Karnataka GST Dept Clarifies Registration and Tax Rules for Suppliers:

Karnataka GST Dept Clarifies Registration and Tax Rules for Suppliers The GST Department of Karnataka has recently issued a press note for the suppliers receiving payment online by UPI, POS machines, and other non-cash methods. Earlier, the department had issued a press note about the taxpayers who were operating businesses without having a GST Number. Such taxpayers were served with GST notices.

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Who Needs to Register Under GST?

As per Section 22 of the Goods and Services Tax Act, 2017, all persons who operate a business and receive payment through cash, UPI, POS machines, Bank Payments or by any other way are mandatorily required to obtain a GST number if their aggregate turnover is more than Rs 40 lakh (for services) and Rs 20 lakh (for goods) in a year. The aggregate turnover includes the taxable and the tax-exempt goods and services. In case the person has obtained a GST number under the regular scheme, the tax will only be imposed on the taxable goods and services. The registered suppliers are required to pay the net tax on the supplies made by them after adjusting the Input Tax Credit (ITC).

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Who Can Opt for the Composition Scheme?

• Small taxpayers whose annual turnover is less than Rs 1.5 crore can opt for the composition scheme to reduce the GST compliance burden. To opt for the Composition Scheme, they must get a GST registration Number and pay SGST at 0.5% and CGST at 0.5%.
• Taxpayers cannot opt for the composition scheme if they do not have a GST registration number.
• So far, nearly 98,915 traders have registered under the composition scheme. Notices have been issued to less than 10% of this number.

What Can Taxpayers Do?

The department has asked the taxpayers receiving notices to visit their local GST office with documents. Officers will guide them and ensure tax is levied only on taxable supplies. The department also warned against moving to cash-only payments to avoid GST, as many taxpayers have stopped using online payments to receive money in the state. The department has clarified that tax will be applicable no matter which mode is being used to receive payments.