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2019 (1) TMI 487 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – TMI – Classification of goods – PP Non-woven bags – whether classifiable under Tariff Head 6305 90 00 of the GST Tariff which is aligned to the First Schedule of the Customs Tariff Act, 1975 or otherwise? – Held that:- The IOSR Journal of Polymer and Textile Engineering (IOSRJPTE), Volume 3, Issue 5 (Sep-Oct, 2016), PP 08-14 [www.iosrjournals.org] explains that Polypropylene (PP) is the homo-polymer that is widely used for the production of non woven fabric. Polypropylene sheets are stitched into bags.
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Note 1 to Chapter 39 of the GST Tariff clarifies that throughout the nomenclature the expression “plastics” means those materials of headings 39.01 to 39.14 (Primary forms of Polypropylene is classified under HSN 3902) which are or have been capable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or pla

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ARATHI DEY, MEMBER Applicant s representative heard Shri Dipak Agarwal 1. The Applicant, stated to be a manufacturer of Polypropylene Non-Woven Bags seeks a Ruling on Classification of and Rate of Tax applicable on the above goods under the CGST/WBGST Acts, 2017 (hereinafter referred to, collectively, as the GST Act ). Advance Ruling is admissible under sub-clauses (a) and (e) of section 97(2) of the GST Act. The Applicant submits that the question raised in the Application has neither been decided by nor is pending before any authority under any provisions of the GST Act. The officer concerned raises no objection to the admission of the Application. The Application is, therefore, admitted. 2. The Application states that the Applicant manufactures Polypropylene Non-Woven Bags which are mainly used by big industrial units, retail outlets and textile shops for packing of different goods and have been granted registration by the Office of the Textile Commissioner of Textilebased products.

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77; 1000/- and GST @ 12% (SGST 6% and CGST 6%) is sale value exceeds ₹ 1000/- The Applicant also submits the order of AAR, Kerala wherein bags of non-woven fabrics are classified under Entry 224 of Schedule 1 of Notification 01/2017-Central Tax (Rate) dated 28.06.2018. During Hearing the Applicant submits a copy of order No C3/17556/09/CT dated 29.09.2009 issued by the Department of Commercial Taxes, Kerala, in which it is clarified that non woven fabrics made of Polypropylene would fall under the general heading of 5603 of the Customs Tariff Act and under Entry 103 of SRO No 82/2006, and Packing Bags, textile bags and carry bags made out of non woven fabrics of polypropylene is covered under HSN 6305.33.00 and the mentioned HSN Code appears under Entry 174(7)(1) of List A of the Third Schedule to the KVAT Act, 2003. 4. The Applicant has not submitted any details of the product manufactured in terms of the raw materials/inputs used, the manufacturing process or the end use of the

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ther in the Application or during Hearing, the parameters that were examined and approved before the issuance of the Registration. Neither is there provided a list of the products which were found to be textile based. Thence, the Registration granted to the Applicant by the Office of the Textile Commissioner of Textile-based products cannot be taken up for consideration by this Authority; The Applicant s reference to the communication from the Office of the Commissioner GST & Central Excise, Madurai is also of little relevance. The above communication has been made to The Madurai Non Woven Bag & Cotton Bag Manufacturer Association in response to a specific letter dated 22.12.2017, copy of which is not submitted by the Applicant. In the absence of either the products considered in that communication and the content of the submissions made before the authority, its relevance to the Applicant s question appears doubtful. 6. By the Applicant s own admission, the product being manuf

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g their commodities. In light of the submission in the Application that the product manufactured by the Applicant is the same as that taken up by the Authority of Advance Ruling, Kerala, and the sample submitted by the Applicant, and in the absence of any contrary independent information provided by the Applicant, it is to be assumed that raw material of the non woven bags manufactured by them is Polypropylene, the manufacturing process involves obtaining a continuous single polypropylene filament, portions of which is lapped on each other on a lapper and then subject to thermal bonding to form a polypropylene sheet from which bags are made, which are used by industrial units, big retail outlets and textile shops for packing their commodities. 7. Tariff item 6305 33 00 under the GST Tariff covers sacks and bags, of a kind used for packing of goods, made, not of jute or of other textile bast fibres of Heading 5303, but of man-made textile materials which are not flexible intermediate bu

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08/2018 = 2018 (11) TMI 663 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL, the West Bengal Appellate Authority for Advance Ruling (hereinafter the Appellate Authority) refers to the judgment in the case of Raj Pack Well Ltd [1993 (41) ECC 285 (Madhya Pradesh)] = 1989 (9) TMI 120 – HIGH COURT OF MADHYA PRADESH AT INDORE. In the aforesaid case the High Court examines the meaning of textile and fibre under sections 2(g) and 2(a) respectively of the Textile Committee Act, 1963, and concludes that plastic is not included in either textile or fibre. It examines the process of manufacturing HDPE woven bags and observes that they are made from plastic. Finally, such bags are known as plastic goods in common parlance also. The court, therefore, holds that HDPE bags, being woven from plastic strips, are to be classified as goods of plastic under Chapter 39. This judgment has since been followed repeatedly by different courts of law and has not yet been overturned. The Appellate Authority

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polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Polypropylene sheets are, therefore, plastic, and, applying the ratio of the judgment in the matter of Raj Pack Well Ltd (supra), bags made from Polypropylene sheets are to be classified as plastic goods under Chapter 39. Sub-heading 3923 29 covers articles of conveyance or packing of goods, namely sacks and bags, made of plastics other than polyethylene. Polypropylene Non-Woven Bags that the Applicant manufactures are, therefore, classifiable under Sub-heading 3923 29. In view of the foregoing, we rule as under: RULING PP Non-woven Bags , specifically made from non woven Polypropylene fabric are plastic goods to be classified under Sub Heading 3923 29 and taxed at 18 % rate under Serial No. 108 of Sch

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2019 (1) TMI 488 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – TMI – Input tax credit – lease rent paid during pre-operative period for the leasehold land on which the resort is being constructed to be used for furtherance of business, when the same is capitalised and treated as capital expenditure – Held that:- The prohibition from availing input tax credit, as provided under section 17(5)(d) of the GST Act, is not limited to the civil structure being constructed. It extends to the immovable property in general (other than plant and machinery), which includes the supplies received for retaining the right to use and develop the land. Such supplies are essential for construction of the civil structure on the piece of land – The Applicant will admittedly capitalize the lease premium. The property is, therefore, admittedly being constructed on the Applicant’s own account and treated as fixed asset, including the lease rental paid. Whether the lease rental paid for the pre-operative perio

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t, stated to be in the hospitality and real estate business and is contemplating a new project on a leasehold land, seeks a ruling as to whether Input Tax Credit is available for lease rent paid during pre-operative period for the leasehold land on which the resort is being constructed to be used for furtherance of business, when the same is capitalised and treated as capital expenditure. Advance Ruling is admissible on the question under Section 97(2) sub-clause (d) of the CGST/ WBGST Acts, 2017 (hereinafter referred to, collectively, as the GST Act ). The Applicant further submits that the question raised in the Application is neither decided by nor pending for decision before any authority under any provisions of the GST Act. The officer concerned raises no objection to admission of the Application. The Application is, therefore, admitted. 2. The Applicant, stated to be a subsidiary of Ambuja Neotia Holdings Private Limited, is in the hospitality and real estate business since 1997.

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used for construction of immovable property is allowed only if such immovable property is in the nature of plant and machinery. The expression plant and machinery has been defined vide Explanation to section 17 in Chapter V of the GST Act to mean apparatus, equipment , and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services and includes such foundation and structural supports but excludes inter alia land, building, or any other civil structures. The input tax credit is, therefore, not admissible for the lease rent paid during the pre-operative period for the leasehold land on which a resort is being constructed. 3. The Applicant states that : (a) Section 16 of the GST Act deals with eligibility and conditions for taking Input Tax Credit. Sub-section (1) of the said Section states Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49,

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(c) The GST Act does not define the exact nature of the goods and services received that are deemed to relate to construction of immovable property. As a result, the meaning of construction cost is to be construed as is taken in the modern parlance. The Applicant is required to pay the lease rent to the Lessor whether or not the construction has been carried out and shall be paying the lease amount even after the completion of the construction of the immovable property for the balance period of the lease period. The lease rent for the pre-operative period is capitalized under the head Leasehold Land and not under the head Building Block . It can, therefore, be inferred that the lease rent is not used for construction of the resort. Hence, the renting services cannot be said to be received for the construction of immovable property as there is no nexus, direct or indirect, between the construction of the hotel and banquet and the rental service availed. Further, mere capitalization of

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the service of right to use the land is a supply for construction of the said property. The Applicant s argument about absence of any nexus – direct or indirect – between the lease rental and construction of the buildings for hotel etc. is incorrect. Construction of the hotel etc. is impossible unless the Applicant enjoys uninterrupted right to use the land. It is clear from the Agreement that the Applicant cannot enjoy that right if he fails to pay the lease rental. Construction of the immovable property is, therefore, critically dependent on the supply of the leasing service. The nexus between them is, therefore, direct and the two are inseparable. The leasing service for right to use the land is, therefore, a supply for construction of the immovable property. The prohibition from availing input tax credit, as provided under section 17(5)(d) of the GST Act, is not limited to the civil structure being constructed. It extends to the immovable property in general (other than plant and m

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2019 (1) TMI 551 – PUNJAB AND HARYANA HIGH COURT – TMI – Permission to withdraw the present petition – Held that:- The present petition is disposed of with liberty to the petitioner to file a detailed and comprehensive representation with respondent No.4 within a period of three days from today. – CWP-40476-2018 Dated:- 8-1-2019 – MR AJAY KUMAR MITTAL AND MRS MANJARI NEHRU KAUL. JJ. For The Petitioner : Mr. Aman Bansal, Advocate ORDER Ajay Kumar Mittal, J. The instant petition has been filed under Article 226 of the Constitution of India for issuance of a writ in the nature of Certiorari for setting aside the notice No.00004 dated Nil (Annexure P-3) passed by respondent No.4 on the ground that it is not legally sustainable in the eyes of

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2019 (1) TMI 566 – CESTAT MUMBAI – TMI – Penalty u/s 78 – short payment of service tax – appellant had gone to its notice during finalisation of the financial accounts for which it could not revise the same in their return – intent to evade – Held that:- Such short payment was mainly due to the fact that it had failed to furnish proof during assessment that it had fulfilled the criteria of “pure agent” as laid down under Rule 5 and failed to discharge service tax liability under reverse charge mechanism on payment made to the Directors – Show-cause also indicated that appellant had failed to charge and pay the service tax on the value received as pure agent and value of director service for which it had contravened the provision of Section 68 of the Finance Act. There is nothing available in the show-cause that such contravention of the Act or Rule was made with an intent to evade payment of service tax.
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In the instant case when the nature of service provide by the appellant be

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ledge, Explanation – 2 to Section 73(3) of the Finance Act is more applicable to the appellant.
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Penalty u/s 78 set aside – appeal allowed – decided in favor of appellant. – Appeal No. ST//86692/2018 – A/85025/2019 – Dated:- 8-1-2019 – Dr. Suvendu Kumar Pati, Member (Judicial) Shri Bipin Kumar Sinha, Consultant for the appellant Shri Dilip Shinde, AC (AR) for the respondent ORDER Confirmation of penalty of ₹ 41,04,525/- under section 78 of the Finance Act by the Commissioner (Appeals) of CGST & CX, Thane by upholding the OIO is assailed in this appeal. 2. Factual backdrop of the case is that the appellant is engaged in providing marketing and research agency services to various companies and has registered it under service tax. For the financial year 2013-14 and 2014-15, it filed ST3 return belatedly for the period from April to September 2013 on 04.04.2014 and for the period from October 2013 to March 2014 on 05.04.2014. Vide show-cause notice dated 28.09.2014 issued un

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s) s order confirming penalty under section 78 of the Finance Act is erroneous. In citing decision reported in Uniworth 2013 (288) ELT 161 (SC) along with other decisions included Larsen & Toubro reported in 2007 (211) ELT 513 (SC) the ld. Counsel for the appellant argued that no such allegation is made in the show-cause notice to attract penalty and therefore the entire penalty of ₹ 4104,525/- under section 78 of the Finance Act is unsustainable. He further pointed out that in all those cases, the cardinal principle of law set was the burden of proof to establish any malafide was on the department and there was no averment that duty of excise has been intentionally evaded or fraud or collusion has been practiced or there was any mis-statement or suppression of fact for which he prayed to set aside the order of the Commissioner (Appeals). 4. In response to such submissions, ld. AR for the department supported the reasoning and rationality of the order passed by the Commission

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her, such short payment was mainly due to the fact that it had failed to furnish proof during assessment that it had fulfilled the criteria of pure agent as laid down under Rule 5 and failed to discharge service tax liability under reverse charge mechanism on payment made to the Directors. Show-cause also indicated that appellant had failed to charge and pay the service tax on the value received as pure agent and value of director service for which it had contravened the provision of Section 68 of the Finance Act. There is nothing available in the show-cause that such contravention of the Act or Rule was made with an intent to evade payment of service tax. On the other hand, the show-cause notice indicates that appellant had failed to discharge the same and such use of word that appellant had failed to discharge the service tax is also found in the OIO and OIA. Further on close scrutiny of the order of Commissioner (Appeals), it is noticed that appellant had produced 14 plus 12 invoice

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search agency. Be that as it may, when appellant had not challenged the same those point needs no further discussion except for the purpose that availment of benefits as pure agent was asserted by the appellant and denied by the revenue authority in which case it cannot be said that such denial has attained finality and appellant had therefore contravened the provisions of the Act Rule as contemplated in Section 73(1) proviso. 5.1. Likewise in borrowing Section 194J of the Income Tax Act which made remuneration made to the director as taxable without distinction of the payment if made to the directors as salary or remuneration, the Commissioner had confirmed the invocation of notification no.30/2012-ST dated 20.06.2012 that was made effective from July 2012 and demanded tax liability under reverse charge mechanism. Therefore, it cannot be said that appellant had not followed the provisions contained in Chapter of Finance Act or in the Rule made thereunder since under erroneous interpre

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2019 (1) TMI 1122 – MADRAS HIGH COURT – TMI – Repeated summons – grievance of the petitioner before this Court is that the petitioner is repeatedly called upon to appear before the respondent for one reason or other without there being a necessity – Held that:- The prayer sought for as such, cannot be entertained, since the power to issue summons by the respondent cannot be curtailed when the matter is pending at the stage of investigation – However, as it is expressed by the petitioner that she made several appearance before the respondent, this Court is of the view that the respondent has to complete the examination of the petitioner by next hearing date – petition disposed off. – W.P.No.34311 of 2018 And W.M.P.No.39942 of 2018 Dated:-

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r without there being a necessity. Therefore, the present writ petition is filed to prevent the respondent from issuing any further summon. 5. On the other hand, it is contended by the respondent that the petitioner is not co-operating with the investigation by giving statements. Therefore, the respondent is left with no other option in issuing repeated summons. 6. The prayer sought for as such, cannot be entertained, since the power to issue summons by the respondent cannot be curtailed when the matter is pending at the stage of investigation. However, as it is expressed by the petitioner that she made several appearance before the respondent, this Court is of the view that the respondent has to complete the examination of the petitioner b

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Shree Mahavira Buildwell Pvt. Ltd. Versus Commissioner of Central GST & Central Excise, Patna, Principal Commissioner of Central Excise & Service Tax, Patna, Commissioner of Central Excise & Service Tax, Patna And Superintendent of Central GST & Central Excise, Patna – 2019 (2) TMI 1180 – PATNA HIGH COURT – TMI – Maintainability of petition – alternative remedy of statutory appeal – post-decisional SCN – time limitation of SCN u/s 73(2) of the Finance Act – Exemption notification dated 24.05.2010 and 20.06.2012 not considered – Held that:- The statutory period for filing such appeal has expired while the matter is pending consideration before this Court.
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4 weeks time is granted to the assessee to exhaust such remedy so available and s

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e period 2011-12, 2012-13, 2013-14 and 2014-15. Mr. Anjani Kumar Sharan, learned counsel appearing for the respondent Department informs that the order is appealable. Mr. D.V. Pathy, learned counsel for the petitioner in trying to distinguish the case from the objection taken of alternative remedy, raises three issues for seeking indulgence by this Court without relegating the petitioner to the remedy of statutory appeal, namely: (a) That the show cause notice is premeditated and in the nature of post-decisional show cause. (b) The show cause notice is issued beyond the period of limitation as prescribed under Section 73(2) of the Finance Act, and (c) The Exemption notification dated 24.05.2010 and 20.06.2012 enclosed with Annexure-4 series

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ed while the matter is pending consideration before this Court. We grant 4 weeks time to the assessee to exhaust such remedy so available and should any appeal be filed within 4 weeks from today accompanied with the petition for condonation of delay, the appellate authority shall consider the same on its own merits and dispose of the same in accordance with law without being prejudiced by the outcome of the present proceeding and bearing in mind the pendency of the matter before the High Court. The petitioner would be at liberty to pray for interim relief which shall be considered accordingly. Let the Department take no coercive measures in 4 weeks next, pursuant to the order impugned. With the observations, the writ petition is disposed of

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GST – Started By: – Madhavan iyengar – Dated:- 7-1-2019 Last Replied Date:- 5-3-2019 – A Vehicle operator has a 50 seater bus, and has a contract with a company for pick up and drop of employees of company to factory in the 50 seater bus, He levies 12% GST can company get ITC on the Charges paid to the vehicle operator. SAC code 996601issue: ITC eligibility under current law and post amendment 01/02/2019 – Reply By DR.MARIAPPAN GOVINDARAJAN – The Reply = In my view it is eligible. – Reply By KASTURI SETHI – The Reply = I support the view of Dr.Govindarajan, Sir. I am also of the view that if any supplier of goods or services hires bus or any other motor vehicle carrying more than six passengers for their employees or otherwise, shall not f

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ase see this judgement of haryana aar where they have held that irrespective of the seating capacity vehicles carrying passengers will fall under rent a cab and covered by disallowance u/sec 17(5) AAR judgement in ref: HAR/HAAR/R/2018-19 = 2019 (2) TMI 1081 – AUTHORITY FOR ADVANCE RULING, HARYANA. experts pls enlighten – Reply By Bipin Parmar – The Reply = Dear Kasturi Sir, I'm still confused. Section 17(5)(b)(iii) says ITC on travel benefits extended to employees would be available only if it's obligatory for the employer to provide. However here as you said it's not obligatory for the employer to provide such travel benefits. Then how would ITC be available? Please clarify. Thanks Bipin – Reply By KASTURI SETHI – The Reply = S

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GST – GST FAQ 3rd Edition – December, 2018 – 25 – 25. Anti-profiteering provisions Q 1. What is profiteering? Ans. In terms of Section 171 of the CGST Act, 2017, the suppliers of goods and services should pass on the benefit of any reduction in the rate of tax or the benefit of input tax credit to the recipients by way of commensurate reduction in prices. The wilful action of not passing on the above benefits to the recipients in the manner prescribed is known as profiteering . Q 2. What is the background to providing statutory provisions on anti-profiteering in GST law? Ans. The Study Report titled Implementation of Value Added Tax (VAT) in India-Lessons for transition to GST released by the Comptroller & Auditor General (C&AG) of India in June, 2010 mentioned about several cases of profiteering by dealers by not passing on the benefit of tax rate reduction to the consumers in the wake of implementation of VAT in the country. The above C&AG report, after checking the reco

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rity shall cease to exist after the expiry of two years from the date on which the Chairman of the Authority enters upon his office unless the GST Council recommends otherwise. Q 5. What are some of the instances in which the statutory provisions of anti-profiteering will kick in? Ans. The different situations in which Section 171 of CGST Act, 2017 & the identical provision in State/ UT GST Act will get attracted include: i. reduction in tax rate; ii. benefit of Input Tax Credit (ITC) available to the registered person/ supplier. Q 6. What is the function of National Anti-Profiteering Authority (NAA)? Ans. The National Anti-Profiteering Authority (NAA) is required to determine whether the benefit of input tax credit or reduction in the tax rate has actually resulted in a commensurate reduction in the price of the goods or services or both. The NAA has the power to identify the registered person who has not passed on the benefit of reduction in tax rate or input tax credit by way of

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rs of goods and services can register their complaints against profiteering: a. Online complaint facility: Complainant can register an online complaint at http://www.naa.gov.in/complaint.php Link to see the guidelines to register online complaint: http://www.naa.gov.in/page.php?id=guidelines-forconsumers b. Via Mail: User can mail the complaint at: Agencies Mail-Id Nature of the complaint Standing Committee sc.antiprofiteering@gov.in anti-profiteering@gov.in Complaints involving issues of all-India nature. State-Screening Committees For State-wise E-mail Addresses please refer to: http://www.naa.gov.in/docs/screening%20committees%2020-08-18.xlsx Complaints involving issues of local nature. c. By Post: Agencies Postal Addresses National Anti-profiteering Authority National Anti-profiteering Authority Dept. of Revenue, Ministry of Finance 6th Floor, Tower One Jeevan Bharati Building Connaught Place New Delhi-110 001. Directorate General of Anti-Profiteering & Standing Committee Direc

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g (erstwhile DG, Safeguards) for a detailed investigation, if prima facie evidence of profiteering exists. 4. The DG, Anti-Profiteering shall conduct the investigation and submit its report to the National Anti-Profiteering Authority (NAA) constituted by the Central Government under section 171 (2) of the CGST Act, 2017 for taking appropriate action, as mentioned in the Answer to Q 6. above. Q 10. How can one file complaint against profiteering? Ans. An online complaint can be filed at http://www.naa.gov.in/complaint.php. Complaints of the nature of national-level can be filed by e-mail at sc.antiprofiteering@gov.in. Complaints of local nature can be sent by mail to the respective State Screening Committee. Q 11. Whether one form is sufficient for multiple goods or services? Ans. No, the prescribed application form APAF-01 is with reference to a single Good/Service. In case of application for multiple Goods/Services, separate application for each Good/Service is required to be filed. Q

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ufacturers or packers or importers of pre-packaged commodities to affix new MRP labels (after incorporating tax changes due to GST) in addition to existing MRP for three months from 1st Jul to 30th Sept 2017. Similar action was taken after the GST rate reduction in November, 2017 and July, 2018. Q 14. What can buyers do if shopping malls and retail stores are still selling goods at pre-GST affixed labels? Ans. As per the Government s directive, shopping malls and retail stores are required to affix two MRP labels reflecting both pre-GST & post-GST prices. Despite this, if consumers find that retailers are selling goods at pre-GST affixed labels, they can report to National Consumer Helpline. Also, the administrative machinery of the Controller of Legal Metrology can be effectively used by States/UTs to monitor & resolve such cases. Q 15. How can buyers of under-construction flats benefit from the anti-profiteering provisions? Ans. Section 171 of the CGST Act, 2017 can be invoke

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redit allowed under Section 140 (3) of the CGST Act, 2017, is required to be passed on to the recipient by way of reduced prices. Q 17. What is the time-frame for deciding cases of anti-profiteering provisions? Ans. The maximum time envisaged for resolution of cases is 9 months excluding the time taken by the State-level screening committee and the Standing Committee (maximum 2 months) for processing the complaints. Q 18. What should a complainant ensure while submitting complaint to Screening Committee/ Standing Committee? Ans. The complainant should submit a duly filled in application form APAF-01 along with his identification document and evidence of profiteering. The instructions for filling the said form are contained in form APAF-01. Q 19. A company in order to justify the prices being charged by it may have to submit information which could be confidential and may impact its business interest? Ans. The provisions of section 11 of the Right to Information Act, 2005, shall apply m

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GST – GST FAQ 3rd Edition – December, 2018 – 24 – 24. Transitional Provisions Q 1. Will CENVAT credit (or VAT credit) carried forward in the last return prior to GST under existing law be available as ITC under GST? Ans. A registered person, other than a person opting to pay tax under composition scheme, shall be entitled to take credit in his electronic credit ledger the amount of CENVAT (or VAT credit) credit carried forward in the return of the last period before the appointed day, subject to the conditions stated therein. (Section 140(1) of the CGST/SGST Act) Q 2. What are those conditions? Ans. The conditions are that: – (i) the said amount of credit is admissible as input tax credit under this Act; (ii) the registered person has furnished all the returns required under the existing law (i.e. Central Excise and VAT) for the period of six months immediately preceding the appointed date; (iii) the said amount of credit does not relate to goods manufactured and cleared under such no

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on 5th July, 2017 (i.e. in GST regime). Will such a person get full credit of CENVAT in GST regime? Ans. Yes, he will be entitled to credit in 2017-18 provided such a credit was admissible as CENVAT credit in the existing law and is also admissible as credit in CGST – section 140(2) of the CGST Act. Q 4. VAT credit was not available on items 'X' & 'Y' as capital goods in the existing law (Central Excise). Since they are covered in GST, can the registered taxable person claim it now? Ans. He will be entitled to credit only when ITC on such goods are admissible under the existing law and is also admissible in GST. Since credit is not available under the existing law on such goods, the said person cannot claim it in GST – proviso to section 140(2) of the SGST Act. Q 5. Assuming the registered person has wrongly enjoyed the credit (Refer to Q4) under the existing law, will the recovery be done under the GST Law or the existing law? Ans. The recovery relating to ITC wro

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10, 000/- in his last VAT return for the period immediately preceding the appointed day. Under GST he opts for composition scheme. Can he carry forward the aforesaid excess ITC to GST? Ans. The registered person will not be able to carry forward the excess ITC of VAT to GST if he opts for composition scheme – Section 140(1). Q 9. Sales return under CST (i.e. Central Sales Tax Act) is allowable as deduction from the turnover within six months? If, say, goods are returned in GST regime by a buyer within six months from appointed day, will it become taxable in GST? Ans. Where tax has been paid under the existing law [CST, in this case] on any goods at the time of sale, not being earlier than six months prior to the appointed day, and such goods are returned by the buyer after the appointed day, the sales return will be considered as a supply of the said buyer in GST and tax has to be paid on such supply, if, – (i) the goods are taxable under the GST Law; and (ii) the buyer is registered

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e details of inputs held in stock by the job worker on the appointed day in the prescribed form. The relevant sections are 141(1), 141(2) & 141 (4). However, if the said inputs/semi- finished goods are not returned within six months (or within the extended period of maximum two months), the input tax credit availed is liable to be recovered. Q 11. What happens if the job worker does not return the goods within the specified time? Ans. Input tax credit availed by manufacturer will be payable by said manufacturer on the said goods if they are not returned to the place of business of the manufacturer within six months (or within the extended period of maximum two months) from the appointed day – Q 12. Can a manufacturer transfer have finished goods sent for testing purpose to the premises of any other taxable person? Ans. Yes, a manufacturer can transfer finished goods sent for testing purpose to the premise of any other registered person on payment of tax in India or without payment

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oods are not returned to the manufacturer within six months (or within the extended period of maximum two months) from the appointed day, the input tax credit availed by the manufacturer will liable to be recovered if the aforesaid goods are not returned within six months from the appointed day. – Section 141(3) Q 15. Is extension of two months as discussed in section 141 automatic? Ans. No, it is not automatic. It may be extended by the Commissioner on sufficient cause being shown. Q 16. What is the time limit for issue of debit/credit note(s) for revision of prices? Ans. The taxable person may issue the debit/credit note(s) or a supplementary invoice within 30 days of the price revision. In case where the price is revised downwards the taxable person will be allowed to reduce his tax liability only if the recipient of the invoice or credit note has reduced his ITC corresponding to such reduction of tax liability-section 142(2). Q 17. What will be the fate of pending refund of tax/int

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the decision goes against the assessee? Ans. The refund will be made in accordance with the provisions of the existing law only. In case any recovery is to be made then, unless recovered under existing law, it will be recovered as an arrear of tax under GST – sections 142(6) & 142(7) Q 20. How shall the refund arising from revision of return(s) furnished under the existing law be dealt in GST? Ans. Any amount found to be refundable as a consequence of revision of any return under the existing law after the appointed day will be refunded in cash in accordance with the provisions of the existing law – section 142(9)(b). Q 21. If any goods or services are supplied in GST, in pursuance of contract entered under existing law, which tax will be payable? Ans. GST will be payable on such supplies- section 142(10) of the CGST Act. Q 22. Tax on a particular supply of goods/services is leviable under the existing law. Will GST be also payable if the actual supply is made in GST regime? Ans. N

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GST – GST FAQ 3rd Edition – December, 2018 – 23 – 23. GSTN and Frontend Business Process on GST Portal Q 1. What is GSTN? Ans. Goods and Services Tax Network (GSTN) is a not-for profit, non-government company under Section-8 of the Companies Act-2013, promoted jointly by the Central and State Governments, to provide shared IT infrastructure and services, to both central and state governments including tax payers and other stakeholders. The Front end services of Registration, Returns, Payments, etc. to all taxpayers will be provided by GSTN. It will be the interface between the government and the taxpayers. Further, GSTN also provides the Back-End Services to tax officers of the Model 2 states. Considering the nature of function performed by GSTN, GST Council has taken a decision that GSTN be converted into a fully owned government Company. For this, the entire 51% equity holding held by the Non-Governmental Institutions in GSTN shall be acquired equally by the Centre and the States go

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s were only possible only when there is a strong IT Infrastructure and Service back bone which would have enabled capturing, processing and exchange of information amongst the stakeholders (including taxpayers, States and Central Government, Bank and RBI). To achieve these objectives of establishing a uniform interface for the tax payer and a common and shared IT infrastructure between the Centre and States, the SPV namely GSTN was created. Q 3. What is the genesis of GSTN? The requirement of a strong IT Infrastructure was discussed in the 4th meeting of 2010 of the Empowered Committee of State Finance Ministers (referred to as the EC) held on 21/7/2010. In the said meeting, the EC approved the creation of an Empowered Group on IT Infrastructure for GST (referred to as the EG) under the chairmanship of Dr. Nandan Nilekani with Additional Secretary (Rev), Member (B&C) CBIC, DG (Systems), CBIC, FA Ministry of Finance, Member Secretary EC and five state commissioners of Trade Taxes (M

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ose Vehicle for implementing the GST System Project. To enable efficient and reliable provision of services in a demanding environment, the EG recommended a non- Government structure for the SPV called GSTN with Government equity of 49% (Centre – 24.5% and States – 24.5%) after considering key parameters such as independence of management, strategic control of Government(s), flexibility in its organizational structure, agility in decision making and ability to hire and retain competent human resources from both, government and private sector. In view of the sensitivity of the role of GSTN and the information that would be available with it, the EG also considered the issue of strategic control of Government over GSTN. The Group recommended that strategic control of the Government over the SPV should be ensured through measures such as composition of the Board of Directors (also referred to as the Board), mechanisms of Special Resolution and Shareholders Agreement, induction of Governme

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eting of 2011 held on 19th August 2011 and in the 4th meeting of 2011 of the EC held on 14th Oct 2011. The proposal of the EG on IT infrastructure for GST regarding GSTN and formation of a not-for-profit section 25 company with the strategic control of the Government were approved by the Empowered Committee of State Finance Ministers (EC) in its meeting held on 14.10.11. The note of Department of Revenue for setting up a Special Purpose Vehicle to be called Goods and Services Tax Network (GSTN-SPV) on the lines mentioned above was considered by the Union Cabinet on 12th April 2012 and approved. The Union cabinet also approved the following: i. Suitable and willing non-government institutions will be identified and firmed up by the Ministry of Finance to invest in GSTN-SPV prior to its incorporation. ii. The strategic control of the Government over the SPV would be ensured through measures such as composition of the Board, mechanisms of Special Resolution and Shareholders Agreement, ind

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other service provider seeking to deliver similar integrated services would be required to enter into a formal arrangement with GSTN SPV for the services. vii. A one- time non- recurring Grant- in aid of ₹ 315 crores from the Central Government towards functioning of the SPV for a three-year period after incorporation. Considering the nature of function performed by GSTN, GST Council has taken a decision that GSTN be converted into a fully owned government Company. For this, the entire 51% equity holding held by the Non-Governmental Institutions in GSTN shall be acquired equally by the Centre and the States governments. Q 4. What is the equity structure and Revenue Modelof GSTN? Ans. (a) Equity Structure: – In compliance of the Cabinet decision, GST Network was registered as a not-for-profit, non-Government, private limited company under section 8 of the Companies Act, 1956 with the following equity structure: Central Govt 24.5% State Govts 24.5% HDFC 10% HDFC Bank 10 ICICI Bank

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The Revenue model for GSTN has been approved by the Empowered Committee of State Finance Ministers under which user charges will be paid by the Centre and States/UTs equally on behalf of taxpayers and other stakeholders for availing services from the GST Portal. The user charges will be shared equally by the Centre and the States. The user charges for States will be apportioned amongst them based on number of registered taxpayers. Q 5. What services are being rendered by GSTN? Ans. GSTN renders the following services through the Common GST Portal: (a) Registration (including existing taxpayer migration); (b) Payment management including payment Gateways and integration with banking systems; (c) Return filing and processing; (d) Taxpayer management, including account management, notifications, information, and status tracking; (e) Tax authority account and ledger Management; (f) Computation of settlement (including IGST Settlement) between the Centre and States; Clearing house for IGST;

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all be provided by GSTN and the Back-End modules shall be developed by states and Central Government themselves. However, 27 states (termed as Model-2 states) asked GSTN to develop their Back-End interface also. The CBIC and 9 states (Model 1) decided to develop and host the Back-End modules themselves. For Model 1 states/ CBIC full data (registration, return, payment etc.) submitted by taxpayers is being shared with them for information and analysis as deemed fit by them. Q 7. What is the role of GSTN in registration? Ans. The application for Registration is made Online on GST Portal. Some of the key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable) is validated by the GST Portal online with the respective agency i.e. CBDT, UID, MCA etc., thereby ensuring minimum need for submission of documentation. The application data along with supporting scanned documents is being sent by GSTN to states/ Centre, which in turn processed that application and sends the quer

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ation of Challan and integration with agency Banks; iv. ITC and Cash Ledger and Liability Register; v. MIS reporting for tax payers, tax officials and other stakeholders; vi. BI/Analytics for Tax officials. Q 10. What is the concept of GST Eco-system? Ans. A common GST system will provide linkage to all State/UT Commercial Tax departments, Central Tax authorities, Taxpayers, Banks and other stakeholders. The eco-system consists of all stakeholders starting from taxpayer to tax professional to tax officials to GST portal to Banks to accounting authorities. The diagram given below depicts the whole GST eco-system. Q 11. What is GSP (GST Suvidha Provider)? Ans. GST System will provide a GST portal for taxpayers to access the GST System and do all the GST compliance activities. But there will be wide variety of tax payers (SME, Large Enterprise, Micro Enterprise etc.) which may require different kind of facilities like converting their purchase/sales register data in GST compliant format,

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Ans. GSP develops applications having features like return filing, reconciliation of purchase register data with auto populated data for acceptance/rejection/Modification, dashboards for taxpayers for quick monitoring of GST compliance activities. They may also provide role based access to divide various GST related activities like uploading invoice, filing returns etc., among different set of users inside a company (medium or large companies will need it), Applications for Tax Professional to manage their client s GST compliance activities, Integration of existing accounting packages/ERP with GST System, etc. Q 13. What are the benefits to taxpayers in using the GSPs? Ans. At the outset it is clarified that all required functions under GST can be performed by a taxpayer at the GST portal. GSP is an additional channel being made available for facilitating the taxpayers for performing some of the functions and use of their services is optional. Some of the specific solution(s) which co

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s from one dashboard, etc. Above are just a few illustrations. There will be many more requirements of different sets of Tax payers. These requirements of taxpayers can be met by GSPs. Q 14. What are the functions which a taxpayer performs at the GST Common Portal being developed and maintained by GSTN for the taxpayers? Ans. GST Common Portal is envisaged as one-stopshop for all requirements under GST for the taxpayers. Illustrative list of functions that can be performed by taxpayers through GST Portal managed by GSTN are: Application for registration as well as amendment in registration, cancellation of registration and profile management; Payment of taxes, including penalties, fines, interest, etc. (in terms of creation of Challan as payment will take place at bank s portal or inside a bank premises); Change of status of a taxpayer from normal to Compounding and vice-versa; Uploading of Invoice data & filing of various statutory returns/Annual statements; Track status of return

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of uploading returns on the last day. Q 17. Does GSTN provide tools for uploading invoice data on GST portal? Ans. Yes, GSTN has provided spreadsheet like tools (such as Microsoft Excel), Offline Utilities, free of cost, to taxpayers to enable them to compile invoice data in the same and generate files which can then be uploaded on GST portal. This are offline tools which can be used to input/capture invoice data without being online and then generate final files in compatible format for uploading to GST portal. These can be accessed at Download section of GST Portal. Q 18. Does GSTN be provide mobile based Apps to view ledgers and other accounts? Ans. The GST portal is being designed in such a way that it can be seen on any smart phone. Thus ledgers like cash ledger, liability ledger, ITC ledger etc. can be seen on a mobile phone using compatible browsers. Q 19. Does GSTN provide separate user ID and password for GST Practitioner to enable them to work on behalf of their customers (T

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uals, FAQ s etc., have also be placed on GST Portal for education of the taxpayers. Apart from it, an interactive Self-Help Grievance Redressal Portal has been set up for the taxpayers for logging of their tickets (https://selfservice.gstsystem.in/) or phone (01244688999). CBT, FAQ and User Manuals for enrolment process are readily available at https://www.gst.gov.in/help. GSTN conducts webinars on various topics related to GST Portal and same can be seen in GSTN you tube channel (https://www.youtube.com/c/GoodsandServicesTaxNetwork). Apart from sending bulk mails to the taxpayers regarding new functionalities and advisories, GSTN connects with the taxpayers and other stakeholders through its social media channel i.e facebook https://www.facebook.com/gstsystemsindia/ and twitter handle (@ask GSTech) https://www.facebook.com/gstsystemsindia/ and through regular updates on new functionalities /advisories and troubleshooting tips. Q 22. Does the return and registration data furnished by t

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GST – GST FAQ 3rd Edition – December, 2018 – 22.3 – 22.3 Place of Supply of Services (Location of supplier or recipient is outside India) Q 30. What is the place of supply in respect of goods that are required to be made physically available for providing the service? Ans. The place of supply of service in respect of goods that are required to be made physically available by the recipient of service to the supplier of service shall be the location where the services are actually performed. (Section 13 (3) (a) of the IGST Act, 2017) Q 31. What is the place of supply of services provided from a remote location using electronic means on goods? Ans. The place of supply shall be the location where the goods are actually located at the time of supply of services. (Proviso to Section 13(3) (a) of the IGST Act, 2017) Illustration: A Laptop at Mumbai is repaired remotely by a software engineer from Bangalore using Team Viewer software. The place of supply shall be Mumbai, the place where the g

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f supplier of service. It is to be noted that this rule will apply only when either the supplier or recipient is located outside India. Q 35. What would be the place of supply in respect of services pertaining to goods transportation, wherein either the supplier or recipient is located outside India? Ans. The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. (Section 13(9) of IGST Act) For goods transportation via mail or courier, the default provision of Section 13(2) will apply i.e. place of supply will be the location of the recipient of service. Q 36. What would be the place of supply in respect of Online Information and Database Access or Retrieval (OIDAR) Services? Ans. For OIDAR services the place of supply will be the location of recipient of services. In case the recipient of OIDAR services is registered, he will pay Integrated tax on reverse charge basis. However, if the recipient is

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taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory. Q 37. Whether the launch service provided by ANTRIX Corporation qualifies to be considered as export of services? Ans. In terms of Section 13(9) of IGST Act, 2017, the place of supply of satellite launch service by ANTRIX Corporation to international customers would be outside India and wherever such supply qualifies all conditions specified under Section 2(6) of the IGST Act, 2017, would constitute as export of service and shall be zero rated. Where satellite service was provided to a person in India, the place of supply of satellite launch service would be location of the recipient of services, provided the recipient is registered. In case where the recipient is not registered then place of supply is the place where such goods are handed over for their transportation. (CBIC Circular No. 02/1/2017- IGST dated 27th September, 2017) Q 38. What i

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cases, the place of supply shall be the location of recipient of services (Default provision in section 13(2)) i.e. outside India. Q 39. How will the place of supply be determined wherein the goods are supplied from the premises of job worker? Ans. The principal may supply, from the place of business / premises of a job worker on payment of tax within India. The place of supply would have to be determined in the hands of the principal irrespective of the location of the job worker s place of business/premises. Illustration: The principal is located in State A, the job worker in State B and the recipient in State C. In case the supply is made from the job worker s place of business / premises, the invoice will be issued by the supplier (principal) located in State A to the recipient located in State C. The said transaction will be an inter-State supply. In case the recipient is also located in State A, it will be an intra-State supply. (CBIC Circular No. 38/2018 dated 26th March, 2018)

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GST – GST FAQ 3rd Edition – December, 2018 – 22.2 – 22.2 Place of Supply of Services (Location of supplier as well as recipient are in India) Q 13. What is the default presumption for place of supply in respect of B2B supply of services? Ans. The terms used in the IGST Act are registered taxpayers and unregistered person. The presumption in case of supplies to registered person is the location of such person until and unless otherwise specified. Q 14. What is the default presumption for place of supply in respect of unregistered recipients? Ans. In respect of unregistered recipients, the usual place of supply is the location of the recipient, where the address on records exists. However, in many cases, the address of recipient is not available, in such cases, location of the supplier of services is taken as proxy for place of supply. Q 15. What is the place of supply in case of services in relation to immovable property? Ans. Any service provided directly in relation to an immovable p

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n proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf. (The Explanation clause to section 12(3) of the IGST Act, for domestic supplies) Q 18. What is the place of supply of services of accommodation services in homestays in Goa? Ans. The place of supply shall be Goa, the location of the home stay. (Section 12(3) of the IGST Act). Q 19. What would be the place of supply of services provided for organizing an event, say, IPL cricket series which is held in multiple states? Ans. In case of an event, if the recipient of service is registered, the place of supply of services for organizing the event shall be the location of such person. However, if the recipient is not registered, the place of supply shall be the place where event is held. Since the event is being held in multiple states an

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ase location of supplier or location of recipient is outside India: The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. For courier, the place of supply of services shall be the location of the recipient of services. Wherever the location of the recipient of services is not available in ordinary course of business, the Place of supply shall be location the supplier of service. Q 21. A film star from Mumbai gets his cosmetic surgery done in a Hospital in Delhi. What should be the place of supply? Ans. The place of supply shall be based on the principle of place of performance and shall be in Delhi. (Section 12(4) of IGST Act) Other such similar services requiring physical presence of natural person (recipient) like restaurant and catering services, personal grooming, fitness, beauty treatment, health services including cosmetic and plastic surgery shall be the location where the services are a

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ation clause to section 12(9) of the IGST Act) Q 24. Suppose a ticket/ pass for anywhere travel in India is issued by M/s Air India to a person. What will be the place of supply? Ans. In the above case, the place of embarkation will not be available at the time of issue of invoice as the right to passage is for future use. Accordingly, place of supply cannot be the place of embarkation. In such cases, the default rule shall apply. (The proviso clause to section 12(9) of the IGST Act) Q 25. What will be the place of supply for mobile connection? Can it be the location of supplier? Ans. For domestic supplies: The location of supplier of mobile services cannot be the place of supply as the mobile companies are providing services in multiple states and many of these services are inter-state. The consumption principle will be broken if the location of supplier is taken as place of supply and all the revenue may go to a few states where the suppliers are located. The place of supply for mobi

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will be the place of supply? Ans. If the service is not linked to the account of person, place of supply shall be Kullu i.e. the location of the supplier of services. However, if the service is linked to the account of the person, the place of supply shall be Mumbai, the location of recipient on the records of the supplier. Q 28. A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done separately in Mumbai. What will be the place of supply of insurance service? Ans. The location of the recipient of services on the records of the supplier of insurance services shall be the place of supply. So Gurgaon shall be the place of supply. (Proviso clause to section 12(13) of the IGST Act) Q 29. A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the place of supply? Ans. The location of the recipient of services on the records of the supplier of insurance services shall

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GST – GST FAQ 3rd Edition – December, 2018 – 22.1 – 22.1 Place of Supply of Goods Q 5. What would be the place of supply where movement of goods is involved? Ans. The place of supply of goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. (Section 10 of IGST Act) Q 6. What would be the place of supply wherein the supplier hands over the goods to recipient in his state and further movement is caused by the recipient? Ans. The movement can be caused by supplier, recipient or any other person. Where the supply involves movement of goods, the place of supply shall be the location where the movement of goods terminates for delivery to the recipient. Illustration: A person

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t will be the place of supply if the goods are delivered by the supplier to a person on the direction of a third person? Ans. It would be deemed that the third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. (Section 10 of IGST Act) Such cases are termed as bill to ship to cases wherein the supplier sends the invoice to the buyer and the goods to the recipient on the direction of the buyer. Even though the goods are not received by the buyer, it is presumed that he has received the goods and he is able to take the input tax credit. The buyer may further issue his invoice to the actual recipient of goods. Thus, it is a tripartite arrangement wherein there are usuall

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rat. However, in respect of services, the place of supply shall be the location of the first scheduled point of departure of that conveyance for the journey. (Section 12 and 13 of IGST Act) Q 10. What is the place of supply in case of assembly or installation of goods at site? Ans. The place of supply of goods, where the goods are installed or assembled at the site, will be the place of such installation or assembly. (Section 10(1)(d) of IGST Act) Q 11. What is the place of supply of goods imported into India? Ans. The place of supply of goods imported into India shall be the location of the importer. Illustration: An importer from Jaipur, Rajasthan imports goods from China through Mumbai Air Cargo and declared the GSTIN of Rajasthan. The p

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GST – GST FAQ 3rd Edition – December, 2018 – 22 – 22. Place of Supply of Goods and Service Q 1. What is the need for the Place of Supply of Goods and Services under GST? Ans. The basic principle of GST is that it should effectively tax the consumption of such supplies at the destination thereof or as the case may at the point of consumption. So place of supply provision determines the place i.e. taxable jurisdiction where the tax should reach. The place of supply determines whether a transaction is intra-state or interstate. In other words, the place of Supply of Goods or services is required to determine whether a supply is subject to SGST plus CGST in a given State or union territory or else would attract IGST if it is an inter-state sup

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receiver and the service provided may not be ascertainable or may easily be suppressed as nothing tangible moves and there would hardly be a trail; (iii) For supplying a service, a fixed location of service provider is not mandatory and even the service recipient may receive service while on the move. The location of billing could be changed overnight; (iv) Sometime the same element may flow to more than one location, for example, construction or other services in respect of a railway line, a national highway or a bridge on a river which originate in one state and end in the other state. Similarly, a copy right for distribution and exhibition of film could be assigned for many states in single transaction or an advertisement or a programme

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ns. The various element involved in a transaction in services can be used as proxies to determine the place of supply. An assumption or proxy which gives more appropriate result than others for determining the place of supply, could be used for determining the place of supply. The same are discussed below: (a) location of service provider; (b) the location of service receiver; (c) the place where the activity takes place/ place of performance; (d) the place where it is consumed; and (e) the place/person to which actual benefit flows Q 4. What is the need to have separate rules for place of supply in respect of B2B (supplies to registered persons) and B2C (supplies to unregistered persons) transactions? Ans. In respect of B2B transactions, t

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GST – GST FAQ 3rd Edition – December, 2018 – 21.6 – 21.6 Imports Q 65. How will imports be taxed under GST? Ans. Import of Goods and Services are treated as deemed inter-state supplies and IGST is levied on import of goods and services in to the country. The IGST on import of goods is leviable under the provisions of Section 5 of the IGST Act, 2017 read with Section 3(5) of the Customs Tariff Act, 1975 and shall be levied at the time of imports along with the levy of the applicable Customs duties on the value in accordance with Section 3 of the Customs Tariff Act, 1975. Q 66. What is import of goods under the GST regime? How are they taxed? Ans. The import of goods has been defined in sub-section (10) of Section 2 of the IGST Act, 2017 as bringing goods into India from a place outside India. The IGST Act, 2017 provides that the integrated tax on goods shall be in addition to the applicable Basic Customs Duty (BCD) which is levied as per the Customs Tariff Act. In addition, GST compens

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Compensation Cess Rs.111 (G) Compensation Cess @ 15% ₹ 16.65 (H) Total Duty ( B+C +E+G) ₹ 47.63 Q 68. Whether Anti-dumping duty/ safeguard duty are to be added for determining the value for integrated tax? Ans. Yes. In cases where imported goods are liable to Anti-Dumping Duty or Safeguard Duty, value for calculation of IGST as well as Compensation Cess shall also include Anti-Dumping Duty amount and Safeguard duty amount. Let s say in the above case if Safeguard duty is ₹ 20/-, the assessable value for integrated tax as well as compensation cess shall be ₹ 131/-. The taxes calculation chart is as under: Particulars Duty (A) Assessable Value ₹ 100/- (B) Basic Customs Duty@10% Rs.10/- (C) Social Welfare Charge @10% Rs.1/- (D) Safeguard Duty Rs.20/- (E) Value for Integrated Tax Rs.131/- (F) Integrated Tax @18% Rs.23.58 (G) Value for Compensation Cess Rs.131/- (H) Compensation Cess @ 15% ₹ 19.65 (I) Total Duty ( B+C +D+F+H) ₹ 74.23 Q 69. Whether

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s the goods in a customs bonded warehouse and thereafter, supplies such goods to another person who then files an ex-bond bill of entry for clearing the said goods from the customs bonded warehouse for home consumption. As per section 7(2) of the IGST Act, 2017, the supply of goods imported into the territory of India, till they cross the customs frontiers of India, is treated as a supply of goods in the course of inter-State trade or commerce. Further, the proviso to section 5(1) of the IGST Act provides that the integrated tax on goods imported into India would be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975. Thus, in case of supply of the warehoused goods, the point of levy would be the point at which the duty is collected under section 12 of the Customs Act, 1962 which is at the time of clearance of such goods under section 68 of the Customs Act. The Customs Tariff Act has been amended and a sub-section (8A) has been inserted i

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are cleared for home consumption from the customs bonded warehouse. Q 71. Whether high seas sales treated as supply in GST? Ans. 'High Sea Sales' is a common trade practice whereby the original importer sells the goods to a third person before the goods are entered for customs clearance. After the High sea sale of the goods, the Customs declarations i.e. Bill of Entry etc. is filed by the person who buys the goods from the original importer during the said sale. IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each such high sea sale shall form part of the value on which IGST is collected at the time of clearance. Q 72. How are import of goods and services by EOUs and SEZs treated in GST? Ans. Goods imported by a unit or

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service where the supplier is located outside India, the recipient is located in India and the place of supply of service is in India. As per the provisions contained in Section 7(1) (b) of the CGST Act, 2017, import of services for a consideration whether or not in the course or furtherance of business shall be considered as a supply. Thus, in general, import of services without consideration shall not be considered as supply. However, business test is not required to be fulfilled for import of service to be considered as supply. Furthermore, in view of the provisions contained in Schedule I of the CGST Act, 2017, the import of services by a taxable person from a related person or from a distinct person as defined in Section 25 of the CGST Act, 2017, in the course or furtherance of business shall be treated as supply even if it is made without any consideration. In view of the provisions contained in Section 14 of the IGST Act, 2017, import of free services from Google and Facebook by

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ees which is already included in the value of goods and IGST is already paid at the time of import? Ans. No. As per the notification no. 06/2018-Integrated tax dated 25th January, 2018, supply of services, imported into the territory of India covered by such temporary transfer or permitting the use or enjoyment of any intellectual property right are exempted from payment of integrated tax to the extent that royalties and license fees have been included in the transaction value as specified under rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 on which the appropriate duties of Customs have been paid. Q 75. What procedure will be followed by EOU to import goods without payment of Customs duty in the GST regime? To avail such import benefits, EOUs will have to follow the procedure under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 Q 76. Is the registered person procuring goods or services from a supplier outside Indi

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ncillary goods imported under lease is chargeable to IGST? Ans. Import of rigs and ancillary goods imported under lease is exempted from IGST, subject to payment of appropriate IGST on the supply/import of such lease service and fulfilment of other specified conditions. Q 79. Whether bona fide gifts imported through post or air are exempted? Ans. Bona fide gifts up to CIF value limit of ₹ 5000 imported through post or air are exempted from payment of basic customs duty and integrated tax. Q 80. How are supplies by SEZs to DTA treated in GST? Ans. Supplies by SEZs to DTA units are liable to GST. Supplies from SEZs to DTA can be categorised as under: Supply under Bill of Entry: The supplies made by SEZ on cover of a bill of entry shall be reported by DTA unit in its GSTR-3B as imports. Supply without Bill of Entry: Any supply made by SEZ to DTA, without the cover of a bill of entry is required to be reported by SEZ unit in GSTR-1. The liability for payment of IGST in respect of sup

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GST – GST FAQ 3rd Edition – December, 2018 – 21.4 – 21.4 Special Economic Zone (SEZ) Q 38. How are supplies by and to SEZs treated in GST? Ans. There is no change in the SEZ scheme. All imports by SEZs are exempted from any duty/tax. As per section 7(5)(b) of the IGST Act, 2017, a supply of goods or services or both to or by a SEZ developer or a SEZ unit is treated to be a supply of goods or services or both in the course of inter-State trade or commerce. Further as per section 16 of IGST Act, 2017 supply of goods or services or both to a SEZ developer or a SEZ unit is considered as zero rated supply. Q 39. What will be the IGST rates when goods or services or both are supplied to SEZ unit? Ans. Supplies to SEZ unit or developer are considered as zero rated. As such, the supplier can choose to either supply on payment of IGST and claim refund or supply without payment of IGST and in that scenario can only claim the refund of unutilized ITC, if any. The IGST rates when supplying goods

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SEZ unit shall be treated as an inter-State supply. Q 41. Whether SEZ unit or developer needs to pay IGST when it received supplies which are under reverse charge mechanism? Ans. All supplies to SEZs are zero rated. However, the suppliers are given two options. In this case, the supplier is not liable to pay GST as the supply is under reverse charge mechanism. The recipient is considered as deemed supplier. Therefore, SEZ has to pay GST in this case. Q 42. What is the refund mechanism when a DTA supplier supplies goods/services to SEZ Unit? Ans. The supplier to SEZs has following two options: (i) Supply goods or services or both to SEZ unit or developer on payment of Integrated tax and claim refund (ii) Supply goods or services or both to SEZ unit or developer without payment of Integrated tax under LUT/Bond and claim refund of unutilized ITC Option I: Supply goods or services or both to SEZ unit or developer on payment of Integrated tax and claim refund The supplier has to follow the

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rule (1) and the details of payment, along with the proof thereof, made by the recipient to the supplier for authorised operations as defined under the Special Economic Zone Act, 2005, in a case where the refund is on account of supply of services made to a Special Economic Zone unit or a Special Economic Zone developer; (iii) a declaration to the effect that the Special Economic Zone unit or the Special Economic Zone developer has not availed the input tax credit of the tax paid by the supplier of goods or services or both, in a case where the refund is on account of supply of goods or services made to a Special Economic Zone unit or a Special Economic Zone developer; (Section 89(1) of CGST (Rules), 2017.) Option II: Supply goods or services or both to SEZ unit or developer without payment of Integrated tax under LUT/Bond and claim refund of unutilized ITC The supplier has to follow the procedure outlined in rule 96A of the CGST Rules, 2017. He needs to submit a bond/LUT in FORM GST R

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Development Commissioner SEZ or the jurisdictional proper officer of GST? Ans. As per Circular No.2/2/2017-GST dated 04.07.2017 Bond/LUT shall be furnished to the jurisdictional Deputy/Assistant Commissioner having jurisdiction over the principal place of business of the exporter. Q 45. What are the requirement for submitting Bond/LUT? Ans. The requirement of Bond/LUT will be as prescribed under Circulars No. 4, 8 and 40/2017. The registered person (exporters) shall fill and submit FORM GST RFD-11 on the common portal. An LUT shall be deemed to be accepted as soon as an acknowledgement for the same, bearing the Application Reference Number (ARN), is generated online. No document needs to be physically submitted to the jurisdictional office for acceptance of LUT. If it is discovered that an exporter whose LUT has been so accepted, was ineligible to furnish an LUT in place of bond as per Notification No. 37/2017-Central Tax, then the exporter s LUT will be liable for rejection. In case

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-processing area of SEZ will not be eligible for exemption granted to SEZ. Q 49. Whether the exemption granted to nominated agency pre GST regime will continue in the post GST regime for importing gold? Ans. The bank as a nominated agency will continue to get the exemption of Customs duty as prevailed before the GST regime vide Notification No. 57/2000-Cus dated 08.05.2000. Import of gold by specified banks and specified PSUs as mentioned in Notification No. 77/2017-Cus dated 13.10.2017 attracts Nil IGST. However, other banks will have to pay the IGST as per the Notification No. 26/2017-Cus dated 28.06.2017 as no exemption has been granted for payment of IGST duty to these. Q 50. Can bank recover the IGST rate from the SEZ Unit while supplying gold to the SEZ Unit? Ans. No. The banks cannot recover IGST rate from the SEZ Unit. However, the Banks can claim the refund of the IGST paid on imports after supplying the goods to the SEZ Unit. Q 51. Whether services of short term accommodation

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cular No. 48/22/2018- GST dated 14th June, 2018) Q 52. Whether the benefit of zero rated supply can be allowed to all procurements by a SEZ developer or a SEZ unit such as event management services, hotel and accommodation services, consumables etc? Ans. Subject to the provisions of section 17(5) of the CGST Act, if event management services, hotel, accommodation services, consumables etc. are received by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the specified officer of the Zone, the benefit of zero rated supply shall be available in such cases to the supplier. (CBIC Circular No. 48/22/2018- GST dated 14th June, 2018) Q 53. Whether a company having a unit in SEZ and a unit in DTA require separate registration for both the units? Ans. Yes, as per Section 8(1) of CGST (Registration) Rules, 2017 a person having a units(s) in a Special Economic Zone or being a Special Economic Zone developer shall make a separate application for registration as a business ver

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anyone making a supply to a SEZ unit or SEZ developer has to necessarily obtain GST registration. Q 55. Whether SEZ Act/Rules are aligned with the GST? Ans. SEZ Rules, 2006 have been synced with the GST Provisions vide SEZ (Amendment) Rules, 2018. The terms like Service Tax, Stamp Duty etc replaced with CGST/SGST/IGST/UTGST etc. GST registration certificate required instead of Sales tax registration earlier for establishment / setting up of SEZ unit(s) Q 56. Whether duty drawback is admissible on supplies by DTA units to SEZs? Ans. Yes. Supplies made by DTA unit to SEZ Unit or developer are eligible for drawback in cases where the SEZ Unit or developer issues a disclaimer to the DTA supplier and drawback is claimed by the DTA supplier. Drawback shall be processed and paid by the office of Principal Commissioner or Commissioner of Customs/ Customs (Preventive) in whose jurisdiction the DTA Unit falls. Brand rate fixation also to be done by the office of Principal Commissioner/ Commissio

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GST – GST FAQ 3rd Edition – December, 2018 – 21.5 – 21.5 Export Oriented Units Q 57. Whether the exemption granted to EOUs pre-GST regime will continue in the post GST regime? Ans. Imports by EOUs: The EOUs will continue to get the exemption of Customs duty as prevailed before the GST regime vide Notification No. 52/2003-Cus dated 31.03.2003. The imports by EOUs are to be levied IGST and compensation cess as per the Notification No. 59/2017-Cus dated 30.06.2017. However, as part of export package, imports by EOUs have been temporarily exempted from payment of IGST and compensation cess up to 31st March, 2019 vide Customs Notification No. 65/2018-Customs dated 24.09.2018. Supply to EOUs: A supply to EOU is considered as deemed exports in te

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e declaration by EOU, Customs Officer at port will allow the clearance of goods giving benefit of exemption Notification No. 52/2003-Cus dated 31.03.2003. There is no requirement of separate continuity bond to be submitted by EOU as per the requirement under Customs (Import of goods at Concessional Rate of Duty) Rules, 2017 as B-17 bond, being a general purpose bond will serve the said purpose. The inter unit transfer would be on invoice on payment of applicable GST taxes. However, such transfer would be without payment of custom duty. The supplier unit will endorse on such documents the amount of custom duty, availed as exemption, if any, on the goods intended to be transferred. The recipient unit would be responsible for paying such basic

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GST Act, 2017, a refund application may be filed within two years from the relevant date by EOUs. The application in form RFD-01A has to accompanied with the documents as prescribed under Rule 89 of CGST Rules, 2017 for claiming refund of ITC. Refund of IGST on exports is available as per Rule 96 of CGST Rules and shipping bill filed is deemed to be application filed for refund. 90% of the total amount claimed as refund will be granted within 10 days of making application or within 7 days of issuance of acknowledgement of refund application. Balance amount of 10% will be granted after verification of documents furnished by the applicant. Q 61. Will supply of goods from one EOU to another EOU termed as inter unit transfer and whether the sam

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GST – GST FAQ 3rd Edition – December, 2018 – 21.3 – 21.3 Duty Drawback Scheme Q 35. Is there any impact of GST on the Duty Drawback Scheme for exporters? Ans. Following changes have been done in the Duty Drawback scheme in Customs: (i) No amendments have been made to the drawback provisions (Section 74 or Section 75) under Customs Act 1962 in the GST regime. (ii) However, the duty drawback rules have substantially been amended and new Customs and Central Excise Duties Drawback Rules, 2017 with effect from 01.10.2017, have been issued. (Notification No. 88/2017-Customs (N.T) dated 21st September, 2017) (iii) The definition of drawback has been amended to exclude Integrated Tax and GST Compensation Cess, hence no refund of any of the GST tax

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under Section 74 will refund Customs duties as well as Integrated Tax and Compensation Cess paid on imported goods which are re-exported. However, a part of the Integrated Tax and Compensation Cess paid on imported goods would have gone to the respective States/UT, therefore, the same can only be refunded only if the concerned State/UT has not refunded it and the importer has not taken ITC of the same. Q 36. Will drawback at higher rate be available to exporters who do not avail Input Tax Credit (ITC) like presently available to those who do not avail CENVAT credit? Ans. Prior to GST, there were two All Industry Rates (AIRs) of duty drawback on exports. The higher rate rebated Customs duties, Central Excise duties and Service tax on inputs

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wever, as an export facilitation measure, for the transition period of 3 months from July to September, 2017, drawback at higher composite rates were continued to be granted subject to the condition that no input tax credit of CGST/IGST was claimed, no refund of IGST paid on export goods was claimed and no CENVAT credit was carried forward. Q 37. Do state taxes also are refunded through duty drawback scheme? Ans. No. The central taxes which are outside GST but are embedded in exports namely Customs, Central Excise are refunded under the Duty Drawback Scheme. The State taxes are only refunded in respect of apparel and clothing under the Refund of State Levies (RoSL) scheme wherein the amount is refunded from the budget of Ministry of textile

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GST – GST FAQ 3rd Edition – December, 2018 – 21.2 – 21.2 Export of Services Q 30. What is supply of services in the GST? Ans. As in the earlier service tax regime, five conditions have been prescribed for a service to be treated as exports in GST. The five conditions comprised in the definition of the term Export of Services are cumulative and are to be fulfilled in totality in order to consider a transaction of supply of service as an export supply. They are as under: (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or i

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s for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment. (c) Where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply. (d) In absence of such places, the location of the usual place of residence of the supplier. A place of business is defined in section 2(85) of the CGST Act, 2017 and includes- (a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or (b) a place where a taxable person mai

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es that where a person has an establishment in India and any other establishment outside India then such establishments shall be treated as establishment of distinct persons. Where the Indian arm is set up as a liaison office or a branch they would be treated as establishments of the same entity and hence the supply inter se shall not qualify as export of services. However, if the Indian arm is set up as a wholly owned subsidiary company incorporated under the Indian laws, the foreign company and the Indian subsidiary would not be governed by the provisions of distinct person or related person as both are separate legal entities. Q 33. Whether supply of services to Nepal and Bhutan in Indian rupees are liable to GST? Ans. No. Supply of serv

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GST – GST FAQ 3rd Edition – December, 2018 – 21 – 21. Exports and Imports 21.1 Exports Q 1. How are exports be treated under GST? Ans. All exports are deemed as inter-State supplies. Exports of goods and services are treated as zero rated supplies. The exporter has the option either to export under bond/Letter of Undertaking without payment of tax and claim refund of ITC or pay IGST by utilizing ITC or in cash at the time of export and claim refund of IGST paid. Q 2. What is Zero Rating? Ans. By zero rating it is meant that the entire value chain of the supply is exempt from tax. This means that in case of zero rating, not only is the output exempt from payment of tax, there is no bar on taking/availing credit of taxes paid on the input side for making/providing the output supply. The concept of zero rating of supplies requires the supplies as well as the inputs or input services used in supplying the supplies to be free of GST. This is done by employing the following means: a) The ta

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be taxed No tax on the outward supplies; Input supplies also to be tax free Credit of input tax needs to be reversed, if taken; No ITC on the exempted supplies Credit of input tax may be availed for making zero-rated supplies, even if such supply is an exempt supply ITC allowed on zero-rated supplies Value of exempt supplies, for apportionment of ITC, shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. Value of zero rated supplies shall be added along with the taxable supplies for apportionment of ITC Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under the CGST or IGST Act shall not be liable to registration A person exclusively making zero rated supplies may have to register as refunds of unutilised ITC or integrated tax paid shall have to

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the system. The IEC holders shall quote their PAN number (instead of IEC) in all their future correspondence as well as documentation with DGFT. Q 6. What IEC number is to be used for special category of importers like government, individual importing for personal use etc in terms of para 2.07(b) of Handbook of Procedure by DGFT? Ans. DGFT has modified the para 2.07(b) and has allotted revised permanent IEC number for such category of importers vide DGFT Public Notice No. 09/2015-20 dated 29th June, 2017. The same can be used for import /export by the categories of importers/exporters mentioned therein. For instance, persons /Institutions /Hospitals importing or exporting goods for personal use, not connected with trade or manufacture or agriculture, earlier using IEC no. 0100000053 now have to use IIHIE0153E as IEC. Q 7. What is export of goods? Ans. The definition of export of goods in section 2(5) of IGST Act has been straight taken from section 2(18) of the Customs Act, 1962 and me

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e Constitution makes it clear that the territories of the States and that of the Union Territories are fixed in terms of First Schedule to the Constitution. India is a Union of States however the territory of India is not limited to the territories of the respective States but also includes other territories as may be acquired. The Maritime Zone Act vide section 3(1) thereof provides that the sovereignty of India extends to territorial waters, sea bed and subsoil underlying such waters and the air space over such waters. The limit of territorial waters is fixed at 12 nautical miles from the baseline as per Section 3(2) of the Maritime Zone Act. The continental shelf of India comprises the seabed and subsoil of the submarine areas that extend beyond the limit of its territorial waters throughout the natural prolongation of its land territory to the outer edge of the continental margin or to a distance of two hundred nautical miles from the baseline where the outer edge of the continenta

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e matter was appealed against before the Supreme Court and the Supreme Court in Civil Appeal No. 3383/2004 has stayed the order of the High Court. The Hon ble Supreme Court on 13.1.2016 = 2016 (1) TMI 1395 – SUPREME COURT OF INDIA while hearing this case had observed as follows: any pronouncement of the court would have far reaching implications not only for central state relationship but the federal character and separation of legislative powers of the union and the States . The GST Council in its ninth meeting held on 16th January, 2017 took the decision that the territorial water within the twelve nautical miles shall be treated as the territory of the Union of India unless the Hon'ble Supreme Court decides otherwise in the on-going litigation on the issue but the power to collect the State tax in the territorial waters shall be delegated by the Central Government to the States. Accordingly, for supplies in territorial waters, section 9 of IGST Act gives powers to States to levy

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in which a supplier can supply goods to an exporter by paying only 0.1% GST and claim refund of unutilised ITC. The exporter in such a scenario cannot export on payment of integrated tax and take refund. He has to adopt the LUT/Bond route only. Q 11. What is the 0.1% scheme for procurement of exports by merchant exporters? Ans. It is a scheme for merchant exporters who have an option to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export vide Notification 40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate) both dated 23.10.2017. Exemption from payment of GST on so much of the tax leviable on such goods as is in excess of the amount calculated @0.1%, is granted, subject to fulfilment of following conditions: Supply on a tax invoice Recipient to export goods within 90 days from issue of invoice by supplier Recipient to indicate the GSTIN number of the registered supplier & tax invoice number issued by the registered supplier in the shipping bill o

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after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported; in case of situation referred to in above condition, the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier. Q 12. What are the

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case of exports of goods or services as the recipient is located outside the taxable territory. However, in respect of supplies to SEZs, section 54(8) has been amended vide CGST (Amendment) Act, 2018 so as to make the principle of unjust enrichment applicable. Thus, from the date of coming of the CGST(Amendment) Act, 2018 into force, the principle of unjust enrichment will be applicable in in case of refunds against supplies to SEZs, even though such supplies are zero rated. Q 15. What is deemed export under GST Law? Whether any supply has been categorized as deemed export by the Government? Ans. Deemed export has been defined under Section 2(39) of CGST Act, 2017 as supplies of goods as may be notified under section 147 of the said Act. Under section 147, the Government may, on the recommendations of the Council, notify certain supplies of goods manufactured in India as deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in Indian

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lies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it. (ii) An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him. (iii) An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund. (Notification No. 49/2017-Central Tax dated 18th October, 2017) Q 17. When an exporter cannot use the route of payment of IGST and taking refund under Rule 96 of CGST Rules, 2017? Ans. Position from 23rd October, 2017 to 8th October, 2018: An exporter cannot use the route of payment of IGST and taking refund under Rule 96 of CGST Rules, 2017 if he receives supplies on which following bene

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payment of IGST and taking refund is not available in case the exporter has procured the goods under 0.1% scheme. He should avail the LUT facility while exporting such goods so that there is no tax liability at the time of export. Q 19. Can we export under normal procedure without availing the benefit of 0.1 per cent while procuring goods for exports? Ans. Yes, the facility of procuring goods at 0.1 per cent is an optional facility which is available subject to adhering to the conditions mentioned in Notification no. 41/2017-Integrated Tax (Rate) dated 23rd October, 2017. In case, an exporter wants to procure the goods for exports on payment of applicable GST and subsequent exports either on LUT or on payment of IGST, the exporter can do it and claim back ITC or IGST, as the case may be. Q 20. Can duty credit scrips received as incentive by exporters such as MEIS, SEIS etc be utilised for payment of all duties at the time of import? Ans. No, these scrips can be utilised only for paymen

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er HSN code 4907 and the sale of such scrips is exempted vide S. No. 122A of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 35/2017-Central Tax (Rate) dated 13.10.2017. Q 23. Whether sale of DFIA scrips liable to GST? Ans. As per Notification No. 35/2017-Central Tax (Rate) dated 13.10.2017, Duty Credit scrips are exempted from GST. DFIA scrips are not Duty Credit scrips and therefore are leviable to GST @ 12%. Q 24. Can a person opting for composition scheme make supply of goods to SEZ? Ans. No, because all supplies to SEZ are treated as interState supplies. A person paying tax under composition scheme cannot make inter-State outward supply of goods. Q 25. An exporter gets an order from a Selling agent to whom he pays commission. Will it be taxable under GST? Ans. Situation I- Selling agent is located in India: The selling agent in India is providing service to the exporter. Supplier and recipient are in India, therefore place of supply wo

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gent is covered in definition of intermediary and therefore place of supply is in India. Situation II- Buying agent is located outside India: The buying commission received will not be taxable as place of supply will be outside India. Q 27. Does GST be payable on goods not intended to be sold, taken out for participation in overseas exhibitions and trade fairs and brought back into India after exhibition? Ans. GST is not payable in such cases. Exporters will need exhibition participation letter and no foreign exchange involved letter from the concerned bank for the purpose of exchange control requirements. At the time of re-import of the subject goods, identity of goods with respect to the export documents needs to be established to seek exemption from import duty in accordance with Customs provisions. Q 28. What is e-wallet scheme? Ans. Concept of e-Wallet is being worked upon by a committee appointed by GST Council. The e-wallet of the exporter would be credited with a notional amoun

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nced later. Q 29. Whether section 16 of the IGST applicable to exports in respect of compensation cess? Ans. Section 11(2) of the GST (Compensation to States) Act, 2017 provides that provisions of IGST Act, and the rules made thereunder, shall, mutatis mutandis, apply in relation to the levy and collection of the cess leviable under section 8 on the inter-State supply of goods and services as they apply in relation to the levy and collection of integrated tax on such inter-State supplies under the said Act. Thus, provisions of section 16 of the IGST Act, 2017, relating to zero rated supply will apply mutatis mutandis for the purpose of Compensation Cess. Exporter will be eligible for refund of Compensation Cess paid on goods exported by him and/or no Compensation Cess will be charged on goods exported by an exporter under bond and he will be eligible for refund of input tax credit of Compensation Cess relating to goods exported [on similar lines as refund of input taxes under section 1

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GST – GST FAQ 3rd Edition – December, 2018 – 20 – 20. Overview of the IGST Act Q 1. What is IGST? Ans. Integrated Goods and Services Tax (IGST) means tax levied under the IGST Act on the supply of any goods and/ or services in the course of inter-State trade or commerce. Q 2. What are inter-state supplies? Ans. A supply of goods and/or services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States, two different union territory or in a state and union territory Further import of goods and services, supplies to SEZ units or developer, or any supply that is not an intra state supply. (Section 7 of the IGST Act). Q 3. How will the Inter-State supplies of Goods and Services be taxed under GST? Ans. IGST shall be levied and collected by Centre on interstate supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies of goods and services. The inter-State s

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the supply does not involve movement of goods, the place of supply shall be the location of such goods at the time of delivery to the recipient. In the case of goods assembled or installed at site, the place of supply shall be the place of such installation or assembly. Finally, where the goods are supplied on board a conveyance, the place of supply shall be the location at which such goods are taken on board. The law also provides for determination of place of supply of service where both supplier and recipient are located in India (domestic supplies) or where supplier or recipient is located outside India (international supplies). This is discussed in details in the next Chapter. It also provides for certain other specific provisions like payment of tax by online information and database access service provider located outside India to an unregistered person in India, upon taking registration in India, under the IGST Act, following a simplified provision (section 14 of the IGST Act)

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consumed. Full and complete set-off will be available as ITC of the IGST paid on import on goods and services. Exports of goods and services will be zero rated. The exporter has the option either to export under bond without payment of duty and claim refund of ITC or pay IGST at the time of export and claim refund of IGST. The IGST on imports is leviable under the provisions of the Customs Tariff Act and shall be levied at the time of imports along with the levy of the Customs Act (Section 5 of the IGST Act) Q 7. How will the IGST be paid? Ans. The IGST payment can be done utilizing ITC or by cash. However, the use of ITC for payment of IGST will be done using the following hierarchy, – First available ITC of IGST shall be used for payment of IGST; Once ITC of IGST is exhausted, the ITC of CGST shall be used for payment of IGST; If both ITC of IGST and ITC of CGST are exhausted, then only the dealer would be permitted to use ITC of SGST for payment of IGST. Remaining IGST liability, if

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GST – GST FAQ 3rd Edition – December, 2018 – 19 – 19. Offences, Penalties, Prosecution and Compounding Q 1. What are the prescribed offences under CGST/SGST Act? Ans. The CGST/SGST Act codifies the offences and penalties in Chapter XVI. The Act lists 21 offences in section 122, apart from the penalty prescribed under section 10 for availing compounding by a taxable person who is not eligible for it. The said offences are as follows: – 1) Making a supply without invoice or with false/ incorrect invoice; 2) Issuing an invoice without making supply; 3) Not paying tax collected for a period exceeding three months; 4) Not paying tax collected in contravention of the CGST/SGST Act for a period exceeding 3 months; 5) Non deduction or lower deduction of tax deducted at source or not depositing tax deducted at source under section 51; 6) Non collection or lower collection of or non- payment of tax collectible at source under section 52; 7) Availing/utilizing input tax credit without actual rec

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oceeding; 18) Supplying/transporting/storing any goods liable to confiscation; 19) Issuing invoice or document using GSTIN of another person; 20) Tampering/destroying any material evidence; 21) Disposing of /tampering with goods detained/ seized/attached under the Act. Q 2. What is meant by the term penalty? Ans. The word penalty has not been defined in the CGST/SGST Act but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as: a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain offence; a punishment imposed by law or contract for doing or failing to do something that was the duty of a party to do. Q 3. What are the general disciplines to be followed while imposing penalties? Ans. The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such genera

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nts (explained in the law as an error apparent on record) that has been made without fraudulent intent or gross negligence Further, wherever penalty of a fixed amount or a fixed percentage has been provided in the CGST/SGST Act, the same shall apply. Q 4. What is the quantum of penalty provided for in the CGST /SGST Act? Ans. Section 122(1) provides that any taxable person who has committed any of the offences mentioned in section 122 shall be punished with a penalty that shall be higher of the following amounts: The amount of tax evaded, fraudulently obtained as refund, availed as credit, or not deducted or collected or short deducted or short collected, or A sum of ₹ 10,000/-. Further Section 122(2) provides that any registered person who has not paid tax or makes a short payment of taxon supplies shall be a liable to penalty which will be the higher of: 10% of the tax not paid or short paid, or ₹ 10,000/- Q 5. Is any penalty prescribed for any person other than the taxab

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per record in books? Ans. If any person transports any goods or stores any such goods while in transit without the documents prescribed under the Act (i.e. invoice and a declaration) or supplies or stores any goods that have not been recorded in the books or accounts maintained by him, then such goods shall be liable for detention along with any vehicle on which they are being transported. Where owner comes forward: – Such goods shall be released on payment of the applicable tax and penalty equal to 100% tax or upon furnishing of security equivalent to the said amount. In case of exempted goods, penalty is 2% of value of goods or ₹ 25,000/- whichever is lesser. Where owner does not come forward: – Such goods shall be released on payment of the applicable tax and penalty equal to 50% of value of goods or upon furnishing of security equivalent to the said amount. In case of exempted goods, penalty is 5% of value of goods or ₹ 25,000/- whichever is lesser. Q 8. What is the pen

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can goods be confiscated under CGST/SGST Act? Ans. Under Section 130 of the CGST Act, goods shall be liable to confiscation if any person: supplies or receives any goods in contravention of any provision of this Act and such contravention results in evasion of tax payable under the Act, or does not account for any goods in the manner required under the Act, or supplies goods that are liable to tax under the Act without applying for registration, or uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of CGST/SGST Act (unless used without knowledge of owner) contravenes any provision of the Act/Rules with the intention of evading payment of tax. Q 11. What happens to the goods upon confiscation of goods by the proper officer? Ans. Upon confiscation, the title in the confiscated goods shall vest in the Government and every Police officer to whom the proper officer makes a request in this behalf, shall assist in taking possession of the goo

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secution? Ans. Prosecution is the institution or commencement of legal proceeding; the process of exhibiting formal charges against the offender. Section 198 of the Criminal Procedure Code defines prosecution as the institution and carrying on of the legal proceedings against a person. Q 15. Which are the offences which warrant prosecution under the CGST/SGST Act? Ans. Section 132 of the CGST/SGST Act codifies the major offences under the Act which warrant institution of criminal proceedings and prosecution. 12 such major offences have been listed as follows: a) Making a supply without issuing an invoice or upon issuance of a false/incorrect invoice; b) Issuing an invoice without making supply; c) Not paying any amount collected as tax for a period exceeding 3 months; d) Availing or utilizing credit of input tax without actual receipt of goods and/or services; e) Obtaining any fraudulent refund) f) evades tax, fraudulently avails ITC or obtains refund by an offence not covered under cl

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d fine Tax evaded between ₹ 2 crore and ₹ 5 crore 3 years and fine Tax evaded between ₹ 1 crore and ₹ 2 crore 1 years and fine • False records • Obstructing officer • Tamper records 6 months Q 17. What are cognizable and non-cognizable offences under CGST/SGST Act? Ans. In terms of Section 132(4) and 132(5) of CGST/SGST Act all offences where the evasion of tax is less than ₹ 5 crores shall be non-cognizable and bailable, all offences where the evasion of tax exceeds ₹ 5 crores shall be cognizable and non- bailable. Q 18. Is prior sanction of competent authority mandatory for initiating prosecution? Ans. Yes. No person shall be prosecuted for any offence without the prior sanction of the designated authority. Q 19. Is mensrea or culpable mental state necessary for prosecution under CGST/SGST Act? Ans. Yes. However, Section 135 presumes the existence of a state of mind (i.e. culpable mental state or mens rea) required to commit an offen

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of- any officer of the company then such officer shall be deemed to be guilty of the said offence and liable to be proceeded against and punished accordingly. Q 22. What is meant by compounding of offences? Ans. Section 320 of the Code of Criminal Procedure defines compounding as to forbear from prosecution for consideration or any private motive. Q 23. Can offences under CGST/SGST Act be compounded? Ans. Yes. As per section 138 of the CGST/SGST Act, any offence, other than the following, may upon payment of the prescribed (compounding) amount be compounded and such compounding is permissible either before or after the institution of prosecution: Offences numbered 1 to 6 of the 12 major offences (outlined in Q. 16 above), if the person charged with the offence had compounded earlier in respect of any of the said offences; Aiding/abetting offences numbered 1 to 6 of the 12 major offences, if the person charged with the offence had compounded earlier in respect of any of the said offence

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n offence. The application is not allowed unless the tax, interest and penalty liable to be paid have been paid in the case for which the application has been made On receipt of the application, the Commissioner shall call for a report from the concerned officer with reference to the particulars furnished in the application, or any other information, which may be considered relevant for the examination of such application. The Commissioner, after taking into account the contents of the said application, may, by order in FORM GST CPD-02, on being satisfied that the applicant has cooperated in the proceedings before him and has made full and true disclosure of facts relating to the case, allow the application indicating the compounding amount and grant him immunity from prosecution or reject such application within ninety days of the receipt of the application. The application shall not be decided without affording an opportunity of being heard to the applicant and recording the grounds

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GST – GST FAQ 3rd Edition – December, 2018 – 18 – 18. Inspection, Search, Seizure and Arrest Q 1. What is the meaning of the term Search ? Ans. As per law dictionary and as noted in different judicial pronouncements, the term search , in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for the purpose of discovering evidence of a crime. The search of a person or vehicle or premises etc. can only be done under proper and valid authority of law. Q 2. What is the meaning of the term Inspection ? Ans. Inspection is a new provision under the CGST/SGST Act. It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a warehouse or godown. Q 3. Who can order for carrying out Inspection and under what circumstan

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ds, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. (Section 67(4) of the Act). Q 5. Whether the person from whose custody any documents are seized is entitled to get the copies thereof? Ans. Yes, the person from whose custody documents are seized is entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such office may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper office, prejudicially affect the investigation. (Section 67(5) of the Act.) Q 6. Can the proper officer authorize Inspection of any assets/premises of any person under this Section? Ans. No. Authorization can be given to an officer of CGST/ SGST Act. to carry out inspection of any of the following: i. any place of business of a taxable person; ii. any place of business of

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believe that thing but not otherwise. Reason to believe contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances. Q 9. Is it mandatory that such reasons to believe has to be recorded in writing by the proper officer, before issuing authorization for Inspection or Search and Seizure? Ans. Although the officer is not required to state the reasons for such belief before issuing an authorization for search, he has to disclose the material on which his belief was formed. Reason to believe need not be recorded invariably in each case. However, it would be better if the materials / information etc. are recorded before issue of search warrant or before conducting search. Q 10. What is a Search Warrant and what are its contents? Ans. The written authority to conduct search is generally called search warrant

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x under this Act; (iii) supplies any goods liable to tax under this Act without having applied for the registration; (iv) contravenes any of the provisions of the CGST/ SGST Act or rules made thereunder with intent to evade payment of tax. Q 12. What powers can be exercised by an officer during valid search? Ans. An officer carrying out a search has the power to search for and seize goods (which are liable to confiscation) and documents, books or things (relevant for any proceedings under CGST/SGST Act) from the premises searched. During search, the officer has the power to break open the door of the premises authorized to be searched if access to the same is denied. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods, account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied. Q 13. What is the procedure for conducting se

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o be taken on the body of the search warrant. The search should be made in the presence of at least two independent witnesses of the locality. If no such inhabitants are available/willing, the inhabitants of any other locality should be asked to be witness to the search. The witnesses should be briefed about the purpose of the search. Before the start of the search proceedings, the team of officers conducting the search and the accompanying witnesses should offer themselves for their personal search to the person in-charge of the premises being searched. Similarly, after the completion of search all the officers and the witnesses should again offer themselves for their personal search. A Panchnama / Mahazar of the proceedings of the search should necessarily be prepared on the spot. A list of all goods, documents recovered and seized/detained should be prepared and annexed to the Panchnama/Mahazar. The Panchnama / Mahazar and the list of goods/ documents seized/detained should invariab

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CGST/SGST or C&AG or a cost accountant or chartered accountant nominated under section 66 of CGST/SGST Act, access to any business premises without issuance of a search warrant for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. However, a written authorization is to be issued by an officer of the rank of Commissioner of CGST or SGST. This provision facilitates access to a business premise which is not registered by a taxable person as a principal or additional place of business but has books of accounts, documents, computers etc. which are required for audit or verification of accounts of a taxable person. Q 16. What is meant by the term Seizure ? Ans. The term seizure has not been specifically defined in the GST Law. In Law Lexicon Dictionary, seizure is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary

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the goods by the department. Detention order is issued when it is suspected that the goods are liable to confiscation. Seizure can be made only on the reasonable belief which is arrived at after inquiry/investigation that the goods are liable to confiscation. Q 19. What are the safeguards provided in GST Act(s) in respect of Search or Seizure? Ans. Certain safeguards are provided in section 67 of CGST/SGST Act in respect of the power of search or seizure. These are as follows: i. Seized goods or documents should not be retained beyond the period necessary for their examination; ii. Photocopies of the documents can be taken by the person from whose custody documents are seized; iii. For seized goods, if a notice is not issued within six months of its seizure, goods shall be returned to the person from whose possession it was seized. This period of six months can be extended on justified grounds up to a further period of maximum six months; iv. An inventory of seized goods shall be made

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further period not exceeding six months. (Section 67(7) of the Act.) Q 21. Can the goods be sold by the department after seizure? Ans. Yes. 17 types of goods have been prescribed in the Notification No. 27/2018-Central Tax dated 13th June, 2018 which can be disposed of, after seizure, by the proper officer, having regard to the perishable or hazardous nature, depreciation in value with the passage of time, constraints of storage space or any other relevant considerations. The list is as under: (i) Salt and hygroscopic substances (ii) Raw (wet and salted) hides and skins (iii) Newspapers and periodicals (iv) Menthol, Camphor, Saffron (v) Re-fills for ball-point pens (vi) Lighter fuel, including lighters with gas, not having arrangement for refilling (vii) Cells, batteries and rechargeable batteries (viii) Petroleum Products (ix) Dangerous drugs and psychotropic substances (x) Bulk drugs and chemicals falling under Section VI of the First Schedule to the Customs Tariff Act, 1975 (xi) Ph

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may be required to carry a prescribed document as prescribed in the E way Bill Rules. Chapter XVI of CGST Rules contains provisions relating to documents required to be carried. Q 23. What is meant by the term arrest ? Ans. The term arrest has not been defined in the CGST/SGST Act. However, as per judicial pronouncements, it denotes the taking into custody of a person under some lawful command or authority . In other words, a person is said to be arrested when he is taken and restrained of his liberty by power or colour of lawful warrant. Q 24. When can the proper officer authorize arrest of any person under CGST / SGST Act? Ans. The Commissioner of CGST/SGST can authorize a CGST/SGST officer to arrest a person if he has reasons to believe that the person has committed an offence attracting a punishment prescribed under section 132(1) (a), (b), (c), (d) or Sec 132(2) of the CGST/SGST Act. Thus, the provisions of arrest are highly restricted in GST. The power can be exercised only wher

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a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST/SGST can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station under section 436 of the Code of Criminal Procedure, 1973; c) All arrest must be in accordance with the provisions of the Code of Criminal Procedure, 1973 relating to arrest. Q 26. What are the precautions to be taken during arrest? Ans. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to arrest and the procedure thereof must be adhered to. It is therefore necessary that all field officers of CGST/SGST be fully familiar with the provisions of the Code of Criminal Procedure, 1973. One important provision to be taken note of is section 57 of Cr.P.C., 1973 which provides that a person arrested without warrant shall not be detained for a longer period than, under the circumstances of the case, is reasonable but this shall not exceed twenty-

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all prepare a memo of arrest at the time of arrest and such memo shall be attested by at least one witness, who may be either a member of the family of the arrestee or a respectable person of the locality from where the arrest is made. It shall also be counter signed by the arrestee and shall contain the time and date of arrest. iii. A person who has been arrested or detained and is being held in custody in a police station or interrogation center or other lock up, shall be entitled to have one friend or relative or other person known to him or having interest in his welfare being informed, as soon as practicable, that he has been arrested and is being detained at the particular place, unless the attesting witness of the memo of arrest is himself such a friend or a relative of the arrestee. iv. The time, place of arrest and venue of custody of an arrestee must be notified by the police where the next friend or relative of the arrestee lives outside the district or town through the Lega

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Union Territory, Director, Health Services should prepare such a panel for all Tehsils and Districts as well. viii. Copies of all the documents including the memo of arrest, referred to above, should be sent to the Magistrate for his record. ix. The arrestee may be permitted to meet his lawyer during interrogation, though not throughout the interrogation. x. A police control room should be provided at all district and State headquarters where information regarding the arrest and the place of custody of the arrestee shall be communicated by the officer causing the arrest, within 12 hours of effecting the arrest and at the police control room it should be displayed on a conspicuous notice board. Q 27. What are the broad guidelines for arrest followed in CBIC? Ans. Decision to arrest needs to be taken on case-to- case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed, nature and quality of evidence, possibility o

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hority to make an arrest without a warrant and to start an investigation with or without the permission of a court. However, GST being a special legislation, only the officers, duly empowered under the Act can act as above. Q 29. What is a non-cognizable offence? Ans. Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order, except as may be authorized under special legislation. Q 30. What are cognizable and non-cognizable offences under CGST Act? Ans. In section 132 of CGST Act, it is provided that the offences relating to taxable goods and /or services where the amount of tax evaded or the amount of input tax credit wrongly availed or the amount of refund wrongly taken exceeds ₹ 5 crores, shall be cognizable and nonbailable. Other offences under the act are non-cognizable and bailable. Q 31. When can the proper

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of non- appearance to summons? Ans. The proceeding before the official who has issued summons is deemed to be a judicial proceeding. If a person does not appear on the date when summoned without any reasonable justification, he can be prosecuted under section 174 of the Indian Penal Code (IPC). If he absconds to avoid service of summons, he can be prosecuted under section 172 of the IPC and in case he does not produce the documents or electronic records required to be produced, he can be prosecuted under section 175 of the IPC. In case he gives false evidence, he can be prosecuted under section 193 of the IPC. In addition, if a person does not appear before a CGST/ SGST officer who has issued the summons, he is liable to a penalty up to ₹ 25,000/- under section 122(3) (d) of CGST/SGST Act. Q 34. What are the guidelines for issue of summons? Ans. The Central Board of Indirect Taxes and Customs (CBIC) in the Department of Revenue, Ministry of Finance has issued guidelines from time

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submit a report or should record a brief of the proceedings in the case file and submit the same to the officer who had authorized the issuance of summons; vi. senior management officials such as CEO, CFO, General Managers of a large company or a Public Sector Undertaking should not generally be issued summons at the first instance. They should be summoned only when there are indications in the investigation of their involvement in the decision making process which led to loss of revenue. Q 35. What are the precautions to be observed while issuing summons? Ans. The following precautions should generally be observed when summoning a person: – (i) A summon should not be issued for appearance where it is not justified. The power to summon can be exercised only when there is an inquiry being undertaken and the attendance of the person is considered necessary. (ii) Normally, summons should not be issued repeatedly. As far as practicable, the statement of the accused or witness should be rec

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notified by the Central/State Government. Q 37. Is there any prescribed format for arrest memo under the CGST Act, 2017? Ans. There is no prescribed format for arrest memo but an arrest memo must be in compliance with the directions in the judgments of the Hon ble Supreme Court in the case of D.K. Basu v/s. State of West Bengal reported in 1997 (1) SCC 416 =1996 (12) TMI 350 – SUPREME COURT. The arrest memo should include: – Brief Facts of the case; Details of the person arrested; Gist of evidence against the person; Relevant section(s) of the CGST/SGST Law or other laws attracted to the case and to the arrested person; The grounds of the arrest must be explained to the arrested person and this fact should be recorded in the arrest memo; A nominated person (as per the detailed provided by arrested person) of the arrested person should be informed immediately and this fact also may be mentioned in the arrest memo; The date and time of arrest may be mentioned in the arrest memo should b

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GST – GST FAQ 3rd Edition – December, 2018 – 17 – 17. Advance Ruling Q 1. What is the meaning of Advance Ruling? Ans. An advance ruling means a decision provided by the authority or the Appellate Authority to an applicant on matters or on questions specified in section 97(2) or 100(1) of CGST/SGST Act as the case may be, in relation to the supply of goods and/or services proposed to be undertaken or being undertaken by the applicant. (section 95 of CGST/SGST Law and section 12 of UTGST law) Authority for Advance Rulings(AAR) are appointed under the respective SGST/UTGST Act(s) and the same are deemed to be the Authority for advance ruling under CGST Act also in respect of that State or Union territory. Q 2. Which are the questions for which advance ruling can be sought? Ans. Advance Ruling can be sought for the following questions: (a) classification of any goods or services or both; (b) applicability of a notification issued under provisions of the GST Act(s); (c) determination of ti

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uling expeditiously in transparent and inexpensive manner. Q 5. What will be the composition of Authority for advance rulings (AAR) under GST? Ans. Authority for advance ruling (AAR) shall comprise one member CGST and one member SGST/UTGST. They will be appointed by the Central and State government respectively. Q 6. Is it necessary for a person seeking advance ruling to be registered? Ans. No, any person registered under the GST Act(s) or desirous of obtaining registration can be an applicant. (Section 95(b)) Q 7. At what time an application for advance ruling be made? Ans. An applicant can apply for advance ruling even before taking up a transaction (proposed supply of goods or services) or in respect of a supply which is being undertaken. The only restriction is that the question being raised is already not pending or decided in any proceedings in the case of applicant. Q 8. What is the fees for filing an application before AAR and AAAR? Ans. A fee of ₹ 10000/- (Five thousand

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. Q 11. How many AAR and AAAR are constituted under GST? Ans. There is one AAR and AAAR constituted for each State. Details of addresses, contact details along with emails of AAR are available at- http://www.gstcouncil.gov.in/sites/default/files/Details%20of%20AAR%2030-11-18.pdf. Similarly, the details of AAAR are available at- http://www.gstcouncil.gov.in/sites/default/files/AAAR-ason-14-12-2018.pdf. Q 12. To whom will the Advance Ruling be applicable? Ans. The advance rulings are given in personem and not in rem, that is, not to the whole world and therefore, rulings cannot apply to other similar cases. Section 103 provides that an advance ruling pronounced by AAR or AAAR shall be binding only on the applicant who sought it in respect of any matter referred to in 97 (2) and on the jurisdictional tax authority of the applicant. This clearly means that an advance ruling is not applicable to similarly placed taxable persons in the State. It is only limited to the person who has applied

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d by the applicant by fraud or suppression of material facts or misrepresentation of facts. In such a situation, all the provisions of the GST Act(s) shall apply to the applicant as if such advance ruling had never been made (but excluding the period when advance ruling was given and up to the period when the order declaring it to be void is issued). An order declaring advance ruling to be void can be passed only after hearing the applicant. Q 16. What is the procedure for obtaining Advance Ruling? Ans. Section 97 and 98 deals with procedure for obtaining advance ruling. The applicant desirous of obtaining advance ruling should make application to AAR in form GST ARA-01. The format of the form and the detailed procedure for making application is prescribed in the CGST Rules. Section 98 provides the procedure for dealing with the application for advance ruling. The AAR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant rec

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horized representative as well as the jurisdictional officers of CGST/SGST/UTGST. Q 19. What happens if there is a difference of opinion amongst members of AAR? Ans. If there is difference of opinion between the two members of AAR, they shall refer the point or points on which they differ to the AAAR for hearing the issue. If the members of AAAR are also unable to come to a common conclusion in regard to the point(s) referred to them by AAR, then it shall be deemed that no advance ruling can be given in respect of the question on which difference persists at the level of AAAR. Q 20. What are the provisions for appeals against order of AAR? Ans. The provisions of appeal before AAAR are dealt in section 100 and 101 of CGST/SGST Act or section 14 of the UTGST Act. If the applicant is aggrieved with the finding of the AAR, he can file an appeal with AAAR. Similarly, if the concerned or jurisdictional officer of CGST/SGST/UTGST does not agree with the finding of AAR, he can also file an app

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. The CGST /SGST Act do not provide for any appeal against the ruling of Appellate Authority for Advance Rulings. Thus no further appeals lie and the ruling shall be binding on the applicant as well as the jurisdictional officer in respect of applicant. However, Writ Jurisdiction may lie before Hon ble High Court or the Supreme Court. Q 22. Can the AAR & AAAR order for rectification of mistakes in the ruling? Ans. Yes, AAR and AAAR have power to amend their order to rectify any mistake apparent from the record within a period of six months from the date of the order. Such mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant or the concerned or the jurisdictional CGST/SGST officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit, the applicant or the appellant must be heard before the order is passed. (Section 102) Q 23. Where can one find the orders passed by AARs and

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GST – GST FAQ 3rd Edition – December, 2018 – 16 – 16. Appeals/Revision Q 1. Who is an adjudicating authority under GST? Ans. adjudicating authority means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Central Board of Indirect Taxes and Customs(CBIC), the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171 (National Anti-Profiteering Authority). Q 2. Whether any person aggrieved by any order or decision passed against him has the right to appeal? Ans. Yes. Any person aggrieved by any order or decision passed under the GST Act(s) has the right to appeal to the Appellate Authority under Section 107. It must be an order or decision passed by an adjudicating authority . However, some decisions or orders (as provided for in Section 121) are not appealable. Q 3. Who is an

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der as may be specified by the Commissioner in his order. The appellate authority can condone a delay of up to one month from the end of the prescribed period of 3/6 months for filing the appeal (3+1/6+1), provided there is sufficient cause as laid down in the section 107(4). A delay beyond one month cannot be condoned by the appellate authority under any circumstances. Q 5. Who are the proper officers to whom appeals will lie under GST? Ans. The appellate authorities under the CGST and SGST Act(s) are as under: For an appealable order passed under the CGST Act Any person aggrieved by any decision or order passed under this Act or the SGST / UTGST Act may appeal to – (a) the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner; (b) any officer not below the rank of Joint Commissioner (Appeals)where such decision or order is passed by the Deputy or Assistant Commissioner or Superintendent, within three months from the date on which the sa

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T Act shall not lie before an officer appointed under the SGST or UTGST Act. Similar provisions exist in SGST/UTGST Act also. Thus appeal against any order passed by CGST officer lie before the Appellate Authority specified under the CGST Act. Similarly appeal against any order passed by SGST officer lie before the Appellate Authority specified under the SGST Act. Q 7. If the proper officer of CGST passes an order under the CGST Act, can such proper officer issue an order under the corresponding State/UT GST Act? Ans. Yes. Where any proper officer issues an order under the CGST Act, he shall also issue an order under the SGST/UTGST Act, as authorised by the SGST/UTGST Act, under intimation to the jurisdictional officer of State tax or Union territory tax. Similar provisions exist under the SGST/UTGST Act also. Q 8. Does the appellate authority have the power to condone any delay beyond three/six months in filing of appeal. If so, what is the period of delay that can be condoned by the

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s been filed. This 10% shall be subject to a maximum limit of ₹ 50 crores (25 crore each under CGST and SGST) as per the CGST (Amendment) Act, 2018, however, the notification to bring the Act into effect is yet to be issued. Q 10. Whether the appellate authority has any powers to allow additional grounds not specified in the appeal memo? Ans. Yes. He has the powers to allow additional grounds not specified in the grounds of appeal if he is satisfied that the omission was not willful or unreasonable. (Section 107(10) of the CGST Act, 2017) Q 11. Is there any format in which appeal has to be filed before the appellate authority? Ans. Yes. Appeal has to be filed in FORM GST APL-03 along with relevant documents. (Rule 109 of CGST Rules). Q 12. If an appeal is filed and pre-deposit made, can the Revenue authorities still proceed and recover the balance amount? Ans. No. In terms of Section 107(7) of CGST Act, 2017, where the appellant has paid the amount of prescribed amount of pre-dep

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odifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order. Q 15. Can the appellate authority enhance any fees/penalty/fine in lieu of confiscation or reduce any amount of refund or ITC etc from that contained in the order of the adjudicating authority? Ans. Yes. However, an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order. Q 16. Can the appellate authority enhance any tax demand from that contained in the order of adjudicating authority? Ans. Yes. However, where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiri

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ailable at the time of issuance of the said order or not or in consequence of an observation by the Comptroller and Auditor General of India, he may, if necessary, stay the operation of such decision or order for such period as he deems fit and after giving the person concerned an opportunity of being heard and after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, including enhancing or modifying or annulling the said decision or order. Such powers are generally to be exercised within three years from passing of the decision or order sought to be revised. Q 19. What are the circumstances in which the revisional authority shall not exercise his power? Ans. The Revisional Authority shall not exercise any power under sub-section (1) of Section 108, if- (a) the order has been subject to an appeal under section 107 (appellate authority) or section 112 (Tribunal) or section 117 (High Court) or section 118 (Supreme Court); or (b) the period spec

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under any circumstances? Ans. Yes. If the said decision or order involves an issue on which the Appellate Tribunal or the High Court has given its decision in some other proceedings and an appeal to the High Court or the Supreme Court against such decision of the Appellate Tribunal or the High Court is pending, the period spent between the date of the decision of the Appellate Tribunal and the date of the decision of the High Court or the date of the decision of the High Court and the date of the decision of the Supreme Court shall be excluded in computing the period of limitation of three years where proceedings for revision have been initiated by way of issue of a notice under this section. Further, where the issuance of an order of revision is stayed by the order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period of limitation of three years. Q 21. To whom will an appeal lie against the order of the appellate and revisional authority?

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matters other than those cases where the issues involved relates to the place of supply. Q 24. What would be the composition of National/Regional Bench? Ans. The National Bench shall be presided over by the President and shall consist of one Technical Member (Centre) and one Technical Member (State). The Regional Benches shall consist of a Judicial Member, one Technical Member (Centre) and one Technical Member (State). Q 25. What would be the composition of the State/Area Benches? Ans. Each State Bench and Area Benches of the Appellate Tribunal shall consist of a Judicial Member, one Technical Member (Centre) and one Technical Member (State) and the State Government may designate the senior most Judicial Member in a State as the State President. Q 26. What happens in case of difference of opinion amongst the members of the Bench? Ans. If the Members of the National Bench, Regional Benches, State Bench or Area Benches differ in opinion on any point or points, it shall be decided accord

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e file appeals against orders of appellate/revisional authority? What is the time limit for filing such appeals by the Revenue? Ans. Revenue appeals before the Tribunal are filed by way of a review mechanism. The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or Commissioner of Union territory tax, call for and examine the record of any order passed by the Appellate Authority or the Revisional Authority under the CGST Act or the SGST/ UTGST Act for the purpose of satisfying himself as to the legality or propriety of the said order and may, by order, direct any officer subordinate to him to apply to the Appellate Tribunal within six months from the date on which the said order has been passed for determination of such points arising out of the said order as may be specified by the Commissioner in his order. Q 29. Does the Appellate Tribunal have power to condone the delay in filing appeal/memorandum of cross objections, by the aggrieved person/Re

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eady over, when the other party prefers an appeal in the case. Thus, in the event of an aggrieved person filing appeal, the respondent can also file memorandum of cross objections to be treated as appeal filed by him. As per section 112(5) of the CGST Act, 2017, the party against whom the appeal has been filed, may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of notice of appeal, file a memorandum of cross-objections, against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal, as if it were an appeal presented within the prescribed time limit specified for filing appeal. Q 31. Is there any prescribed form for filing an appeal before the Appellate Tribunal? Ans. Yes. The appeal has to be filed FORM GST APL – 05 as prescribed under rule 110 of the CGST Rules, 2017. Q 32. What are the pre-deposit requirements for an appeal to be heard by the Appellat

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ion 107(6) (appellate authority) or section 112(8) (appellate Tribunal) is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal, interest at the rate specified under section 56 shall be payable in respect of such refund from the date of payment of the amount (not from date of order-in-appeal) till the date of refund of such amount. The rate of interest notified is six percent. Q 34. Does the Tribunal have any power to amend its own order? Ans. Yes. The Appellate Tribunal may amend any order passed by it so as to rectify any error apparent on the face of the record, if such error is noticed by it on its own accord, or is brought to its notice by the Commissioner or the Commissioner of State tax or the Commissioner of the Union territory tax or the other party to the appeal within a period of three months from the date of the order: Provided that no amendment which has the effect of enhancing an assessment or reducing a refund or input t

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tertain an appeal after the expiry of the said period if it is satisfied that there was sufficient cause for not filing it within such period. Q 37. Against which orders will appeals lie to the Hon ble Supreme Court? Ans. An appeal shall lie to the Supreme Court- (a) from any order passed by the National Bench or Regional Benches of the Appellate Tribunal; or (b) from any judgment or order passed by the High Court in an appeal made under section 117 in any case which, on its own motion or on an application made by or on behalf of the party aggrieved, immediately after passing of the judgment or order, the High Court certifies to be a fit one for appeal to the Supreme Court. Q 38. Which are the orders against which no appeal shall lie? Ans. No appeal shall lie against any decision taken or order passed by an officer of central tax if such decision taken or order passed relates to any one or more of the following matters, namely:- (a) an order of the Commissioner or other authority empow

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Court/Supreme Court stays the operation of the order of the Tribunal, the amount due will be payable by the taxable person. Q 40. Does the Board have the powers to issue directions fixing any monetary limits for filing of appeals? Ans. Yes. The Board may, on the recommendations of the Council, from time to time, issue orders or instructions or directions fixing such monetary limits, as it may deem fit, for the purposes of regulating the filing of appeal or application by the officer of the central tax. No such circular has been issued so far. Q 41. Whether the fee paid by litigants in the Consumer Disputes Redressal Commissions are leviable to GST? Ans. Services by any court or Tribunal established under any law for the time being in force is neither a supply of goods nor services. It has been clarified vide CBIC Circular no. 32/06/2018 dated 12th February, 2018 that fee paid by litigants in the Consumer Disputes Redressal Commissions are not leviable to GST. Any penalty imposed by or

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his service under the Government, had worked in a post not below the rank than that of a Group-B Gazetted officer for a period of not less than two years: Provided that such officer shall not be entitled to appear before any proceedings under this Act for a period of one year from the date of his retirement or resignation; or e) any person who has been authorised to act as a GST Practitioner on behalf of the concerned registered person. (Section 116 of the CGST Act, 2017) Q 43. How can a taxpayer search for a GST Practitioner? Ans. There is a functionality on the dashboard of the registered person on the GST Portal wherein he can get the contact details of all GST Practitioners in a State, district and pincode wise. Q 44. Can a person be disqualified to act as authorised representative? Ans. Yes, where an authorised representative, other than those referred to in clause (b) or clause (c) in above question, upon an enquiry into the matter, guilty of misconduct in connection with any pr

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