Ask us: I have been earning less than Rs.20 lakh per annum. I had a GST registration number but I have cancelled it to avail exemption on GST. In the past, I paid hefty penalties for not paying GST. I would like to understand if I did the right thing by cancelling GST.
The sender requested anonymity
The government has exempted distributors earning up to Rs.20 lakh from paying GST. So if you earn commission less than RS.20 lakh a year, you are exempted from paying GST as on January 2020. However, ensure that you include commission from other financial products to arrive at your annual income.
GST norms include commission income from all financial products such as insurance, stock broking and mutual funds to arrive at your annual income.
We say that in the past you were fined for not paying GST. Even if you earn less than Rs.20 lakh and have GST registration, you will have to pay GST on your commission income from Re.1. You could have reduced your GST liability to some extent by availing input tax credits.
Hence, it is better to cancel GST registration if your income is less than Rs.20 lakh a year.
Ask us: I am a distributor from Gujarat. I would like to understand if I could avail benefits of GST composition scheme.
Yatin Patel, Gujarat
Currently, only a fraction of Maharashtra distributors who do not have business with AMCs beyond the state and earn between Rs.20 lakh and Rs.50 lakh can avail of the benefits of Composition Scheme. Since you are based out of Gujarat, you cannot avail this benefit.
