Goods and Services Tax – GST – Dated:- 18-1-2018 – 1. Overview of Goods and Services Tax (GST) Q 1. What is Goods and Services Tax (GST)? Ans. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer. Q 2. What exactly is the concept of destination based tax on consumption? Ans. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. Q 3. Which of the existing taxes are proposed to be subsumed under GST? Ans. The GST would replace the following taxes: (i) taxes currently levied and collected by the Centre: a. Central Excise duty b. Duties of Excise (Medicinal and Toilet Preparations) c. Additional Duties of Excise (Goods of Special Import
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ssibility of being subsumed under GST. While identifying, the following principles were kept in mind: (i) Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services. (ii) Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the consumption of goods and services at the other. (iii) The subsumation should result in free flow of tax credit in intra and inter-State levels. The taxes, levies and fees that are not specifically related to supply of goods & services should not be subsumed under GST. (v) Revenue fairness for both the Union and the States individually would need to be attempted. Q 5. Which are the commodities proposed to be kept outside the purview of GST? Ans. Article 366(12A) of the Constitution as amended by 101st Constitutional Amendment Act, 2016 defines the Goods and S
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Central Excise duty on these products. Q 8. What type of GST is proposed to be implemented? Ans. It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States/ Union territory would be called the State GST (SGST)/ UTGST. Similarly, Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services. Q 9. Why is Dual GST required? Ans. India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal fe
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and collect this tax. The Constitution of India has been amended by the Constitution (one hundred and first amendment) Act, 2016 for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST. Q 12. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)? Ans. The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services made by registered persons except the exempted goods and services, goods and services which are outside the purview of GST. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State. Illustration I: Suppose h
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again hypothetically, that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for, let us say ₹ 100, the ad company would charge CGST of ₹ 10 as well as SGST of ₹ 10 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not again actually pay ₹ 20 (Rs. 10+Rs. 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc.). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilise the credit of SGST alone. In other words, CGST credit cannot, in general, be used for paymen
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inister. Q 14. What is IGST? Ans. Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of inter- State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. Q 15. Who will decide rates for levy of GST? Ans. The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council. Q 16. What would be the role of GST Council? Ans. A GST Council would be constituted comprising the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers to make recommendations to the
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iple of GST Council? Ans. The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services. Q 18. How will decisions be taken by GST Council? Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting. One half of the total number of members o
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ould be exempt from taking registration under GST. Further, a person whose aggregate turnover in the preceding financial year is less than ₹ 1 Crore (75 lakhs for 9 special category states viz 1. Arunachal Pradesh, 2. Assam, 3. Manipur, 4. Meghalaya, 5. Mizoram, 6. Nagaland, 7. Sikkim, 8. Tripura, and 9. Himachal Pradesh) can opt for a simplified composition scheme where tax will payable at a concessional rate on the turnover in a state. [Aggregate turnover shall include the aggregate value of all taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate turnover shall be computed on all India basis. For NE States and special category states, the exemption threshold shall be [Rs. 10 lakhs]. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies of goods or paying tax on reverse charge basis shall not be eligible for threshold
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oods and services. Q 23. How will Exports be treated under GST? Ans. Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. The Exporter will have an option to either pay tax on the output and claim refund of IGST or export under Bond without payment of IGST and claim refund of Input Tax Credit (ITC). Q 24. What is the scope of composition scheme under GST? Ans. Small taxpayers with an aggregate turnover in a preceding financial year up to Rs. One Crore (75 lakhs for special category States – except Jammu & Kashmir and Uttarakhand) shall be eligible for composition levy. This scheme is basically for suppliers of goods and restaurant service providers only. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover in a state during the year without the benefit of ITC. The rate of tax for CGST and SGST/UTGST shal
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astructure and services to Central and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN would, inter alia, include: (i) facilitating registration; (ii) forwarding the returns to Central and State authorities; (iii) computation and settlement of IGST; (iv) matching of tax payment details with banking network; (v) providing various MIS reports to the Central and the State Governments based on the tax payer return information; (vi) providing analysis of tax payers profile; and (vii) running the matching engine for matching, reversal and reclaim of input tax credit. The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/ reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. Further, the GSTN is developing back-end modules like assessment, audit, refund, appeal etc. for 19 States a
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n respect of specified parameters. Such ratings shall also be placed in the public domain. A prospective client will be able to see the compliance ratings of suppliers and take a decision as to whether to deal with a particular supplier or not. This will create healthy competition amongst taxable persons. Q 29. Whether actionable claims liable to GST? Ans. As per section 2(52) of the CGST/SGST Act actionable claims are to be considered as goods. Schedule III read with Section 7 of the CGST/SGST Act lists the activities or transactions which shall be treated neither as supply of goods nor supply of services. The Schedule lists actionable claims other than lottery, betting and gambling as one of such transactions. Thus only lottery, betting and gambling shall be treated as supplies under the GST regime. All the other actionable claims shall not be supplies. Q 30. Whether transaction in securities be taxable in GST? Ans. Securities have been specifically excluded from the definition of go
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ay result in penalty being imposed as per Section 123. Q 32. Different companies have different types of accounting software packages and no specific format are mandated for keeping records. How will department be able to read into these complex software? Ans. As per Section 153 of the CGST/SGST Act, having regard to the nature and complexity of a case and in the interest of revenue, department may take assistance from an expert at any state of scrutiny, inquiry, investigation or any other proceedings. Q 33. Is there any provision in GST for tax treatment of goods returned by the recipient? Ans. Yes, Section 34 deals with such situations. Where the goods supplied are returned by the recipient, the registered person (supplier of goods) may issue to the recipient a credit note containing the prescribed particulars. The details of the credit note shall be declared by the supplier in the returns for the month during which such credit note was issued but not later than September following t
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y registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. NAPA has power to investigate cases against the registered person who has not passed on the benefits by way of commensurate reduction in prices and order reduction in prices, cancel registration, impose penalty and/or return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest. Q 35. What tax will be levied on goods manufactured but not cleared from factory before 01.07.2017? Ans. Goods manufactured, but not cleared from factory before 01.07.2017 have been exempted from Central Excise duty vide Tariff Notification No. 12/2017-CE dated 30.06.2017. Appropriate GST will have to be paid whenever the goods are cleared after 01.07.2017. Q 36. Is there any provision for cross empowerment of officers of State and Central Government under GST? Ans. Yes. A
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. 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 purview of supply under GST? Ans. Yes, but only those activities which are specified in Schedule I to the CGST Act / SGST Act. The said provision has been adopted in IGST Act as well as in UTGST Act also. In cases where the inputs/ capital goods sent for job work are not returned with in the specified time limit, the supplies made by the principal to job worker will also be deemed to be a supply. Q 4. Will activities of charitable institutions be taxable under GST? Ans. Services of charitable activities by an enti
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mposite 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 separately. Q 7. What is the treatment of composite supply and mixed supply under GST? Ans. Composite supply shall be treated as supply of the principal supply. Mixed supply would be treated as supply of that particular goods or services which attracts the highest rate of tax. Q 8. Are all goods and services taxable under GST? Ans. Supplies of all goods and services are taxable except alcoholic liquor for human consumption. Supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas
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4) and 5 (4) of the CGST Act and the IGST Act respectively, have been kept in abeyance till 31.03.2018. Q 11. What will be the implications in case of receipt of supply from unregistered persons? Ans. In case of receipt of supply from an unregistered person, the registered person who is receiving goods or services shall be liable to pay tax under reverse charge mechanism. However, this provision (of reverse charge on supplies received from unregistered persons) have been kept in abeyance till 31.03.2018 Q 12. 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 and Not
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scheme is ₹ 1 Crore of aggregate turnover in the preceding financial year. The benefit of composition scheme can be availed up to the turnover of ₹ 1 Crore in current financial year. (75 lakhs for 9 special category states viz 1. Arunachal Pradesh, 2. Assam, 3. Manipur, 4. Meghalaya, 5. Mizoram, 6. Nagaland, 7. Sikkim, 8. Tripura, and 9. Himachal Pradesh) Q 14. What are the rates of tax for composition scheme? Ans. There are different rates for different sectors. In normal cases of supplier of goods (i.e. traders), the composition rate is 0.5 % of the turnover in a State or Union territory. If the person opting for composition scheme is manufacturer, then the rate is 1% of the turnover in a State or Union territory. In case of restaurant services, it is 2.5% of the turnover in a State or Union territory. These rates are under one Act, and same rate would be applicable in the other Act also. So, effectively, the composition rates (combined rate under CGST and SGST/UTGST) are
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t for composition scheme generally. However, a manufacturer of goods, which would be notified on the recommendations of the GST Council, cannot opt for this scheme. The goods so notified are ice cream and other edible ice, whether or not containing cocoa (Tariff Heading-21050000), pan masala (Tariff Heading – 21069020) & tobacco and manufactured tobacco substitutes (Tariff Heading – 24). This scheme is not available for services sector, except restaurants. Q 18. Who are not eligible to opt for composition scheme? Ans. Broadly, following categories of registered person are not eligible to opt for the composition scheme: (i) supplier of services other than supplier of restaurant service; (ii) supplier of goods which are not taxable under the CGST Act/SGST Act/UTGST Act; (iii) an inter-State supplier of goods; (iv) person supplying goods through an electronic commerce operator who is required to collect tax at source under section 52; (v) manufacturer of certain notified goods such as
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2(6). Accordingly, aggregate turnover means value of all outward supplies (taxable supplies +exempt supplies +exports + inter-state supplies) of a person having the same PAN and it excludes taxes levied under central tax (CGST), State tax (SGST), Union territory tax (UTGST), integrated tax(IGST) and compensation cess. Also, the value of inward supplies on which tax is payable under reverse charge is not taken into account for calculation of aggregate turnover . Q 23. What are the penal consequences if a person opts for the composition scheme in violation of the conditions? Ans. If a taxable person has paid tax under the composition scheme though he was not eligible for the scheme then the person would be liable to penalty and the provisions of section 73 or 74 shall be applicable for determination of tax and penalty. Q 24. Does the GST Law empower the Government to exempt supplies from the levy of GST? Ans. Yes. In the public interest, the Central or the State Government can exempt eit
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ting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business. • Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients. • Getting eligible to avail various other benefits and privileges rendered under the GST laws. Q 2. Can a person without GST registration claim ITC and collect tax? Ans. No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him. Q 3. What will be the effective date of registration? Ans. Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be the date on which he became liable for registration. Where an application for registration has been submitted by the applicant
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is ten lakh rupees. Besides, Section 24 of the Act mentions certain categories of suppliers, who shall be liable to take registration even if their aggregate turnover is below the said threshold limit of 20 lakh rupees. On the other hand, as per Section 23 of the Act, an agriculturist in respect of supply of his agricultural produce; as also any person exclusively making supply of non-taxable or wholly exempted goods and/or services under GST law will not be liable for registration. Q 5. What is aggregate turnover? Ans. As per section 2(6) of the CGST/SGST Act aggregate turnover includes the aggregate value of: (i) all taxable supplies, (ii) all exempt supplies, (iii) exports of goods and/or service, and, (iv) all inter-state supplies of a person having the same PAN. The above shall be computed on all India basis and excludes taxes charged under the CGST Act, SGST Act, UTGST Act, and the IGST Act. Aggregate turnover shall include all supplies made by the Taxable person, whether on his
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upply; vi) persons who are required to deduct tax under section 51; vii) persons who make taxable supply of goods or services on behalf of other registered taxable persons whether as an agent or otherwise; viii) Input service distributor (whether or not separately registered under the Act); ix) persons who supply goods, other than supplies specified under Section 9(5), through such e-commerce operator who is required to collect tax at source under section 52; x) every electronic commerce operator; xi) every person supplying online information and data base retrieval services from a place outside India to a person in India, other than a registered person; and, In addition, the Government may notify other person or class of persons who shall be required to be registered mandatorily. The Government, however, has granted exemption from compulsory registration vide Notification no. 32/2017-Central Tax dated 15/09/2017 (casual taxable person making taxable supplies of handicraft goods) and N
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registrations? Ans. Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as prescribed in the registration rules. Q 10. Is there a provision for a person to get himself voluntarily registered though he may not be liable to pay GST? Ans. Yes. In terms of Sub-section (3) of Section 25, a person, though not liable to be registered under Section 22 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person. Q 11. Is possession of a Permanent Account Number (PAN) mandatory for obtaining a Registration? Ans. Yes. As per Section 25(6) of the CGST/SGST Act every person shall have a Permanent Account Number issued under the Income Tax Act,1961(43 of 1961) in order to be eligible for grant of registration. However as per the proviso to the aforesaid secti
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of section 25 of the CGST/SGST Act, the proper officer can reject an application for registration after due verification. Q 14. Whether the Registration granted to any person is permanent? Ans. Yes, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended or revoked. Q 15. Is it necessary for the UN bodies to get registration under GST? Ans. Yes. In terms of Section 25(9) of the CGST/SGST Act, all notified UN bodies, Consulate or Embassy of foreign countries and any other class of persons so notified would be required to obtain a unique identification number (UIN) from the GST portal. The structure of the said ID would be uniform across the States in conformity with GSTIN structure and the same will be common for the Centre and the States. This UIN will be needed for claiming refund of taxes paid on notified supplies of goods and services received by them, and for any other purpose as may be notified. Q 16. What is the responsibility of the taxabl
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of business. Q 19. Who is a Non-resident Taxable Person? Ans. In terms of Section 2(77) of the CGST/SGST Act, a non-resident taxable person means any person who occasionally undertakes transactions involving supply of goods and/or services whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. Q 20. What is the validity period of the Registration certificate issued to a Casual Taxable Person and non- Resident Taxable person? Ans. In terms of Section 27(1) read with proviso thereto, the certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for a period specified in the application for registration or ninety days from the effective date of registration, whichever is earlier. However, the proper officer, at the request of the said taxable person, may extend the validity of the aforesaid period of ninety days by a further period not exceeding ninety days. Q 21. Is there an
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of such information furnished either by the registrant or as ascertained by him, approve or reject amendments in the registration particulars within a period of 15 common working days from the date of receipt of application for amendment. It is to be noted that permission of the proper officer for making amendments will be required for only certain core fields of information, whereas for the other fields, the certificate of registration shall stand amended upon submission of application in the GST common portal. Q 23. Whether Cancellation of Registration Certificate is permissible? Ans. Yes. Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned in Section 29 of the CGST/SGST Act. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as
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ng return by a composition dealer for three consecutive tax periods or non-furnishing of returns by a regular taxpayer for a continuous period of six months, and not commencing business within six months from the date of voluntary registration. However, before cancelling the registration, the proper officer has to follow the principles of natural justice. (Proviso to Section 29(2) (e)) Q 26. What happens when the registration is obtained by means of willful mis-statement, fraud or suppression of facts? Ans. In such cases, the registration may be cancelled with retrospective effect by the proper officer. (Section 29(2) (e)) Q 27. Is there an option to take centralized registration for services under GST Law? Ans. No, the tax paper has to take separate registration in every state from where he makes taxable supplies. Q 28. If the taxpayer has different business verticals in one state, will he have to obtain separate registration for each such vertical in the state? Ans. No, however the t
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r or succession and he will have to obtain a fresh registration with effect from the date of such transfer or succession. (Section 22(3)). Q 33. Whether all assesses / dealers who are already registered under existing central excise/service tax/ vat laws will have to obtain fresh registration? Ans. No, GSTN shall migrate all such assessees/dealers to the GSTN network and shall issue a provisional registration certificate with GSTIN number on the appointed day, which after due verification by the departmental officers within six months, will be converted into final registration certificate. For converting the provisional registration to final registration the registrants will be asked to submit all requisite documents and information required for registration in a prescribed period of time. Failure to do so will result in cancellation of the provisional GSTIN number. The service tax assesses having centralized registration will have to apply afresh in the respective states wherever they
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s having no IT infrastructure? Ans. In order to cater to the needs of tax payers who are not IT savvy, following facilities shall be made available: – GST Practitioners: A taxable person may prepare his registration application /returns himself or can approach the GST Practitioner for assistance. GST Practitioner will prepare the said registration document / return in prescribed format on the basis of the information furnished to him by the taxable person. The legal responsibility of the correctness of information contained in the forms prepared by the GST Practitioner will rest with the registered person only and the GST Practitioner shall not be liable for any errors or incorrect information. Facilitation Centre (FC): shall be responsible for the digitization and/or uploading of the forms and documents including summary sheet duly signed by the Authorized Signatory and given to it by the taxable person. After uploading the data on common portal using the ID and Password of FC, a prin
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shall have to respond to the application within three common working days. If they communicate any deficiency or discrepancy in the application within such time, then the applicant will have to remove the discrepancy / deficiency within 7 days of such communication. Thereafter, for either approving the application or rejecting it, the State and the Central authorities will have 7 days from the date when the taxable person communicates removal of deficiencies. In case no response is given by the departmental authorities within the said time line, the portal shall automatically generate the registration. Q 40. What will be the time of response by the applicant if any query is raised in the online application? Ans. If during the process of verification, one of the tax authorities raises some query or notices some error, the same shall be communicated to the applicant and to the other tax authority through the GST Common Portal within 3 common working days. The applicant will reply to the
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n of his registration application through an e-mail and SMS by the GST common portal. Jurisdictional details would be intimated to the applicant at this stage. Q 43. Can the registration certificate be downloaded from the GSTN portal? Ans. In case registration is granted; applicant can download the Registration Certificate from the GST common portal. Q 44. Can cancellation of registration order be revoked? Ans. Yes, but only in cases where the initial cancellation has been done by the proper officer suo moto, and not on the request of the taxable person or his legal heirs. A person whose registration has been cancelled suo moto can apply to the proper officer for revocation of cancellation of registration within 30 days from the date of communication of the cancellation order. The proper officer may within a period of 30 days from the date of receipt of application for revocation of cancellation or receipt of information/clarification, either revoke the cancellation or reject the appli
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nsactions involving supply of goods or services in a state or UT where he has no fixed place of business. Occasional undertakes transactions involving supply of goods or services but has no fixed place of business residence in India. Has a PAN Number Do not have a PAN Number; A non-resident person, if having PAN number may take registration as a casual taxable person Same application form for registration as for normal taxable persons viz GST REG-01 Separate application form for registration by non-resident taxable person viz GST REG-9 Has to undertake transactions in the course or furtherance of business Business test absent in the definition Has to file normal GSTR-1, GSTR-2 and GSTR-3 returns Has to file a separate simplified return in the format GSTR-5 Can claim ITC of all inward supplies Can get ITC only in respect of import of goods and /or services. 4. Meaning and Scope of Supply Q 1. What is the taxable event under GST? Ans. The taxable event under GST shall be the supply of go
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to constitute a supply , the following elements are required to be satisfied, i.e.- (i) the activity involves supply of goods or services or both; (ii) the supply is for a consideration unless otherwise specifically provided for; (iii) the supply is made in the course or furtherance of business; (iv) the supply is made in the taxable territory; (v) the supply is a taxable supply; and (vi) the supply is made by a taxable person. Q 5. Can a transaction in which any one or more of the above criteria is not fulfilled, be still considered as supply under GST? Ans. Yes. Under certain circumstances such as import of services for a consideration whether or not in the course or furtherance of business (Section 7(1) (b)) or supplies made without consideration, specified under Schedule-I of CGST /SGST Act, where one or more ingredients specified in answer to question no.4 are not satisfied, it shall still be treated as supply for levy of GST. Q 6. Import of Goods is conspicuous by its absence in
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red for a transaction to be considered as a supply of goods. In case title is not transferred, the transaction would be treated as supply of service in terms of Schedule II (1) (b). In some cases, possession may be transferred immediately but title may be transferred at a future date like in case of sale on approval basis or hire purchase arrangement. Such transactions will also be termed as supply of goods. Q 9. What do you mean by supply made in the course or furtherance of business ? Ans. Business is defined under Section 2(17) include any trade, commerce, manufacture, profession, vocation, adventure or wager etc. whether or not undertaken for a pecuniary benefit. Business also includes any activity or transaction which is incidental or ancillary to the aforementioned listed activities. In addition, any activity undertaken by the Central Govt. or a State Govt. or any local authority in which they are engaged as public authority shall also be construed as business. From the above, it
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pply or not? Ans. Yes. Provision of facilities by a club, association, society or any such body to its members shall be treated as supply. This is included in the definition of business in section 2(17) of CGST/SGST Act. Q 13. What are the different types of supplies under the GST law? Ans. (i) Taxable and exempt supplies. (ii) Inter-State and Intra-State supplies, (iii) Composite and mixed supplies and (iv) Zero rated supplies. Q 14. What are inter-state supplies and intra-state supplies? Ans. Inter-state and intra-state supplies have specifically been defined in Section 7(1), 7(2) and 8(1), 8(2) of the IGST Act respectively. Broadly, where the location of the supplier and the place of supply are in same state it will be intra-state and where it is in different states it will be inter-state supplies. Q 15. Whether transfer of right to use goods will be treated as supply of goods or supply of service? Why? Ans. Transfer of right to use goods shall be treated as supply of service becaus
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at a future date. Q 19. What is a Composite Supply under CGST/ SGST/UTGST Act? Ans. Composite Supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. For example, where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply. Q 20. How will tax liability on a composite supply be determined under GST? Ans. A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Q 21. What is a mixed supply? Ans. Mixed Supply means two or more individual supplies of goods or services or any combination thereof, made in conjunction with each other by a taxable person for
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s of Parliament, State Legislatures, members of the local authorities, Constitutional functionaries (iv) services of funeral, burial, crematorium or mortuary and (v) sale of land and (vi), actionable claims other than lottery, betting and gambling shall be treated neither a supply of goods or supply of services. Q 24. What is meant by zero rated supply under GST? Ans. Zero rated supply means export of goods and/or services or supply of goods and/or services to a SEZ developer or a SEZ Unit. Q 25. Will import of services without consideration be taxable under GST? Ans. As a general principle, import of services without consideration will not be considered as supply under GST in terms of Section 7. However, import of services by ataxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business, even without consideration will be treated as supply in terms of Sl. No.4 of Schedule I. 5. Time of Supply Q 1. What is time of
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f services. The time of supply of services shall be the earlier of the following namely, (a) the date of issue of invoice by the supplier if the invoice is issued within the period prescribed under section 31(2) or the date of receipt of payment whichever is earlier; or (b) the date of provision of service, if the invoice is not issued within the period prescribed under section 31(2) or the date of receipt of payment whichever is earlier. (c) the date on which the recipient shows the receipt of services in his books of account, in case where the provisions of clause (a) and (b) do not apply. Q 4. What is time of supply in case of supply of vouchers in respect of goods and services? Ans. The time of supply of voucher in respect of goods and services shall be; a) the date of issue of voucher, if the supply is identifiable at that point; or b) the date of redemption of voucher in all other cases. Q 5. Where it is not possible to determine the time of supply in terms of sub-section 2, 3, 4
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e or part payment is received. Q 8. What is the time of supply of goods in case of tax payable under reverse charge? Ans. The time of supply will be the earliest of the following dates: a) date of receipt of goods; or b) date on which payment is made; or c) the date immediately following 30 days from the date of issue of invoice by the supplier. Q 9. What is the time of supply of service in case of tax payable under reverse charge? Ans. The time of supply will be the earlier of the following dates: a) date on which payment is made; or b) the date immediately following sixty days from the date of issue of invoice by the supplier. Q 10. What is the time of supply applicable with regard to addition in the value by way of interest, late fee or penalty or any delayed payment of consideration? Ans. The time of supply with regard to an addition in value on account of interest, late fee or penalty or delayed consideration shall be the date on which the supplier received such additional conside
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has been issued after the change in rate of tax, the time of supply shall be the date of receipt of payment; (However for supply of goods payment of tax need to be made only at the time of issue of invoice in terms of notification 66/2017-Central Tax dated 15.11.2017) Q 13. What is the time of supply, where supply is completed after to change in rate of tax? Ans. In such cases time of supply will be (i) where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; (However for supply of goods payment of tax need to be made only at the time of issue of invoice in terms of notification 66/2017-Central Tax dated 15.11.2017) or (ii) where the invoice has been issued and the payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or; (However for supply of g
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ice issued after 1.9.2017 Q 16. What is the time period within which invoice has to be issued for supply of Goods? Ans. As per Section 31 of CGST/SGST Act a registered taxable person shall issue a tax invoice showing description, quantity and value of goods, tax charged thereon and other prescribed particulars, before or at the time of (a) removal of goods for supply to the recipient, where supply involves movement of goods or (b) delivery of goods or making available thereof to the recipient in other cases. Q 17. What is the time period within which invoice has to be issued for supply of Services? Ans. As per Section 31 of CGST/SGST Act a registered person shall, before or after the provision of service, but within a period of 30 days from the date of supply of service, issue a tax invoice showing description, value of goods, tax payable thereon and other prescribed particulars. For Banking and Insurance companies, this period is 45 days. For inter-state self-supplies made by bang, in
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before due date of payment.; (b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.; (c) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event. Q 20. What is the time period within which invoice has to be issued where the goods being sent or taken on approval for sale? Ans. The invoice in respect of goods sent or taken on approval for sale or return shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier. 6. Valuation in GST Q 1. What is the value of taxable supply to be adopted for the levy of GST? Ans. The value of taxable supply of goods and services shall ordinarily be the transaction value which is the price paid or payable, when the parties are not related and price is the sole consideration. Section 15 of the CGST/SGST Act furt
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is influenced by factors like relationship of parties or where certain transactions are deemed to be supply, which do not have a price, the value has to be determined in accordance with the GST Valuation Rules. Q 5. Is reference to GST Valuation Rules required in all cases? Ans. No. Reference to GST Valuation Rules is required only in cases where value cannot be determined under sub-section (1) of Section 15. Q 6. Can the transaction value declared under section 15(1) be accepted? Ans. Yes, if all the conditions specified therein have been fulfilled. Q 7. Whether post-supply discounts or incentives are to be included in the transaction value? Ans. Yes. where the post-supply discount is established as per the agreement which is known at or before the time of supply and where such discount specifically linked to the relevant invoice and the recipient has reversed input tax credit attributable to such discount, the discount is allowed as admissible deduction under Section 15 of the CGST
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at the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods and/or services; c) Incidental expenses, such as commission and packing, charged by the supplier to the recipient of a supply, including any amount charged for anything done by the supplier in respect of the supply of goods and/or services at the time of, or before delivery of the goods or as the case may be supply of the services; d) Interest or late fee or penalty for delayed payment of any consideration for any supply; and e) Subsidies directly linked to the price excluding subsidies provided by the Central and State Government. Q 11. How will value be determined where supply is made by a dealer dealing in second hand goods? Ans. As per Rule 32(5) of the CGST Rules, 2017, where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or af
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s contract), involving transfer of property in land or undivided share of land, as the case may be, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply. Total amount means the sum total of, – (a) consideration charged for aforesaid service; and (b) amount charged for transfer of land or undivided share of land, as the case may be Q 14. How will supply of lottery tickets be valued under GST? Ans. Value of supply of lottery shall be 100/112 of the face value or the price notified in the Official Gazette by the organising State, whichever is higher, in case of lottery run by State Government and 100/128 of the face value or the price notified in the Official Gazette by the organising St
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nt under the reverse charge mechanism. Further, in some notified cases of intra-state supply of services, the liability to pay GST may be cast on e-commerce operators through which such services are supplied. Also Government Departments making payments to vendors above a specified limit [2.5 lakh under one contract as per S.51(1)(d)] are required to deduct tax (TDS) and E-commerce operators are required to collect tax (TCS) on the net value [i.e. aggregate value of taxable supplies of goods and/or services but excluding such value of services on which the operator is made liable to pay GST under Section 9(5) of the CGST Act, 2017] of supplies made through them and deposit it with the Government. Q 3. When does liability to pay GST arises? Ans. Liability to pay arises at the time of supply of Goods as explained in Section 12 and at the time of supply of services as explained in Section13. The time is generally the earliest of one of the three events, namely receiving payment, issuance o
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r maintained on the Common Portal – ONLY Tax can be paid. Interest, Penalty and Fees cannot be paid by debit in the credit ledger. Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order. (ii) In cash by debit in the Cash Ledger of the tax payer maintained on the Common Portal. Money can be deposited in the Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter Payment in branches of Banks Authorized to accept deposit of GST. Q 6. When is payment of taxes to be made by the Supplier? Ans. Payment of taxes by the normal tax payer is to be done on monthly basis by the 20th of
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section 39 on which self-assessed tax has been paid in full. It is only the valid return that would be used for allowing input tax credit (ITC) to the recipient. In other words, unless the supplier has paid the entire self-assessed tax and filed his return and the recipient has filed his return, the ITC of the recipient would not be confirmed. Q 9. Which date is considered as date of deposit of the tax dues – Date of presentation of cheque or Date of payment or Date of credit of amount in the account of government? Ans. It is the date of credit to the Government account. Q 10. What are E-Ledgers? Ans. Electronic Ledgers or E-Ledgers are statements of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have an electronic tax liability register. Once a taxpayer is registered on Common Portal (GSTN), two e-ledgers (Cash &Input Tax Credit ledger) and an electronic tax liability register will be automatically opened and displayed on hi
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mber (CIN) is automatically sent by the Bank to the Common Portal confirming payment receipt. No manual intervention will be involved in the process by any one including bank cashier or teller or the tax payer. Q 15. Can a tax payer generate challan in multiple sittings? Ans. Yes, a taxpayer can partially fill in the challan form and temporarily save the challan for completion at a later stage. A saved challan can be edited before finalization. After the tax payer has finalized the challan, he will generate the challan, for use of payment of taxes. The remitter will have option of printing the challan for his record. Q 16. Can a challan generated online be modified? Ans. No. After logging into GSTN portal for generation of challan, payment particulars have to be fed in by the tax payer or his authorized person. He can save the challan midway for future updation. However once the challan is finalized and CPIN generated, no further changes can be made to it by the taxpayer. Q 17. Is ther
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xpayer as well as to GSTN. Q 20. What is the sequence of payment of tax where that taxpayer has liabilities for previous months also? Ans. Section 49(8) prescribes an order of payment where the taxpayer has tax liability beyond the current return period. In such a situation, the order of payment to be followed is: First self-assessed tax and other dues for the previous period; thereafter self-assessed tax and other dues for the current period; and thereafter any other amounts payable including any confirmed demands under section 73 or 74. This sequence has to be mandatorily followed. Q 21. What does the expression Other dues referred to above mean? Ans. The expression other dues means interest, penalty, fee or any other amount payable under the Act or the rules made thereunder. Q 22. What is an E-FPB? Ans. E-FPB stands for Electronic Focal Point Branch. These are branches of authorized banks which are authorized to collect payment of GST. Each authorized bank will nominate only one bra
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amount shown as TDS will be reflected in the electronic cash ledger of the concerned supplier. He can utilize this amount towards discharging his liability towards tax, interest fees and any other amount. Q 25. How will the TDS Deductor account for such TDS? Ans. TDS Deductor will account for such TDS in the following ways: 1. Such deductors needs to get compulsorily registered under section 24 of the CGST/SGST Act. 2. They need to remit such TDS collected by the 10th day of the month succeeding the month in which TDS was collected and reported in GSTR 7. 3. The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier. 4. They need to issue certificate of such TDS to the deductee within 5 days of crediting the TDS to the govt a/c, failing which fees of ₹ 100 per day subject to maximum of ₹ 5000/- will be payable by such deductor. Q 26. What is Tax Collected at Source (TCS)? Ans. This provision is applicable only for E-Commerce Operator under s
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al for the GST payment? Ans. Yes. The taxpayer would be required to pre-register his credit card, from which the tax payment is intended, with the Common Portal maintained on GSTN. GSTN may also attempt to put in a system with banks in getting the credit card verified by taking a confirmation from the credit card service provider. The payments using credit cards can therefore be allowed without any monetary limit to facilitate ease of doing business. 8. Electronic Commerce Q 1. What is Electronic Commerce? Ans. Electronic Commerce has been defined to mean the supply of goods or services or both, including digital products over digital or electronic network. Q 2. Who is an e-commerce operator? Ans. Electronic Commerce Operator has been defined to mean any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Q 3. Is it mandatory for e-commerce operator to obtain registration? Ans. Yes. The benefit of threshold exemption is not available
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commerce operators liable to pay tax on notified services? Ans. No. Threshold exemption is not available to e-commerce operator who are require to pay tax on notified services provided through them. Q 7. What is Tax Collection at Source (TCS)? Ans. The e-commerce operator is required to collect an amount calculated at the rate not exceeding one percent of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). However, Section 52 of the CGST Act, 2017 which deals with TCS has not come into force as of yet and GST Council has recommended to keep this provision in abeyance till 31.03.2018. Q 8. It is very common that customers of e-commerce companies return goods. How these returns are going to be adjusted? Ans. An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, value of the supp
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operator to Government account? Ans. The amount collected by the operator is to be paid to appropriate government within 10 days after the end of the month in which amount was so collected. Q 13. How can actual suppliers claim credit of this TCS? Ans. The amount of TCS deposited by the operator with the appropriate government will be reflected in the cash ledger of the actual registered supplier (on whose account such collection has been made) on the basis of the statement filed by the operator. The same can be used at the time of discharge of tax liability in respect of the supplies by the actual supplier. Q 14. Is the e-commerce operator required to submit any statement? What are the details that are required to be submitted in the statement? Ans. Yes, every operator is required to furnish a statement, electronically, containing the details of outward supplies of goods or services effected through it, including the supplies of goods or services returned through it, and the amount co
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of which any discrepancy is communicated and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output liability of the said supplier, for the calendar month succeeding the calendar month in which the discrepancy is communicated. The concerned supplier shall, in whose output tax liability any amount has been added shall be liable to pay the tax payable in respect of such supply along with interest on the amount so added from the date such tax was due till the date of its payment. Q 17. Are there any additional powers to tax officers available? Ans. Any authority not below the rank of Deputy Commissioner may issue a notice to the electronic operator to furnish specified details within a period of 15 working days from the date of service of such notice. 9. Job Work Q 1. What is job work? Ans. Job work means undertaking any treatment or process by a person on goods belonging to another registered taxable per
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quently to another job worker(s) and shall either bring back such inputs/capital goods after completion of job work or otherwise within 1 year/3 years of their being sent out or supply such inputs/capital goods after completion of job work or otherwise within 1 year / 3 years of their being sent out, from the place of business of a job worker on payment of tax within India or with or without payment of tax for export. Q 3. Is a job worker required to take registration? Ans. Yes, as job work is a service, the job worker would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold. Q 4. Whether the goods of principal directly supplied from the job worker s premises will be included in the aggregate turnover of the job worker? Ans. No. It will be included in the aggregate turnover of the principal. However, the value of goods or services used by the job worker for carrying out the job work will be included in the value of services supplied by the job
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premises of the job worker. Q 7. Under what circumstances can the principal directly supply goods from the premises of job worker without declaring the premises of job worker as his additional place of business? Ans. The goods can be supplied directly from the place of business of job worker without declaring it as additional place of business in two circumstances namely where the job worker is a registered taxable person or where the principal is engaged in supply of such goods as may be notified by the Commissioner. Q 8. What are the provisions concerning taking of ITC in respect of inputs/capital goods sent to a job worker? Ans. Principal shall be entitled to take credit of taxes paid on inputs or capital goods sent to a job worker whether sent after receiving them at his place of business or even when such the inputs or capital goods are directly sent to a job worker without their being first brought to his place of business. However, the inputs or capital goods, after completion
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the treatment of such items in job work provisions? Ans. The condition of bringing back capital goods within three years is not applicable to molds, dies, jigs and fixtures or tools. Q 11. What would be treatment of the waste and scrap generated during the job work? Ans. The waste and scrap generated during the job work can be supplied by the job worker directly from his place of business, on payment of tax, if he is registered. If he is not registered, the same would be supplied by the principal on payment of tax. Q 12. Whether intermediate goods can also be sent for job work? Ans. Yes. The term inputs, for the purpose of job work, includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or job worker. Q 13. Who is responsible for the maintenance of proper accounts related to job work? Ans. It is completely the responsibility of the principal to maintain proper accounts of job work related inputs and capital goods. Q 14. Are the prov
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ry or in different States or Union Territories. 10. Input Tax Credit Q 1. What is input tax? Ans. Input tax means the central tax (CGST), State tax (SGST), integrated tax (IGST) or Union territory tax (UTGST) charged on supply of goods or services or both made to a registered person. It also includes tax paid on reverse charge basis and integrated tax goods and services tax charged on import of goods. It does not include tax paid under composition levy. Q 2. Can GST paid on reverse charge basis be considered as input tax? Ans. Yes. The definition of input tax includes the tax payable under the reverse charge. Q 3. Does input tax includes tax (CGST/IGST/SGST) paid on input goods, input services and capital goods? Ans. Yes, it includes taxes paid on input goods, input services and capital goods. Credit of tax paid on capital goods is permitted to be availed in one instalment. Q 4. Is credit of all input tax charged on supply of goods or services allowed under GST? Ans. A registered perso
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upon receipt of the last lot or installment. Q 7. Can a person take input tax credit without payment of consideration for the supply along with tax to the supplier? Ans. Yes, the recipient can take ITC. But he is required to pay the consideration along with tax within 180 days from the date of issue of invoice. This condition is not applicable where tax is payable on reverse charge basis. Q 8. What would happen of the ITC taken by the registered person if he has not paid the consideration along with tax within 180 days from the date of issue of invoice? Ans. The amount of ITC would be added to output tax liability of the person. He would also be required to pay interest. However, he can take ITC again on payment of consideration and tax. Q 9. Who will get the ITC where goods have been delivered to a person other than taxable person ( bill to – ship to scenarios)? Ans. It would be deemed that the registered person has received the goods when the goods have been delivered to a third part
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on the tax component of the cost of capital goods under the provisions of the Income Tax Act,1961, will ITC be allowed in such cases? Ans. The input tax credit shall not be allowed on the said tax component in respect of which depreciation has been claimed. Q 12. Is credit of tax paid on every input used for supply of taxable goods or services or both is allowed under GST? Ans. Yes, except a small list of items provided in the law, the credit is admissible on all items. The list covers mainly items of personal consumption, inputs use of which results into formation of an immovable property (except plant and machinery), telecommunication towers, pipelines laid outside the factory premises, etc. and taxes paid as a result of detection of evasion of taxes. Q 13. A taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid on purchase of such motor vehicle? Ans. No. ITC on motor vehicl
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for registration can take input tax credit of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration. If the person was liable to take registration and he has applied for registration within thirty days from the date on which he became liable to registration, then input tax credit of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date on which he became liable to pay tax can be taken. Q 17. A person becomes liable to pay tax on 1st August, 2017and has obtained registration on 15th August, 2017. Such person is eligible for input tax credit on inputs held in stock as on: (a) 1st August, 2017 (b) 31st July, 2017 (c) 15th August, 2017 (d) He cannot take credit for the past period Ans. 31st July, 2017. Q 18. What is the eligibility of input tax credit on inputs in stock for a person who obtains voluntary regis
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GST Rules. Q 21. If input tax credit is allowed only in respect of goods or services or both for effecting taxable supplies, would it not lead to loss of input tax credit on exempt supplies when exported? Ans. No. Zero-rated supplies have been covered within taxable supplies for the purpose of allowing input tax credit. Moreover, IGST Act specifically allows availment of input tax credit for making zero rated supplies, notwithstanding that such supply may be exempt. Q 22. Which of the following is included for computation of taxable supplies for the purpose of availing credit? (a) Zero-rated supplies (b) Exempt supplies (c) Both Ans. Zero rated supplies. Q 23. Where goods or services received by a registered person are used partly for the purpose of business and partly for other purposes, whether the input tax credit is available to the person? Ans. The input tax credit of goods or services or both attributable only to the purpose of business can be taken by registered person. The mann
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, 2017, Mr. A becomes liable to pay tax under regular scheme. Is he eligible for ITC? Ans. Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock and capital goods (reduced by such percentage points as has been prescribed by the ITC Rules) as on 30th July, 2017. The Input Tax Credit on capital goods shall be claimed after reducing the tax paid on such capital goods by five percentage points per quarter of a year or part thereof from the date of invoice or such other documents on which the capital goods were received by the him. Q 27. Mr. B applies for voluntary registration on 5th July, 2017 and obtained registration on 22nd July, 2017. Mr. B is eligible for input tax credit on inputs in stock as on………….. Ans. Mr. B is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 21st July, 2017. This is subject to
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e for 4 years, 6 months and 15 days. The useful remaining life in months will be 5 months ignoring the part of the month. If ITC on such capital goods is taken as C, ITC attributable to the remaining useful life will be C multiplied by 5/60. This would be the amount payable on capital goods. The ITC amount shall be determined separately for integrated tax, central tax and state tax. The payment can be made by debiting electronic credit ledger, if there is sufficient balance in the said ledger, or by debiting electronic cash ledger. If any balance remains in the electronic credit ledger, it would lapse. Q 29. Is there any restriction on period for availment of ITC? Ans. In cases of new registration, change from composition to normal scheme, from exempt to taxable supplies, the concerned person cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply. Q 30. What happens where the details of inward supplies furnished by the recipient do n
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al goods or plant and machinery on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, as reduced in the manner prescribed under sub-rule 6 of rule 44 of the CGST Rules, 2017, or the tax on the transaction value of such capital goods or plant and machinery, whichever is higher. But in case of refractory bricks, molds and dies, jigs and fixtures when these are supplied as scrap, the person can pay tax on the transaction value. 11. Concept of Input Service Distributor in GST Q 1. What is Input Service Distributor (ISD)? Ans. ISD means an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said services to a supplier of taxable goods o
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usiness. Q 5. It is not possible many a times to establish a one-to-one link between quantum of input services used in the course or furtherance of business by a supplier. In such situations, how distribution of ITC by the ISD is to be done? Ans. In such situations, distribution would be based on a formula. Firstly, distribution would be done only amongst those recipients of input tax credit to whom the input service being distributed are attributable. Secondly, distribution would be done amongst the operational units only. Thirdly, distribution would be done in the ratio of turnover in a State or Union territory of the recipient during the period to the aggregate of all recipients to whom input service being distributed is attributable. Lastly, the credit distributed should not exceed the credit available for distribution. Q 6. What does the turnover used for ISD cover? Ans. The turnover for the purpose of ISD does not include any duty or tax levied under entry 84 of List I and entry
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stribute SGST /UTGST credit as IGST for the recipients located in different States. Q 12. Whether the ISD can distribute the CGST and IGST Credit as CGST credit? Ans. Yes, CGST and IGST credit can be distributed as CGST credit by an ISD for the recipients located in same State. Q 13. Whether the SGST/ UTGST and IGST Credit can be distributed as SGST/UTGST credit? Ans. Yes, ISD can distribute SGST and IGST credit as SGST / UTGST credit for the recipients located in same State. Q 14. How to distribute common credit among all the recipients of an ISD? Ans. The common credit used by all the recipients can be distributed by ISD on pro rata basis i.e. based on the turnover of each recipient to the aggregate turnover of all the recipients to which credit is distributed. Q 15. The ISD may distribute the CGST and IGST credit to recipient outside the State as_______ (a) IGST (b) CGST (c) SGST Ans. (a) IGST. Q 16. The ISD may distribute the CGST credit within the State as____ (a) IGST (b) CGST (c
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rest. 12. Returns Process and matching of Input Tax Credit Q 1. What is the purpose of returns? Ans. a) Mode for transfer of information to tax administration; b) Compliance verification program of tax administration; c) Finalization of the tax liabilities of the taxpayer within stipulated period of limitation; to declare tax liability for a given period; d) Providing necessary inputs for taking policy decision; e) Management of audit and anti-evasion programs of tax administration. Q 2. Who needs to file Return in GST regime? Ans. Every person registered under GST will have to file returns in some form or other. A registered person will have to file returns either monthly (normal supplier) or quarterly basis (Supplier opting for composition scheme). An ISD will have to file monthly returns showing details of credit distributed during the particular month. A person required to deduct tax (TDS) and persons required to collect tax (TCS) will also have to file monthly returns showing the
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sis. The last date for filing GSTR-1 for such taxpayers for the period July-Sep 17 is 31.12.2017, Oct-Dec 17 is 15.02.2018 & Jan-March 2018 is 30.04.2018. It is also clarified that the registered person may opt to file FORM GSTR-1 on monthly basis if he so wishes even though his aggregate turnover is up to ₹ 1.5 Crore. Q 5. Is the scanned copy of invoices to be uploaded along with GSTR-1? Ans. No scanned copy of invoices is to be uploaded. Only certain prescribed fields of information from invoices need to be uploaded. Q 6. Whether all invoices will have to be uploaded? Ans. No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies. For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done. In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to im
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mation in his GSTR-2 which has been missed by the supplier? Ans. Yes, the recipient can himself feed the invoices not uploaded by his supplier. The credit on such invoices will also be given provisionally but will be subject to matching. On matching, if the invoice is not uploaded by the supplier, both of them will be intimated. If the mismatch is rectified, provisional credit will be confirmed. But if the mismatch continues, the amount will be added to the output tax liability of the recipient in the returns for the month subsequent to the month in which such discrepancy was communicated. Q 10. Does the taxable person have to feed anything in the GSTR-2 or everything is auto-populated from GSTR-1? Ans. While a large part of GSTR-2 will be auto-populated, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc. Q 11. What if the invoices do not match? Whether I
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TR-3 of the month in which he had earlier failed to upload the invoice. The recipient shall be eligible to reduce his output tax liability to the extent of the amount in respect of which the supplier has rectified the mis-match. The interest paid by the recipient at the time of reversal will also be refunded to the recipient by crediting the amount in corresponding head of his electronic cash ledger. Q 13. What is the special feature of GSTR-2? Ans. The special feature of GSTR-2 is that the details of supplies received by a recipient can be auto populated on the basis of the details furnished by the counterparty supplier in his GSTR-1. Q 14. Do tax payers under the composition scheme also need to file GSTR-1 and GSTR-2? Ans. No. Composition tax payers do not need to file any statement of outward or inward supplies. They have to file a quarterly return in Form GSTR-4 by the 18th of the month after the end of the quarter. Since they are not eligible for any input tax credit, there is no
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redit? Ans. Under GST, the deductor will be submitting the deductee wise details of all the deductions made by him in his return in Form GSTR-7 to be filed by 10th of the month next to the month in which deductions were made. The details of the deductions as uploaded by the deductor shall be auto populated in the GSTR-2 of the deductee. The taxpayer shall be required to confirm these details in his GSTR-2 to avail the credit for deductions made on his behalf. To avail this credit, he does not require to produce any certificate in physical or electronic form. The certificate will only be for record keeping of the tax payer and can be downloaded from the Common Portal. Q 17. Which type of taxpayers need to file Annual Return? Ans. All taxpayers filing return in GSTR-1 to GSTR-3, other than ISD s, casual/non-resident taxpayers, taxpayers under composition scheme, TDS/TCS deductors, are required to file an annual return. Casual taxpayers, non- resident taxpayers, ISDs and persons authorize
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ed in any of the future GSTR- 1/2 in the tables specifically provided for the purposes of amending previously declared details. Q 20. How can taxpayers file their returns? Ans. Taxpayers will have various modes to file the statements and returns. Firstly, they can file their statement and returns directly on the Common Portal online. However, this may be tedious and time consuming for taxpayers with large number of invoices. For such taxpayers, an offline utility will be provided that can be used for preparing the statements offline after downloading the auto populated details and uploading them on the Common Portal. GSTN has also developed an ecosystem of GST Suvidha Providers (GSP) that will integrate with the Common Portal. Q 21. What precautions, a taxpayer is required to take for a hassle free compliance under GST? Ans. One of the most important things under GST will be timely uploading of the details of outward supplies in Form GSTR-1 by 10th of next month. How best this can be e
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of doing it on or close to the due date. The system would allow recipients to see if their suppliers have uploaded invoices pertaining to them. The GSTN system will also provide the track record about the compliance level of a tax payer, especially about his track record in respect of timely uploading of his supply invoices giving details about the auto reversals that have happened for invoices issued by a supplier. The Common Portal of GST would have pan India data at one place which will enable valuable services to the taxpayers. Efforts are being made to make regular uploading of invoices as easy as possible and it is expected that an enabling eco- system will be developed to achieve this objective. Taxpayers should make efficient use of this ecosystem for easy and hassle free compliance under GST. Q 22. Is it compulsory for a taxpayer to file return by himself? Ans. No. A registered taxpayer can also get his return filed through a Tax Return Preparer, duly approved by the Central
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edit detected by the system on account of mis-match between GSTR-1 and GSTR-2 and recovered as output tax can be reclaimed? Ans. Yes, once the mismatch is rectified by the supplier by declaring the details of the invoices or debit notes, as the case may be, in his valid return for the month/quarter in which the error had been detected. The said amount can be reclaimed by way of reducing the output tax liability during the subsequent tax period. [Section 42(7)]. Similar provisions have also been made in Section 43 of the Act in respect of the credit notes issued by the supplier. Q 26. What is GSTR-3B? Ans. GSTR-3B is a simplified monthly return that all taxpayers need to file from July 2017 to March 2018. It is a summarized return form which every taxpayer will be required to file on self-declaration basis till 31st March 2018. The same needs to be filed by 20th day of next month. i.e. for the month of December,2017 GSTR-3B needs to be filed by 20th January, 2018 after paying appropriat
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R-1 but the specified details of invoice itself can be directly uploaded on the system. Details of all advances against which the invoices have not been issued till the end of the tax period shall have to be reported on a consolidated basis in Table 11 of Form GSTR-1. As and when the invoices against these advances are issued, they have to be declared in Form GSTR-1 and the adjustment of the tax paid on advances against the tax payable on the invoices uploaded in Form GSTR-1 shall have to be done in Table 11 of Form GSTR-1. It may be noted that in terms of notification 66/2017-Central Tax dated 15.11.2017, there is no liability to pay tax at the time of receipt of advance in case of supply of goods. 13. Assessment and Audit Q 1. Who is the person responsible to make assessment of taxes payable under the Act? Ans. Every person registered under the Act shall himself assess the tax payable by him for a tax period and after such assessment he shall file the return required under section 39
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h surety or security as the proper officer may deem fit. Q 3. What is the latest time by which final assessment is required to be made? Ans. The final assessment order has to be passed by the proper officer within six months from the date of the communication of the order of provisional assessment. However, on sufficient cause being shown and for reasons to be recorded in writing, the above period of six months may be extended: a) by the Joint / Additional Commissioner for a further period not exceeding six months, and b) by the Commissioner for such further period as he may deem fit not exceeding fours. Thus, a provisional assessment can remain provisional for a maximum of five years. Q 4. Where the tax liability as per the final assessment is higher than in provisional assessment, will the taxable person be liable to pay interest? Ans. Yes. He will be liable to pay interest from the date the tax was due to be paid originally till the date of actual payment. Q 5. What recourse may be
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quired under law (under section 39 (monthly/quarterly), or 45 (final return), what legal recourse is available to the tax officer? Ans. The proper officer has to first issue a notice to the defaulting taxable person under section 46 of CGST/SGST Act requiring him to furnish the return within a period of fifteen days. If the taxable person fails to file return within the given time, the proper officer shall proceed to assess the tax liability of the return defaulter to the best of his judgement taking into account all the relevant material available with him. (Section 62). Q 7. Under what circumstances can a best judgment assessment order issued under section 60 be withdrawn? Ans. The best judgment order passed by the Proper Officer under section 62 of CGST/SGST Act shall automatically stand withdrawn if the taxable person furnishes a valid return for the default period (i.e. files the return and pays the tax as assessed by him), within thirty days of the receipt of the best judgment as
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has incurred a liability to pay tax under the Act, and b) the proper officer believes that delay in passing an assessment order will adversely affect the interest of revenue. Such order can be passed after seeking permission from the Additional Commissioner / Joint Commissioner. Q 11. Other than appellate remedy, is there any other recourse available to the taxpayer against a summary assessment order? Ans. A taxable person against whom a summary assessment order has been passed can apply for its withdrawal to the jurisdictional Additional/Joint Commissioner within thirty days of the date of receipt of the order. If the said officer finds the order erroneous, he can withdraw it and direct the proper officer to carry out determination of tax liability in terms of section 73 or 74 of CGST/SGST Act. The Additional/Joint Commissioner can follow a similar course of action on his own motion if he finds the summary assessment order to be erroneous (section 64 of CGST/SGST Act). Q 12. Is summar
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65 of the CGST/SGST Act) (c) Special Audit: If at any stage of scrutiny, inquiry, investigations or any other proceedings, if department is of the opinion that the value has not been correctly declared or credit availed is not with in the normal limits, department may order special audit by chartered accountant or cost accountant, nominated by department. (Section 66 of the CGST/SGST Act) Q 14. Whether any prior intimation is required before conducting the audit? Ans. Yes, prior intimation is required and the taxable person should be informed at least 15 working days prior to conduct of audit. Q 15. What is the period within which the audit is to be completed? Ans. The audit is required to be completed within 3 months from the date of commencement of audit. The period is extendable for a further period of a maximum of 6 months by the Commissioner. Q 16. What is meant by commencement of audit? Ans. The term commencement of audit is important because audit has to be completed within a g
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stances can a special audit be instituted? Ans. A special audit can be instituted in limited circumstances where during scrutiny, investigation, etc. it comes to the notice that a case is complex or the revenue stake is high. This power is given in section 66 of CGST /SGST Act. Q 20. Who can serve the notice of communication for special audit? Ans. The Assistant / Deputy Commissioner is to serve the communication for special audit only after prior approval of the Commissioner. Q 21. Who will do the special audit? Ans. A Chartered Accountant or a Cost Accountant so nominated by the Commissioner may undertake the audit. Q 22. What is the time limit to submit the audit report? Ans. The auditor will have to submit the report within 90 days or within the further extended period of 90 days. Q 23. Who will bear the cost of special audit? Ans. The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner. Q 24. What ac
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input tax credit can be allowed as refund in accordance with the provisions of sub-section (3) of section 54 in the following situations: – (i) Zero rated supplies made without payment of tax; (ii) Where credit has accumulated on account of rate of tax on inputs being higher than the rate of taxes on output supplies (other than nil rated or fully exempt supplies) However, no refund of unutilized input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty, and also in the case where the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. Q 3. Can unutilized ITC be given refund, in case goods Exported outside India are subjected to export duty? Ans. Refund of unutilized input tax credit is not allowed in cases where the goods exported out of India are subjected to export duty – as per the second proviso to Section 54(3) of CGST/SGST Act. Q 4. Wil
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months from the last day of the month in which such supply was received. [The United Nations Organization and Consulates or Embassies are required to take a Unique Identity Number [section 26(1) of the CGST/SGST Act] and purchases made by them will be reflected against their Unique Identity Number in the return of outward supplies of the supplier(s)] Q 7. What is the time limit for taking refund? Ans. A person claiming refund is required to file an application before the expiry of two years from the relevant date as given in the Explanation to section 54 of the CGST/SGST Act. Q 8. Whether principle of unjust enrichment will be applicable in refund? Ans. The principle of unjust enrichment would be applicable in all cases of refund except in the following cases: – i. Refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies ii. Unutilized input tax credit in respect of (i) zero rated supplies made withou
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not sanctioned within the said period of 60 days, interest at the rate notified not exceeding 6% will have to be paid in accordance with section 56 of the CGST/SGST Act. However, in case where provisional refund to the extent of 90% of the amount claimed is refundable in respect of zero-rated supplies made by certain categories of registered persons in terms of sub-section (6) of section 54 of the CGST/SGST Act, the provisional refund has to be given within 7 days from the date of acknowledgement of the claim of refund. Q 11. Can refund be withheld by the department? Ans. Yes, the proper officer can withhold refund of accumulated ITC under Section 54(3) in the following circumstances: i. If the person has failed to furnish any return till he files such return; ii. If the registered taxable person is required to pay any tax, interest or penalty which has not been stayed by the appellate authority/Tribunal/ court, till he pays such tax interest or penalty; The proper officer can also de
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be paid as per the provisions of the existing law and will be made in cash and will not be available as ITC. Q 15. Whether refund can be made before verification of documents? Ans. In case of any claim of refund to a registered person on account of zero rated supplies of goods or services or both (other than registered persons as may be notified), 90% refund may be granted on provisional basis before verification subject to such conditions and restrictions as prescribed in Refund rules in accordance with sub-section 6 of section 54 of the CGST/SGST Act. Q 16. In case of refund under exports, whether BRC is necessary for granting refund? Ans. In case of refund on account of export of goods, the refund rules do not prescribe BRC as a necessary document for filing of refund claim. However, for export of services details of BRC is required to be submitted along with the application for refund. Q 17. Will the principle of unjust enrichment apply to exports and supplies to SEZ Units? Ans. Th
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tax and claim refund of the tax paid or the unutilized input tax credit in accordance with section 54(1)/54(3) of the CGST/SGST Act. Q 20. Presently under Central law, exporters are allowed to obtain duty paid inputs, avail ITC on it and export goods upon payment of duty (after utilizing the ITC) and thereafter claim refund of the duty paid on exports. Will this system continue in GST? Ans. Yes. In terms of Section 16 of the IGST Act, a registered taxable person shall have the option either to export goods/services without payment of IGST under bond or letter of undertaking and claim refund of ITC or he can export goods/services on payment of IGST and claim refund of IGST paid. Q 21. What is the time period within which an acknowledgement of a refund claim has to be given? Ans. Where an application relates to a claim for refund from the electronic cash ledger as per sub-section (6) of section 49 of the CGST/SGST Act made through the return furnished for the relevant tax period the ack
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aim of refund will be sanctioned by the proper officer in Form GST RFD-06 if the claim is found to be in order and payment advice will be issued in Form GST RFD-05. The refund amount will then be electronically credited to the applicants given bank account. Q 25. What happens if there are deficiencies in the refund claim? Ans. Deficiencies, if any, in the refund claim has to be pointed out within 15 days. A form GST RFD-03 will be issued by the proper officer to the applicant pointing out the deficiencies through the common portal electronically requiring him to file a refund application after rectification of such deficiencies. Q 26. Can the refund claim be rejected without assigning any reasons? Ans. No. When the proper officer is satisfied that the claim is not admissible he shall issue a notice in Form GST RFD-08 to the applicant requiring him to furnish a reply in GST RFD -09 within fifteen days and after consideration of the applicant s reply, he can accept or reject the refund c
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narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs) 7 60 Knitted or crocheted fabrics [All goods] 8 8601 Rail locomotives powered from an external source of electricity or by electric accumulators 9 8602 Other rail locomotives; locomotive tenders; such as Diesel-electric locomotives, Steam locomotives and tenders thereof 10 8603 Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604 11 8604 Railway or tramway maintenance or service vehicles, whether or not self-propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles) 12 8605 Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604) 13 8606 Railway or tramway goods vans and wagons, not self-propelled 14 8607 Parts of railway or tramway locomotives or rolling-s
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shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:- (a) the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export; and (b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-3B and GSTR-1 or Table 6A of the said GSTR-1. Q 30. Is it necessary to execute a bond for effecting zero rated supplies? Ans. No. The facility to export under Letter of Undertaking (LUT) has been extended to all zero rated suppliers (barring a few exceptions such as those who have been prosecuted for an offence involving tax of ₹ 2.5 crore) vide Notification No. 37/2017 – Central Tax dated 4.10.2017. Circular No. 8/8/2017-GST dated 4.10.2017 may also be referred to. Q 31. Is there any provision for filing manu
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fore issue of show cause notice under section 73? Ans. In such cases notice shall not be issued by the proper officer. {sec.73 (6)} Q 3. If show cause notice is issued under Section 73 and thereafter the noticee makes payment along with applicable interest, is there any need to adjudicate the case? Ans. If the person pays the tax along with interest within 30 days of issue of notice, no penalty shall be payable and all proceedings in respect of such notice shall be deemed to be concluded. {sec.73 (8)} Q 4. What is the relevant date for issue of Show Cause Notice? Ans. (i) In case of section 73(cases other than fraud/ suppression of facts/willful misstatement), the relevant date shall be counted from the due date for filing of annual return for the financial year to which demand relates to. The SCN has to be adjudicated within at period of three years from the due date of filing of annual return. The SCN is required to be issued at least three months prior to the time limit set for adju
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filing of annual return for the financial year to which demand relates to or the date of erroneous refund/ITC wrongly availed. {sec.74(10)} Q 6. Is there any immunity to a person chargeable with tax in cases of fraud/suppression of facts/ willful misstatement, who pays the amount of demand along-with interest before issue of notice? Ans. Yes. Person chargeable with tax, shall have an option to pay the amount of tax along with interest and penalty equal to 15% percent of the tax involved, as ascertained either on his own or ascertained by the proper officer, and on such payment, no notice shall be issued with respect to the tax so paid. {sec. 74(6)} Q 7. If notice is issued under Section 74 and thereafter the noticee makes payment, is there any need to adjudicate the case? Ans. Where the person to whom a notice has been issued under sub-section (1) of section 74, pays the tax along with interest with penalty equal to 25% of such tax within 30 days of issue of notice, all proceedings in
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erson representing tax under this act, to the government. For any such amount not so paid, proper officer may issue SCN for recovery of such amount and penalty equivalent to such amount. {Sec.76 (1&2)} Q 11. In case the person does not deposit tax collected in contravention of Section 76(1), what is the proper course of action to be taken? Ans. SCN may be issued and if so, an order shall be passed following Principles of natural justice within one year of date of issue of such notice. {sec.76 (2 to 6)} Q 12. What is the time limit to issue notice in cases under Section 76 i.e. taxes collected but not paid to Government? Ans. There is no time limit. Notice can be issued on detection of such cases without any time limit. Q 13. What are the modes of recovery of tax available to the proper officer? Ans. The proper officer may recover the dues in following manner: a) Deduction of dues from the amount owned by the tax authorities payable to such person. b) Recovery by way of detaining an
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SGST and vice-versa. {sec.79 (1,2,3,4)} Q 14. Whether the payment of tax dues can be made in installments? Ans. On receipt of any such request, Commissioner/Chief Commissioner may extend the time for payment or allow payment of any amount due under the Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly installments not exceeding twenty-four, subject to payment of interest under section 50 with such limitations and conditions as may be prescribed. However, where there is default in payment of any one installment on its due date, the whole outstanding balance payable on such date shall become payable and recovered without any further notice. {sec.80} Q 15. What is the course of recovery in cases where the tax demand confirmed is enhanced in appeal/ revision proceedings? Ans. The notice of demand is required to be served only in respect of the enhanced dues. In so far as the amount already confirmed prior to disposal of appeal/revisi
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Q 18. What is the liability of directors of the Company (taxable person) under liquidation? Ans. When any private company is wound up and any tax or other dues determined whether before or after liquidation that remains unrecovered, every person who was a director of the company during the period for which the tax was due, shall jointly and severally be liable for payment of dues unless he proves to the satisfaction of the Commissioner that such non-recovery is not attributed to any gross neglect, misfeasance or breach of duties on his part in relation to the affairs of the company. {Sec.88(3),89} Q 19. What is the liability of partners of a partnership firm (Taxable person) to pay outstanding tax? Ans. Partners of any firm shall jointly and severally be liable for payment of any tax, interest or penalty. Firm/ partner shall intimate the retirement of any partner to the Commissioner by a notice in writing. Liability to pay tax, interest or penalty up to the date of such retirement, whe
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dministrator General / Official Trustee / Receiver or Manager appointed under any order of a Court, the tax, interest or penalty shall be levied and recoverable from such Court of Wards/Administrator General / Official Trustee / Receiver or Manager to the same extent as it would be determined and recoverable from a taxable person. {Sec.92} 16. Appeals, Review and Revision in GST Q 1. Whether any person aggrieved by any order or decision passed against him has the right to appeal? Ans. Yes. Any person aggrieved by any order or decision passed under the GST Act(s) has the right to appeal to the Appellate Authority under Section 107. It must be an order or decision passed by an adjudicating authority . However, some decisions or orders (as provided for in Section 121) are not appealable. Q 2. What is the time limit to file appeal to Appellate Authority (AA)? Ans. For the aggrieved person, the time limit is fixed as 3 months from the date of communication of order or decision. For the depa
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made along with every appeal before Appellate Authority? Ans. Full amount of tax, interest, fine, fee and penalty arising from the impugned order as is admitted by the appellant and a sum equal to 10% of remaining amount of tax in dispute arising from the order in relation to which appeal has been filed. Q 7. Can the Department apply to AA for ordering a higher amount of pre-deposit? Ans. No Q 8. What about the recovery of the balance amount? Ans. On making the payment of pre-deposit as above, the recovery of the balance amount shall be deemed to be stayed, in terms of section 107(7) Q 9. Whether in an appeal the AA can pass an order enhancing the quantum of duty/ fine/ penalty/ reduce the amount of refund/ITC from the one passed by the original authority? Ans. The AA is empowered to pass an order enhancing the fees or penalty or fine in lieu of confiscation or reducing the amount of refund or input tax credit provided the appellant has been given reasonable opportunity of showing cau
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ty appointed or authorised under this Act for revision of decision or orders referred to in section 108. Section 108 of the Act authorizes such revisional authority to call for and examine any order passed by his subordinates and in case he considers the order of the lower authority to be erroneous in so far as it is prejudicial to revenue and is illegal or improper or has not taken into account certain material facts, whether available at the time of issuance of the said order or not or in consequence of an observation by the Comptroller and Auditor General of India, he may, if necessary, he can revise the order after giving opportunity of being heard to the noticee. Q 12. Can the revisional authority order for staying of operation of any order passed by his subordinates pending such revision? Ans. Yes. Q 13. Are there any fetters to the powers of revisional authority under GST to revise orders of subordinates? Ans. Yes. The revisional authority shall not revise any order if (a) the o
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o be filed before the Tribunal? Ans. The aggrieved person has to file appeal before Tribunal within 3 months from the date of receipt of the order appealed against. Department has to complete review proceedings and file appeal within a period of six months from the date of passing the order under revision. Q 16. Can the Tribunal condone delay in filing appeal before it beyond the period of 3/6 months? If so, till what time? Ans. Yes, the Tribunal has powers to condone delay of a further three months, beyond the period of 3/6 months provided sufficient cause is shown by the appellant for such delay. Q 17. What is the time limit for filing memorandum of cross objections before Tribunal? Ans. 45 days from the date of receipt of appeal. Q 18. Whether interest becomes payable on refund of pre-deposit amount? Ans. Yes. As per Section 115 of the Act, where an amount deposited by the appellant under sub-section (6) of section 107 or under sub-section (8) of section 112 is required to be refund
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eipt of the order appealed against. However, the High Court has the power to condone further delay on sufficient cause being shown. Q 21. To whom shall an appeal against the order passed by an officer of CGST lie? Ans. The appeal shall lie only to an officer appointed under the CGST Act. Section 6 (3) of the CGST Act specifically mandates that any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under CGST Act shall not lie before an officer appointed under the SGST or UTGST Act. Similar provisions exist in SGST/UTGST Act also. Q 22. If the proper officer of CGST passes an order under the Act, can such proper officer issue an order under the corresponding state/UT GST Act? Ans. Yes. Where any proper officer issues an order under the CGST Act, he shall also issue an order under the SGST/UTGST Act, as authorised by the SGST/UTGST Act, under intimation to the jurisdictional officer of State tax or Union territory tax. Sim
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e Act; (f) whether applicant is required to be registered under the Act; (g) whether any particular thing done by the applicant with respect to any goods or services amounts to or results in a supply of goods or services, within the meaning of that term. Q 3. What is the objective of having a mechanism of Advance Ruling? Ans. The broad objective for setting up such an authority is to: i. provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant; ii. attract Foreign Direct Investment (FDI); iii. reduce litigation; iv. pronounce ruling expeditiously in transparent and inexpensive manner. Q 4. What will be the composition of Authority for advance rulings (AAR) under GST? Ans. Authority for advance ruling (AAR) shall comprise one member CGST and one member SGST/ UTGST. They will be appointed by the Central and State government respectively. Q 5. Is it necessary for a person seeking advance ruling to be registered? Ans. No, any perso
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ve state or Union Territory. An applicant, or the jurisdictional officer, if aggrieved by any advance ruling, may appeal to the Appellate Authority. Q 9. How many AAR and AAAR will be constituted under GST? • Ans. There will be one AAR and AAAR for each State. Details of addresses, contact details along with emails of AAR are available at http://www.gstcouncil.gov.in/sites/default/files/Details-of-AAR-as-on_22-11-2017.pdf Q 10. To whom will the Advance Ruling be applicable? Ans. Section 103 provides that an advance ruling pronounced by AAR or AAAR shall be binding only on the applicant who sought it in respect of any matter referred to in 97 (2) and on the jurisdictional tax authority of the applicant. This clearly means that an advance ruling is not applicable to similarly placed taxable persons in the State. It is only limited to the person who has applied for an advance ruling. Q 11. Whether the advance ruling have precedent value of a judgment of the High Court or the Supreme
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visions of the GST Act(s) shall apply to the applicant as if such advance ruling had never been made (but excluding the period when advance ruling was given and up to the period when the order declaring it to be void is issued). An order declaring advance ruling to be void can be passed only after hearing the applicant. Q 14. What is the procedure for obtaining Advance Ruling? Ans. Section 97 and 98 deals with procedure for obtaining advance ruling. Section 97 provides that the applicant desirous of obtaining advance ruling should make application to AAR in the prescribed form. The format of the form and the detailed procedure for making application is prescribed in the CGST Rules. Section 98 provides the procedure for dealing with the application for advance ruling. The AAR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant records. The AAR may then examine the application along with the records and may also hear the app
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ppens if there is a difference of opinion amongst members of AAR? Ans. If there is difference of opinion between the two members of AAR, they shall refer the point or points on which they differ to the AAAR for hearing the issue. If the members of AAAR are also unable to come to a common conclusion in regard to the point(s) referred to them by AAR, then it shall be deemed that no advance ruling can be given in respect of the question on which difference persists at the level of AAAR. Q 18. What are the provisions for appeals against order of AAR? Ans. The provisions of appeal before AAAR are dealt in section 100 and 101 of CGST/SGST Act or section 14 of the UTGST Act. If the applicant is aggrieved with the finding of the AAR, he can file an appeal with AAAR. Similarly, if the concerned or jurisdictional officer of CGST/SGST/UTGST does not agree with the finding of AAR, he can also file an appeal with AAAR. The word concerned officer of CGST/SGST means an officer who has been designated
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r Advance Rulings. Thus no further appeals lie and the ruling shall be binding on the applicant as well as the jurisdictional officer in respect of applicant. However, Writ Jurisdiction may lie before Hon ble High Court or the Supreme Court. Q 20. Can the AAR & AAAR order for rectification of mistakes in the ruling? Ans. Yes, AAR and AAAR have power to amend their order to rectify any mistake apparent from the record within a period of six months from the date of the order. Such mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant or the concerned or the jurisdictional CGST/SGST officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit, the applicant or the appellant must be heard before the order is passed. (Section 102) 18. Settlement Commission [Omitted] Omitted as the chapter is no longer there in the Final GST Act(s) 19. Inspection, Search, Seizure and Arrest Q 1.
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GST only upon a written authorization given by an officer of the rank of Joint Commissioner or above. A Joint Commissioner or an officer higher in rank can give such authorization only if he has reasons to believe that the person concerned has done one of the following: i. suppressed any transaction of supply; ii. suppressed stock of goods in hand; iii. claimed excess input tax credit; iv. contravened any provision of the CGST/SGST Act to evade tax; v. a transporter or warehouse owner has kept goods which have escaped payment of tax or has kept his accounts or goods in a manner that is likely to cause evasion of tax. Q 4. Can the proper officer authorize Inspection of any assets/premises of any person under this Section? Ans. No. Authorization can be given to an officer of CGST/ SGST to carry out inspection of any of the following: i. any place of business of a taxable person; ii. any place of business of a person engaged in the business of transporting goods whether or not he is a reg
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determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances. Q 7. Is it mandatory that such reasons to believe has to be recorded in writing by the proper officer, before issuing authorization for Inspection or Search and Seizure? Ans. Although the officer is not required to state the reasons for such belief before issuing an authorization for search, he has to disclose the material on which his belief was formed. Reason to believe need not be recorded invariably in each case. However, it would be better if the materials / information etc. are recorded before issue of search warrant or before conducting search. Q 8. What is a Search Warrant and what are its contents? Ans. The written authority to conduct search is generally called search warrant. The competent authority to issue search warrant is an officer of the rank of Join
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ng applied for the registration; (iv) contravenes any of the provisions of the CGST/ SGST Act or rules made thereunder with intent to evade payment of tax. Q 10. What powers can be exercised by an officer during valid search? Ans. An officer carrying out a search has the power to search for and seize goods (which are liable to confiscation) and documents, books or things (relevant for any proceedings under CGST/SGST Act) from the premises searched. During search, the officer has the power to break open the door of the premises authorized to be searched if access to the same is denied. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods, account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied. Q 11. What is the procedure for conducting search? Ans. Section 67(10) of CGST/SGST Act prescribes that searches must be carried
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search should be made in the presence of at least two independent witnesses of the locality. If no such inhabitants are available /willing, the inhabitants of any other locality should be asked to be witness to the search. The witnesses should be briefed about the purpose of the search. • Before the start of the search proceedings, the team of officers conducting the search and the accompanying witnesses should offer themselves for their personal search to the person in-charge of the premises being searched. Similarly, after the completion of search all the officers and the witnesses should again offer themselves for their personal search. • A Panchnama / Mahazar of the proceedings of the search should necessarily be prepared on the spot. A list of all goods, documents recovered and seized/detained should be prepared and annexed to the Panchnama/Mahazar. The Panchnama / Mahazar and the list of goods/ documents seized/detained should invariably be signed by the witnesses, the
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C&AG or a cost accountant or chartered accountant nominated under section 66 of CGST/SGST Act, access to any business premises without issuance of a search warrant for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. However, a written authorization is to be issued by an officer of the rank of Commissioner of CGST or SGST. This provision facilitates access to a business premise which is not registered by a taxable person as a principal or additional place of business but has books of accounts, documents, computers etc. which are required for audit or verification of accounts of a taxable person. Q 14. What is meant by the term Seizure ? Ans. The term seizure has not been specifically defined in the GST Law. In Law Lexicon Dictionary, seizure is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary to the wishes
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the department. Detention order is issued when it is suspected that the goods are liable to confiscation. Seizure can be made only on the reasonable belief which is arrived at after inquiry/investigation that the goods are liable to confiscation. Q 17. What are the safeguards provided in GST Act(s) in respect of Search or Seizure? Ans. Certain safeguards are provided in section 67 of CGST/SGST Act in respect of the power of search or seizure. These are as follows: i. Seized goods or documents should not be retained beyond the period necessary for their examination; ii. Photocopies of the documents can be taken by the person from whose custody documents are seized; iii. For seized goods, if a notice is not issued within six months of its seizure, goods shall be returned to the person from whose possession it was seized. This period of six months can be extended on justified grounds up to a further period of maximum six months; iv. An inventory of seized goods shall be made by the seizi
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n defined in the CGST/SGST Act. However, as per judicial pronouncements, it denotes the taking into custody of a person under some lawful command or authority . In other words, a person is said to be arrested when he is taken and restrained of his liberty by power or colour of lawful warrant. Q 20. When can the proper officer authorize arrest of any person under CGST / SGST Act? Ans. The Commissioner of CGST/SGST can authorize a CGST/SGST officer to arrest a person if he has reasons to believe that the person has committed an offence attracting a punishment prescribed under section 132(1) (a), (b), (c), (d) or Sec 132(2) of the CGST/SGST Act. This essentially means that a person can be arrested only where the tax evasion is more than 2 crore rupees or where a he has been convicted earlier under CGST Act. Q 21. What are the safeguards provided under CGST /SGST Act for a person who is placed under arrest? Ans. There are certain safeguards provided under section 69 for a person who is pla
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f is section 57 of Cr.P.C., 1973 which provides that a person arrested without warrant shall not be detained for a longer period than, under the circumstances of the case, is reasonable but this shall not exceed twenty-four hours (excluding the journey time from place of arrest to the Magistrate s court). Within this period, as provided under section 56 of Cr.PC. the person making the arrest shall send the person arrested without warrant before a Magistrate having jurisdiction in the case. In a landmark judgment in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416, the Hon ble Supreme Court has laid down specific guidelines required to be followed while making arrests. While this is in relation to police, it needs to be followed by all departments having power of arrest. These are as under: i. The police personnel carrying out the arrest and handling the interrogation of the arrestee should bear accurate, visible and clear identification and name tags with thei
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lace of arrest and venue of custody of an arrestee must be notified by the police where the next friend or relative of the arrestee lives outside the district or town through the Legal Aid Organization in the District and the police station of the area concerned telegraphically within a period of 8 to 12 hours after the arrest. v. An entry must be made in the diary at the place of detention regarding the arrest of the person which shall also disclose the name of the next friend of the person who has been informed of the arrest and the names and particulars of the police officials in whose custody the arrestee is. vi. The arrestee should, where he so requests, be also examined at the time of his arrest and major and minor injuries, if any present on his/her body, must be recorded at that time. The Inspection Memo must be signed both by the arrestee and the police officer effecting the arrest and its copy provided to the arrestee. vii. The arrestee should be subjected to medical examinat
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-to- case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed, nature and quality of evidence, possibility of evidences being tampered with or witnesses being influenced, cooperation with the investigation, etc. Power to arrest has to be exercised after careful consideration of the facts of the case which may include: i. to ensure proper investigation of the offence; ii. to prevent such person from absconding; iii. cases involving organized smuggling of goods or evasion of customs duty by way of concealment; iv. master minds or key operators effecting proxy/ benami imports/exports in the name of dummy or non-existent persons/IECs, etc.; v. where the intent to evade duty is evident and element of mensrea/guilty mind is palpable; vi. prevention of the possibility of tampering with evidence; vii. intimidating or influencing witnesses; and viii. large amounts of evasion of duty or service tax at least exceeding one
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amount of refund wrongly taken exceeds ₹ 5 crores, shall be cognizable and non-bailable. Other offences under the act are non-cognizable and bailable. Q 27. When can the proper officer issue summons under CGST Act? Ans. Section 70 of CGST/SGST Act gives powers to a duly authorized CGST/SGST officer to call upon a person by issuing a summon to present himself before the officer issuing the summon to either give evidence or produce a document or any other thing in any inquiry which an officer is making. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. Q 28. What are the responsibilities of the person so summoned? Ans. A person who is issued summon is legally bound to attend either in person or by an authorized representative and he is bound to state the truth before the officer who
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t are the guidelines for issue of summons? Ans. The Central Board of Excise and Customs (CBEC) in the Department of Revenue, Ministry of Finance has issued guidelines from time to time to ensure that summons provisions are not misused in the field. Some of the important highlights of these guidelines are given below: i. summons is to be issued as a last resort where assesses are not co-operating and this section should not be used for the top management; ii. the language of the summons should not be harsh and legal which causes unnecessary mental stress and embarrassment to the receiver; iii. summons by Superintendents should be issued after obtaining prior written permission from an officer not below the rank of Assistant Commissioner with the reasons for issuance of summons to be recorded in writing; iv. where for operational reasons, it is not possible to obtain such prior written permission, oral/ telephonic permission from such officer must be obtained and the same should be reduc
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ance of the person is considered necessary. (ii) Normally, summons should not be issued repeatedly. As far as practicable, the statement of the accused or witness should be recorded in minimum number of appearances. (iii) Respect the time of appearance given in the summons. No person should be made to wait for long hours before his statement is recorded except when it has been decided very consciously as a matter of strategy. (iv) Preferably, statements should be recorded during office hours; however, an exception could be made regarding time and place of recording statement having regard to the facts in the case. Q 32. Are there any class of officers who are required to assist CGST/SGST officers? Ans. Under section 72 of CGST/SGST Act, the following officers have been empowered and are required to assist CGST/SGST officers in the execution of CGST/SGST Act. The categories specified are as follows: i. Police; ii. Railways iii. Customs; iv. Officers of State/UT/ Central Government engag
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on 51; 6) Non collection or lower collection of or non- payment of tax collectible at source under section 52; 7) Availing/utilizing input tax credit without actual receipt of goods and/or services; 8) Fraudulently obtaining any refund; 9) Availing/distributing input tax credit by an Input Service Distributor in violation of Section 20; 10) Furnishing false information or falsification of financial records or furnishing of fake accounts/ documents with intent to evade payment of tax; 11) Failure to register despite being liable to pay tax; 12) Furnishing false information regarding registration particulars either at the time of applying for registration or subsequently; 13) Obstructing or preventing any official in discharge of his duty; 14) Transporting goods without prescribed documents; 15) Suppressing turnover leading to tax evasion; 16) Failure to maintain accounts/documents in the manner specified in the Act or failure to retain accounts/documents for the period specified in the
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ty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 126 of the Act. Accordingly- • no penalty is to be imposed without issuance of a show cause notice and proper hearing in the matter, affording an opportunity to the person proceeded against to rebut the allegations levelled against him, • the penalty is to depend on the totality of the facts and circumstances of the case, • the penalty imposed is to be commensurate with the degree and severity of breach of the provisions of the law or the rules alleged, • the nature of the breach is to be specified clearly in the order imposing the penalty, • the provisions of the law under which the penalty has been imposed is to be specified. Section 126 further specifies that, in particular, no substantial penalty is to be imposed for – • any minor breach
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ho has not paid tax or makes a short payment of taxon supplies shall be a liable to penalty which will be the higher of: 10% of the tax not paid or short paid, or ₹ 10,000/- Q 5. Is any penalty prescribed for any person other than the taxable person? Ans. Yes. Section 122(3) provides for levy of penalty extending to ₹ 25,000/- for any person who- • aids or abets any of the 21 offences, • deals in any way (whether receiving, supplying, storing or transporting) with goods that are liable to confiscation, • receives or deals with supply of services in contravention of the Act, • fails to appear before an authority who has issued a summon, • fails to issue any invoice for a supply or account for any invoice in his books of accounts. Q 6. What is the penalty provided for any contravention for which no separate penalty has been prescribed under CGST/SGST Act? Ans. Section 125 of the CGST/SGST Act provides that any person who contravenes any provision of t
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oods shall be released on payment of the applicable tax and penalty equal to 50% of value of goods or upon furnishing of security equivalent to the said amount. In case of exempted goods, penalty is 5% of value of goods or ₹ 25,000/- whichever is lesser. Q 7. What is the penalty prescribed for a person who opts for composition scheme despite being ineligible for the said scheme? Ans. Section 10(5) provides that if a person who has paid under composition levy is found as not being eligible for compounding then such person shall be liable to penalty to an amount equivalent to the tax payable by him under the provisions of the Act i.e. as a normal taxable person and that this penalty shall be in addition to the tax payable by him. Q 8. What is meant by confiscation? Ans. The word confiscation has not been defined in the Act. The concept is derived from Roman law wherein it meant seizing or taking into the hands of emperor, and transferring to Imperial fiscus or Treasury. The word co
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payment of tax. Q 10. What happens to the goods upon confiscation of goods by the proper officer? Ans. Upon confiscation, the title in the confiscated goods shall vest in the Government and every Police officer to whom the proper officer makes a request in this behalf, shall assist in taking possession of the goods. Q 11. After confiscation, is it required to give option to the person to redeem the goods? Ans. Yes. In terms of section 130(2), the Owner or the person in-charge of the goods liable to confiscation is to be given the option for fine (not exceeding market price of confiscated goods) in lieu of confiscation. This fine shall be in addition to the tax and other charges payable in respect of such goods. Q 12. Can any conveyance carrying goods without cover of prescribed documents be subject to confiscation? Ans. Yes. Section 130 provides that any conveyance carrying goods without the cover of any documents or declaration prescribed under the Act shall be liable to confiscation
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out making supply; c) Not paying any amount collected as tax for a period exceeding 3 months; d) Availing or utilizing credit of input tax without actual receipt of goods and/or services; e) Obtaining any fraudulent refund) f) evades tax, fraudulently avails ITC or obtains refund by an offence not covered under clause (a) to (e); g) Furnishing false information or falsification of financial records or furnishing of fake accounts/ documents with intent to evade payment of tax; h) Obstructing or preventing any official in the discharge of his duty; i) Dealing with goods liable to confiscation i.e. receipt, supply, storage or transportation of goods liable to confiscation; j) Receiving/dealing with supply of services in contravention of the Act; k) tampers with or destroys any material evidence or documents l) Failing to supply any information required of him under the Act/Rules or supplying false information; m) Attempting to commit or abetting the commission of any of the offences at (a
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offence without the prior sanction of the designated authority. Q 17. Is mensrea or culpable mental state necessary for prosecution under CGST/SGST Act? Ans. Yes. However, Section 135 presumes the existence of a state of mind (i.e. culpable mental state or mensrea) required to commit an offence if it cannot be committed without such a state of mind Q 18. What is a culpable state of mind? Ans. While committing an act, a culpable mental state is a state of mind wherein- • the act is intentional; • the act and its implications are understood and controllable; • the person committing the act was not coerced and even overcomes hurdles to the act committed; • the person believes or has reasons to believe that the act is contrary to law. Q 19. Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act? Ans. Yes. Section 137 of the CGST/SGST ACT provides that every person who was in-charge of or responsible to a company for the conduct of its b
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fences numbered 1 to 6 of the 12 major offences (outlined in Q. 16 above), if the person charged with the offence had compounded earlier in respect of any of the said offences; • Aiding/abetting offences numbered 1 to 6 of the 12 major offences, if the person charged with the offence had compounded earlier in respect of any of the said offences; • Any offence (other than the above offences) under any SGST Act/IGST Act in respect of a supply with value exceeding ₹ 1 crore, if the person charged with the offence had compounded earlier in respect of any of the said offences; • Any offence which is also an offence under NDPSA or FEMA or any other Act other than CGST/SGST; Compounding is to be permitted only after payment of tax, interest and penalty and compounding shall not affect any proceeding already instituted under any other law. Q 22. Are there any monetary limits prescribed for compounding of offence? Ans. Yes. The lower limit for compounding amount is to be th
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union territory Further import of goods and services, supplies to SEZ units or developer, or any supply that is not an intra state supply. (Section 7 of the IGST Act). Q 3. How will the Inter-State supplies of Goods and Services be taxed under GST? Ans. IGST shall be levied and collected by Centre on inter-state supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies of goods and services. The inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information is also submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and info
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mestic supplies) or where supplier or recipient is located outside India (international supplies). This is discussed in details in the next Chapter. It also provides for certain other specific provisions like payment of tax by online information and database access service provider located outside India to an unregistered person in India, upon taking registration in India, under the IGST Act, following a simplified provision (section 14 of the IGST Act), Q 5. What are the advantages of IGST Model? Ans. The major advantages of IGST Model are: a. Maintenance of uninterrupted ITC chain on inter-State transactions; b. No upfront payment of tax or substantial blockage of funds for the inter-State seller or buyer; c. No refund claim in exporting State, as ITC is used up while paying the tax; d. Self-monitoring model; e. Ensures tax neutrality while keeping the tax regime simple; f. Simple accounting with no additional compliance burden on the taxpayer; g. Would facilitate in ensuring high le
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d? Ans. The IGST payment can be done utilizing ITC or by cash. However, the use of ITC for payment of IGST will be done using the following hierarchy, – First available ITC of IGST shall be used for payment of IGST; Once ITC of IGST is exhausted, the ITC of CGST shall be used for payment of IGST; If both ITC of IGST and ITC of CGST are exhausted, then only the dealer would be permitted to use ITC of SGST for payment of IGST. Remaining IGST liability, if any, shall be discharged using payment in cash. GST System will ensure maintenance of this hierarchy for payment of IGST using the credit. Q 8. How will the settlement between Centre, exporting state and importing state be done? Ans. There would be settlement of account between the Centre and the states on two counts, which are as follows- • Centre and the exporting state: The exporting state shall pay the amount equal to the ITC of SGST used by the supplier in the exporting state to the Centre. • Centre and the importing stat
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valuation, time of supply, invoice, accounts, records, adjudication, appeal etc. (Section 20 of the IGST Act) 22. Place of Supply of Goods and Service Q 1. What is the need for the Place of Supply of Goods and Services under GST? Ans. The basic principle of GST is that it should effectively tax the consumption of such supplies at the destination thereof or as the case may at the point of consumption. So place of supply provision determines the place i.e. taxable jurisdiction where the tax should reach. The place of supply determines whether a transaction is intra-state or inter-state. In other words, the place of Supply of Goods or services is required to determine whether a supply is subject to SGST plus CGST in a given State or union territory or else would attract IGST if it is an inter-state supply. Q 2. Why are place of supply provisions different in respect of goods and services? Ans. Goods being tangible do not pose any significant problems for determination of their place of co
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struction or other services in respect of a railway line, a national highway or a bridge on a river which originate in one state and end in the other state. Similarly, a copy right for distribution and exhibition of film could be assigned for many states in single transaction or an advertisement or a programme is broadcasted across the country at the same time. An airline may issue seasonal tickets, containing say 10 leafs which could be used for travel between any two locations in the country. The card issued by Delhi metro could be used by a person located in Noida, or Delhi or Faridabad, without the Delhi metro being able to distinguish the location or journeys at the time of receipt of payment; (v) Services are continuously evolving and would thus continue to pose newer challenges. For example, 15-20 years back no one could have thought of DTH, online information, online banking, online booking of tickets, internet, mobile telecommunication etc. Q 3. What proxies or assumptions in
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or the recipient of such supplies in as much as the recipient is entitled to use the input tax credit for payment of future taxes. For B2B transactions the location of recipient takes care in almost all situations as further credit is to be taken by recipient. The recipient usually further supplies to another customer. The supply is consumed only when a B2B transaction is further converted into B2C transaction. In respect of B2C transactions, the supply is finally consumed and the taxes paid actually come to the government. Q 5. What would be the place of supply where goods are removed? Ans. The place of supply of goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. (Section 10 of IGST Act) Q 6. What will be the place of supply if the goods are delivered by the supplier to a person on the direction of a third person? Ans. It would be deemed that the third person has received the goods and the place of supply of su
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esumption for place of supply in respect of unregistered recipients? Ans. In respect of unregistered recipients, the usual place of supply is location of recipient. However, in many cases, the address of recipient is not available, in such cases, location of the supplier of services is taken as proxy for place of supply. Q 10. The place of supply in relation to immovable property is the location of immovable property. Suppose a road is constructed from Delhi to Mumbai covering multiple states. What will be the place of supply? Ans. Where the immovable property is located in more than one State, the supply of service shall be treated as made in each of the States in proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf. (The Explanation clause to section 12(3) of the IGST Act, for domesti
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he place of supply shall be the place where the goods are handed over for transportation (section 12 of the IGST Act. For international supplies: The place of supply of transport services, other than the courier services, shall be the destination of goods. For courier, the place of supply of services is where goods are handed over to courier. However, if the courier services are performed even partially in India, the place of supply shall be deemed as India (section 13(3), 13(6) and 13(9) of the IGST Act). Q 13. What will be the place of supply of passenger transportation service, if a person travels from Mumbai to Delhi and back to Mumbai? Ans. If the person is registered, the place of supply shall be the location of recipient. If the person is not registered, the place of supply for the forward journey from Mumbai to Delhi shall be Mumbai, the place where he embarks. However, for the return journey, the place of supply shall be Delhi as the return journey has to be treated as separat
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ace of supply for mobile connection would depend on whether the connection is on postpaid or prepaid basis. In case of postpaid connections, the place of supply shall be the location of billing address of the recipient of service. In case of pre-paid connections, the place of supply shall be the place where payment for such connection is received or such pre-paid vouchers are sold. However, if the recharge is done through internet/e-payment, the location of recipient of service on record shall be the taken as the place of service. For international supplies: The place of supply of telecom services is the location of the recipient of service. Q 16. A person in Goa buys shares from a broker in Delhi on NSE (in Mumbai). What will be the place of supply? Ans. The place of supply shall be the location of the recipient of services on the records of the supplier of services. So Goa shall be the place of supply. Q 17. A person from Mumbai goes to Kullu-Manali and takes some services from ICICI
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both central and state governments including tax payers and other stakeholders. The Frontend services of Registration, Returns, Payments, etc. to all taxpayers will be provided by GSTN. It will be the interface between the government and the taxpayers. Q 2. What was need to create GSTN? Ans. The GST System Project is a unique and complex IT initiative. It is unique as it seeks, for the first time to establish a uniform interface for the tax payer and a common and shared IT infrastructure between the Centre and States. Currently, the Centre and State indirect tax administrations work under different laws, regulations, procedures and formats and consequently the IT systems work as independent sites. Integrating them for GST implementation would be complex since it would involve integrating the entire indirect tax ecosystem so as to bring all the tax administrations (Centre, State and Union Territories) to the same level of IT maturity with uniform formats and interfaces for taxpayers an
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es (Maharashtra, Assam, Karnataka, West Bengal and Gujarat) as members. The Group was mandated to suggest, inter alia, the modalities for setting up a National Information Utility (NIU/ SPV) for implementing the Common Portal to be called GST Network (GSTN) and recommend the structure and terms of reference for the NIU/ SPV, detailed implementation strategy and the road map for its creation in addition to other items like training, outreach etc. In March 2010, TAGUP constituted by the Ministry of Finance had recommended that National Information Utilities should be set up as private companies with a public purpose for implementation of large and complex Government IT projects including GST. Mandate of TAGUP was to examine the technological and systemic issues relating to the various IT projects such as GST, TIN, NPS, Central Govt 24.5% State Govts 24.5% HDFC 10% HDFC Bank 10% ICICI Bank 10% NSE Strategic Investment Co 10% LIC Housing Finance Ltd The GSTN in its current form was created
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ich user charges will be paid by the Centre and States/UTs equally on behalf of taxpayers and other stakeholders for availing services from the GST Portal. The user charges will be shared equally by the Centre and the States. The user charges for States will be apportioned amongst them based on number of registered taxpayers. Q 5. What services will be rendered by GSTN? Ans. GSTN will render the following services through the Common GST Portal: (a) Registration (including existing taxpayer migration, a process which began on 8th Nov 2016); (b) Payment management including payment Gateways and integration with banking systems; (c) Return filing and processing; (d) Taxpayer management, including account management, notifications, information, and status tracking; (e) Tax authority account and ledger Management; (f) Computation of settlement (including IGST Settlement) between the Centre and States; Clearing house for IGST; (g) Processing and reconciliation of GST on import and integratio
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have asked GSTN to develop their backend modules also. The CBEC and rest of the 9 states (Model 1) have decided to develop and host the back-end modules themselves. For Model 1 states/ CBEC full data (registration, return, payment etc.) submitted by taxpayers will be shared with them for information and analysis as deemed fit by them. Q 7. What will be the role of GSTN in registration? Ans. The application for Registration will be made Online on GST Portal. Some of the key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable) will be validated by the GST Portal online with the respective agency i.e. CBDT, UID, MCA etc., thereby ensuring minimum need for submission of documentation. The application data along with supporting scanned documents shall be sent by GSTN to states/ Centre, which in turn shall send the query, if any, or approval or rejection intimation and digitally signed registration to GSTN for eventual download by the taxpayer. Q 8. What is the role of
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other stakeholders; vi. BI/Analytics for Tax officials. Q 10. What is the concept of GST Eco-system? Ans. A common GST system will provide linkage to all State/UT Commercial Tax departments, Central Tax authorities, Taxpayers, Banks and other stakeholders. The eco-system consists of all stakeholders starting from taxpayer to tax professional to tax officials to GST portal to Banks to accounting authorities. The diagram given below depicts the whole GST eco-system. etc. The EG had seven meetings between 2nd August 2010 and 8th August 2011 to discuss the modalities. After due deliberations, the EG recommended creation of a Special Purpose Vehicle for implementing the GST System Project. To enable efficient and reliable provision of services in a demanding environment, the EG recommended a non- Government structure for the GSTN SPV with Government equity of 49% (Centre – 24.5% and States – 24.5%) after considering key parameters such as independence of management, strategic control of Gov
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e business knowledge resides with the officials of Government of India and States. However, professionals with sophisticated technology knowledge will be required to run this company independently, similar to NSDL which is working professionally and independently. EG also recommended a non-government company as that will have operational freedom. These recommendations were presented before the Empowered Committee of State Finance Ministers in its 3rd meeting of 2011 held on 19th August 2011 and in the 4th meeting of 2011 of the EC held on 14th Oct 2011. The proposal of the EG on IT infrastructure for GST regarding GSTN and formation of a not-for-profit section 25 company with the strategic control of the Government were approved by the Empowered Committee of State Finance Ministers (EC) in its meeting held on14.10.11. The note of Department of Revenue for setting up a Special Purpose Vehicle to be called Goods and Services Tax Network (GSTN-SPV) on the lines mentioned above was conside
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on of Government officers to the GSTN SPV for exercise of strategic control and for bringing in necessary domain expertise. v. GSTN SPV would have a self- sustaining revenue model, where it would be able to levy user charges on the tax payers and the tax authorities availing services. vi. GSTN SPV to be the exclusive national agency responsible for delivering integrated indirect Tax related services involving multiple tax authorities. Accordingly, any other service provider seeking to deliver similar integrated services would be required to enter into a formal arrangement with GSTN SPV for the services. vii. A one- time non- recurring Grant- in aid of ₹ 315 crores from the Central Government towards functioning of the SPV for a three-year period after incorporation. Q 4. What is the equity structure and Revenue Model of GSTN? Ans. (a) Equity Structure: – In compliance of the Cabinet decision, GST Network was registered as a not-for-profit, non-Government, private limited company
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the IT Platform to provide services to the Center and States through GST portal and developing the backend for 27 States and Union Territories. The Revenue model for GSTN has been approved by the Empowered Committee of State Finance Ministers under which user charges will be paid by the Centre and States/UTs equally on behalf of taxpayers and other stakeholders for availing services from the GST Portal. The user charges will be shared equally by the Centre and the States. The user charges for States will be apportioned amongst them based on number of registered taxpayers. Q 5. What services will be rendered by GSTN? Ans. GSTN will render the following services through the Common GST Portal: (a) Registration (including existing taxpayer migration, a process which began on 8th Nov 2016); (b) Payment management including payment Gateways and integration with banking systems; (c) Return filing and processing; (d) Taxpayer management, including account management, notifications, information
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ax authorities of States and Central governments. Thus, the frontend (GST Portal services) shall be provided by GSTN and the backend modules shall be developed by states and Central Government themselves. However, 27 states (termed as Model-2 states) have asked GSTN to develop their backend modules also. The CBEC and rest of the 9 states (Model 1) have decided to develop and host the back-end modules themselves. For Model 1 states/ CBEC full data (registration, return, payment etc.) submitted by taxpayers will be shared with them for information and analysis as deemed fit by them. Q 7. What will be the role of GSTN in registration? Ans. The application for Registration will be made Online on GST Portal. Some of the key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable) will be validated by the GST Portal online with the respective agency i.e. CBDT, UID, MCA etc., thereby ensuring minimum need for submission of documentation. The application data along with supp
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iling on stipulated dates for each type of return (GSTR [1, 2, 3, 5, 9.etc]; iii. Tax payment by creation of Challan and integration with agency Banks; iv. ITC and Cash Ledger and Liability Register; v. MIS reporting for tax payers, tax officials and other stakeholders; vi. BI/Analytics for Tax officials. Q 10. What is the concept of GST Eco-system? Ans. A common GST system will provide linkage to all State/UT Commercial Tax departments, Central Tax authorities, Taxpayers, Banks and other stakeholders. The eco-system consists of all stakeholders starting from taxpayer to tax professional to tax officials to GST portal to Banks to accounting authorities. The diagram given below depicts the whole GST eco-system. Q 11. What is GSP (GST Suvidha Provider)? Ans. GST System will provide a GST portal for taxpayers to access the GST System and do all the GST compliance activities. But there will be wide variety of tax payers (SME, Large Enterprise, Micro Enterprise etc.) which may require diffe
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ven a generic name, GST Suvidha Providers or GSP. Q 12. What will be the role of GST Suvidha Providers (GSP)? Ans. GSP will be developing applications having features like return filing, reconciliation of purchase register data with auto populated data for acceptance/rejection/Modification, dashboards for taxpayers for quick monitoring of GST compliance activities. they may also provide role based access to divide various GST related activities like uploading invoice, filing returns etc., among different set of users inside a company (medium or large companies will need it), Applications for Tax Professional to manage their client s GST compliance activities, Integration of existing accounting packages/ERP with GST System, etc. Q 13. What are the benefits to taxpayers in using the GSPs? Ans. At the outset it is clarified that all required functions under GST can be performed by a taxpayer at the GST portal. GSP is an additional channel being made available for performing some of the fu
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pplications to manage and undertake GST compliance activities for their client Tax payers from one dashboard, etc. Above are just a few illustrations. There will be many more requirements of different sets of Tax payers. These requirements of taxpayers can be met by GSPs. Q 14. What are the functions which a taxpayer will perform at the GST Common Portal being developed and maintained by GSTN for the taxpayers? Ans. GST Common Portal is envisaged as one-stop-shop for all requirements under GST for the taxpayers. Illustrative list of functions that can be performed by taxpayers through GST Portal managed by GSTN are: Application for registration as well as amendment in registration, cancellation of registration and profile management; Payment of taxes, including penalties, fines, interest, etc. (in terms of creation of Challan as payment will take place at bank s portal or inside a bank premises); Change of status of a taxpayer from normal to Compounding and vice-versa; Uploading of Inv
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ta be uploaded on day to day basis? Ans. Yes, GST Portal will have functionality for taxpayers to upload invoice data on any time basis. Early upload of invoices by supplier taxpayer will help receiver taxpayer in early reconciliation of data in Invoices as well as help supplier taxpayer in avoiding last minute rush of uploading returns on the last day. Q 18. Will GSTN provide tools for uploading invoice data on GST portal? Ans. Yes, GSTN will provide spreadsheet like tools (such as Microsoft Excel), free of cost, to taxpayers to enable them to compile invoice data in the same and generate files which can then be uploaded on GST portal. This will be an offline tool which can be used to input/capture invoice data without being online and then generate final files in compatible format for uploading to GST portal. Q 19. Will GSTN be providing mobile based Apps to view ledgers and other accounts? Ans. The GST portal is being designed in such a way that it can be seen on any smart phone. Th
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isting taxpayers under taxes which are to be subsumed under GST and whose PAN have been validated from CBDT database will not be required to apply afresh. They will be issued provisional GSTIN by GST portal, which will be valid for six months. Such taxpayers will be required to provide relevant data as per GST enrollment form online on GST Portal. On completion of data filing the status of taxpayer will change to Migrated. On appointed day the status of taxpayer will change to Active and he will be able to comply with requirements of GST regime for payment of taxes, filing of returns etc., on GST Portal. GSTN has issued Provisional IDs and passwords to all such taxpayers and the same has been shared with tax authorities for conveying the same to the taxpayers. Enrolment of existing taxpayers for GST started at GST portal on 8th November 2016 and by end of March 2017 a large number of them have activated the Provisional ID and many have completed the migration process. More details are
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by the taxpayers on GST Common Portal. This will be done by ensuring Role Based Access Control (RBAC) and encryption of critical data of taxpayers both during transit and in storage. Only the authorized tax authorities will be able to see and read the data. Q 25. What are the security measures being taken by GSTN to ensure security of the GST system? Ans. GST Systems project has incorporated state of art security framework for data and service security. Besides high end firewalls, intrusion detection, data encryption at rest as well as in motion, complete audit trail, tamper proofing using consistent hashing algorithms, OS and host hardening etc., GSTN is also establishing a primary and secondary Security Operations Command & Control center, which will proactively monitor and protect malicious attack in real time. GSTN is also ensuring secure coding practices through continuous scanning of source code & libraries being used in GST system to protect against commonly known and u
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Central Government.) Under SGST law there will be one more condition as given below: – So much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8 of the Central Sales Tax Act, 1956 that is not substantiated in the manner, and within the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger: However, an amount equivalent to the credit specified above shall be refunded under the existing law when the said claims are substantiated in the manner prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957. Q 3. A registered person, say, purchases capital goods under the existing law (Central Excise) in the June quarter of 2017-18. Though the invoice has been received within 30th June but the capital goods are received on 5th July, 2017 (i.e. in GST reg
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nder the existing law, will be recovered as arrears of tax under GST. Q 6. Give two examples of registered taxable persons who are not liable to be registered under the existing law (Central Excise / VAT) but are required to be registered under GST? Ans. A manufacturer having a turnover of say ₹ 60 lakh who is enjoying SSI exemption under the existing law will have to be registered under GST as the said turnover exceeds the basic threshold of ₹ 20 lakh – section 22. A trader having turnover below the threshold under VAT but, making sales through e-commerce operator will be required to be registered in GST. There will be no threshold for such person(s) – section 24. Q 7. Will ITC be allowed to a service provider on VAT paid inputs held as stock on the appointed day? Ans. Yes, he will be entitled to input tax credit on inputs held in stock in accordance with the provisions of section 140(3). Q 8. A registered person has excess ITC of ₹ 10, 000/- in his last VAT return f
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ler is entitled to refund of such tax [CST, in this case] paid under the existing law if the aforesaid buyer is an unregistered person under GST and the goods are returned within 06(six) months (or within the extended period of maximum two months) from the appointed day and the goods are identifiable – Section 142(1). Q 10. Shall a manufacturer or a job worker become liable to pay tax if the inputs or semi-finished goods sent for job work under the existing law are returned after completion of job work after the appointed day? Ans. No tax will be payable by the manufacturer or the job worker under the following circumstances: – (i) Inputs/ semi-finished goods are sent to the job worker in accordance with the provisions of the existing law before the appointed day. (ii) The job worker returns the same within six months from the appointed day (or within the extended period of maximum two months). (iii) Both the manufacturer and the job worker declare the details of inputs held in stock b
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s (or within the extended period of maximum two months)- section 141(3) Q 13. If finished goods removed from a factory for carrying out certain processes under existing law are returned on or after the appointed day, whether GST would be payable? Ans. No tax under GST will be payable if finished goods removed from factory prior to the appointed day to any other premise for carrying out certain processes are returned to the said factory after undergoing tests or any other process within six months (or within the extended period of maximum two months) from the appointed day – section 141(3). Q 14. When tax shall become payable in GST on manufactured goods sent to a Job worker for carrying out tests or any other process not amounting to manufacture under the existing law? Ans. Where manufactured goods are sent to a job worker prior to the appointed day for carrying out tests or any process not amounting to manufacture under the existing law and if such goods are not returned to the manufa
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The pending refund claims will be disposed of in accordance with the provisions of the existing law – section 142(3). Q 18. What will be fate of any appeal or revision relating to a claim of CENVAT/ITC on VAT which is pending under the existing law? If say, it relates to output liability then? Ans. Every proceeding of appeal, revision, review or reference relating to a claim for CENVAT/input tax credit or any output tax liability initiated whether before, on or after the appointed day, will be disposed of in accordance with the existing law and any amount of credit of CENVAT/ input tax credit or output tax found admissible for refund will have to be refunded in accordance with the existing law. However, any amount which becomes recoverable will have to be recovered as arrears of tax under the GST LawSection 142(6)/142(7). Q 19. If the appellate or revisional order goes in favour of the assessee, whether refund will be made in GST? What will happen if the decision goes against the asses
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y of goods/services under GST to the extent the tax is leviable under the existing law – section 142(11). Q 23. In pursuance of any assessment or adjudication proceedings instituted, after the appointed day, under the existing law, an amount of tax, interest, fine or penalty becomes refundable. Shall such amount be refundable under the GST law? Ans. No refund of such amount will be made in cash under the existing law – section 142(8)(b) of the CGST Act. Q 24. If services are received by ISD under the earlier law, can the ITC relating to it be distributed in GST regime? Ans. Yes, irrespective of whether the invoice(s) relating to such services is received on or after the appointed day – section 140(7) of the CGST Act. Q 25. Where any goods are sold on which tax was required to be deducted at source under State VAT law and an invoice was also issued before the appointed day, shall deduction of tax at source shall be made under this Act if the payment is made after the appointed day? Ans.
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