Get guidance from tax dept, traders told amid GST notices over digital payments
BENGALURU: In the wake of confusion among traders over hefty tax notices for conducting business through digital payment gateways, the Commercial Taxes Department has advised them to submit explanations with relevant documents at the office from where they received the notice.
“The officers would verify them, inform the relevant provisions of the GST and also their remedies and would levy tax at the applicable rates only on the taxable turnovers after excluding the tax exempted goods and services,” the department stated. The office of the Additional Commissioner of Commercial Taxes (Headquarters 1) stated: “It has come to the knowledge of the department that certain traders have stopped receiving payment through UPI and are receiving consideration in the form of cash subsequent to the issue of the notice. The department will take suitable action to collect the applicable tax under the GST Act from traders who received consideration in any form.”
As per Section 22 of the Goods and Services Tax Act, 2017, every person who carries on a business activity and receives payment by way of cash, UPI, PoS, bank payments or by any other means exceeding Rs 40 lakh annually in case of a person dealing only in goods, and exceeding Rs 20 lakh annually in case of persons dealing in services, have to obtain GST registration mandatorily.
Any person whose annual turnover is less than Rs 1.5 crore can opt for composition tax scheme after obtaining GST registration and can pay SGST at 0.5% and CGST at 0.5%. But, the composition tax scheme is not applicable on the turnover made without obtaining registration. Presently, 98,915 tax payers have registered and are paying taxes under the composition scheme.