Hi, I have registered a Partnership firm. I provide IT services(like cloud and software development). My clients are from US so I don't get GST from them. I have filed LUT so that I don't pay GST. I have 2 questions: 1. Can I claim presumptive taxation? 2. Can I buy a Car for company purpose and get some GST rebate on it since I am not getting any GST? I intend to use the car from Company travel between offices. Thanks
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Presumptive taxation for businesses is covered under section 44AD of the income tax act. Any business which has a turnover of less than Rs 2 crore can opt to be taxed presumptive. They must declare profits of 8% for non-digital transactions or 6% for digital transactions, whichever one is applicable.
The GST credit paid on purchase of car cannot be claimed, unless you are in the business of buying selling cars and/or travel business.
Yes you can do the above
Dear Client,
1. As per Sections 44ad and 44aa you are not eligible to claim presumptive taxation.
2. You are not eligible to get a GST rebate on Car as you would not use it for making taxable supplies.
Thank you
I have been told by my CA that because I provide services(IT), so even for presumptive taxation, I will be charged 50% of my turnover instead of 8% that is mentioned in Presumptive.
The law related with presumptive will be applicable to you
You can claim presumptive taxation
Presumptive taxation for businesses is covered under section 44AD of the income tax act. Any business which has a turnover of less than Rs 2 crore can opt to be taxed presumptively. They must declare profits of 8% for non-digital transactions or 6% for digital transactions, whichever one is applicable.
If you feel that your CA is not giving a proper opinion on this you may better take a second opinion on this from a different CA.
You were informed about the prevailing law in it hence it is your choice either to go by your CA's opinion or to have a second opinion based on the background facts in your situation with a different and experienced auditor. .