Is the reverse charge mechanism applicable only to services? – Question 10 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 10 – Q 10. Is th
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Question 5 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 5 – Q 5. Who can notify a transaction to be supply of goods or services? Ans. Central Government or State Government, on the recommendations of the GST Council, can notify an activity to be the supply of goods and not supply of services or supply of services and not supply of goods or neither a supply of goods nor a supply of services. – Statutory Provisions, Acts, Rules, Regu
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Question 6 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 6 – Q 6. What are composite supply and mixed supply? How are these two different from each other? Ans. Composite supply is a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are bundled in natural course and are supplied in conjunction with each other in the ordinary course of business and where one of which is a
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Question 7 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 7 – Q 7. What is the treatment of composite supply and mixed supply under GST?
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Question 1 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 1 – 2. Levy of and Exemption from Tax Q 1. Where is the power to levy GST derived from? Ans. Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both, Parliament and State Legislatures to make laws with respect to GST i.e. central tax (CGST) and state tax (SGST) or union territory tax (UTGST). Howe
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What is the taxable event under GST? – Question 2 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 2 – Q 2. What is the taxable event under
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Question 3 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 3 – Q 3. Whether supplies made without consideration will also come within the
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Question 4 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 4 – Q 4. Will giving away essential commodities by a charitable institution be taxable activity? Ans. In order to be a supply which is taxable under GST, the transaction should be in the course or furtherance of business. As there is no quid pro quo involved in supply for charitable activities, it is not a supply under GST. – Statutory Provisions, Acts, Rules, Regulations, Tax
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Question 31 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 31 – Q 31. Different companies have different types of accounting software packages and no specific format are mandated for keeping records. How will department be able to read into these complex software? Ans. As per Section 153 of the CGST/SGST Act, having regard to the nature and complexity of a case and in the interest of revenue, department may take assistance
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Question 32 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 32 – Q 32. Is there any provision in GST for tax treatment of goods returned by the recipient? Ans. Yes, Section 34 deals with such situations. Where the goods supplied are returned by the recipient, the registered person (supplier of goods) may issue to the recipient a credit note containing the prescribed particulars. The details of the credit note shall be declar
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Question 33 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 33 – Q 33. What is Anti-Profiteering measure? Ans. As per section 171 of the CGST/SGST Act, any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. An authority may be constituted by the government to examine whether input tax credits availed by
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Question 28 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 28 – Q 28. Whether actionable claims liable to GST? Ans. As per section 2(52) of the CGST/SGST Act actionable claims are to be considered as goods. Schedule III read with Section 7 of the CGST/SGST Act lists the activities or transactions which shall be treated neither as supply of goods nor supply of services. The Schedule lists actionable claims other than lottery
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Whether transaction in securities be taxable in GST? – Question 29 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 29 – Q 29. Whe
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Question 30 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 30 – Q 30. What is the concept of Information Return? Ans. Information return is based on the idea of verifying the compliance levels of registered persons through information procured from independent third party sources. As per section 150 of the CGST/SGST Act, many authorities who are responsible for maintaining records of registration or statement of accounts or
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Whether the composition scheme will be optional or compulsory? – Question 24 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 24 –
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Question 25 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 25 – Q 25. What is GSTN and its role in the GST regime? Ans. GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN would, inter alia, include: (i) facilitating registration; (ii) forwarding the returns to Central and State authorities; (iii) computation and settlement of IGST; (iv) matching of tax payment details with banking network; (v) provi
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Question 26 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 26 – Q 26. How are the disputes going to be resolved under the GST regime? Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that the Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute- (a) between the Government of India and one or more States; or (b) between the Government of India and any State or States
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Question 27 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 27 – Q 27. What is the purpose of Compliance rating mechanism? Ans. As per Section 149 of the CGST/SGST Act, every registered person shall be assigned a compliance rating based on the record of compliance in respect of specified parameters. Such ratings shall also be placed in the public domain. A prospective client will be able to see the compliance ratings of supp
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Question 21 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 21 – Q 21. How will imports be taxed under GST? Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed.
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Question 22 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 22 – Q 22. How will Exports be treated under GST? Ans. Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. The Exporter will have an option to either pay tax on the output and claim refund of IGST or export u
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Question 23 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 23 – Q 23. What is the scope of composition scheme under GST? Ans. Small taxpayers with an aggregate turnover in a preceding financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover in a state during the year without the benefit of ITC. The floor rate of tax for CGST and SG
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Question 18 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 18 – Q 18. Who is liable to pay GST under the proposed GST regime? Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of ₹ 20 lakhs (Rs. 10 lakhs for NE & Special Category States) except in certain specified cases where th
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Question 19 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 19 – Q 19. What are the benefits available to small tax payers under the GST regime? Ans. Tax payers with an aggregate turnover in a financial year up to [Rs.20 lakhs & ₹ 10 Lakhs for NE and special category states] would be exempt from tax. Further, a person whose aggregate turnover in the preceding financial year is less than ₹ 50 Lakhs can opt for
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Question 20 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 20 – Q 20. How will the goods and services be classified under GST regime? Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. 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-dig
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Question 16 – Draft-Bills-Reports – Overview of Goods and Services Tax (GST) – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 16 – Q 16. What is the guiding principle of GST Council? Ans. The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided b
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