Should value of loans & advances be included to determine GST registration limit?

In re: Anil Kumar Agrawal – Ruling dated May 4, 2020 – Authority for Advance Rulings (Karnataka)

Ruling: Income received from the following activities / transactions should be included, while calculating aggregate turnover, to determine the registration threshold:

  • remuneration as non-executive director of a company;
  • renting of commercial property;
  • renting of residential property (though it is exempt);
  • value of amounts extended as deposits / loans / advances (out of which interest is being received).

Comment(s): In paragraph 7.6 of the ruling, the Authority has recorded its finding that the actual amount of deposits / loans / advances is the actual value of service. It is erroneous to construe the amount of deposits / loans / advances extended as the value of service. Rather, interest earned therein is the actual value of supply for the activity of extending deposits / loans / advances.

Srinivasan V, Advocate

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