Goods and Services Tax – GST – Dated:- 21-7-2017 – Question 1: As per Chapter 53 heading 5303 of the GST rate schedule, raw jute has been kept at the NIL rate slab. Thus, it is presumed that suppliers dealing only in raw jute are not required to register themselves under GST. But Jute Mills are asking their raw jute suppliers to mandatorily register themselves else their supplies would not be accepted. Please clarify whether raw jute suppliers are liable for registration? Answer: Raw jute has been kept at NIL rate of GST i.e. there would be no tax on raw jute. Therefore, as per Section 23 (1) (a) of the CGST Act, 2017 the suppliers dealing only in raw jute are not required to register. Jute mills are not required to pay tax under Reverse Charge Mechanism (RCM) as mentioned under Section 9(4) of the CGST Act, 2017 because both the goods have been kept at NIL rate of duty. Similarly, Raw Silk has also been kept at NIL rate of GST i.e. there would be no tax on raw silk. Therefore, the su
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1000/- is 12%. Is this value transaction value or MRP? Answer: As per the rate schedule, all goods of sale value not exceeding ₹ 1000/- per piece would be taxed at 5% and the goods of sale value exceeding ₹ 1000/- per piece would be taxed at 12%. Therefore, it is the sale value i.e. the transaction value on which the tax has to be paid and not the MRP. Question 5: No rates have been announced for Jute bags and Jute blended bags. It is feared that they may be placed under Chapter 42 for leather wherein the rate for leather bags is indicated as 28%. It is suggested that the Jute bags may be kept at zero % to promote production of green Jute Diversified products for combating pollution and safe guarding environment? Answer: The bags made of jute are clearly specified in the rate schedule under heading 4202 22 30. The rates for Hand bags and shopping bags of jute is 18%. Question 6: Man-made textile yarns have been kept at 18% while fabrics have been kept at 5%. If I buy yarn w
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y if the entire GST has already been paid? (b) What would happen to my opening stock on 1st July 2017. Will I get input credit on it or do I just need to supply it after adding 5% GST on it? (c) Is government assuring of payment within 180 days. There are rumours that the wholesaler/retailer has to pay within 180 days. Is it true? (d) How will I make my invoices if a buyer under the composition scheme come to buy our sarees? (e) We are confused about GST implementation as there was no tax on us before. Will we get relaxation for the return filing? Answer: (a) You can issue a credit note in respect of the goods returned and adjust your tax liability if the person returning the goods has reversed the credit availed by him at the time of original supply. Such credit note cannot be issued after September of the fol lowing year or filing of annual return whichever is earlier. (b) Full credit of the tax paid on the stock would be available if the documents evidencing tax pay ment are availab
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the government is not assuring payment within 180 days. (d) A normal invoice has to be issued irrespective of whether the buyer is under composition scheme or not. The difference would be only when you receive supplies from the person registered under the composition scheme. (e) Relaxation in filing of returns for the month of July and August, 2017 has already been provided as per which for the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR- 3B) containing summary of outward and inward supplies which will be submitted before 20th of the succeeding month. However, the invoice-wise details in regular GSTR – 1 would have to be filed for the month of July and August, 2017 as per the timelines given below: Month GSTR – 3B GSTR – 1 GSTR-2 (auto populated from GSTR-1) July, 2017 By 20th August By 5th Setember 6th – 10th September August, 2017 By 20th Setember By 20th Stember 21st – 25th September Question 8: I have a manufacturing unit of
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4% VAT. Also we are doing job work of textile lamination for some customers. Our invoice value is sum total of raw material used for job work, labour charges and profit. Under GST regime: (a) Whether we will get input credit on material? (b) How can we make invoice, which rate, or we have to make two different invoice, one for material used for lamination and other for service charges? Answer: (a) Yes. You would be eligible for credit of tax paid on material used for job work. (b) No. You are not required to raise two different invoices. You would be raising one invoice similar one to what you have been doing till now and GST at the applicable rate will be charged on the invoice value. You can pay your tax liability by using Input Tax Credit (ITC). However, invoice should carry all the details as required by the CGST Act, 2017 and the CGST Rules. Question 11: We are in Furnishing Fabrics Industries for curtain and upholstery fabrics. We mainly deal in Woven, Knitted, Polyester and Coa
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e rate of 5% would be chargeable on the job process relating to the textile yarns (other than Man Made Fibre/ Filament) and fabrics. Sarees are treated as fabrics and a saree remains fabrics only as no new item emerges having distinct name, character and use. Stitching of two or more different kinds of fabrics also does not take away its classification. Therefore, the sarees whether embroidered or not would be taxed at the same rate at which the fabric is taxed. Question 13: Will the 5 % fabric GST be applied or 12% GST of embroidery strips/badges be applied? Answer: Embroidery strips/ badges (narrow woven fabrics) are classified under heading 5810 and chargeable to tax at 12%. Question 14: What is the difference between Fabric and Made-ups? Whether Shawl is a fabric or apparel or made-up. What is the rate on Shawls? Answer: Shawls fall in the category of articles of apparel and clothing accessories and are classified under heading 61.17, if knitted or crocheted and under heading 62.14
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having predominance of wool would fall under Chapter 51. If all kinds are in equal proportion i.e. no fibre is predominant, it will get classified in the chapter covering the fibre last in the numerical order, so Chapter 54 or 55 in case MMF are present. Question 17: What would be the GST rate on old cotton dhoti used for cleaning purpose? It is a used product recycled for cleaning purpose. Is there any GST on old dhoti because there is no VAT on old dhoti? Answer: Dhoti is classifiable under Chapter 52 or Chapter 54 as fabrics. Old dhoti is classifiable under heading 63.09 as worn clothing. The tax for chapter 63 is similar to apparels and related to sale value whereas cotton fabrics/man-made fabrics, irrespective of value, are taxed at 5%. Whatever be the classification, as presumably the old cotton dhoti would be below the sale value of ₹ 1000/- per piece, it would be taxed at 5%. Question 18: We are small traders of textile dealing in Suiting, Shirting, Sarees, Dress Material
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o the goods sold by you. (b) GST rate on fabric is flat 5% irrespective of composition. (c) Upto ₹ 1.5 cr turnover, no HSN code is required to be mentioned. For those having turnover of ₹ 1.5 to 5 Cr, first 2 digits of the HSN code are required i.e. the chapter number. Only those who have turnover above ₹ 5 Cr are required to mention 4 digits of the HSN code. You will start getting the HSN code in your supplier's invoice, so it would not cause any issues once the supplies under new regime take place. (d) ITC would be admissible as per the Transitional provisions of GST Law. (e) Rate of tax linked to the sale value applies only to garments and not for sarees and suilengths which are fabrics. Question 19: I am an un-registered trader dealing in textile fabrics which was exempted from tax under the State VAT Act. If I get registered under the GST Act, will I be eligible to avail of input tax credit on my stock of goods lying on the appointed day? Answer: Since the go
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paying central tax/integrated tax on such supply. You are allowed to enjoy the scheme for six months from the appointed day or till such stock is sold out, whichever is earlier, and tax paid by you shall be credited as central tax in your electronic credit ledger. Question 20: I am a manufacturer of readymade garments. If I send any inputs to the job worker, will it be treated as taxable supply under the GST Act? Can I supply the goods after completion of job work from the place of business of the job worker? Answer: You can send your inputs or capital goods to a job-worker for job work without payment of tax and also bring back the same, after completion of job work, within one year or three years respectively. You can also supply the inputs or capital goods from the place of business of the job worke subject to the condition condition that you have to declare the place of business of the job-worker as your additional place of business if the job-worker is not a registered person. Ho
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