What would be the place of supply where goods are removed? – Question 5 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 5 – Q 5. What
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Question 6 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 6 – Q 6. What 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 9 of IGST Act) – Statutory Provisions, Acts, Rules, Regulations, Ta
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Question 7 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 7 – Q 7. What will be the place of supply where the goods or services are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle? Ans. In respect of goods, the place of supply shall be the location at which such goods are taken on board. (Section 9 of IGST Act) However, in respect of services, the place of supply shall be the location o
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Question 8 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 8 – Q 8. 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 non-registered taxpayers. The presumption in case of supplies to registered person is the location of such person. Since the recipient is registered, address of recipient is always there and the same can be ta
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Question 1 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 1 – 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
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Question 2 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 2 – Q 2. Why are place of supply provisions different in respect of goods and services? Ans. Goods being tangible do not pose any significant problems for determination of their place of consumption. Services being intangible pose problems w.r.t determination of place of supply mainly due to following factors: (i) The manner of delivery of service could be altered easily. For example, telecom service could change from mostly post-paid to mostly pre-paid; billing address could be changed, billers address could be changed, repair or maintenance of software could be changed from onsite to online; banking services were
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distribution and exhibition of film could be assigned for many states in single transaction or an advertisement or a programme is broadcasted across the country at the same time. An airline may issue seasonal tickets, containing say 10 leafs which could be used for travel between any two locations in the country. The card issued by Delhi metro could be used by a person located in Noida, or Delhi or Faridabad, without the Delhi metro being able to distinguish the location or journeys at the time of receipt of payment; (v) Services are continuously evolving and would thus continue to pose newer challenges. For example, 15-20 years back no one could have thought of DTH, online information, online banking, online booking of tickets, internet,
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Question 3 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 3 – Q 3. What proxies or assumptions in a transaction can be used to determine the place of supply? Ans. 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 su
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Question 7 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 7 – 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 CG
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Question 8 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 8 – Q 8. How will the settlement between Centre, exporting state and importing state be done? Ans. There would be settlement of account between the Centre and the states on two counts, which are as follows- • Centre and the exporting state: The exporting state shall pay the amount equal to the ITC of SGST used by the supplier in the exporting state to the Centre. • Centre
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Question 9 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 9 – Q 9. What treatment is given to supplies made to SEZ units or developer? Ans: Supplies to SEZ units or developer shall be zero rated in the same manner as done for the physical exports. Supplier shall have option to make supplies to SEZ without payment of taxes and claim refunds of input taxes on such supplies (section 16 of the IGST Act). – Statutory Provisions, Acts, Rules, Re
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Question 10 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 10 – Q 10. Are business processes and compliance requirement same in the IGST and CGST Acts? Ans: The procedure and compliance requirement are same for processes likes registration, return filing and payment of tax. Further, the IGST act borrows the provisions from the CGST Act as relating to assessment, audit, valuation, time of supply, invoice, accounts, records, adjudication, ap
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Question 4 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 4 – Q 4. What are the salient features of the draft IGST Law? Ans. The draft IGST law contains 25 sections divided into9 Chapters. The law, inter alia, sets out the rules for determination of the place of supply of goods. Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient. Where 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
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Question 5 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 5 – Q 5. What are the advantages of IGST Model? Ans. The major advantages of IGST Model are: a. Maintenance of uninterrupted ITC chain on inter-State transactions; b. No upfront payment of tax or substantial blockage of funds for the inter-State seller or buyer; c. No refund claim in exporting State, as ITC is used up while paying the tax; d. Self-monitoring model; e. Ensures tax ne
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Question 6 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 6 – Q 6. How will imports/exports be taxed under GST? Ans. All imports/exports will be deemed as inter-state supplies for the purposes of levy of GST (IGST). The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available as ITC of t
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What is IGST? – Question 1 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 1 – 21. Overview of the IGST Act Q 1. What is IGST? Ans. Integrated Go
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Question 2 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 2 – 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 i
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Question 3 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 3 – 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 seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGS
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Question 21 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 21 – Q 21. 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 of
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Question 22 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 22 – Q 22. Are there any monetary limits prescribed for compounding of offence? Ans. Yes. The lower limit for compounding amount is to be the greater of the following amounts: – • 50% of tax involved, or • ₹ 10,000. The upper limit for compounding amount is to be greater of the following amounts: – • 150% of tax involved or • ₹
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Question 23 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 23 – Q 23. What is the consequence of compounding of an offe
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Question 19 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 19 – Q 19. Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act? Ans. Yes. Section 137 of the CGST/SGST ACT provides that every person who was in-charge of or responsible to a company for the conduct of its business shall, along-with the company itself, be liable to be proceeded against and punished for an offence committe
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What is meant by compounding of offences? – Question 20 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 20 – Q 20. What i
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Is prior sanction of competent authority mandatory for initiating prosecution? – Question 16 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 3
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Question 17 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 17 – Q 17. Is mensrea or culpable mental state necessary for
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Question 18 – Draft-Bills-Reports – Offences, Penalties, Prosecution and Compounding – FAQ on GST (2nd Edition) dated 31.3.2017 – Question 18 – Q 18. What is a culpable state of mind? Ans. While committing an act, a culpable mental state is a state of mind wherein- • the act is intentional; • the act and its implications are understood and controllable; • the person committing the act was not coerced and even overcomes hurdles to the act committed; • the person believes or h
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