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Question 23 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 23 – Q 23. What are the penal consequences if a person opts for the composition scheme in violation of the conditions? Ans. If a taxable person has paid tax under the composition scheme though he was not eligible for the scheme then the person would be liable to penalty and the provisions of section 73 or 74 shall be applicable for determination of tax and penalty. – Statutor

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Question 24 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 24 – Q 24. Does the GST Law empower the Government to exempt supplies from the levy of GST? Ans. Yes. In the public interest, the Central or the State Government can exempt either wholly or partly, on the recommendations of the GST council, the supplies of goods or services or both from the levy of GST either absolutely or subject to conditions. Further the Government can exe

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Question 25 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 25 – Q 25. When exemption from whole of tax collected on goods or services or

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Question 20 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 20 – Q 20. Can the customer who buys from a registered person who is under the composition scheme claim composition tax as input tax credit? Ans. No, customer who buys goods from registered person who is under composition scheme is not eligible for composition input tax credit because a composition scheme supplier cannot issue a tax invoice. – Statutory Provisions, Acts, Rule

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Can composition tax be collected from customers? – Question 21 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 21 – Q 21. Can composition t

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Question 22 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 22 – Q 22. How to compute aggregate turnover to determine eligibility for composition scheme? Ans. The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, aggregate turnover means value of all outward supplies (taxable supplies+exempt supplies+exports + inter-state supplies) of a person having the same PAN and it excludes taxes levied under centra

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Question 17 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 17 – Q 17. Can composition scheme be availed of by a manufacturer and a service supplier? Ans. Yes, a manufacturer can opt for composition scheme generally. However, a manufacturer of goods, which would be notified on the recommendations of the GST Council, cannot opt for this scheme. This scheme is not available for services sector, except restaurants. – Statutory Provisions

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Question 18 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 18 – Q 18. Who are not eligible to opt for composition scheme? Ans. Broadly, five categories of registered person are not eligible to opt for the composition scheme. These are: (i) supplier of services other than supplier of restaurant service; (ii) supplier of goods which are not taxable under the CGST Act/SGST Act/UTGST Act. (iii) an inter-State supplier of goods; (iv) pers

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Can the registered person under composition scheme claim input tax credit? – Question 19 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 19

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A person availing composition scheme during a financial year crosses the turnover of ₹ 50 Lakhs during the course of the year i.e. say he crosses the turnover of ₹ 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? – Question 15 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 15 – Q 15. A person availing composition scheme during a financial year

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Question 16 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 16 – Q 16. Will a taxable person, having multiple registrations, be eligible to opt for composition scheme only for a few of registrations? Ans. All registered persons having the same Permanent Account Number (PAN) have to opt for composition scheme. If one registered person opts for normal scheme, others become ineligible for composition scheme. – Statutory Provisions, Acts,

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Question 11 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 11 – Q 11. What will be the implications in case of receipt of supply from unr

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Question 12 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 12 – Q 12. Can any person other than the supplier or recipient be liable to pay tax under GST? Ans. Yes, the Central/State government can specify categories of services the tax on which shall be paid by the electronic commerce operator, if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the p

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Question 13 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 13 – Q 13. What is the threshold for opting to pay tax under the composition s

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Question 14 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 14 – Q 14. What are the rates of tax for composition scheme? Ans. There are different rates for different sectors. In normal cases of supplier of goods (i.e. traders), the composition rate is 0.5 % of the turnover in a State or Union territory. If the person opting for composition scheme is manufacturer, then the rate is 1% of the turnover in a State or Union territory. In ca

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Question 8 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 8 – Q 8. Are all goods and services taxable under GST? Ans. Supplies of all goods and services are taxable except alcoholic liquor for human consumption. Supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be taxable with effect from a future date. This date would be notified by the Government on th

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What is meant by Reverse Charge? – Question 9 – Draft-Bills-Reports – Levy of and Exemption from Tax – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 9 – Q 9. What is meant by Reverse Charge? Ans

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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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