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CA Intermediate · Taxation · Registration

Ananya Traders, a proprietorship in Pune, supplies only goods within Maharashtra. Its aggregate turnover in the preceding financial year was Rs 38 lakh, and it expects Rs 42 lakh in the current year. Assume it is a normal-category State (not a special category State) and it has no other registrable circumstance. Is it liable to register under GST on the basis of turnover?

Ananya Traders is not liable on the basis of turnover yet. A goods-only supplier in a normal-category State must register only when aggregate turnover in a financial year exceeds Rs 40 lakh, and liability arises when that limit is actually crossed, not on the basis of an expected turnover.

  1. AYes, because the threshold for suppliers of goods is Rs 20 lakh
  2. BNo, because the threshold for suppliers of goods only is Rs 40 lakh, and its turnover is below the threshold in the preceding year; registration arises only once aggregate turnover exceeds Rs 40 lakh in a financial yearCorrect
  3. CYes, because expected turnover of Rs 42 lakh exceeds the threshold from the first day of the year
  4. DNo, because the threshold for suppliers of goods is Rs 1.5 crore

Explanation

For a normal-category State, a supplier exclusively of goods becomes liable only when aggregate turnover in a financial year exceeds Rs 40 lakh. Liability arises on the date the turnover crosses the limit, not on expectation of crossing it. Option C wrongly uses projected turnover from day one.

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