Goods and Services Tax

What is the default presumption for place of supply in respect of B2B supply of services?
Question 8
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
Q 8. What is the default presumption for place of supply in respect of B2B supply of services?
Ans. The terms used in the IGST Act are registered taxpayers and non-registered taxpayers. The presumption in case of supplies to registered person is the location of such person. Since the recipient i

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What will be the place of supply where the goods or services are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle?
Question 7
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
Q 7. What will be the place of supply where the goods or services are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle?
Ans. In respect of goods, the place of supply shall be the location a

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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?
Question 6
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
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 such goods shall be the principal pla

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What would be the place of supply where goods are removed?
Question 5
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
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)
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Statute, statutory provisions legislation, law, enactment, Acts, Rules, Regul

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What is the need to have separate rules for place of supply in respect of B2B (supplies to registered persons) and B2C (supplies to unregistered persons) transactions?
Question 4
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
Q 4. What is the need to have separate rules for place of supply in respect of B2B (supplies to registered persons) and B2C (supplies to unregistered persons) transactions?
Ans. In respect of B2B transactions, the taxe

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What proxies or assumptions in a transaction can be used to determine the place of supply?
Question 3
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
Q 3. What proxies or assumptions in a transaction can be used to determine the place of supply?
Ans. The various element involved in a transaction in services can be used as proxies to determine the place of supply. An assumption or proxy which gives more appropriate result than others for dete

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Why are place of supply provisions different in respect of goods and services?
Question 2
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
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 consumption. Services being intangible pose problems w.r.t determination of place of supply mainly due to following factors:
(i) The manner of delivery of service could be altered easily. For example, telecom service could change from mostly post-paid to mostly pre-paid; billing address could be changed, billers address could be changed, repair or maintenance of software

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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, on

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What is the need for the Place of Supply of Goods and Services under GST?
Question 1
Bill
Place of Supply of Goods and Service
Faq On GST (2nd Edition) Dated 31.3.2017
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 supp

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Are business processes and compliance requirement same in the IGST and CGST Acts?
Question 10
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
Q 10. Are business processes and compliance requirement same in the IGST and CGST Acts?
Ans: The procedure and compliance requirement are same for processes likes registration, return filing and payment of tax. Further, the IGST act borrows the provisions from the CGST Act as relating to assessment, audit, valuati

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What treatment is given to supplies made to SEZ units or developer?
Question 9
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
Q 9. What treatment is given to supplies made to SEZ units or developer?
Ans: Supplies to SEZ units or developer shall be zero rated in the same manner as done for the physical exports. Supplier shall have option to make supplies to SEZ without payment of taxes and claim refunds of input taxes on such supplies (section 16 of the

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How will the settlement between Centre, exporting state and importing state be done?
Question 8
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
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

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How will the IGST be paid?
Question 7
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
Q 7. 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 IGS

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How will imports/exports be taxed under GST?
Question 6
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
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 w

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What are the advantages of IGST Model?
Question 5
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
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-monito

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What are the salient features of the draft IGST Law?
Question 4
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
Q 4. What are the salient features of the draft IGST Law?
Ans. The draft IGST law contains 25 sections divided into9 Chapters. The law, 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 terminates for delivery to the recipient. Where the supply does not involve movement of goods, the place of supply shall be the location of such goods at the time of delivery to the recipient. In the case of goods assembled or installed a

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How will the Inter-State supplies of Goods and Services be taxed under GST?
Question 3
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
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 interstate 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 addit

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What are inter-state supplies?
Question 2
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
Q 2. What are inter-state supplies?
Ans. A supply of goods and/or services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States, two different union territory or in a state and union territory Further import of goods and services, supplies to SEZ units or developer, or any

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What is IGST?
Question 1
Bill
Overview of the IGST Act
Faq On GST (2nd Edition) Dated 31.3.2017
21. Overview of the IGST Act
Q 1. What is IGST?
Ans. “Integrated Goods and Service

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What is the consequence of compounding of an offence under CGST/SGST Act?
Question 23
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 23. What is the consequence of compounding of an offence under CGST/SGST Act?
Ans. Sub-section (3) of section 138 provides that on payment of compounding amount no further proceeding to be initiated under this Act and criminal proceeding already initiated shall stand abated.
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Statute, stat

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Are there any monetary limits prescribed for compounding of offence?
Question 22
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 22. Are there any monetary limits prescribed for compounding of offence?
Ans. Yes. The lower limit for compounding amount is to be the greater of the following amounts: –
• 50% of tax involved, or
• ₹ 10,000.
The upper limit for compounding amount is to be greater of the followin

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Can offences under CGST/SGST Act be compounded?
Question 21
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 21. Can offences under CGST/SGST Act be compounded?
Ans. Yes. As per section 138 of the CGST/SGST Act, any offence, other than the following, may upon payment of the prescribed (compounding) amount be compounded and such compounding is permissible either before or after the institution of prosecution:
• Offences nu

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What is meant by compounding of offences?
Question 20
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
Q 20. What is meant by compoundi

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Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act?
Question 19
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
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 business shall, along-with the company itsel

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What is a culpable state of mind?
Question 18
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
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;
&bul

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Is ‘mensrea’ or culpable mental state necessary for prosecution under CGST/SGST Act?
Question 17
Bill
Offences, Penalties, Prosecution and Compounding
Faq On GST (2nd Edition) Dated 31.3.2017
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

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