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Interest on PPF, savings bank deposit to be included for calculating GST registration threshold: AAR

  • Jun 22, 2020 | Divita S Gupta

Interest on PPF, savings bank deposit to be included for calculating GST registration threshold: AAR

The Gujarat bench of the Appellate Authority for Advance Ruling has held that value of exempted income, like interest on PPF, savings bank account and loans given to family/friends, will be included along with taxable supplies while calculating the threshold limit for obtaining GST registration. At present, the registration is applicable to taxpayers with an annual turnover of ₹40 lakhs. The applicant sought an advance ruling to understand whether interest received from a savings bank account, income from a public provident fund (PPF) and loans and advances to the family would be considered for the purpose of calculating threshold limit of Rs 40 lakh for registration under GST law. The Gujarat Bench of the AAR ruled that the applicant is required to consider the value of both taxable supply as well as exempted supply viz. renting of immovable property and deposits, loans or advances for which interest was earned as income, to arrive at an aggregate turnover. If this turnover meets with one prescribed under the GST framework, the applicant will be liable to obtain a GST registration. Experts have commented that such a ruling will even bring retired personnel, senior citizens and homemakers under the GST purview and that the Gujarat bench of the AAR has failed to distinguish between individual and business income. 


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.