‘Interest on PPF, savings bank included for GST threshold’

NEW DELHI: The value of exempted income sources,

like interest on PPF, savings bank account and loans given to family and friends, will be included along with taxable supplies while calculating the threshold limit for obtaining GST registration.

The Authority for Advance Ruling (AAR) Gujarat bench has made this ruling which is

likely to be challenged in courts. These income categories are exempt from tax. Under the Goods and Services Tax law, businesses and individuals are required to obtain GST registration if their aggregate turnover is Rs 20 lakh or more. A person not in any business, had filed an application before the Gujarat bench of AAR asking whether interest received from savings bank, PPF and loans and advances to family would be considered for the purpose of calculating threshold limit of Rs 20 lakh for registration under GST law. He disclosed in the application that his total receipts in 2018-19 fiscal were about Rs 20.12 lakh, including rent receipt of Rs 9.84 lakh, while the remaining was interest on bank, PPF deposits and from personal

loans extended to friends and family.

The AAR, while ruling that interest income would be included for calculating registration threshold, said that the applicant is required to consider the value of both taxable supply i.e. “renting of immovable property” and exempted supply of service provided by way of extending deposits, loans or advances for which interest income was earned to arrive at “aggregate turnover” to determine the GST threshold.