Kirana Stores supplying Ice Cream, Pan Masala and Tobacco are not Eligible for Threshold Exemption of Rs 40 Lakh-Check who others are not eligible for threshold limit of Rs 40 Lakh
Government vide Notification No. 10/2019-Central Tax dated 7th March 2019 exempted person, who is engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed forty lakh rupees. Let’s take a quick review about the persons who not eligible for the benefit of enhanced threshold limit:
- Person who are not engaged in exclusive supply of goods i.e. persons who are also supplying any kind of services- Persons who are claiming the benefit of enhanced threshold exemption limit need to be vary of the fact that there should not be any kind of supply service. Some of Common Example of services is as follows:
- Income from Job Work
- Income from Service Charges
- Interest from Business Loans and Advances
- Commission Income
- Rent from Residential House Property
- Receipt of Cheque Dishonour Charges
Please keep in mind that supply of service can be any kind of service whether it is exempted or taxable and would be immaterial whether amount received from such supply of service is Rs 100 or Rs 100000 or any amount.
- Supplier of Ice cream and other edible ice, whether or not containing cocoa falling under Chapter 2105 00 00
- Supplier of Pan Masala falling under Chapter 2106 90 20
- Supplier of all goods, i.e. Tobacco and manufactured tobacco substitutes falling under Chapter 24
- Person making inter-state supply of taxable goods
- Persons who are required to pay tax under reverse charge on the following receipt of services. Some of the Common Services on which tax is required to be paid on Reverse Charge:
- Goods transport agency
- Services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly.
- Services supplied by the Central Government, State Government, Union territory or local authority to a business entity
- Services provided by way of sponsorship to any body corporate or partnership firm.
- Services supplied by a director of a company or a body corporate to the said company or the body corporate.
- Import of Services by a business entity
(The above entries are only for reference and one would have to refer detailed entries in the relevant Notifications for each of the cases)
- Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.
- Persons who supply goods through electronic commerce operator Like Amazon, Ebay who are required to collect tax at source under section 52
- Persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand
- Persons exercising option under the provisions of sub-section (3) of section 25 to obtain Voluntary Registration,
- Registered persons who intend to continue with their registration under the said Act.