tax) in the coming fiscal year, I actually did enroll for Service Tax just to be prepared so that I can start collecting and filing once we actually cross the threshold.

Then the GST storm has hit and all my acquired knowledge via, articles, blogs and news about taxation is now a cloud.
I will be getting a provisional id and a password from ACES post 25th and I am supposedly required to enroll for the GST in 6 months time, however as per my projection I won't be crossing the 19 lakh threshold this fiscal year.

My Queries:

1: Am I liable to enroll for GST?

2: What would happen if I don't enroll with in 6 months? If my provisional id gets cancelled, do I have an option to enroll later? would that be a complicated step?

3: What would happen if I cross 9 lakh threshold for the Service Tax which I am already registered with?

4: If I enroll for GST, should I start collecting and filing/paying GST irrespective of my business crossing the threshold which is 19 lakhs?

5: Even if I start collecting GST for my services, is there any way I can not collect for certain services for example:

Assume I have a tie up with another institution (hereafter referred to as A) where they regularly refer students to my place. 'A' collects a caution deposit (eg. 5000/-) from the students and pays an amount (eg. 3000/-) to us as our service charges. They get to keep the balance. Let us assume, 'A' is not willing to pay the extra 18% GST, so I would have to make the 3000/- that I get from them inclusive of tax so that leaves me with just 2460/- which would definitely hurt my business. However, I can and will be able to collect 18% tax directly from other students who directly enroll at my institution. So how do I go about with the GST? How can I not pay GST for the 3000/- that I directly get from A? and pay all the taxes I collect directly from other sources? Is there any other option to deal with such a situation?

Looking forward to a healthy discussion and answers from all the experts of this community.

Thanks a ton in advance.

Regards

Asked 8 years ago in Taxation

Answer 1

Any person with a taxable supply turnover of Rs.10 lakhs in northeast and hill stations and Rs.20 Lakhs in other states are required to pay GST.

2) since your turnover is only Rs 5 lakh you dont require GST registration .GST registration must be obtained within 30 days of exceeding the 19 Lakh turover limit.

3) the government has put on common portal a notice that says: “ The enrollment window will reopen at a later date for taxpayers who could not enroll themselves as well as for those who enrolled but did not sign the enrollment form.

4) you can always enrol later as and when your turnover crosses the limit

5) you need not worry about your service tax figure crossing Rs 9 lakhs as for GST threshold limit is Rs 20 lakhs

6) you should not collect and pay GST as your turnover is below the threshold limit

7) you cannot avoid payment of GST on Rs 3000 collected by you

Ajay Sethi

Advocate, Mumbai

Available Now

99958 Answers

8158 Consultations

Talk to Advocate Ajay Sethi NOW!

Answer 2

Sellers or suppliers on e-commerce platforms will have to register under GST irrespective of threshold

2) Under GST both ecommerce companies and sellers would have to simultaneously register these warehouses as Principal and Additional Place of Business, respectively.

3) as far as your initial start up is concerned (as mentioned in your initial query) since your turnover is below threshold limit you do not require any mandatory compliances

Ajay Sethi

Advocate, Mumbai

Available Now

99958 Answers

8158 Consultations

Talk to Advocate Ajay Sethi NOW!

Answer 3

Under the present situation, nobody can give a concrete opinion with regard to GST and its applicability.

For the present the rates have been rolled out however since the effective date for its implementation shall be from first July, you may have to wait until then for all your questions to be answered.

If you are in a hurry to know the details, you may get an idea from a chartered accountant, you may contact one in the local.

T Kalaiselvan

Advocate, Vellore

Available Now

90153 Answers

2505 Consultations