Goods and Services Tax

What is the treatment of composite supply and mixed supply under GST?
Question 7
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
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.
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What are composite supply and mixed supply? How are these two different from each other?
Question 6
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
Q 6. What are composite supply and mixed supply? How are these two different from each other?
Ans. Composite supply is a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are bundled in natural course and are supplied in conjunction with e

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Who can notify a transaction to be supply of goods or services?
Question 5
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
Q 5. Who can notify a transaction to be supply of goods or services?
Ans. Central Government or State Government, on the recommendations of the GST Council, can notify an activity to be the supply of goods and not supply of services or supply of services and not supply of goods or neither a supply of goods nor a supply of ser

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Will giving away essential commodities by a charitable institution be taxable activity?
Question 4
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
Q 4. Will giving away essential commodities by a charitable institution be taxable activity?
Ans. In order to be a supply which is taxable under GST, the transaction should be in the course or furtherance of business. As there is no quid pro quo involved in supply for charitable activities, it is not a

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Whether supplies made without consideration will also come within the purview of supply under GST?
Question 3
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
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.
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What is the taxable event under GST?
Question 2
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
Q 2. What is the taxable event under GST?
Ans. Taxable

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Where is the power to levy GST derived from?
Question 1
Bill
Levy of and Exemption from Tax
Faq On GST (2nd Edition) Dated 31.3.2017
2. Levy of and Exemption from Tax
Q 1. Where is the power to levy GST derived from?
Ans. Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both, Parliament and State Legislatures to make laws with respect to GST i.e. central tax (CGST) and state tax (SGST) or un

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What is Anti-Profiteering measure?
Question 33
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 33. What is Anti-Profiteering measure?
Ans. As per section 171 of the CGST/SGST Act, any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. An authority may be constituted by the government to examine whether input tax cr

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Is there any provision in GST for tax treatment of goods returned by the recipient?
Question 32
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 32. 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 presc

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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?
Question 31
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 31. 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 comple

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What is the concept of Information Return?
Question 30
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 30. What is the concept of Information Return?
Ans. Information return is based on the idea of verifying the compliance levels of registered persons through information procured from independent third party sources. As per section 150 of the CGST/SGST Act, many authorities who are responsible for maintaining records of registration or

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Whether transaction in securities be taxable in GST?
Question 29
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 29. Whether transaction in se

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Whether actionable claims liable to GST?
Question 28
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 28. 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 cla

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What is the purpose of Compliance rating mechanism?
Question 27
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 27. What is the purpose of Compliance rating mechanism?
Ans. As per Section 149 of the CGST/SGST Act, every registered person shall be assigned a compliance rating based on the record of compliance in respect of specified parameters. Such ratings shall also be placed in the public domain. A prospective client will be able to s

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How are the disputes going to be resolved under the GST regime?
Question 26
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 26. How are the disputes going to be resolved under the GST regime?
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that the Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute-
(a) between the Government of India and one or more States; or
(b) between

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What is GSTN and its role in the GST regime?
Question 25
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 25. What is GSTN and its role in the GST regime?
Ans. GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure 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

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Whether the composition scheme will be optional or compulsory?
Question 24
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 24. Whether the com

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What is the scope of composition scheme under GST?
Question 23
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 23. What is the scope of composition scheme under GST?
Ans. Small taxpayers with an aggregate turnover in a preceding financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. 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 f

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How will Exports be treated under GST?
Question 22
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 22. 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

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How will imports be taxed under GST?
Question 21
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 21. How will imports be taxed under GST?
Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. 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 serv

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How will the goods and services be classified under GST regime?
Question 20
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 20. How will the goods and services be classified under GST regime?
Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Taxpayers whose turnover is above ₹ 1.5 crores but below ₹ 5 crores shall use 2-digit code and the taxpayers whose turnover

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What are the benefits available to small tax payers under the GST regime?
Question 19
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 19. What are the benefits available to small tax payers under the GST regime?
Ans. Tax payers with an aggregate turnover in a financial year up to [Rs.20 lakhs & ₹ 10 Lakhs for NE and special category states] would be exempt from tax. Further, a person whose aggregate turnover in the preceding finan

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Who is liable to pay GST under the proposed GST regime?
Question 18
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 18. Who is liable to pay GST under the proposed GST regime?
Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of ₹ 20 lakhs (Rs. 10 lakhs for NE & Special Category States) except in

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How will decisions be taken by GST Council?
Question 17
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 17. 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 weig

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What is the guiding principle of GST Council?
Question 16
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 16. What is the guiding principle 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 f

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