Goods and Services Tax

What would be the role of GST Council?
Question 15.
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 15. 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 Union and the States on
(i) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST;
(ii) the goods and services that may be subjected to or exempted from the GST;
(iii) the date on which the GST shall be levied on petroleum crude, high speed diesel, mo

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Who will decide rates for levy of GST?
Question 15
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 15. Who will decide rates for levy of GST?

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What is IGST?
Question 14
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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What are the benefits which the Country will accrue from GST?
Question 13
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 13. What are the benefits which the Country will accrue from GST?
Ans. Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill ef

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How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)?
Question 12
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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 except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on t

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count of the concerned State Government. Of course, he need not actually pay ₹ 20 (Rs. 10 + ₹ 10) in cash as he would be entitled to set-off this liability against the CGST or SGST paid on his purchases (say, inputs). But for paying CGST he would be allowed to use only the credit of CGST paid on his purchases while for SGST he can utilize the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST.
Illustration II: Suppose, 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 M

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Why was the Constitution of India amended recently in the context of GST?
Question 11
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 11. Why was the Constitution of India amended recently in the context of GST?
Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (

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Which authority will levy and administer GST?
Question 10
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 10. Which authority will levy and ad

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Why is Dual GST required?
Question 9
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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

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What type of GST is proposed to be implemented?
Question 8
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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 wou

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What will be status of Tobacco and Tobacco products under the GST regime?
Question 7
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 7. What will be status of Tobacco and Tobacco products under the GST regime?
Ans. Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products.
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Statute, statutory provisions legislation, law, enactment, Acts, Rules,

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What will be the status in respect of taxation of above commodities after introduction of GST?
Question 6
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 6. What will be the status in respect of taxation of above commodities after introduction of GST?
Ans. The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities.
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Statute, statutory provisions legislation, law, enactment, Acts, Rules, R

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Which are the commodities proposed to be kept outside the purview of GST?
Question 5
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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 Services tax (GST) as a tax on supply of goods or services or both, except supply of alcoholic liquor for human

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What principles were adopted for subsuming the above taxes under GST?
Question 4
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
Q 4. What principles were adopted for subsuming the above taxes under GST?
Ans. The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind:
(i) Taxes or levies to be subsumed should be primari

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Which of the existing taxes are proposed to be subsumed under GST?
Question 3
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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 I

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What exactly is the concept of destination based tax on consumption?
Question 2
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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.
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Statute, statutory provisions legislation, law, enactment, Acts, Rules, Regulations, Tax

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What is Goods and Services Tax (GST)?
Question 1
Bill
Overview of Goods and Services Tax (GST)
Faq On GST (2nd Edition) Dated 31.3.2017
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 ad

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FOREWORD

Bill
FOREWORD
Faq On GST (2nd Edition) Dated 31.3.2017
FOREWORD
The compilation of frequently asked questions on GST brought out by the apex training institute under the
Central Board of Excise & Customs (CBEC) the National Academy of Customs, Excise & Narcotics (NACEN), has been extremely well received. These GST FAQs were released on 21st September, 2016 by the Hon'ble Finance Minister and were based on the Model GST Law as on June, 2016. The GST FAQs were translat

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Rate of tax of the composition levy
Rule 5
Bill
Composition Rules
GST – Composition Rules – Final Draft Rules 18-5-2017
5. Rate of tax of the composition levy
The category of registered persons, eligible for composition levy under section 10 and these rules, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table:
Sl No.
Category of registered persons
Rate of tax
(1)
(2)
(3)
1.
Manufacturers, other

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Validity of composition levy
Rule 4
Bill
Composition Rules
GST – Composition Rules – Final Draft Rules 18-5-2017
4 Validity of composition levy
(1) The option exercised by a registered person to pay tax under section 10 shall remain valid so long as he satisfies all the conditions mentioned in the said section and these rules.
(2) The person referred to in sub-rule (1) shall be liable to pay tax under sub-section (1) of section 9 from the day he ceases to satisfy any of the conditions mentioned in section 10 or these rules and shall issue tax invoice for every taxable supply made thereafter and he shall also file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days of occurrence of such event

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icer shall issue an order in FORM GST CMP-07 within thirty days of receipt of such reply, either accepting the reply, or denying the option to pay tax under section 10 from the date of option or from the date of the event concerning such contravention, as the case may be.
(6) Every person who has furnished an intimation under sub-rule (2) or filed an application for withdrawal under sub-rule (3) or a person in respect of whom an order of withdrawal of option has been passed in FORM GST CMP-07 under sub-rule (5), may electronically furnish at the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner, a statement in FORM GST ITC-01 containing details of the stock of inputs and inputs contained in semi-f

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Conditions and restrictions for composition levy
Rule 3
Bill
Composition Rules
GST – Composition Rules – Final Draft Rules 18-5-2017
3. Conditions and restrictions for composition levy
(1) The person exercising the option to pay tax under section 10 shall comply with the following conditions:
(a) he is neither a casual taxable person nor a non-resident taxable person;
(b) the goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State, where the option is exercised under sub-rule (1) of rule 1;
(c) the goods held in stoc

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Effective date for composition levy
Rule 2
Bill
Composition Rules
GST – Composition Rules – Final Draft Rules 18-5-2017
2. Effective date for composition levy
(1) The option to pay tax under section 10 shall be effective from the beginning of the financial year, where the intimation is filed under sub-rule (3) of rule 1 and the appointed day where intimation is filed under sub-rule (1) of the said rule.
(2) The intimation under sub-rule (2) of rule 1 shall be considered only

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Intimation for composition levy
Rule 1
Bill
Composition Rules
GST – Composition Rules – Final Draft Rules 18-5-2017
Chapter
COMPOSITION RULES
1. Intimation for composition levy
(1) Any person who has been granted registration on a provisional basis under sub-rule (1) of rule Registration.17 and who opts to pay tax under section 10, shall electronically file an intimation in FORM GST CMP-01, duly signed or verified through electronic verification code (EVC), on the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the appointed day, but not later than thirty days after the said day, or such further period as may be extended by the Commissioner in this behalf:
Provided

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year for which the option to pay tax under the aforesaid section is exercised and shall furnish the statement in FORM GST ITC-3 in accordance with the provisions of sub-rule (4) of rule ITC.9 within sixty days from the commencement of the relevant financial year,
(4) Any person who files an intimation under sub-rule (1) to pay tax under section 10 shall furnish the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the said section, electronically, in FORM GST CMP-03, on the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner, within sixty days of the date from which the option for c

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Rate of exchange of currency, other than Indian rupees, for determination of value
Rule 8
Bill
Determination of Value of Supply
GST – Determination of Value of Supply – Final Draft Rules 18-5-2017
8. Rate of exchange of currency, other than Indian rupees, for determination of value
The rate of exchange for determination of value of taxable goods or services or both shall be the applicable reference rate for that currency as determined by the Reserve Bank of India on the date o

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Value of supply of services in case of pure agent
Rule 7
Bill
Determination of Value of Supply
GST – Determination of Value of Supply – Final Draft Rules 18-5-2017
7. Value of supply of services in case of pure agent
Notwithstanding anything contained in these rules, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely:-
(i) the supplier acts as a pure agent of the recipient of the supply, when he makes payment to the third party on authorization by such recipient;
(ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice i

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amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account .
Illustration. Corporate services firm A is engaged to handle the legal work pertaining to the incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to Registrar of the Companies. The fees charged by the Registrar of the companies registration and approval of the name are compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees. Therefore, A's recovery of such expenses is a disbursement and not part of the value of supply made by A to B.
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Determination of value in respect of certain supplies
Rule 6
Bill
Determination of Value of Supply
GST – Determination of Value of Supply – Final Draft Rules 18-5-2017
6. Determination of value in respect of certain supplies
(1) Notwithstanding anything contained in these rules, the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter.
(2) The value of supply of services in relation to purchase or sale of foreign currency, including money changing, shall be determined by the supplier of service in the following manner:-
(a) For a currency, when exchanged from, or to, Indian Rupees (INR), the value shall be equal to the difference in the buying rate or the selling rate, as the case may be, and the Reserve Bank of India (RBI) reference rate for that currency at that time, multiplied by the total units of currency:
Provided that in case where the RBI reference rate for a currency is not av

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f a per cent. of the gross amount of currency exchanged for an amount exceeding one lakh rupees and up to ten lakh rupees; and
(iii) five thousand and five hundred rupees and one tenth of a per cent. of the gross amount of currency exchanged for an amount exceeding ten lakh rupees, subject to maximum amount of sixty thousand rupees.
(3) The value of supply of services in relation to booking of tickets for travel by air provided by an air travel agent, shall be deemed to be an amount calculated at the rate of five percent. of the basic fare in the case of domestic bookings, and at the rate of ten per cent. of the basic fare in the case of international bookings of passage for travel by air.
Explanation – For the purposes of this sub-rule, the expression “basic fare” means that part of the air fare on which commission is normally paid to the air travel agent by the airline.
(4) The value of supply of services in relation to life insurance business shall be:
(a) the gross premium cha

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ll be the difference between the selling price and purchase price and where the value of such supply is negative it shall be ignored:
Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.
(6) The value of a token, or a voucher, or a coupon, or a stamp (other than postage stamp) which is redeemable against a supply of goods or services or both shall be equal to the money value of the goods or services or both redeemable against such token, voucher, coupon, or stamp.
(7)The value of taxable services provided by such class of service providers as may be notified by the Government on the recommendations of the Council as referred to in paragraph 2 of

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