Traders Required to Pay GST Regardless of Payment Mode: GST Department

Traders Required to Pay GST Regardless of Payment Mode: GST Department

The GST Department has made it clear that the traders are required to pay GST at the applicable rates, no matter whether the payment they receive is in cash or UPI. The department released a clear explanation after some reports said that some shopkeepers had stopped accepting payments through UPI apps. This happened after the department sent GST notices to traders who had not registered but had UPI transactions that exceeded Rs 20 lakh a year for services or Rs 40 lakh a year for goods.

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In the statement, the GST department has mentioned that all the traders must be registered under GST if they receive Rs 20 lakh for the supply of services and Rs 40 lakh for the supply of goods per year, for all transaction modes, including cash, UPI, PoS machine, and bank transfers. For the composition scheme, the department added that traders can only opt for the composition scheme if their annual turnover is less than Rs 1.5 crores. Under this scheme, they can pay SGST at 0.5% and CGST at 0.5%. However, to opt for the composition scheme, the traders must first get GST registration.

To spread awareness among the unregistered traders, the department has instructed the officials so that more traders can get registered under GST and ensure compliance. Due to these efforts by the department, over 98,000 traders have registered with GST and are also paying taxes under the composition scheme.

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The statement clearly mentioned that the traders who have opted for the composition scheme can pay 1% of the taxable turnover. The number of persons receiving the notices is less than 10% of registered GST taxpayers under the composition scheme. Most of the traders using the composition scheme are already paying their taxes regularly.

Many small traders were anxious and confused after receiving the tax notices. The department has asked such taxpayers to submit supporting documents to the GST department, where the officials will check the documents and will give suggestions. They will charge the GST at applicable rates only on the aggregate turnover, excluding the tax-exempted goods and services.