Levy of and Exemption from Tax
GST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)
Goods and Services Tax
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). However, clause 2 of Article 246A read with Article 269A provides exclusive power to the Parliament to legislate with respect to inter-State trade or commerce i.e. integrated tax (IGST).
Q 2. What is the taxable event under GST?
Ans. Taxable event under GST is supply of goods or services or both. CGST and SGST/ UTGST will be levied on intra-State supplies. IGST will be levied on inter-State supplies.
Q 3. Whether supplies made without consideration will also come within the purv
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t 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 principal supply. For example, when a consumer buys a television set and he also gets warranty and a maintenance contract with the TV, this supply is a composite supply. In this example, supply of TV is the principal supply, warranty and maintenance service are ancillary.
Mixed supply is combination of more than one individual supplies of goods or services or any combination thereof made in conjunction with each other for a single price, which can ordinarily be supplied separately. For example, a shopkeeper selling storage water bottles along with refrigerator. Bottles and the refrigerator can easily be priced and sold sepa
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solutely or subject to conditions. Further the Government can exempt, under circumstances of an exceptional nature, by special order any goods or services or both. It has also been provided in the SGST Act and UTGST Act that any exemption granted under CGST Act shall be deemed to be exemption under the said Act.
Q 10. When exemption from whole of tax on goods or services or both has been granted absolutely, can a person pay tax?
Ans. No. Furthermore, if the goods are partly exempted, the person supplying exempted goods or services or both shall not collect the tax in excess of the effective rate.
Q 11. What is meant by Reverse Charge?
Ans. It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.
Q 12. Is the reverse charge mechanism applicable only to services?
Ans. No, reverse charge applies to supplies of both goods and services, as notified by the Governm
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ernment. However, the notification to bring the Act into effect is yet to be issued.
Q 13. What are the supplies of goods under RCM?
Ans. Supplies of goods under reverse charge mechanism:
S/No.
Description of supply of Goods
Supplier of goods
Recipient of Goods
1
Cashew nuts, not shelled or peeled
Agriculturist
Any registered person
2
Bidi wrapper leaves (tendu)
Agriculturist
Any registered person
3
Tobacco leaves
Agriculturist
Any registered person
4
Silk yarn
Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn
Any registered person
4A
Raw cotton
Agriculturist
Any registered person.
5
Supply of lottery
State Government, Union Territory or any local authority
Lottery distributor or selling agent
6
Used vehicles, seized and confiscated goods, old and used goods, waste and scrap
Central Government, State Government, Union territ
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ight be available to CTP?
Ans. The “estimated net tax liability” only and not the gross tax liability, after considering the due eligible ITC which might be available to such taxable person needs to be paid as advance tax by a casual taxable person(CTP) while taking registration.
Q 16. Can any person other than the supplier or recipient be liable to pay tax under GST?
Ans. Yes, the 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 person liable to pay tax in relation to supply of such services. Notification No. 17/2017-Central Tax (rate) dated 28/06/2017 as amended by notification no.23/2017-Central Tax (rate) dated 22/08/2017 and Notification No. 14/2017-Integrated Tax (Rate) dated 28/06/2017 as amended by notification no. 23/2017-Integrated Tax (rate) dated 22/08/2017 have been is
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