Skip to content

CA Intermediate · Taxation · Registration

Sharma Traders, a proprietorship in Lucknow, supplies only taxable goods intra-State and is its only business. Its aggregate turnover in the preceding financial year was Rs 38 lakh, and in the current year it has crossed Rs 39 lakh by October. The threshold for registration for goods suppliers in a normal category State is Rs 40 lakh. In which situation is Sharma Traders liable to register under normal provisions?

Sharma Traders must register only when its aggregate turnover in the financial year exceeds Rs 40 lakh. Being a goods supplier in a normal category State making intra-State supplies, it has no other trigger, and the Rs 20 lakh limit applies to services, so it is not yet liable.

  1. AImmediately, because turnover exceeds Rs 20 lakh
  2. BOnly when its aggregate turnover in the financial year exceeds Rs 40 lakhCorrect
  3. COnly if it makes inter-State supply of goods
  4. DImmediately, because it is a trader

Explanation

For a goods supplier in a normal category State, registration is required once aggregate turnover in a financial year exceeds Rs 40 lakh. At Rs 39 lakh the limit is not crossed, and the supplies are intra-State goods supplies, so no other trigger applies. The Rs 20 lakh limit relates to service suppliers, not to this trader.

Did you get it right without looking?

One question tells you little. A timed set on Registration shows your real accuracy, how long you take and where you lose marks.

Practise RegistrationFree diagnostic mock

More Registration questions