Frequently Asked Questions On GST
Answer: It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer
Answer: The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.
Answer: The GST would replace the following taxes:
(i) taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
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f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they
relate to supply of goods and services
(ii) State taxes that would be subsumed under the GST are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and services
The GST Council shall make recommendations to the Union and States on the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the GST.
Answer: It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States/ Union territory would be called the State GST (SGST)/ UTGST. Similarly, Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services
Answer: India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appr opr iat e legi s lat ion. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism.
Answer: Centre will levy and administer CGST & IGST while respective states /UTs will levy and administer SGST/UTGSt
Answer: Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer.
Answer: Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.
Answer: The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council.
Answer: Under the GST regime, tax is payable by the registered taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person 13. Downloaded from www.gstindia.com
crosses the turnover threshold of Rs.20 lakhs (Rs. 10 lakhs for NE & Special Category States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. The CGST / SGST is payable on all intra-State supply of goods and/orservices and IGST is payable on all inter- State supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts.
Answer: Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available on the GST paid on import on goods and Services
Answer: Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. The Exporter will have an option to either pay tax on the output and claim refund of IGST or export under Bond without payment of IGST and claim refund of Input Tax Credit (ITC).
Answer: Refer Section 2(6) of CGST Act. Aggregate turnover does not include value of inward supplies on which tax is payable on reverse charge basis.
Answer: New registration would be required as partnership firm would have new PAN.
Answer: He is liable to register if the aggregate turnover (all India) is more than 20 lacs (Rs. 10 lacs in Special Category States) or if he is engaged in inter-State supplies.
Answer: Provisional GSTIN (PID) should be converted into final GSTIN within 90 days. Yes, provisional GSTIN can be used till final GSTIN is issued. PID & final GSTIN would be same.
Answer: If the person is involved in 100% supply of goods which are not liable for GST, then no registration is required.
Answer: Not liable to tax means supplies which is not leviable to tax under the CGST/SGST/IGST Act. Please refer to definition under Section 2(78) of the CGST Act.
Answer: A supplier of service will have to register at the location from where he is supplying services.
Answer: Outward supplies on which tax is paid on reverse charge basis by the recipient will be included in the aggregate turnover of the supplier.
Answer: SEZs under same PAN in a state require one registration. Please see proviso to rule 8(1) of CGST Rules.
Answer: Exemption from registration has been provided to such suppliers who are making only those supplies on which recipient is liable to discharge GST under RCM.
Answer: If services are being provided from Nasik then registration is required to be taken only in Maharashtra and IGST to be paid on inter-state supplies.
Answer: A separate & new registration is required for ISD.
Answer: The same can be filled while filing FORM REG-26 for converting provisional ID to final registration.
Answer: This conversion may be done while filling FORM REG-26 for converting provisional ID to final registration.
Answer: GST is leviable only if aggregate turnover is more than 20 lacs. (Rs. 10 lacs in 11 special category States). For computing aggregate supplies turnover of all supplies made by you would be added.
Answer: A person dealing with 100% exempted supply is not liable to register irrespective of turnover.
Answer: There is no liability of registration if the person is dealing with 100% exempt supplies.
Answer: Yes, you would be treated as a normal taxable person.
Answer: Separate registration as tax deductor is required.
Answer: There will be only one registration per State for all activities. But, you have the option to be registered as a separate business vertical.
Answer: Any person who makes make inter-state taxable supply is required to take registration. Therefore in this case AP dealer shall take registration and pay tax.
Answer: There will be no area based exemptions in GST.
Answer: Only if you provide any supply from Delhi you need to take registration in Delhi. Else, registration at Mumbai is sufficient (and pay IGST on supplies made from Mumbai to Delhi)
Answer: An unregistered person has 30 days to complete its registration formalities from its date of liability to obtain registration.oreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Foreign Central Banks, Multilateral Development Bank, Long term investors like Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds and Pension Funds which are registered with SEBI Long Term Investors may invest in other securities as specified in Schedule 5 to Notification No FEMA 20.
Answer: You can apply for cancellation of Provisional ID on or before 31st July 2017.
Answer: You would be able to apply for new registration at the GST Portal gst.gov.in
Answer: Yes, you have to pay GST via RCM. You can avail ITC of the GST so paid if you are otherwise eligible.
Q.41: Can an unregistered dealer supply goods to other States if his turnover is below Rs. 20 lakhs?
Answer: No. The supplier would be liable to obtain registration in case of inter-State supplies irrespective of his turnover.
Answer: The registration in other State would come under fresh registration.
Answer: If exclusively making supplies of Nil rated supplies, registration is not compulsory. Kindly refer section 23 of CGST Act.
Answer: No, a franchisor company need not take registration in a state where only its franchisee is located.
Answer: You may directly take GST registration on www.gst.gov.in
Answer: If registered, then you need to file returns. You may choose to cancel your registration since you are dealing only in exempted products.
Answer: Yes. Since, exports are zero rated, one needs to register for GST to claim refunds.
Answer: One PAN holder gets one registration in every state, but he has the option of getting different registrations for different business verticals.
Answer: Job workers making taxable supplies above the threshold aggregate turnover need to register. Composition scheme is not available to job-workers. They, however, can avail benefit of section 143 of the CGST Act.
Answer: Service providers, except restaurants/caterers, are not eligible for composition scheme.
Answer: No. The following three classes of persons, namely
– Ice cream and other edible ice, whether or not containing cocoa.
– Pan masala
– All goods, i.e. Tobacco and manufactured tobacco substitutes are not eligible for benefit of composition scheme.
Answer: Those availing composition can exit and opt for normal tax scheme anytime. They would be eligible for ITC on stocks available on the date of switchover in terms of section 18(1)(c ) of CGST Act, 2017.
Answer: You can opt for composition scheme from the beginning of the next financial year on submitting the option to avail composition scheme before beginning of the financial year. It may please be noted that composition scheme cannot be availed from the middle of a financial year.
Answer: No, taxpayer becomes ineligible for composition scheme on the day the turnover crosses Rs. 75 lakhs.
Answer: Please apply for cancellation of registration under Section 29(1) of the CGST Act, 2017 read with Rule 24(4) of CGST Rules, 2017. You will be required to calculate and pay ITC availed on goods held in stock on the date of cancellation of registration.
Answer: In your new registration application, if you have referred to your past registration no. of Central Excise or Service Tax, you will be eligible for transitional credit under Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017.
Answer: Provisional ID (PID) will be your GSTIN. You can supply goods or services or both specifying PID as your GSTIN on Invoice.
Answer: You can supply goods or services or both on bill of supply without mentioning GSTIN and/or ARN. On receipt of GSTIN, you will need to issue revised invoice mentioning GSTIN. You are required to reflect this supply in your return and also pay tax thereon..
Answer: No, if you are dealing in 100% exempted supplies you are not liable to be registered in GST. There is no requirement of registration for making inter-state purchases.
Answer: There is no such requirement under GST law.
Answer: Refunds under earlier laws will be given under the respective laws only
Answer: Appropriate provisions have been made in the law by providing for grant of 90% refund on provisional basis within 7 days from filing of registration.
Answer: Clean Environmental Cess on coal will be replaced by GST Compensation Cess.
Answer: Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered person.
Answer: Customs duty and cess as applicable + IGST+ GST compensation cess. IGST and GST compensation cess shall be paid after adding all customs duty and customs cess to the value of imports.
Answer: The export procedure for Nepal would be same as that to other Countries.
Answer: Supplies to SEZs are zero-rated supplies as defined in Section 16 of IGST Act.
Answer: Supply to SEZs is zero rated supplies and supplies by SEZs to DTA are treated as imports.
Answer: POS for transport of goods determinable in terms of sec 12(8) or sect 13(8) of IGST Act, 2017, depending upon location of service provider/service receiver. Exports are treated as zero rated supplies.
Answer: Such supply is treated as import and present procedure of payment of duty continues with the variation that IGST is levied in place of CVD.
Answer: Such supply is treated as import and present procedure of payment continues with the variation that IGST is levied in place of CVD.
Answer: SGST of one State cannot be utilized for discharging of output tax liability of another State.
Answer: SGST Credit can be used for payment of IGST liability under the same GSTIN only.
Answer: The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only.
Answer: Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit.
Answer: Detailed rules for reversal of ITC when the supplier is providing exempted and non-exempted supplies have been provided in ITC Rules.
Answer: Like invoice, credit/debit notes on behalf of unregistered person will be given by registered person only. Further, GSTR2 provides for reporting of same by the recipient.
Answer: Input tax credit for rent-a-cab service is not available under GST.
Answer: In such a case the person can issue one tax invoice for the taxable invoice and also declare exempted supply in the same invoice.
Q.80 : Do registered dealers have to record Aadhaar/PAN while selling goods to unregistered dealers?
Answer: There is no requirement to take Aadhaar / PAN details of the customer under the GST Act.
Answer: All expenses will have to be included in the value and invoice needs to be issued accordingly. Please refer to Section 15 of CGST Act and Invoice Rules.
Answer: If the goods are meant to be supplied in the course of construction an invoice is necessary. If the goods are tools which are to be used for construction then delivery challan should be issued.
Answer: The supplier may issue credit note to the customers.
Answer: For RCM liabilities tax invoice has to be issued on self.
Answer: The law provides flexibility to such service providers to issue tickets or tax invoice within one month from the date of supply of service. Except banking and financial service providers, service providers such as taxi aggregators do not have the option to issue consolidated invoices. Whereas, the proposal for providing consolidated invoices for various service providers may be explored.
Answer: The suggestion to include Invoice №/Bill № in the bank statement itself, wherever a payment is made for any service or goods, can be examined further.
Answer: Advance refunded can be adjusted in return.
Answer: Generally not. But required in case of inter-State supplies having invoice value of more than Rs 2.50 Lakhs.
Answer: Returns provide for furnishing rate wise details.
Answer: It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered person. For supplies above this amount, a monthly consolidated bill can be raised.
Answer: Tax will be charged only on the total consideration charged for such supply.
Q.92 : How to comply with 9(4) of CGST Act if POS is in another State of the unregistered supplier ?
Answer: Any person making inter-state supply has to compulsorily obtain registration and therefore in such cases, section 9(4) will not come into play.
Answer: Stipend paid to interns will be employer-employee transactions. Hence, not liable for GST.
Answer: Salary will not be liable for GST.
Answer: It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered person.
Answer: Tax is payable on consideration received for the supply and ITC will be available accordingly.
Answer: GST will be levied on the value charged for the supply only.
Answer: If the disposal is in the course or furtherance of business purposes, it will be considered as a supply.
Answer: Generally these will be two supplies where the supplier from MP will charge IGST from the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge IGST from the recipient in MP.
Answer: If the place of supply and the location of the supplier are in the same State then it will be intra-State supply and CGST / SGST will be applicable.
Answer: Three levies are under three different statutes and are required to be separately accounted for.
Answer: Exempt supply includes Nil rated (taxable at 0%) and non-Taxable supplies and no ITC is available for such supplies.
Answer: Professional tax is not a tax on supply of goods or services but on being in a profession. Professional tax not subsumed in GST.
Answer: Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds Rs. 50000/- in a financial year.
Answer: Section 2(30) defines what will be considered as a composite supply. Whereas, Section 8 provides that in case of a composite supply, the treatment for tax rate etc. will be that of principal supply.
Answer: It will have the same treatment as normal supply.
Answer: Salary will not be leviable of GST.
Answer: Transition credit can be availed by filing the respective forms under Transition rules.
Answer: Area based exemptions will not be continued under GST. It will be operated through the route of reimbursement as prescribed.
Answer: The dealer will get deemed credit @ 40% / 60% of the CGST paid on supply of such goods in GST. If the goods are branded and greater than Rs. 25,000, full credit using CTD can be availed.
Answer: Yes deemed credit will be available subject to satisfaction of other conditions as prescribed.
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Answer: The supplier would be eligible to carry forward the closing balance of ITC from VAT return for June 17.
Answer: The supplier would be eligible to carry forward ITC on such stock from VAT return for June 17.
Answer: Refund claimed under existing law will be handled as per the provisions of the existing law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules of the respective State SGST Rules.
Answer: If Point of Tax arises after appointed date, then GST will be chargeable on such supply.
Answer: No provision for such credit is there in GST law.
Answer: Balance VAT credit in the return will be transferred as SGST Credit.
Answer: Form H will not be there in GST.
Answer: Closing ITC in VAT return will be allowed to be carry forward in GST.
Answer: For all inputs with duty paying documents available respective CGST / SGST credit will be available. But credit of CST will not be available.
Answer: Deemed Credit will be available on stock in hand provided the conditions of section 140(3) read with Rule 1(4) of Transition Rules are satisfied.
Answer: No such provision in GST.
Answer: No. Clean Energy Cess is being repealed. Coal, however, will be subject to compensation cess @ Rs 400/- per tonne.
Answer: No it will not be carried forward in GST as it is not covered by definition of “eligible duties and taxes” under Section 140 of the CGST Act.
Answer: Deemed credit will be available for all stock procured within a 1 year period.
Answer: The window to declare transition credit forms is three months from the appointed day. Please refer to transition rules for more details.
Answer: GST has no special dispensation for EOUs. As to whether they exist for any other purpose may be seen from the FTP.
Answer: Deemed credit will be available to you for stock as duty paying documents are not available, subject to provisions of section 140 (3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Answer: Credit may be availed on the basis of document evidencing payment of duty on inputs as per section 140(3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Answer: Credit of stock which was unconditionally exempt from excise duty or was NIL rated shall not be available. Please see Rule 117(4) of the CGST Rules, 2017.
Answer: If he has duty paying documents then he will get full credit of central excise duty paid on stock held by him.
Answer: If the invoice has been raised and payment made before the 1st of July 2017 then GST will not be applicable.
Answer: The liability of RCM under GST will arise only after 1st of July 2017.
Answer: No there is no particular format. Rule 46 of the CGST Rules, 2017 prescribes the particulars to be contained in Invoice.
Answer: Same sequence can be followed provided conditions laid down in Section 31 of the CGST Act, 2017 read with Rule 46 of CGST Rules, 2017 are met.
Answer:
Circular No. 4/4/2017-GST dated 07.07.2017 has clarified that the existing Bonds/LUTs shall be valid till 31.07.2017 after which the Bonds/LUTs shall have to be executed in the newly prescribed formats. New formats of bond and LUT have been prescribed under Rule 96A of CGST Rules, 2017.
ARE-1 procedure is being dispensed with except in respect to commodities which continue to attract Central Excise duty.
Answer: ITC on capital goods is generally available if they are used in the course or furtherance of business. However, credit is not available on cars, unless you are in a business of imparting driving training, or supplying such cars. A list of item on which ITC is not available is provided in Section 17 of the CGST Act, 2017.
Answer: Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5 crores.
Answer: You will be entitled to carry forward closing balance of CENVAT credit shown in your last return filed under Central Excise Act.
Answer: You will be entitled to carry forward closing balance of CENVAT credit shown in your last return filed under Central Excise Act.
Answer: No, a person registering under the composition scheme cannot take ITC on inputs.
Answer: Not eligible for ITC under composition scheme. Your ITC lying in balance will lapse.
Answer: Credit on such inputs services will be allowed subject to satisfaction of conditions prescribed in Section 140 (5) of the CGST Act.
Answer: CENVAT credit lying in balance in the return filed for period upto 30.06.17 is to be allowed as CGST credit as per Section 140(8) of the CGST Act, 2017 read with Rule 117(2) of CGST Rules, 2017.
Answer: Yes. For supplies within A&N, CGST plus UTGST would be leviable.
Answer: IGST shall be levied only once on imports.
Answer: GST does not concern such fee so GST does not affect it.
Answer: The present system for E-way Bill in States to continue, till the E-Way Bill procedures are finalized.
Answer: Yes, the sunset clause for Anti-profiteering Authority is of two years.
Answer: The documents specified under Rule 48 of the CGST Rules, 2017 may please be referred. Triplicate copy of invoices for supply of goods and duplicate copy of invoice for supply of services may be used.
Answer: No, GST is not leviable on the entire credit card bill; it is charged only on the fee/commission charged by the credit card company.
Answer: If on every instance you are making a supply then an invoice needs to be issued. For any other movement of goods other than supply (as specified in Rule 55 of CGST Rules, 2017), a delivery challan may be issued.
Answer: There is no distinction between goods or services under GST. Service charge like any other supply will be leviable to GST. It is also clarified that service charge is not a statutory levy. It is not levied by the Government.
Answer: Yes, you need to charge GST but you can use transition credit, if available on the said goods.
Answer: This will be a composite supply where the principal supply (the goods) cannot be supplied without the cartage / unloading / transportation expenses. Therefore, the GST rate applicable will be the same as that of the principal supply, i.e, cycle parts, as provided under Section 8 of the CGST Act, 2017.
Answer: Since, you are providing both taxable and non-taxable supply. You will charge VAT on the non-taxable supply (which is alcohol for human consumption) and GST on all other taxable supplies.
Answer: No, these are two independent supplies at two different prices, they will be charged at the GST rate applicable to them even if they are purchased on the same invoice.
Answer: The value to be charged on such transaction will be the open market value of the entire transaction as per Rule 27(a) of the CGST Rules, 2017. Therefore, GST be charged on entire 20 gm.
Answer: Yes, a composition dealer will issue a self invoice as he is required to pay GST. He will not be eligible for ITC also.
Answer: CGST credit can be first used to set off CGST liability. Whatever is left can be used to set off IGST liability. It cannot be used to set off SGST liability. Similarly, SGST credit can be used to set off SGST and IGST liability, in that order. It cannot be used to set off CGST liability. Please see Section 49 of the CGST Act, 2017.
Answer: No, if a firm is registered in more than one state, then each such registration will be treated as a separate registered person. Cross utilization of credit available with two different registered persons is not allowed.