GST — FAQ on Mining dated 31-07-2017
General FAQ on GST – GST Frequently Asked Questions (FAQs)
GST
Question 1 : Can small mining leaseholders with a turnover less than ₹ 75 lacs operate under composition scheme?
Answer : As per Sec. 10(1) of the CGST Act, 2017, a registered person whose aggregate turnover in the preceding FY did not exceed ₹ 75 lakhs, would be eligible for paying GST under the composition scheme.
Question 2 : What is the GST rate for minerals and ores in Composition Scheme?
Answer : In a case where the process amounts to manufacture, the rate of tax will be 1% (CGST) and 1% (SGST/UTGST). In any other case, the rate will be ½% (CGST) and ½% (SGST/UTGST).
Question 3 : Will they have to deposit GST under SGST/CGST heads separately?
Answer : Yes. GST has to be paid separately under CGST and SGST/UTGST by generating a single challan through the common portal under a single return.
Question 4 : Ca
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om unregistered suppliers. As the mine owner who is paying tax under composition scheme is registered, the recipients need not pay GST on reverse charge mechanism.
Question 8 : What is the threshold limit and conditions when a small mine owner/lease holder under Composition Scheme has to migrate into full GST System?
Answer : As per section 10(3) of the CGST Act, 2017, the option availed of by the small mine owner/lease holder shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds ₹ 75 lakhs. For details regarding other conditions, section 10 of the CGST Act, 2017 and the rules framed there under may be referred to.
Question 9 : Is the Return filing and compliance simpler under composition scheme?
Answer : Yes, Return filing and compliance is simpler under the composition scheme. The registered person has to file only one return on a quarterly basis in Form GSTR-4.
Question 10 : Will the basic exemption l
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the same Permanent Account Number, to be computed on all India basis but excludes Central tax, State tax, Union territory tax, integrated tax and compensation cess.
Question 12 : Will the buyer of goods from unregistered person pay reverse tax?
Answer : A registered person receiving taxable goods or services from a supplier who is not registered, would be liable to pay GST under reverse charge mechanism. However, in terms of notification no. 8/2017-Central Tax (rate), dated 28th June, 2017, aggregate value of supplies of goods and/or service received by a registered person from any or all the suppliers, who is or are not registered, upto five thousand rupees in a day is exempt from tax under reverse charge mechanism. This exemption will not apply if the value exceeds ₹ 5000/-.
Question 13 : Can a buyer of goods and services pay the value of services/goods to the supplier and deposit the GST component of the invoice in the supplier's account so that when the buye
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ce for supply of goods from a mining lease holder or it will be applicable on the amount of advance received by the mining company for booking the order?
Answer : No. As per the provisions of section 12(2) of the CGST Act, 2017 the time of supply of goods shall be the date of issue of invoice or the date of receipt of payment, whichever is earlier. Accordingly, GST would be payable on advance payment received prior to issuance of the invoice.
Question 17 : Will the supplier have to issue “receipt voucher” against each advance received?
Answer : Yes, as per section 31(3)(d) of the CGST Act, 2017 the supplier has to issue a “receipt voucher” for every advance received.
Question 18 : How do I show the advance received in GSTR-1?
Answer : Where against an advance the invoice is issued in the same tax period, the advance need not be shown separately in Form GSTR-1 but the specified details of invoice itself can be directly uploaded on the system. Details of all
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to be made from various loading point and time. In such situation how will the billing person at one point realize how much “balance advance” is available for adjustment while raising invoice at his end at a specific point of time?
Answer : Under GST gross amount of advance is to be reported and tax has to be paid. Advance can be adjusted in totality. While raising the invoice subsequent to receipt of advance, the tax payable will get reduced by the amount of tax paid on the advance and balance amount of advance may be adjusted against future supplies.
Question 21 : Will GST charged on purchase of all earth moving machinery including JCB, tippers, dumpers by a mining company be allowed as input credit?
Answer : The provision of Sec. 17(5)(a) of the CGST Act, 2017 restricts credit on motor vehicle for specified purposes listed therein. Further, in terms of the provision of Section 2(76) of the CGST Act, 2017 the expression 'motor vehicle' shall have the same meaning a
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of business, would be allowed as ITC.
Question 24 : What is the time limit for availing input credit under GST?
Answer : As per provisions of Section 16(4) of the CGST Act, 2017 the ITC is not available after the due date of furnishing the return for the month of September of the next year or furnishing of the annual return, whichever is earlier.
Question 25. Would the net outstanding amount of unutilised input credit be refunded by the Government?
Answer : In terms of the provision of Section 54(3) of the CGST Act, 2017 subject to conditions, refund of unutilized input tax credit would be available in respect of zero rated supply or where ITC has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supply. However, such refund of ITC would not be available if export duty is payable on the goods so exported out of India.
Question 26. Will GST charged by tax consultants, advocates, Chartered Accountants, environme
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transport bilti on movement of mineral from mine to the buyer be allowed as ITC to the buyer irrespective of the ownership of the transporting vehicle?
Answer : In case of an FOR contract for supply of mineral from the mine to the buyer, it is a composite supply where the consideration will be inclusive of the transportation cost. Therefore, GST on forward charge will be payable by the supplier of the mineral and credit will be available to the buyer if otherwise available. The supplier of the mineral will also pay tax on reverse charge basis on the freight charged by the GTA and the credit of the same will be available to the supplier of the mineral.
In case of an ex-works contract of supply, where the GTA service has been booked by the supplier at the instance of the buyer and the service is billed by the GTA to the buyer and the minerals are billed by the supplier of the mineral to the buyer, then GTA on reverse charge shall be paid by the buyer who shall be entitled to take
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be eligible to take ITC under GST?
Answer : Rigs, capitalized in the books of accounts as capital goods are used in the course or furtherance of business. Hence, it will be eligible as capital goods and ITC will be available under GST.
Question 31. Will ITC be available for holding Environmental Clearance (EC) and Forestry Clearance (FC) meetings and for obtaining 'consent to operate' the Mines?
Answer : Yes, ITC on expenses incurred in the course or furtherance of business shall be available.
Question 32. Will the mining companies be eligible to take ITC for construction of townships, hospitals and schools?
Answer : No. Mining companies will not be eligible for ITC on such activities even if used in course or furtherance of business. In this connection, the provisions contained in section 17(5)(c) of the CGST Act, 2017 refer.
Question 33. Are minerals sent for export in processed or raw form fully exempted from payment of GST or I GST?
Answer :&ems
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g of returns, as huge mines are located throughout the districts in the country, especially in rural and backward areas, and the problem will be aggravated as the huge number of mines are operating without any IT infrastructure?
Answer : Returns may be filed from the central office of the Company which are usually located in areas with infrastructure required for filing such returns.
Question 36. Whether GST TDS will be applicable on Works Contract Jobs (to be renamed as Supply of Services) in case of PSUs, since such GST TDS U/s. 51(1) of CGST Act, 2017 is applicable on : a) Dept., or establishment of the Central Govt., or State Govt.; or b) Local authority; or c) Govt., agencies; or d) Such persons or category of persons as may be notified by the Govt., on the recommendations of the Council.
Answer : TDS, under section 51(1) of the CGST Act, 2017 will apply to supplies made to such agencies as may be mandated by the Government for TDS. As of now, this section has no
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will be able to distribute the available credit even if the invoices are received after the appointed day.
Question 39. In Table 5(b) of GST-TRAN-1, the details of Form C, F and H/I are to be given for the period April 15 to June 17 (i.e. for 27 months) which would be a voluminous task. Reasons of furnishing the details for last 27 months may please be clarified?
Answer : In cases where sales were covered by Forms C, F, H and I, the input tax credit has remained in the account of the taxpayer because the taxpayer has availed of the benefit of concessional rate/nil rate of tax on the sale/stock transfer under CGST Act. The benefit of concessional rate/nil rate is available conditional upon production of the statutory forms. Therefore, allowing migration of the credit that has accrued on account of sale/stock transfer having been made on concessional rate/nil rate should be given only on production of the statutory forms. Even otherwise, the taxpayer would have claimed refund
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laimed as refund under the Central Excise Law.
Question 42. Whether credit of Green Cess (Clean Energy Cess) paid on coal and available at the time of transition be eligible for being carried over?
Answer : No. Credit of Clean Energy Cess cannot be carried forward on transition.
Question 43. Whether stock held by mining companies on which Clean Energy Cess has been paid be chargeable to compensation cess in GST regime?
Answer : Yes. Compensation cess will be charged on supply of such stock.
Question 44. Can supplies of coal under a particular order or under FSA (Fuel Supply Agreement) be eligible under the definition of 'continuous supply of goods?
Answer : Such supplies are in the nature of continuous supply as the invoices are raised periodically. The individual dispatches may be covered under delivery challans and invoice may be issued for the supplies made during a period as per the contract.
Question 45. In case of coal, the applicable Com
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te. Clarity on the same may be provided by the Government
Answer : Chapter 68 covers value added articles of sandstone etc. which are further worked other than by way of roughly trimmed or merely cut into blocks or slabs.
Question 48. Whether supply of HSD free of cost for mining operation would attract GST and whether the input tax credit would be available for GST so charged by the Service provider?
Answer : HSD is outside GST and therefore, input tax credit would not be admissible.
Question 49 : Will ITC be available on steel, timber and sometimes cement which are used in the underground mines to provide a protective device for security purpose?
Answer : Credit will not be available if these goods are supplied for construction of an immovable property. But if these are temporarily placed for protective purposes, credit will be available.
Question 50 : As per Section 54(3), it is clear that no refund of ITC will be available for export in the cases
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