Breif Issue :
Facts & Issue of the Ruling
Mr Anil Kumar filed application for Advance ruling Out of the following sources of Income/ Revenue which all revenue income shall be considered for Aggregate Turnover for registration?
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a) Partner's salary as partner from my partnership firm, |
k) Interest on Post office deposits |
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b) Salary as director from Private Limited company |
l) Interest income on National Savings certificate (NSCs) |
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c) Interest income on partners fixed capital credited to partner's |
m) Interest income credited on PF account |
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capital account |
n) Accumulated Interest (along with principal) received on closure of |
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d) Interest income on partners variable capital credited to partner's |
PF account. |
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capital account |
o) Interest income on PPF |
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e) Interest received on loan given, |
p) Interest income on National Pension Scheme (NPS) |
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f) Interest received on advance given |
q) Receipt of maturity proceeds of life insurance policies |
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g) Interest accumulated along with deposit/ fixed deposit |
r) Dividend on shares |
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h) Interest income received on deposit/ fixed deposit |
s) Rent on Commercial Property |
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i) Interest received on Debentures |
t) Residential Rent |
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j) Interest accumulated on debentures |
u) Capital gain/loss on sale of shares |
Decision
Interest income received from different sources
extending the deposits/loans/advances by the applicant is nothing but exempted service and the actual amounts of deposits/loans/advances become the value of the service.
Partner's salary, received as partner, from applicant’s partnership firm:
If the applicant is a working partner and is getting salary, then the said salary is neither supply of goods nor supply of service in terms of clause 1 of Schedule III of CGST Act 2017. Further, in case if the applicant is in receipt of the amount towards his share of profit from the said partnership firm, then also the said income is not under the purview of GST as the share of profit is nothing but application of money and hence the said salary is not required to be included in the aggregate turnover for registration under the provisions of GST Act.
Salary received as Director from a Private Limited Company:
Following AAR can be referred in context of decision made in the advance ruling authority, Karnataka in case of "Clay Craft India Pvt. Ltd, AAR-Rajasthan" GIB/RJ/CLAY CRAFT/20.02.2020/AAR-239 ,"Alcon Consulting Engineers(India) Pvt. Ltd.,AAR-Karnataka"- GIB/KR/ALCON CONSULTING/25.09.2019/AAR-313 and "Shree Sawai Manoharlal Rathi, AAR-Gujarat"- GIB/GJ/SHREE SAWAI/19.04.2020/AAR-326 as remuneration received by the applicant as Executive Director is not includable in the aggregate turnover, as it is the value of the services supplied by the applicant being an employee. Further
if the applicant receives the remuneration as a Non-Executive Director, such remuneration is liable to tax under reverse charge mechanism under section 9(3) of the CGST Act 2017, in the hands of the company, under entry no. 6 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017
Rental income on Commercial Property :
The transaction of rental/lease of commercial property amounts to supply.
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