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CA Intermediate · Taxation · Registration

Sundar Traders of Coimbatore, a proprietorship, supplies only taxable goods within Tamil Nadu. Its aggregate turnover in the preceding financial year was Rs 38 lakh, and in the current year it reached Rs 41 lakh by October. Assuming Tamil Nadu is a normal category State and the threshold for goods suppliers is Rs 40 lakh, from which point is Sundar Traders liable to register?

Sundar Traders becomes liable to register from the date its aggregate turnover crossed Rs 40 lakh during the year. Registration liability for a goods supplier arises when the threshold is exceeded, not from the beginning of the year or the next year.

  1. AFrom the start of the current financial year
  2. BFrom the date on which its aggregate turnover exceeded Rs 40 lakhCorrect
  3. CFrom the first day of the next financial year
  4. DFrom the date of applying for registration voluntarily only

Explanation

A supplier of goods in a normal category State becomes liable to register once aggregate turnover in a financial year exceeds Rs 40 lakh. Liability arises on the date turnover crosses the limit, not from the start of the year. Preceding-year turnover of Rs 38 lakh does not by itself create liability.

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