In case an application is made within the time period and registration is granted, there would be a time lag between the date of grant of certificate of registration and the date of liability to obtain registration. 
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In case an application is made within the time period and registration is granted, there would be a time lag between the date of grant of certificate of registration and the date of liability to obtain registration. I am a consultant. This year my turnover will cross Rs 20 lakh. I do not have a GST number. Will I be charged a penalty if I apply for GST registration now? How will my income get taxed?
-Rajat
How much tax do I have to pay? Calculate now
By Sandeep Sehgal, Partner- Tax, AKM Global, a tax and consulting firm
As you are a consultant (service provider), you need to obtain registration under GST when the aggregate turnover for the financial year exceeds Rs 20 lakh (Rs 10 lakh in the case of certain specified states). You are required to apply for GST registration within 30 days from the date the turnover exceeds the limit. It takes seven working days in case you furnish Aadhaar, else it may take upto 30 days.
In case an application is made within the time period and registration is granted, there would be a time lag between the date of grant of certificate of registration and the date of liability to obtain registration. For supplies made by you during this intervening period, the law enables issuance of a revised invoice within one month from the date of issuance of certificate of registration. After obtaining GST Registration, you shall be required to issue tax invoices and collect GST from the recipient on all the invoices.
In case, you fail to obtain GST Registration within the prescribed time limit then you may be charged a penalty u/s 122 of CGST Act, 2017, amounting to Rs 10,000 or an amount equal to tax not paid to the Government.
Regarding income tax, you have two options to pay tax on your income. If your aggregate gross receipts in the year is up to Rs 50 lakh, you can opt for presumptive scheme of taxation i.e., 50 per cent of total turnover/gross receipt under Section 44ADA. Please note that only professionals notified under Section 44AA (namely legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration etc.) can opt for presumptive taxation and do not need to maintain any books of accounts in respect to their profession. No further expenditure incurred can be claimed from your income. Alternatively, if you opt for normal tax provisions, you are required to maintain prescribed books of accounts in respect to your profession and your income would be computed by deducting all the expenditure incurred to carry out the profession from your receipts.
Once your total income is calculated you further have two options to pay your tax, under old regime or new regime (without claiming several deductions) of tax. Tax shall be computed at slab rate plus applicable surcharge and cess applicable under both regimes. You shall compute your tax liability under both regimes for comparison purposes and shall opt for whichever is beneficial to you.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)
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