Frequently Asked Questions (FAQ) on GST
GST
Dated:- 17-7-2017
1. What is GST?
Ans. Simply put GST stands for Goods and Services Tax, which is levied on supply of goods or services or both. Sale of goods, for example is a type of supply. Various economic activities are all different types of supply.
2. On what type of transactions is GST levied?
Ans. In general, GST is levied on all supplies of goods or services or both which are made for consideration. In most cases consideration is the payment for sale of manufactured or traded goods.
3. Will GST be levied on all goods or services or both?
Ans. No. GST will not be levied on alcohol for human consumption. It will also not be levied for the time being on 5 petroleum products (Crude, Motor Spirit (Petrol), HSD, Aviation fuel & Natural gas),on electricity and on sale and purchase of real estate.
4. How GST will be levied on different kinds of supply of Goods or Services or both?
1. Ans. GST is a dual levy. On ever
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
paid by the supplier in Tamil Nadu.
7. Who will pay GST?
Ans. GST, in general, will be paid by the supplier. He will collect the same from the recipient of supply (buyer). However, in few cases, the recipient, would be liable to pay GST to the Government on reverse charge basis.
8. How will GST be collected?
Ans. GST follows multi-stage collection mechanism. GST shall be collected at every stage in the supply chain. However, any tax paid at previous stage is available as set-off. In a nutshell, only value addition will be taxed at every stage. For instance, B purchases goods from A for ₹ 100/-. Let's say tax rate is 10%. A will pay tax of 10% and will collect ₹ 110/- from B. Suppose B further sells the goods for ₹ 105/-. He will have to pay ₹ 10.50 as tax. He will the tax by using the credit of ₹ 10/- already paid by him to A. So in effect, he will be paying ₹ 0.50 only on the value add of ₹ 5/- made by him.
9. What in Input Tax Credit?
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
such as registration, returns, refunds, tax payments,etc. have been prescribed. Since multiple record keeping for a variety of taxes is not required, there will be lesser investment of resources and manpower in maintaining records. The tax payer will no longer have to go to multiple authorities to report compliances. In the long run, due to automated procedures, compliance burden is going to reduce under GST. It will give a great boost to improving ease of doing business.
FAQs on Job Work
1.What does 'job work' mean?
Ans: 'Job work' means undertaking any treatment or process by a person on goods belonging to another registered person and the expression 'job worker' shall be construed accordingly, as defined in Section 2(68) of CGST Act 2017.
2. For the purposes of job work, what does the term 'input' include?
Ans: For the purposes of job work, the term 'input' includes intermediate goods arising from any treatment or process carried out on the inputs by the Principal or the jo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
er.
8.Can a job worker dispatch goods directly from his place of business?
Ans: Any waste and scrap generated during the job work may be supplied by the job worker directly from his place of business on payment of tax if such job worker is registered, or by the principal, if the job worker is not registered, as per Section 143(5) of CGST Act 2017.
9.What documentation are required when materials are being sent for job work?
Ans: When material is sent for job work, Delivery Challan should be prepared in triplicate containing details specified in Rule No.8 (1) of Invoice Rules.
10.Are details of challans in respect of goods dispatched from a job worker be reflected in Returns?
Ans: Yes. Details of challan in respect of goods dispatched to a job worker shall be included in Return Form GSTR-1.
11.What will happen if inputs/capital goods are not received from a job worker during prescribed period?
Ans: If inputs/capital goods are not received during prescribed period, GST will b
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
oods, other than moulds and dies, jigs and fixtures, or tools sent for job work, are to be returned to Principal or supplied from the place of business of job worker within three years of their being sent out.
16.Who will undertake responsibility and accountability for any contravention under the Law during job work?
Ans: Principal will undertake responsibility and accountability for any contravention under the law during job-work.
17. What is the tax treatment under GST for inputs removed for job work before the appointed day?
Ans: Where any inputs received in a factory had been removed as such or removed after being partially processed to a job worker for further processing, testing, repair, re-conditioning or any other purpose in accordance with the provisions of earlier law prior to the appointed day and such inputs, after completion of the job work, are returned to the said factory on or after the appointed day, no tax shall be payable if such inputs are returned to the said
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
paid on reverse charge basis by the recipient will be included in the aggregate turnover of recipient paying tax under reverse charge.
4. I have migrated under GST but want to register as ISD. Whether I can apply now and what is the procedure?
Ans: A separate and new registration is required for ISD.
5. I have ST number on individual name and have migrated to GST. I wish to transfer this on my proprietorship firm.
Ans: This conversion may be done while filling FORM-REG-26 for converting provisional ID to final registration.
6. If someone trades only 0% GST items (grains, pulses) then is it necessary to register for GST, if the turnover exceeds ₹ 20 lakhs?
Ans: A person dealing with 100% exempted supplies is not liable to register irrespective of turnover.
7. If I register voluntarily though turnover is less than ₹ 20 lakhs, am I required to pay tax from 1st supply post registration?
Ans: Yes, you would be treated as a normal taxable person and pay tax on suppli
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
istration will be granted within 3 working days. If no objection is raised on the application by the proper officer within 3 days, registration will be deemed to have been granted.
13. How will taxpayer get the certificate of registration?
Ans. The taxpayer can himself download the certificate of registration online from the GST common portal (www.gst.gov.in).
14. Can registration particulars once furnished be amended?
Ans. Yes. The request for amendment has to be made online. All minor amendments in registration particulars can be amended by the taxpayer himself by filing an application for amendment on the system. In case of certain major amendments in particulars of registration like change in legal name of business, place of business, change in constitution of business, etc, the registration particulars may be amended with the approval of the proper officer within a period of 15 working days.
15. In which state will the person be registered?
Ans. A person applying for regi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
becoming liable to registration?
Ans: An un-registered person has 30 days to complete his registration formalities from its date of liability to obtain registration.
20. What if I am not liable to register under GST but I was registered under Service Tax?
Ans: You can apply for cancellation of Provisional ID if you do not need registration under GST.
21. If I am not an existing tax payer and wish to register under GST, when can I do so?
Ans: You would be able to apply for new registration at the GST Portal gst.gov.in.
22. Do registered dealers have to upload the sale details to un-registered dealers also in GST?
Ans:. In case of intra-State supply and inter-State B2C supply, a consolidated entry has to be specified in the Return. However, for B2C inter-State supply, each supply having invoice value of more than ₹ 2.50 lakhs is required to be reported in the Return.
23. How do I incorporate two supplies in the same period Return for say Pharmaceutical products with sam
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
all reflect the relevant debit entry number in his Return. For example, payment of taxes for the month of July, 2017 shall be made by the 20th of August, 2017. Composition tax payers are required to pay tax on quarterly basis.
3. What is the last date by which GST is to be paid for a particular supply?
Ans. If a supply is undertaken in a particular month, the GST in respect of that supply has to be paid by the 20th of the succeeding month. GST can be paid either in cash or using the credit balance in the ITC ledger.
4. Can traders get the credit of IGST paid at the time of imports for discharging their domestic liabilities under GST? If yes, how?
Ans. Yes. Under GST, traders will be on par with manufacturers. IGST paid at the time of import will be available as credit which can be used for payment of taxes on further supplies.
GSTIN would be used for the purpose of credit flow of IGST on import of goods and refund of IGST paid in case of export.
5. Is GST payable upon receipt o
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
2) of CGST and SGST Act. He has to submit application in Form GSTTRAN 1 within 90 days.
3. Can a taxable person who was not eligible to take CENVAT credit earlier, but is now eligible to do so under GST, avail Input Tax credit?
Ans: A taxable person who was not eligible to take CENVAT credit earlier but is now eligible to do so under GST can take Input Tax credit of Excise duty which was paid on the stock with him, if he has Invoice or other documents evidencing payment of Excise duty. He has to submit stock statement, as specified under Section 140 (3) of CGST and SGST Act 2017.
4. Can Input Tax credit be availed for goods cleared by supplier prior to 01.07.2017, but received by recipient after 01.07.2017?
Ans: If goods were cleared by supplier prior to 01.07.2017 by paying Excise duty and State VAT but goods were received after 01.07.2017 by recipient, Input Tax credit of such Excise duty or State VAT is available if such invoice was recorded in the books of accounts within 30
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Ans: A registered taxable person shall be entitled to take, in his electronic credit ledger, credit of un-availed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the earlier law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed.
8. What is the treatment for Exempted goods returned to the place of business within 6 months form the appointed day?
Ans: Where any goods on which duty had been exempt under the earlier law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, no tax shall be payable thereon if such goods are returned to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer.
9. What is the treatment for Exempted goods returned to the place of business after
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
are liable to tax under this Act and are returned after a period of six months from the appointed day.
12. Can the person to whom goods are returned take credit of Goods paid at the time of removal of such goods?
Ans: Every taxable person who receives such goods within a period of six months shall be entitled to take credit of the duty paid earlier at the time of removal.
13. What is the treatment of goods sent on approval basis but returned on or after the appointed day?
Ans: When goods are sent on approval basis and such goods are returned within the period of six months from the appointed day, or extended period of 2 months, then no tax is payable as per Section 162 D of CGST Act 2017.
14. Is tax payable in case goods are rejected or not approved by a buyer received after the appointed day?
Ans: No tax shall be payable in case where any goods are rejected or not approved by the buyer and are returned within the period of 6 months. However, GST shall be payable by the perso
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
or more multiple series, containing alphabets or numerals or special characters-hyphen or dash and slash symbolized as “_” and “/” respectively, and any combination thereof, unique for a financial year
(iii) Date of its issue
(iv) Name, address and GSTIN or UIN, if registered, of the recipient
(v) Description of goods or services or both
(vi) Taxable value of supply of goods or services or both taking into account discount or abatement, if any
(vii) Rate of tax (Central tax, State tax, Integrated tax,Union Territory tax or cess)
(viii) Amount of tax charged in respect of taxable goods or services ( Central tax, State tax, Integrated tax, Union Territory tax or cess).
(ix) Signature or digital signature of the supplier or his authorized representative.
3. What must be done with a tax invoice whose value is less than ₹ 200?
Ans: If value of each tax invoice is less than ₹ 200, consolidated invoice may be issued at the end of the day.
4. How many copies of tax invo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
sue Bill of Supply and NOT tax invoice, with details specified in Rule 4, namely:
(i) Name, address and GSTIN of the supplier
(ii) A consecutive serial number not exceeding sixteen characters, in one or more multiple series, containing alphabets or numerals or special characters-hyphen or dash and slash symbolized as “_” and “/” respectively, and any combination thereof, unique for a financial year
(iii) Date of its issue
(iv) Name, address and GSTIN or UIN, if registered, of the recipient
(v) Description of goods or services or both
(vi) Taxable value of supply of goods or services or both taking into account discount or abatement, if any
(vii) Rate of tax (Central tax, State tax, Integrated tax, Union Territory tax or cess)
(viii) Amount of tax charged in respect of taxable goods or services ( Central tax, State tax, Integrated tax, Union Territory tax or cess).
(ix) Signature or digital signature of the supplier or his authorized representative.
9. If goods are transported
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
al signature of the Input service Distributor or his authorized representative.
FAQs on Accounts
1. What is the basic information that needs to be furnished in Form GSTR-1?
Ans: The details to be entered in the return of outward supplies Form GSTR-1, made by the trader depends upon the nature of supplies made. The provisions are as follows:
i) intra-State supplies to consumers (B2C supplies) – tax-rate wise summary;
ii) inter-State supplies to consumers (B2C supplies) of value upto ₹ 2.5 lakhs – State-wise and tax-rate wise summary;
iii) inter-State supplies to consumers (B2C supplies) of value above ₹ 2.5 lakhs – specified invoice wise details;
iv) supplies to resellers (B2B) – specified invoice wise details.
2. What if a trader/businessman is unable to undertake compliances under GST himself?
Ans. Under GST, the government will allow qualified persons to act as GST Practitioners. In case the trader is unable to undertake compliances himself, he can utilize the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
in the State or Union territory, inward supplies of goods or services or both, tax payable on reverse charge basis in case of purchases made from unregistered persons and tax payable.
5. Will the compliance process under GST be complicated for traders under GST? What measures have been put in place to ease burden of compliance on small traders?
Ans. No. The compliance process will be automated and easy for traders. The following steps have been taken by the Government in this regard.
a) Small traders with a turnover below ₹ 20 Lakhs need not register under GST.
b) An easy to understand and comply composition scheme for traders having turnover upto ₹ 75 lakhs where tax can be paid quarterly as a percentage of turnover.
c) GST Seva Kendras have been opened in all Commisssionerates (upto Range office) under CBEC to help small traders under the GST law and process.
d) For uploading of invoice details, GST Network will be providing easy to use application free of cost whi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
h interest will be paid. For Exports, provisional refund up to 90% of the claim will be sanctioned upfront without any verification. The amount of refund will be directly credited to beneficiary's bank account.
6. The traders are not used to classify the goods under the HSN nomenclature and are likely to face hardship in this regard?
Ans. Taxpayers whose turnover is above ₹ 1.5 crores but below ₹ 5 crores shall use 2-digit code and the taxpayers whose turnover is ₹ 5 crores and above shall use 4-digit code. Taxpayers whose turnover is below ₹ 1.5 crores are not required to mention HSN Code in their invoices. Further the goods emanate either from manufacture or from imports. The traders usually don't change the nature of goods. The classification, in general, will be in continuity from the HSN declared by the manufacturer or importer both of whom have been using the system in the past also.
FAQs on Returns
1. From when do the first Returns need to be filed b
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
es?
Ans: Returns provide for furnishing rate wise details.
6. Who shall undertake responsibility for keeping proper accounts under this provision and in case of contraventions?
Ans: The principal would undertake the primary responsibility and accountability of the goods including payment of taxes, if any.
7. What is the time limit within which Capital goods have to be returned to Principal?
Ans: Three years.
8. Can the benefit of sub Section 1, 2 and 3 be availed even if the date of removal of inputs, semi-finished goods or finished goods is falling beyond one year before the appointed date?
Ans: There are no restrictions in Sec 141 regarding the time period before the appointed date within which the date of removal of goods removed should fall in order to avail the benefit of Section 141. The restriction regarding the time limit is only in respect of receiving back of the goods to the place of business from where those goods were originally removed.
9. A person who is regi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
payers whose turnover is above ₹ 1.5 crores but below ₹ 5 crores shall use 2-digit code and the taxpayers whose turnover is ₹ 5 crores and above shall use 4-digit code. Taxpayers whose turnover is below ₹ 1.5 crores are not required to mention HSN Code in their invoices. Further the goods emanate either from manufacture or from imports. The traders usually don't change the nature of goods. The classification, in general, will be in continuity from the HSN declared by the manufacturer or importer both of whom have been using the system in the past also.
12. What if a manufacturer/businessman is unable to undertake compliances under GST himself?
Ans. Under GST, the government will allow qualified persons to act as GST Practitioners. In case the manufacturer is unable to undertake compliances himself, he can utilize the services of such GST practitioners to do the compliances for him.There would also be Facilitation Centres, help desks in each GST Commissionerat
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
In the case of following 9 North East and special category states, the limit of turnover is ₹ 50 Lakhs in the preceding financial year.
a) Arunachal Pradesh
b) Assam
c) Manipur
d) Meghalaya
e) Mizoram
f) Nagaland
g) Sikkim
h) Tripura and
i) Himachal Pradesh
3. What is the rate of tax under Composition levy?
Ans. Rate for manufacturers is 2% (1% CGST and 1% SGST).
4. Who are the persons(traders/manufacturers) not eligible for composition scheme?
Ans. Following persons are not allowed to opt for the composition scheme:
a) a casual taxable person or a non-resident taxable person;
b) suppliers whose aggregate turnover in the preceding financial year crossed ₹ 75 lakhs;
c) supplier who has purchased any goods or services from unregistered supplier unless he has paid GST on such goods or services on reverse charge basis;
d) supplier of services, other than restaurant service;
e) persons supplying goods which are not taxable under GST law;
f) persons making an
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the year i.e. say he crosses the turnover of ₹ 75 Lakhs/Rs. 50 Lakhs in December? Will he be allowed to pay tax under composition scheme for the remainder of the year i.e. till 31st March?
Ans. No. The option availed shall lapse from the day on which his aggregate turnover during the financial year exceeds ₹ 75 Lakhs/50 Lakhs. Once he crosses the threshold, he shall file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days of the occurrence of such event.
Every person who has furnished such an intimation, may electronically furnish at the common portal, a statement in FORM GST ITC-01 containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock as well as the capital goods held by him on the date on which the option is withdrawn, within a period of thirty days from the date from which the option is withdrawn.
7. How will aggregate turnover be computed for the purpose of composition?
Ans. I
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e composition scheme is out of the credit chain. He can neither take credit on his input supplies, nor issue taxable invoice to his buyer. He cannot charge tax from the recipient. The person purchasing from him cannot take any credit.
10.Can a person paying tax under the composition scheme issue a tax invoice under GST?
Ans. No. He can issue a bill of supply in lieu of tax invoice and such bill of supply cannot show tax element separately.
11. Are monthly returns required to be filed by the person opting to pay tax under the composition scheme?
Ans. No. Such persons need to file a simplified quarterly returns in Form GSTR-4. The GSTR-4 needs to be filed electronically on the GSTN common portal by the 18th day of the month succeeding the quarter relating to the supplies.
12. What is the basic information that need to be furnished in Form GSTR 4?
Ans. It should contain details of turnover in the State or Union territory, inward supplies of goods or services or both, tax payable
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Form GST CMP-01. A person who has already obtained registration and opts for payment under composition levy need to give intimation electronically in Form GST CMP-02.
15. In case a person has registration in multiple states? Can he opt for payment of tax under composition levy only in one state and not in other state?
Ans. No. Any intimation under sub-rule (1) or sub-rule (3) of Rule 3 of the CGST Rules, 2017 in respect of any place of business in any State or Union territory shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number.
16. What is the effective date of composition levy?
Ans. There can be three situations:
Situation
Effective date of composition levy
Persons who have been granted provisional registration and who opt for composition levy (Intimation is filed under Rule 3(1) in Form GST CMP-01)
The appointed date i.e. 22nd June, 2017
Persons opting for composition levy at the time of making a
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ceived from his branch situated outside the State or from his agent or principal outside the State;
(c) the goods held in stock by him have not been purchased from an unregistered supplier and where purchased, he pays the tax under reverse charge mechanism;
(d) he shall pay tax under reverse charge mechanism where he purchases goods or services from an un-registered persons;
(e) he was not engaged in the manufacture of notified goods namely ice cream and other edible ice, pan masala and tobacco and manufactured tobacco products;
(f) he shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him; and
(g) he shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.
18. What is the validity of composition levy?
Ans. The option exercised by a registered person
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
red to be given electronically in FORM GST CMP-02, prior to the commencement of the relevant financial year.
21.What is the validity of composition levy?
Ans. The option to pay tax under composition levy would remain valid so long as conditions mentioned in Section 10 of the CGST Act, 2017 and Rule 3 to 5 of the CGST Rules, 2017 remain satisfied.
22.Can a person paying tax under composition levy, withdraw voluntarily from the scheme? If so, how?
Ans. Yes. The registered person who intends to withdraw from the composition scheme can file a duly signed or verified application in FORM GST CMP-04.
Every person who has filed an application for withdrawal from the composition scheme, may electronically furnish, a statement in FORM GST ITC-01 containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date of withdrawal, within a period of thirty days of withdrawal.
23.Will withdrawal intimation in any one place be appl
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
