Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 9-5-2016 – Frequently Asked Questions (FAQs) on GST and their answers which would help the readers to know and understand about the concept and nuances of proposed Goods and Services Tax (GST) and its models. These FAQs have been compiled with sole objective of providing a means of better understanding of GST. For details, readers may refer to Government portals / literature. Q.31 What is the scope of composition and compounding scheme under GST? Ans. A Composition/Compounding Scheme will be an important feature of GST to protect the interests of small traders and small scale industries. The Composition/Compounding scheme for the purpose of GST should have an upper ceiling o
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reduction in revenue of the government. This adjusted Rate is termed as Revenue Neutral Rate (RNR). According to Sub-committee on GST rates headed by CEA (MOF), the term Revenue Neutral Rate (RNR) will refer to that single rate, which preserves revenue at desired (current) levels. In practice, there will be a structure of rates, but for the sake of analytical clarity and precision it is appropriate to think of the RNR as a single rate. It is a given single rate that gets converted into a whole rate structure, depending on policy choices about exemptions, what commodities to charge at a lower rate (if at all), and what to charge at a very high rate. Q.33 How is Revenue Neutral Rate different from standard rate of GST ? Ans. The Revenue Neutr
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. For example, a legal entity with single registration within a State would have 1‟ as 13th digit of the GSTIN. If the same legal entity goes for a second registration for a second business vertical in the same State, the 13th digit of GSTIN assigned to this second entity would be 2‟.This way 35 business verticals of the same legal entity can be registered within a State. 14th digit of GSTIN would be kept BLANK for future use. Q.35 How will Goods and Service Tax return filing be done? Ans. Common periodicity of returns for a class of taxpayers would be enforced. There will be different frequency for filing of returns for different class of taxpayers, after payment of due tax, either prior to or at the time of filing return. The
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