Goods and Services Tax – General FAQ on GST – Frequently Asked Questions – 170828-01 – COMPOSITION Q. 1. Whether a person can avail the composition scheme on Small Retail Trading of goods if he is holding both incomes like Sale of business : ₹ 25 lakh (Small Retail Trader) and Rental income : ₹ 12 lakh, whereas the person was registered earlier in VAT Composition Scheme and was paying Service Tax on rental income? Ans. Renting is a service and supplier of service, except restaurant service, cannot opt for composition scheme. Since you are supplying both goods & services, you are not eligible for composition scheme. Q. 2. Can traders selling on e-commerce portals avail composition scheme if their turnover is less than ₹ 75 lakh? Ans. No. Refer Sub-section (2) of Section 10 of CGST Act, 2017. EXPORTS Q. 3. Whether every registered person who intends to export requires fresh Bond/LUT even if the same was issued on or before 30-6-2017 and is still live i.e. not one y
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ay be furnished in place of a bond. It may be clarified as to whether any conditions and safeguard has been notified by the Board as on date, as certain parties have filed LUT for export in this office. Ans. Yes, conditions and safeguards have been specified by Notification No. 16/2017-Central Tax, dated 7-7-2017 and clarified in detail in Circular No. 4/4/2017-GST, dated 7-7-2017. The sum and substance of these documents is that the facility of Letter of Undertaking in place of a bond is available to a registered person who is either (a) a status holder as specified in the Foreign Trade Policy 2015-2020; or (b) who has received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year. The person should not have been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws in a case where the amount of tax ev
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ses of manufacturer-exporter? Does the merchant-exporter have the option either to avail option of Bond/LUT or to pay IGST for export of such goods? Ans. Yes. The manufacturer would be liable to pay CGST and SGST. The merchant-exporter has the option either to avail option of Bond/LUT or to pay IGST for export of such goods. There is no provision on the lines of Form H under the CST Act in the GST. Q. 9. As per Rule 96A of CGST Rules, 2017, the LUT is to be accepted by the Jurisdictional Commissioner, Udaipur whereas in pre GST era the same was accepted by the jurisdictional Deputy/Assistant Commissioner Kota. The Commissioner of Kota region has office at Udaipur which is 290 Kilometers away from Kota due to which it is impractical to file LUT at Udaipur with Commissioner as compared to previous procedure. Ans. Circular No. 2/2/2017-GST, dated 4-7-2017 has clarified that an exporter wishing to export without payment of integrated tax may approach the jurisdictional AC/DC for acceptance
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xisting LUTs/Bonds till 31st July, 2017. Exporters shall submit the LUTs/Bond in the revised format latest by 31st July, 2017. Q. 12. There is lack of clarity in the trade regarding the eligibility conditions for the LUT/Bond as per the Notification No. 16/2017-Central Tax. Para i(b) of the said notification requires the exporter to receive the due foreign inward remittances amounting to a minimum 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year. It is not clear for the exporters having an export turnover of say ₹ 5 Crore. For such people whose 10% of the export turnover is below one crore, what is the implication? Are those exporters who have received their total due inward remittance of e.g. ₹ 5 Crore eligible for availing the facility of LUT? Ans. Condition i(b) in the said Notification means that: the registered person should have received at least 10% of his/her export turnover as foreign inward remittance in t
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iding centralized HR, Finance and IT functions also need to raise invoices to its branches? Ans. Yes, if the head office and branches are distinct persons as specified in Section 25(4) of CGST Act, 2017 invoice is required to be issued and GST should also be paid. Q. 16. Kindly clarify the accounting treatment of Credit Note while raising Invoice after implementation of GST? Ans. For the purpose of GST law, credit note can be issued to reduce the taxable value or to reduce tax payable or to claim goods return, where the relevant invoice had already been issued and taxable value or tax charged in that tax invoice is in excess. Section 34 of CGST Act, 2017 may be referred to for further details. Q. 17. Whether any trader having turnover of less than ₹ 20 lakh needs to sell his goods on proper invoice/billing? Ans. Only registered persons are required to issue tax invoices as per provision of Section 31 of CGST Act, 2017 read with rules. An unregistered person may supply goods on or
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required to be reversed. Q. 21. Under GST, how to send demonstration equipment and instruments to customers or branch offices with in India on returnable basis? – No sale is involved. Ans. As the goods are sent on returnable basis and no transfer of title is involved, it is not a supply of goods. If some element of service is involved, the same will be a taxable supply. The goods may be sent on delivery challan without invoice as it is not a supply of goods. Q. 22. How to send equipment and instruments to manufacturers factory for repairs and calibration with in India on returnable basis? – No sale is involved. Ans. Challan for movement of goods without supply is to be issued in terms of Rule 55 of CGST Rules. Q. 23. Clarification is sought on the following : Revision in GSTR Returns. Ans. Mistakes can be corrected in subsequent returns to be filed through amendment Table (For example Table 11 of GSTR-1). Such mistakes can be corrected till the due date for filing of the return for the
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on, the composition person cannot charge any tax and hence the question of availing ITC does not arise. Q. 27. Please clarify ITC Credit status for the following condition : On GST Deducted Commission for Distributor registered under GST Taxpayer Ans. Any deductions under TDS/TCS provisions from amount paid or credited to the supplier shall be credited to the electronic cash ledger which can be used for payment of tax. Q. 28. Please clarify ITC Credit status for the following condition : If Commission received Without Deducting GST in cases where distributor under Exemption or composition Scheme Ans. The section concerning GST deduction (Section 51 of CGST Act, 2017) has not been operationalized till now. But if the distributor is under threshold exemption or under composition scheme, the requirement for GST deduction depends upon the taxable supply and value of contract rather than the nature of the supplier. Q. 29. How should importers take credit of clean energy cess paid on goods l
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pplicable for a person who was registered under the existing laws (e.g. under Central Excise, Service Tax, Value Added Tax). And therefore, credit of taxes paid on inputs was getting recorded in the returns filed. Section 140(3) of CGST Act is applicable for persons who were not liable for registration under existing laws or who were selling/providing non-taxable, exempt goods/services but their supplies are liable to tax under GST. Please also refer to Section 140 of the SGST Act of your respective state and the associated rules. Q. 32. Please clarify on availment of input tax credit of GST paid on trucks, commonly used for G.T.A. business, Safex, Multi-modal and packing business? Ans. No ITC is permitted to GTA engaged in providing GTA services which are under RCM and are treated as exempted supplies in the hand of GTA. However, if GTA is also liable to pay tax under forward charge as supplier, he is not permitted to avail ITC if he is claiming the concessional rate of 5%. If ITC is
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consider excluding banks from reporting of exempt/non-GST supplies in GSTR-1? Ans. Return Rules have already been notified. It is not possible to make exception for one sector. Q. 37. Clarification is sought for the following : Penal Interest on loans and advances Ans. Penal interest is a consideration for tolerating an act and it is a supply of service and will be taxable. Q. 38. In case of takeover of a Partnership firm by a Private Limited Company, then who will get the ITC credit? And who should file the GST TRAN-1? Ans. If the business is transferred as a going concern, and liabilities are also transferred then ITC can be transferred to the company. The company can file GST TRAN-1. JOB WORK Q. 39 Whether the job worker (who converts barley into Malt) has to charge GST from the Principal only on the Job Work charges or full value of goods, i.e. (Value of Raw Material + Job Work Charges)? Ans. The job worker has to pay GST on job work charges only. Q. 40. In case of job workers not
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0 lakh (Rs. 10 lakh in special category States). Q. 43. What kind of facilities provided by employer to employee would be liable to GST? For instance, whether club membership provided will be considered as service ? Ans. The compensation to employees in the form of money is not a supply. However, fringe benefits are supply of goods or services and are liable to tax if not exempted. These are transactions in furtherance of business and even if supplied without consideration, the same are deemed supply. Q. 44. An USA based company provides services to its account holders spread worldwide. Whether services given by it would be covered under Section 13(8) of IGST Act? Ans. If the place of supply is in India, the registered recipient will have to pay tax under reverse charge and if the recipient is unregistered, company will pay GST in accordance with Section 14 of IGST Act. Q. 45. Whether 5% GST applicable to the Transport service provider is to be charged on the total freight amount bill?
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ation No. 7/2017 will be applicable for SGST Act, IGST Act and UTGST Act? Ans. Separate notifications are issued under SGST Act, IGST Act and UTGST Act. Q. 49. Whether GST would be payable in case of demand of excise duty made upon finalization of provisional excise assessment in post GST period? Ans. Demands arising from finalization of provisional assessments under the Central Excise Act, unless recovered under the said Act, shall be recovered as an arrear of tax under GST Act. Q. 50. What option shall be opted while clearing samples from factory to warehouse location : (a) No GST should be levied but corresponding ITC should be reversed (b) GST should be levied but GST (ITC) paid on samples cleared should be reversed at receiving warehouse location. Ans. Depends upon the location of the factory and warehouse. If both are located in the same State and not registered separately, no GST is to be charged. Once finally supplied to any other recipient, no GST is to be charged but ITC on t
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