Goods and Services Tax

Question 2 – Draft-Bills-Reports – Offences and Penalties, Prosecution and Compounding – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 2 – Q 2. What is meant by the term penalty? Ans. The word penalty has not been defined in the MGL but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as: a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain offence; a punishment impose

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Question 14 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 14 – Q 14. What are the powers of Settlement Commission? Ans. The powers and procedures of Settlement Commission are given in sections 25 and 26 of IGST Act. It is vested with the powers of a civil court under the Code of Civil Procedure, 1908, for discovery and inspection, enforcing the attendance of a person and examining him on oath, and compelling production of books of account and other records. Settlement Commission is deemed to be a civil court for the purposes of section 195 of the Code of Criminal Procedure, 1973. Any proceeding before it shall be deemed to be a judicial proceeding under section 193 and 228 an

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Question 1 – Draft-Bills-Reports – Offences and Penalties, Prosecution and Compounding – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 1 – Q 1. What are the prescribed offences under MGL? Ans. The Model GST Law codifies the offences and penalties in Chapter XVI. The Act lists 21 offences in section 66, apart from the penalty prescribed under section 8 for availing compounding by a taxable person who is not eligible for it. The said offences are as follows:- 1) Making a supply without invoice or with false/ incorrect invoice; 2) Issuing an invoice without making supply; 3) Not paying tax collected for a period exceeding three months; 4) Not paying tax collected in contravention of the MGL for a period exceeding 3 months; 5)

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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 Act; 17) Failure to furnish information/documents required by an officer in terms of the Act/Rules or furnishing false information/documents during the course of any proceeding; 18) Supplying/transporting/storing any goods liable to confiscation; 19) Issuing invoice or document using GSTIN of another person; 20) Tampering/destroying any material evidence; 21) Disposing of /tampering with goods detained/seized/attached under the Act. – Statu

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Question 13 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 13 – Q 13. Who cannot use Settlement Commission? Ans. The following persons cannot avail of the facility of Settlement Commission? i. No person can avail the facility of settlement more than twice. (section 23) ii. A person cannot apply for settlement in any other matter where after passing of a settlement order, a person was convicted of any offence under the IGST Act in r

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Question 9 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 9 – Q 9. 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

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Question 8 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 8 – Q 8. How will the IGST be paid? 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 exha

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Question 12 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 12 – Q 12. What are the circumstances in which order of Settlement Commission can be revoked? Ans. (i) Order of Settlement Commission shall be void if it is later found that it was obtained by fraud or misrepresentation of facts. Thereafter proceedings covered by the settlement shall stand revived from the stage at which the application was allowed to be proceeded with by t

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Question 7 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 7 – Q 7. IGST Act is very small with very few definitions and major part catering to settlement commissioner. Whether provisions in CGST or SGST Act will apply to IGST Act? Ans. Yes, Section 27 of the IGST Act provides that various provisions as mentioned therein shall apply under IGST Act as they apply in relation to levy under the CGST Act. – Statutory Provisions, Acts,

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Question 6 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 6 – Q 6. How will imports/exports be taxed under GST? Ans. All imports/exports will be deemed as inter-state supplies for the purposes of levy of GST (IGST). The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available

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Question 5 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 5 – Q 5. What are the advantages of IGST Model? Ans. The major advantages of IGST Model are: a). 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)

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Question 11 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 11 – Q 11. What orders can be passed by the Settlement Commission? Ans. Settlement Commission shall pass an order providing for terms of settlement which shall include: i. the amount of tax, interest, fine or penalty that is payable by the applicant (if this amount is not paid within thirty days or a further extended period of three months, it shall be recovered along with interest as sums due to Central Government in accordance with section 54 of CGST Act ); (section 16) ii. manner in which the sums due under the settlement shall be paid; (section 16) iii. granting immunity from prosecution for any offence under the I

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Question 4 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 4 – Q 4. What are the salient features of the draft IGST Law? Ans. The draft IGST law contains 33 sections divided into 11 Chapters. The draft, inter alia, sets out the rules for determination of the place of supply of goods. Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at which the movement of goods terminate

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Question 3 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 3 – 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, C

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Can the applicant withdraw his settlement application once filed? – Question 10 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 10 – Q 10

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What are inter-state supplies – Question 2 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 2 – Q 2. What are inter-state supplies? Ans

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What is IGST – Question 1 – Draft-Bills-Reports – Overview of the IGST Act – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 1 – Q 1. What is IGST? Ans. Integrated Goods and Services Ta

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Question 9 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 9 – Q 9. What are the circumstances in which application for settlement cannot be entertained? Ans. As per section 15 of the IGST Act, in the following circumstances, Settlement Commission will not accept an application for settlement: i. If the case involved in the application is pending with the Appellate Tribunal or any Court; ii. If the application involves determination

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Question 18 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 18 – Q 18. A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the place of supply? Ans. The location of the recipient of services on the records of the supplier of insurance services shall be the place of supply. So Gurgaon shall be the place of supply. (proviso clause to section 6

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Question 8 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 8 – Q 8. What are the conditions which must be fulfilled before application for settlement can be accepted? Ans. As per section 15 of the IGST Act, the following conditions must be fulfilled before an application for settlement of a case can be accepted: (a) the applicant has furnished the return(s), which he is or was required to furnish under the IGST Act or this requireme

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Question 17 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 17 – Q 17. A person from Mumbai goes to Kullu-Manali and takes some services from ICICI Bank in Manali. What will be the place of supply? Ans. If the service is not linked to the account of person, place of supply shall be Kullu i.e. the location of the supplier of services. However if the service is linked to the account of the person, the place of supply sh

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Question 16 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 16 – Q 16. A person in Goa buys shares from a broker in Delhi

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Question 7 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 7 – Q 7. What should be the contents of the settlement application? Ans. The settlement application should contain full and true disclosure of: i. tax Liability which has not been disclosed to the proper officer of IGST; ii. manner of deriving such tax liability; iii. additional amount of tax which he accepts to be payable; iv. other particulars such as misclassification, ex

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Question 15 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 15 – Q 15. What will be the place of supply for mobile connection? Can it be the location of supplier? Ans. The location of supplier of mobile services cannot be the place of supply as the mobile companies are providing services in multiple states and many of these services are inter-state. The consumption principle will be broken if the location of supplier

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Question 14 – Draft-Bills-Reports – Place of Supply of Goods and Service – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 14 – Q 14. Suppose a ticket/ pass for anywhere travel in India is issued by M/s Air India to a person. What will be the place of supply? Ans. In the above case, the place of embarkation will not be available at the time of issue of invoice as the right to passage is for future use. Accordingly, place of supply cannot be the place of embarkation. In such cases

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Question 6 – Draft-Bills-Reports – Settlement Commission – FAQ on GST dated 21.9.2016 based on Draft Model GST – Question 6 – Q 6. Who can apply for settlement? Ans As per section 15 of the IGST Act,

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