Frequently Asked Questions (FAQ) on GST – as released by CBEC as on 21.09.2016
GST
Dated:- 22-9-2016
GST – FAQ – Chapter wise \/ Question Wise
\nAs part of this capacity building exercise, the NACEN has prepared a compilation of Frequently Asked Questions (FAQ) based on inputs gathered while conducting training and interactive sessions, as a training tool for helping the officers as well as public, to get acquainted with the Model GST Law and its nuances. The FAQs have been prepared and reviewed by a team of officials from both Centre and States.
\nNajib Shah
\nChairman, CBEC
\n
\n
\nThis FAQ on GST compiled by NACEN and vetted by the Source Trainers is based on the draft Model GST Law released in pub-lic domain in June, 2016. This FAQ is for training and academic purposes only.
\nThe information in this booklet is intended only to provide a general overview and is not intended to be treated<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n orm, with effect from 01 April = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Overview of Goods and Services Tax (GST) 17. Advance Ruling… = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n G.D. Lohani, CCE, Faridabad (Chap. 21 & 22); and Shri = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Tax = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n products under the GST regime? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n x. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n can utilize the credit of SGST alone. In other = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n for the Centre and the States due to widening = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rces during any natural = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the Schedules to = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n credit will be available and same will be = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n , appeal etc. for 19 States and UTs (Model = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n . CGST & SGST will be = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n oes not affect inter- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n conditionally, can taxable person pay tax? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ST due on supply of goods or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n l be computed on all India basis and excludes = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n for different = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ntity Number = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ndia is a non-resident = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n himself carry out the amendments. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n terms of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ional place of business. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n hose who do not have a = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t\/CGST Act). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n pply; and = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the course or furtherance of business: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s or supply of service? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n is not issued and date of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e, the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on rules) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n as follows: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of supply of services as explained in = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n posit of GST. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n o the Government account. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n er amounts = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n within 5 days of deducting TDS failing = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ommerce operator? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n connect with the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n f respective supplies made by them = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ails of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \na manner so as to ensure that the activity of job-work = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n tered = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to a taxable person, means the {IGST and CGST} in = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ished goods held in stock on the day = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n gistered taxable = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r. It has also been provided that after = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n in terms of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ning ITC? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n be availed: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ital goods on which input tax credit has been taken, the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n mount of credit distributed should not exceed = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n be = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n necessary inputs for taking policy = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ty GSTR-1, the ITC will be reversed if the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n gible for any input tax credit, there is no relevance = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ons authorized to deduct = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Form = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on can also get his = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \na request for paying tax on provisional basis has to come = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n tory = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n thirty days of the receipt of the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \nQ 15. Is summary assessment order to be necessarily = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n be the action by the proper officer = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n in sub-section = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \ncredited to the Consumer Welfare Fund. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n granted before verification subject to = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n w, exporters are = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to be = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n section 51B (7). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n proper officer may, on an authorization by = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n immediately before such = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n axable = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n at the order is not legal and proper and = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ount payable under rule-of the GST = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ST revise any = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n from the date of receipt of appeal. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ave a difference of views regarding the treatment = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ertaken = = = = = = = =<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n2017. One of the biggest challenges is to train the indirect
\ntax officials of both Centre and State, as well as the trade
\non the concepts, processes and procedures of GST.
\nNational Academy of Customs, Excise & Narcotics
\n(NACEN), the apex training institution for capacity building
\nin indirect taxation under the Central Board of Excise
\nand Customs, has been mandated to impart training on
\nGST to Central and State Government officers. NACEN is
\nconducting a mammoth capacity building exercise to train
\nabout 60,000 indirect tax officers of the Centre and State so
\nthat officers are well equipped to implement GST when it
\nis rolled out. NACEN has already created a team of almost
\n2000 trainers across the country to train the field officers.
\nConsidering the limited time available, NACEN apart
\nfrom Classroom training, is also planning to use advanced
\ninformation technology tools, such as Virtual Classrooms
\nand E-Learning modules, to ensure larger cove<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n2. Levy of and Exemption from Tax…………
\n3. Registration
\n–
\n4. Meaning and Scope of Supply …..
\n5. Time of Supply………
\n6. Valuation in GST..
\n7. GST Payment of Tax….
\n8. Electronic Commerce
\n9. Job Work……\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..
\n10. Input Tax Credit.
\n_
\n3
\n19
\n27
\n45
\n53
\n59
\n65
\n77
\n85
\n91
\n11. Concept of Input Service Distributor in GST …105
\n12. Returns Process and matching of Input Tax Credit…..113
\n13. Assessment and Audit…………
\n14. Refunds………………..
\n.125
\n.137
\n15. Demands and Recovery
\n16. Appeals, Review and Revision in GST<\/p>\n
\n-\u2026\u2026\u2026\u2026\u2026
\n\u2026\u2026\u2026\u2026\u2026…145
\n.155
\n.165
\n18. Settlement Commission..
\n…… 175
\n19. Inspection, Search, Seizure and Arrest..
\n187
\n20. Offences and Penalties, Prosecution and Compounding….211
\n21. Overview of the IGST Act ………..
\n.227
\n22. Place of<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nPrakash Kumar, CEO, GSTN (Chap.23).
\nComments and Suggestions on FAQ may please be sent to
\ndg.nacen-cbec@nic.in
\nDisclaimer:
\nThis FAQ on GST compiled by NACEN and vetted by the Source
\nTrainers is based on the draft Model GST Law released in pub-
\nlic domain in June, 2016. This FAQ is for training and academic
\npurposes only.
\nThe information in this booklet is intended only to provide a
\ngeneral overview and is not intended to be treated as legal ad-
\nvice or opinion. For greater details, you are requested to refer to
\nthe model GST law.
\nviii
\nOverview of Goods and
\nServices Tax (GST)
\n1.
\nOverview of Goods and Services
\nTax (GST)
\nQ 1. What is Goods and Service Tax (GST)?
\nAns. It is a destination based tax on consumption of goods
\nand services. It is proposed to be levied at all stages right
\nfrom manufacture up to final consumption with credit
\nof taxes paid at previous stages available as setoff. In a
\nnutshell, only value<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nC.
\nLuxury Tax
\nd. Entry Tax (all forms)
\ne.
\nEntertainment and Amusement Tax (except when
\nlevied by the local bodies)
\nTaxes on advertisements
\nPurchase Tax
\nf.
\ng.
\nh.
\nTaxes on lotteries, betting and gambling
\ni.
\nState Surcharges and Cesses so far as they relate to
\nsupply of goods and services
\nThe GST Council shall make recommendations to the Union
\nand States on the taxes, cesses and surcharges levied by
\nthe Centre, the States and the local bodies which may be
\nsubsumed in the GST.
\nQ4.
\nWhat principles were adopted for subsuming
\nthe above taxes under GST?
\nAns. The various Central, State and Local levies were
\n4
\nexamined to identify their possibility of being subsumed
\nunder GST. While identifying, the following principles were
\nkept in mind:
\n(i) Taxes or levies to be subsumed should be primarily in
\nthe nature of indirect taxes, either on the supply of goods
\nor on the supply of services.
\n(ii) Taxes or levies to be subsumed should be part of
\nthe transaction chain <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nAns. Tobacco and tobacco products would be subject to
\nGST. In addition, the Centre would have the power to levy
\nCentral Excise duty on these products.
\nQ7. What type of GST is proposed to be
\nimplemented?
\nAns. It would be a dual GST with the Centre and States
\nsimultaneously levying it on a common tax base. The GST
\nto be levied by the Centre on intra-State supply of goods
\nand\/or services would be called the Central GST (CGST)
\nand that to be levied by the States would be called the State
\nGST (SGST). Similarly Integrated GST (IGST) will be levied
\nand administered by Centre on every inter-state supply of
\ngoods and services.
\nQ8. Why is Dual GST required?
\nAns. India is a federal country where both the Centre and
\nthe States have been assigned the powers to levy and collect
\ntaxes through appropriate legislation. Both the levels
\nof Government have distinct responsibilities to perform
\naccording to the division of powers prescribed in the
\nConstitut<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nIntroduction of the GST required amendments in the
\nConstitution so as to simultaneously empower the Centre
\nand the States to levy and collect this tax. The Constitution
\nof India has been amended by the Constitution (one hundred
\nand first amendment) Act, 2016 recently for this purpose.
\nArticle 246A of the Constitution empowers the Centre and
\nthe States to levy and collect the GST.
\nQ 11. How a particular transaction of goods and
\nservices would be taxed simultaneously under
\nCentral GST (CGST) and State GST (SGST)?
\nAns. The Central GST and the State GST would be levied
\nsimultaneously on every transaction of supply of goods and
\nservices except the exempted goods and services, goods
\nwhich are outside the purview of GST and the transactions
\nwhich are below the prescribed threshold limits. Further,
\n7
\nboth would be levied on the same price or value unlike
\nState VAT which is levied on the value of the goods inclusive
\nof CENVAT. While the location of the supplier and the
\nre<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nwords, CGST credit cannot, in general, be used for payment
\nof SGST. Nor can SGST credit be used for payment of CGST.
\nIllustration II: Suppose, again hypothetically, that the
\nrate of CGST is 10% and that of SGST is 10%. When
\nan advertising company located in Mumbai supplies
\nadvertising services to a company manufacturing soap
\nalso located within the State of Maharashtra for, let
\nus say Rs. 100, the ad company would charge CGST of
\n8
\nRs. 10 as well as SGST of Rs. 10 to the basic value of
\nthe service. He would be required to deposit the CGST
\ncomponent into a Central Government account while
\nthe SGST portion into the account of the concerned State
\nGovernment. Of course, he need not again actually pay
\nRs. 20 (Rs. 10+Rs. 10) in cash as it would be entitled to
\nset-off this liability against the CGST or SGST paid on
\nhis purchase (say, of inputs such as stationery, office
\nequipment, services of an artist etc). But for paying
\nCGST <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nof the tax base, increase in trade volumes and improved
\n9
\ntax compliance. Last but not the least, this tax, because of
\nits transparent character, would be easier to administer.
\nQ 13. What is IGST?
\nAns. Under the GST regime, an Integrated GST (IGST)
\nwould be levied and collected by the Centre on inter-State
\nsupply of goods and services. Under Article 269A of the
\nConstitution, the GST on supplies in the course of inter-
\nState trade or commerce shall be levied and collected by
\nthe Government of India and such tax shall be apportioned
\nbetween the Union and the States in the manner as may be
\nprovided by Parliament by law on the recommendations of
\nthe Goods and Services Tax Council.
\nQ 14. Who will decide rates for levy of GST?
\nAns. The CGST and SGST would be levied at rates to be
\njointly decided by the Centre and States. The rates would
\nbe notified on the recommendations of the GST Council.
\nQ 15. What would be the role of GST C<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ncalamity or disaster;
\n(viii) special provision with respect to the North-
\nEast States, J&K, Himachal Pradesh and
\nUttarakhand; and
\n(ix) any other matter relating to the GST, as the
\nCouncil may decide.
\nQ 16. What is the guiding principle of GST Council?
\nAns. The mechanism of GST Council would ensure
\nharmonization on different aspects of GST between the
\nCentre and the States as well as among States. It has
\nbeen provided in the Constitution (one hundred and
\nfirst amendment) Act, 2016 that the GST Council, in its
\ndischarge of various functions, shall be guided by the need
\nfor a harmonized structure of GST and for the development
\nof a harmonized national market for goods and services.
\n11
\nQ 17. How will decisions be taken by GST Council?
\nAns. The Constitution (one hundred and first amendment)
\nAct, 2016 provides that every decision of the GST Council
\nshall be taken at a meeting by a majority of not less than
\n3\/4th of the weighted votes of the Member<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nthe respective Acts.
\nQ 19. What are the benefits available to small tax
\npayers under the GST regime?
\nAns. Tax payers with an aggregate turnover in a financial
\nyear up to [Rs.10 lakhs] would be exempt from tax.
\n12
\n[Aggregate turnover shall include the aggregate value of
\nall taxable and non-taxable supplies, exempt supplies and
\nexports of goods and\/or services and exclude taxes viz.
\nGST.] Aggregate turnover shall be computed on all India
\nbasis. For NE States and Sikkim, the exemption threshold
\nshall be [Rs. 5 lakhs]. All taxpayers eligible for threshold
\nexemption will have the option of paying tax with input
\ntax credit (ITC) benefits. Tax payers making inter-State
\nsupplies or paying tax on reverse charge basis shall not be
\neligible for threshold exemption.
\nQ 20. How will the goods and services be classified
\nunder GST regime?
\nAns. HSN (Harmonised System of Nomenclature) code
\nshall be used for classifying the goods under the GST regime.
\nTaxpayers whose<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\navailable as refund to the exporters.
\nQ 23. What is the scope of composition scheme under
\nGST?
\nAns. Small taxpayers with an aggregate turnover in
\na financial year up to [Rs. 50 lakhs] shall be eligible for
\ncomposition levy. Under the scheme, a taxpayer shall
\npay tax as a percentage of his turnover during the year
\nwithout the benefit of ITC. The floor rate of tax for CGST
\nand SGST shall not be less than [1%]. A tax payer opting
\nfor composition levy shall not collect any tax from his
\ncustomers. Tax payers making inter- state supplies or
\npaying tax on reverse charge basis shall not be eligible for
\ncomposition scheme.
\nQ 24. Whether the composition scheme will be
\noptional or compulsory?
\nAns. Optional.
\nQ 25. What is GSTN and its role in the GST regime?
\nAns. GSTN stands for Goods and Service Tax Network
\n(GSTN). A Special Purpose Vehicle called the GSTN has
\nbeen set up to cater to the needs of GST. The GSTN shall
\nprovide a shared I<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nII States). The CBEC and Model I States (15 States) are
\nthemselves developing their GST back-end systems.
\nIntegration of GST front-end system with back-end systems
\nwill have to be completed and tested well in advance for
\nmaking the transition smooth.
\nQ 26. How are the disputes going to be resolved
\nunder the GST regime?
\nAns. The Constitution (one hundred and first amendment)
\nAct, 2016 provides that the Goods and Services Tax Council
\nshall establish a mechanism to adjudicate any dispute-
\n15
\n(a) between the Government of India and one or more
\nStates; or
\n(b) between the Government of India and any State or
\nStates on one side and one or more other Sates on the other
\nside; or
\n(c) between two or more States,
\narising out of the recommendations of the Council or
\nimplementation thereof.
\nQ 27. What are the other legislative requirements
\nfor introduction of the GST?
\nAns. Suitable legislation for the levy of GST (Central GST
\nBill, In<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nlevied on intra-state supplies while IGST will be levied on
\ninter-state supplies. The charging section is section 7 (1)
\nof CGST\/SGST Act and Section 4(1) of the IGST Act.
\nQ3.
\nIs the reverse charge mechanism applicable
\nonly to services?
\nAns. No, reverse charge applies to supplies of both goods
\nand services.
\nQ4.
\nWhat will be the implications in case of
\npurchase of goods from unregistered dealers?
\nAns. The receiver of goods will not be able to get
\nITC. Further, the recipients who are registered under
\ncomposition schemes would be liable to pay tax under
\nreverse charge.
\n19
\nQ 5. In respect of exchange of goods, namely gold
\nwatch for restaurant services will the transaction be
\ntaxable as two different supplies or will it be taxable
\nonly in the hands of the main supplier?
\nAns. No. In the above case the transaction of supply of
\nwatch from consumer to the restaurant will not be an
\nindependent supply as the same is not in the course of
\nbusiness. It is<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nstate supplies.
\nQ 10. Can the taxable person under composition
\nscheme claim input tax credit?
\nAns. No, taxable person under composition scheme is not
\neligible to claim input tax credit.
\nQ11. Can the customer who buys from a taxable
\nperson who is under the composition scheme claim
\ncomposition tax as input tax credit?
\nAns. No, customer who buys goods from taxable person
\nwho is under composition scheme is not eligible for
\ncomposition input tax credit because a composition scheme
\nsupplier cannot issue a tax invoice
\nQ 12. Can composition tax be collected from
\ncustomers?
\nAns. No, the taxable person under composition scheme is
\nrestricted from collecting tax. It means that a composition
\nscheme supplier cannot issue a tax invoice.
\nQ 13. What is the threshold for opting to pay tax
\nunder the composition scheme?
\nAns. The threshold for composition scheme is Rs. 50 Lakhs
\nof aggregate turnover in financial year.
\n21
\nQ 14. How to compute 'aggregate turnover'<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nAns. No, the taxable person providing such goods or
\nservices shall not collect the tax on such goods or services.
\nQ 18. What is remission of tax\/duty?
\nAns. It means relieving the tax payer from the obligation
\nto pay taxon goods when they are lost or destroyed due
\n22
\nto any natural causes. Remission is subject to conditions
\nstipulated under the law and rules made thereunder.
\nQ 19. Whether remission is allowed under GST law?
\nAns. Yes, proposed section 11 of Model GST law permits
\nremission of tax on supply of goods.
\nQ 20. Whether remission is allowed for goods lost or
\ndestroyed before supply?
\nAns. Remission of tax will apply only when tax is payable
\nas per law i.e. taxable event should have happened and tax
\nis required to be paid as per law. Under GST Law, levy is
\napplicable upon supply of goods. Where goods are lost or
\ndestroyed before supply, taxable event does not occur in
\norder to pay tax. Accordingly, question of remission<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nservices or both by the business.
\nLegally authorized to collect tax from his
\npurchasers and pass on the credit of the taxes
\npaid on the goods or services supplied to
\npurchasers or recipients.
\nCan a person without GST registration claim
\nITC and collect tax?
\nAns. No. A person without GST registration can neither
\ncollect GST from his customers nor claim any input tax credit
\nof GST paid by him.
\nQ3.
\nWhat will be the effective date of
\nregistration?
\nAns. Where the application for registration has been
\nsubmitted within thirty days from the date on which the
\nperson becomes liable to registration, the effective date of
\nregistration shall be date of his liability for registration.
\n27
\nWhere an application for registration has been submitted
\nby the applicant after thirty days from the date of his
\nbecoming liable to registration, the effective date of
\nregistration shall be the date of grant of registration.
\nIn case of suomoto registration, i.e. tak<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ntaxes charged under the CGST Act, SGST Act and the IGST
\nAct.
\nAggregate turnover does not include value of supplies on
\nwhich tax is levied on reverse charge basis, and value of
\ninward supplies.
\nQ6.
\nWhich are the cases in which registration is
\ncompulsory?
\nAns. As per paragraph 5 in Schedule III of MGL, the
\nfollowing categories of persons shall be required to be
\nregistered compulsorily irrespective of the threshold limit:
\na) persons making any inter-State taxable supply;
\nb) casual taxable persons;
\nc) persons who are required to pay tax under reverse
\ncharge;
\nd)
\nnon-resident taxable persons;
\ne) persons who are required to deduct tax under
\nsection 37;
\nf) persons who supply goods and\/or services
\non behalf of other registered taxable persons
\nwhether as an agent or otherwise;
\ng) input service distributor;
\nh) persons who supply goods and\/or services,
\nother than branded services, through electronic
\ncommerce operator;
\ni) ever<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nregistrations?
\nAns. Yes. In terms of Sub-Section (2) of Section 19, a person
\nhaving multiple business verticals in a State may obtain a
\nseparate registration for each business vertical, subject to
\nsuch conditions as may be prescribed.
\n30
\nQ 10. Is there a provision for a person to get himself
\nvoluntarily registered though he may not be liable to
\npay GST?
\nAns. Yes. In terms of Sub-section (3) of Section 19, a person,
\nthough not liable to be registered under Schedule III, may
\nget himself registered voluntarily, and all provisions of this
\nAct, as are applicable to a registered taxable person, shall
\napply to such person.
\nQ 11. Is possession of a Permanent Account Number
\n(PAN) mandatory for obtaining a Registration?
\nAns. Yes. Every person shall have a Permanent Account
\nNumber issued under the Income Tax Act, 1961 (43 of
\n1961) in order to be eligible for grant of registration under
\nSection 19 of the Model GST Law.
\nHowever as per section 19 (4A) of MGL, PAN i<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nwithout giving a notice to show cause and without giving
\nthe person a reasonable opportunity of being heard.
\nQ 14. Whether the Registration granted to any
\nperson is permanent?
\nAns. Yes, the registration Certificate once granted is
\npermanent unless surrendered, cancelled, suspended or
\nrevoked.
\nQ 15. Is it necessary for the UN bodies to get
\nregistration under MGL?
\nAns. All UN bodies Consulate or Embassy of foreign
\ncountries and any other class of persons so notified would
\nbe required to obtain a unique identification number (UIN)
\nfrom the GST portal. The structure of the said ID would
\nbe uniform across the States in conformity with GSTIN
\nstructure and the same will be common for the Centre and
\nthe States. This UIN will be needed for claiming refund of
\ntaxes paid by them and for any other purpose as may be
\nprescribed in the GST Rules.
\nQ 16. What is the responsibility of the taxable person
\nsupplying to UN bodies?
\n32
\nAns. The taxable supplier supplying to <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ntaxable person in terms of Section 2 (69) of the MGL.
\nQ 20. What is the validity period of the Registration
\ncertificate issued to a Casual Taxable Person and non-
\nResident Taxable person?
\nAns. The certificate of registration issued to a “casual
\n33
\ntaxable person” or a “non-resident taxable person” shall
\nbe valid for a period of ninety days from the effective date
\nof registration. However, the proper officer, at the request
\nof the said taxable person, may extend the validity of the
\naforesaid period of ninety days by a further period not
\nexceeding ninety days.
\nQ 21. Is there any Advance tax to be paid by a Casual
\nTaxable Person and Non-resident Taxable Person at
\nthe time of obtaining registration under this Special
\nCategory?
\nAns. Yes. While a normal taxable person does not have to
\nmake any deposit of money to obtain registration, a casual
\ntaxable person or a non-resident taxable person shall, at
\nthe time of submission of application for registra<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 23. Whether
\nCancellation
\nCertificate is permissible?
\nof Registration
\nAns. Yes. Any Registration granted under this Act may
\nbe cancelled by the Proper Officer, in circumstances
\nmentioned in Section 21 of the MGL. The proper officer
\nmay, either on his own motion or on an application filed,
\nin the prescribed manner, by the registered taxable person
\nor by his legal heirs, in case of death of such person, cancel
\nthe registration, in such manner and within such period as
\nmay be prescribed.
\nQ 24. Whether cancellation of Registration under
\nCGST Act means cancellation under SGST Act also?
\nAns. Yes. The cancellation of registration under one Act
\n(say CGST Act) shall be deemed to be a cancellation of
\nregistration under the other Act (i.e. SGST Act). (Section
\n21 (6))
\nQ 25. Can the proper Officer Cancel the Registration
\non his own?
\nAns. Yes, in certain circumstances specified under section
\n21(2) of MGL, the proper officer can cancel the reg<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nSection 19(2) of MGL.
\nQ 29. Who is an ISD?
\nAns. ISD stands for Input Service Distributor and has
\nbeen defined under Section 2 (56) of MGL. It is basically
\nan office meant to receive tax invoices towards receipt of
\ninput services and further distribute the credit to supplier
\nunits proportionately.
\n36
\nQ 30. Will ISD be required to be separately registered
\nother than the existing taxpayer registration?
\nAns. Yes. The ISD registration is for one office of
\nthe taxpayer which will be different from the normal
\nregistration.
\nQ 31. Can a taxpayer have multiple ISDs?
\nAns. Yes. Different offices of a taxpayer can apply for ISD
\nregistration.
\nQ 32. What could be the liabilities (in so far as
\nregistration is concerned) on transfer of a business?
\nAns. The transferee or the successor shall be liable to be
\nregistered with effect from such transfer or succession and he
\nwill have to obtain a fresh registration with effect from such
\ndate. (Schedule III of MGL).
\nQ 33. Wheth<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 36. At the time of registration will the assessee
\nhave to declare all his places of business?
\nAns. Yes. The principal place of business and place of
\nbusiness have been separately defined under section 2(78)
\n& 2(75) of MGL respectively. The taxpayer will have to
\ndeclare the principal place of business as well as the details
\nof additional places of business in the registration form.
\nQ 37. Is there any system to facilitate smaller dealers
\nor dealers having no IT infrastructure?
\nAns. In order to cater to the needs of taxpayers who are
\nnot IT savvy, following facilities shall be made available:-
\nTax Return Preparer (TRP): A taxable person may prepare
\nhis registration application \/returns himself or can
\napproach the TRP for assistance. TRP will prepare the
\nsaid registration document \/ return in prescribed format
\non the basis of the information furnished to him by the
\ntaxable person. The legal responsibility of the correctness
\n38
\nof information co<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ndigital signature, alternative mechanisms will be provided
\nin the GST Rules on Registration.
\nQ 39. What will be the time limit for the decision on
\nthe online application?
\nAns. If the information and the uploaded documents
\nare found in order, the State and the Central authorities
\nshall approve the application and communicate the
\napproval to the common portal within three common
\nworking days. The portal will then automatically
\n39
\ngenerate the Registration Certificate. In case \u00d0\u00bf\u00d0\u00be
\ndeficiency is communicated to the applicant by both
\nthe tax authorities within three common working days,
\nthe registration shall be deemed to have been granted
\n[section 19(9) of MGL] and the portal will automatically
\ngenerate the Registration Certificate.
\nQ 40. What will be the time of response by the
\napplicant if any query is raised in the online
\napplication?
\nAns. If during the process of verification, one of the tax
\nauthorities raises some query or notices some <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 42. Will there be any communication related to
\nthe application disposal?
\nAns. The applicant shall be informed of the fact of grant or
\nrejection of his registration application through an e-mail
\nand SMS by the GST common portal. Jurisdictional details
\nwould be intimated to the applicant at this stage.
\nQ 43. Can the registration certificate be downloaded
\nfrom the GSTN portal?
\nAns. In case registration is granted, applicant can
\ndownload the Registration Certificate from the GST
\ncommon portal.]
\n****
\n41
\nMeaning and Scope of
\nSupply
\n4.
\nMeaning and Scope of Supply
\nQ 1. What is the taxable event under GST?
\nAns. The taxable event under GST shall be the supply
\nof goods and\/or services made for consideration in the
\ncourse or furtherance of business. The taxable events under
\nthe existing indirect tax laws such as manufacture, sale, or
\nprovision of services shall stand subsumed in the taxable
\nevent known as 'supply.
\nQ2.
\nWhat is the meaning of 'Supply'?
\nAns. <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(vi) Supply is made by a taxable person.
\nCan a transaction in which any one or more of
\nthe above criteria is not fulfilled, be still considered as
\nsupply under GST?
\nAns. Yes. Under certain circumstances such as importation
\nof service (Section 3(1) (b)) or supplies made without
\nconsideration, specified under Schedule-I of MGL, where
\none or more ingredients specified in answer to question no.
\n4 are not satisfied, it shall still be treated as supply under
\nGST Law
\nQ 6. Importation of Goods is conspicuous by its
\nabsence in Section 3. Why?
\nAns. Importation of goods is dealt separately under
\nthe Customs Act, 1962, wherein IGST shall be levied as
\nadditional duty of customs in addition to basic customs
\nduty.
\nQ7.
\nAre self-supplies taxable under GST?
\nAns. Inter-state self-supplies such as stock transfers will
\nbe taxable as a taxable person has to take state wise
\n46
\nregistration in terms of Schedule 1(5). Such transactions
\nhave been made taxable even if there is no<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n1. Is the activity, a serious undertaking earnestly
\npursued?
\n2.
\nIs the activity is pursued with reasonable or
\nrecognisable continuity?
\n3. Is the activity conducted in a regular manner based
\non sound and recognised business principles?
\n47
\n4.
\nIs the activity predominantly concerned with
\nthe making of taxable supply for consideration\/
\nprofit motive?
\nThe test may ensure that occasional supplies, even if
\nmade for consideration, will not be subjected to GST.
\nQ 10. An individual buys a car for personal use and
\nafter a year sells it to a car dealer. Will the transaction
\nbe a supply in terms of MGL? Give reasons for the
\nanswer.
\nAns. No, because supply is not made by the individual in
\nthe course or furtherance of business. Further, no input
\ntax credit was admissible on such car at the time of its
\nacquisition as it was meant for non-business use.
\nQ 11. A dealer of air-conditioners transfers an air
\nconditioner from his stock in trade,<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nWhy?
\nAns. Transfer of right to use goods shall be treated as
\nsupply of service because there is no transfer of title in
\nsuch supplies. Such transactions are specifically treated as
\nsupply of service in Schedule-II of MGL
\nQ 15. Whether Works contracts and Catering
\nservices will be treated as supply of goods or supply
\nof services? Why?
\nAns. Works contract and catering services shall be treated
\nas supply of service as specified in Schedule-II of MGL.
\nQ 16. Whether goods supplied on hire purchase
\nbasis will be treated as supply of goods or supply of
\nservices? Why?
\nAns. Supply of goods on hire purchase shall be treated
\nas supply of goods as there is transfer of title, albeit at a
\nfuture date.
\n49
\n****
\nTime of Supply
\n5.
\nTime of Supply
\nQ 1.
\nWhat is time of supply?
\nAns. The time of supply fixes the point when the liability
\nto charge GST arises. It also indicates when a supply is
\ndeemed to have been made. The MGL provides separate
\ntime of supply<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n53
\nQ4.
\nb) where there are no successive statements of
\naccount or successive payments involved, the
\ndate of issue of the invoice or the date of receipt
\nof payment whichever is earlier.
\nWhat is time of supply of goods sent on
\napproval basis?
\nAns. In case of supply on approval basis, the time of supply
\nshall be the time at which it is known whether a supply will
\ntake place or six months from the date of supply, whichever
\nis earlier.
\nQ5.
\nWhere it is not possible to determine the
\ntime of supply in terms of sub-section 2, 3, 5 or 6
\nof Section 12 or that of Section 13 of MGL, how will
\ntime of supply be determined?
\nAns. There is a residual entry in Section 12(7) as well as
\n13 (7) which say that if periodical return has to be filed,
\nthen the due date of filing of such periodical return shall
\nbe the time of supply. In other cases, it will be the date
\non which the CGST\/SGST\/IGST is paid.
\nQ 6. When does the liability to pay GST arise in
\nrespect of supply of services?
\nAn<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\npayment or date of completion of provision of service
\nare also not ascertainable, what will be the time of
\nsupply?
\nAns. The time of supply shall be the date on which the
\nrecipient shows the receipt of services in his books of
\naccounts.
\nQ 11. Suppose part advance payment is made or
\ninvoice issued is for part payment, whether the time
\nof supply will cover the full supply?
\nAns. No. The supply shall be deemed to have been made
\n55
\nto the extent it is covered by the invoice or the part
\npayment.
\nQ 12. What is time of supply of service in case of tax
\npayable under reverse charge?
\nAns. The time of supply will be the earliest of the following
\ndates:
\na) date of receipt of services;
\nb) date on which payment is made;
\nc) date of receipt of invoice;
\nd) date of debit in the books of accounts by
\nsupplier.
\nQ 13. What will be the time of supply in continuous
\nsupply of services?
\nAns. The time of supply shall be the due date of payment,
\nif ascertainable f<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ntransaction value shall not include refundable deposit,
\ndiscount allowed before or at the time of supply.
\nQ 2. What is transaction value?
\nAns. Transaction value refers to the price actually paid or
\npayable for the supply of goods and or services where the
\nsupplier and the recipient are not related and price is the
\nsole consideration for the supply. It includes any amount
\nwhich the supplier is liable to pay but which has been
\nincurred by the recipient of the supply.
\nQ3.
\nAre there separate valuation provisions for
\nCGST, SGST and IGST and Goods and Services?
\nAns. No, section 15 is common for all three taxes and also
\ncommon for goods and services.
\nQ4. Is contract price not sufficient to determine
\nvaluation of supply?
\nAns. Contract price is more specifically referred to as
\n'transaction value' and that is the basis for computing tax.
\n59
\nHowever, when the price is influenced by some factors like
\nrelationship of parties or certain transactions are deemed
\nto be supp<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 8. Whether post-supply discounts or incentives are
\nto be included in the transaction value?
\n60
\n60
\nAns. Yes. Unless the post-supply discount is established as
\nper the agreement and is known at or before the time of
\nsupply and specifically linked to relevant invoice.
\nQ 9.
\nWhether pre-supply
\npre-supply discounts allowed
\nbefore or at the time of supply are includible in the
\ntransaction value?
\nAns. No, provided it is allowed in the course of normal
\ntrade practice and has been duly recorded in the invoice.
\nQ 10. When are Valuation Rules applicable?
\nAns. Valuation Rules are applicable when (i) Consideration
\nnot in money terms; (ii) parties are related or supply by
\nany specified category of supplier; and (iii) transaction
\nvalue declared is not reliable.
\nQ 11. What are the reasons for doubting transaction
\nvalue declared?
\nAns. The reasons have been indicated in Rule 7(b) of the
\ndraft GST Valuation Rules. It is:- (i) comparable supplies
\nare at significantly hig<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\na) Any amounts paid by recipient that are
\nobligation of supplier to pay;
\nb) Money value of goods or services provided free
\nor at concession by recipient;
\nc) Royalties and license fees payable by recipient
\nas a condition of supply;
\nd) Taxes levied under any other law(s) (other than
\nSGST\/CGST or IGST);
\ne) Expenses incurred by supplier before supply and
\ncharged separately;
\nf) Subsidy realized by supplier on the supply;
\ng) Reimbursements
\nsupplier;
\nclaimed separately by
\nh) Discounts allowed 'after' supply except when
\nknown before supply; (Discounts allowed as a
\nnormal trade practice and reflected on the face
\nof the invoice shall not be included).
\n62
\nGST Payment of Tax
\n7.
\nGST Payment of Tax
\nWhat are the Payments to be made in GST
\nQ 1.
\nregime?
\nAns. In the GST regime, for any intra-state supply, taxes to
\nbe paid are the Central GST (CGST, going into the account
\nof the Central Government) and the State GST (SGST, going
\ninto the account of the concerned S<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nSection 13. The time is generally the earliest of one of the
\n65
\nthree events, namely receiving payment, issuance of invoice
\nor completion of supply. Different situations envisaged and
\ndifferent tax points have been explained in the aforesaid
\nsections.
\nQ4.
\nWhat are the main features of GST payment
\nprocess?
\nAns. The payment processes under proposed GST regime
\nwill have the following features:
\n\u2022
\nElectronically generated challan from GSTN
\nCommon Portal in all modes of payment and no
\nuse of manually prepared challan;
\nFacilitation for the taxpayer by providing hassle
\nfree, anytime, anywhere mode of payment of tax;
\nConvenience of making payment online;
\nLogical tax collection data in electronic format;
\n.
\nFaster remittance of tax
\nrevenue to the
\nGovernment Account;
\n.
\nPaperless transactions;
\n.
\nSpeedy Accounting and reporting;
\nElectronic reconciliation of all receipts;
\nSimplified procedure for banks;
\nWarehousing of Digital <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ6.
\nWhen is payment of taxes to be made by the
\nSupplier?
\nAns. Payment of taxes by the normal taxpayer is to be done
\non monthly basis by the 20th of the succeeding month. Cash
\npayments will be first deposited in the Cash Ledger and the
\ntaxpayer shall debit the ledger while making payment in
\nthe monthly returns and shall reflect the relevant debit
\nentry number in his return. As mentioned earlier, payment
\ncan also be debited from the Credit Ledger. Payment of
\ntaxes for the month of March shall be paid by the 20th
\nof April. Composition tax payers will need to pay tax on
\n67
\nquarterly basis. Timing of payment will be from 0000 Hrs
\nto 2000 Hrs.
\nQ7.
\nWhether time limit for payment of tax can be
\nextended or paid in monthly installments?
\nAns. No, this is not permitted in case of self-assessed
\nliability. In other cases, competent authority has been
\nempowered to extend the time period or allow payment in
\ninstallments. (Section 55 of MGL).
\nQ 8. What happens if th<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n68
\nQ 10. What are E-Ledgers?
\nAns. Electronic Ledgers or E-Ledgers are statements of
\ncash and input tax credit in respect of each registered
\ntaxpayer. In addition, each taxpayer shall also have
\nan electronic tax liability register. Once a taxpayer
\nis registered on Common Portal (GSTN), 2 e-ledgers
\n(Cash & Input Tax Credit) and an electronic tax liability
\nregister will be automatically opened and displayed on
\nhis dashboard at all times.
\nQ 11. What is a tax liability register?
\nAns. Tax Liability Register will reflect the total tax liability
\nof a taxpayer (after netting) for the particular month.
\nQ 12. What is a Cash Ledger?
\nAns. The cash ledger will reflect all deposits made in
\ncash, and TDS\/TCS made on account of the taxpayer. The
\ninformation will be reflected on real time basis. This ledger
\ncan be used for making any payment on account of GST.
\nQ 13. What is an ITC Ledger?
\nAns. Input Tax Credit as self-assessed in monthly returns
\nwill be ref<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nchallan, for use of payment of taxes. The remitter will have
\noption of printing the challan for his record.
\nQ 16. Can a challan generated online be modified?
\nAns. No. After logging into GSTN portal for generation of
\nchallan, payment particulars have to be fed in by the tax
\npayer or his authorized person. He can save the challan
\nmidway for future updation. However once the challan is
\nfinalized and CPIN generated, no further changes can be
\nmade to it by the taxpayer.
\nQ 17. Is there a validity period of challan?
\nAns. Yes, a challan will be valid for fifteen days after its
\ngeneration and thereafter it will be purged from the System.
\nHowever, the taxpayer can generate another challan at his
\nconvenience.
\n10
\n70
\nQ 18. What is a CPIN?
\nAns. CPIN stands for Common Portal Identification
\nNumber (CPIN) given at the time of generation of challan.
\nIt is a 14 digit unique number to identify the challan. As
\nstated above, the CPIN remains valid for a period of 15
\ndays.
\nQ 19. W<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\npayable including any confirmed demands under section
\n51. This sequence has to be mandatorily followed.
\n71
\n14
\nQ 21. What is an E-FPB?
\nAns. E-FPB stands for Electronic Focal Point Branch.
\nThese are branches of authorized banks which are
\nauthorized to collect payment of GST. Each authorized
\nbank will nominate only one branch as its E-FPB for
\npan India Transactions. The E-FPB will have to open
\naccounts under each major head for all governments.
\nTotal 38 accounts (one each for CGST, IGST and one
\neach for SGST for each State\/UT Govt.) will have to be
\nopened. Any amount received by such E-FPB towards
\nGST will be credited to the appropriate account held by
\nsuch E-FPB.
\nFor NEFT\/RTGS Transactions, RBI will act as E-FPB.
\nQ 22. What is TDS?
\nAns. TDS stands for Tax Deducted at Source (TDS). As
\nper section 37, this provision is meant for Government
\nand Government undertakings and other notified
\nentities making contractual payments in excess of Rs.
\n10 Lakhs to suppl<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nwhich fees of Rs. 100 per day subject to maximum of
\nRs. 5000\/- will be payable by such deductor.
\nQ 25. What is Tax Collected at Source (TCS)?
\nAns. This provision is applicable only for E-Commerce
\nOperator under section 43C of MGL. Every E-Commerce
\nOperator needs to withhold a percentage (to be notified
\nlater on the recommendation of the GST Council) of the
\namount which is due from him to the supplier at the time
\nof making actual payment to the supplier. Such withheld
\namount is to be deposited by such E-Commerce Operator
\nto the appropriate GST account by the 10th of the next
\n73
\nmonth. The amount deposited as TCS will be reflected in
\nthe electronic cash ledger of the supplier.
\nQ 26. Is the pre-registration of credit card necessary
\nin the GSTN portal for the GST payment?
\nAns. Yes. The taxpayer would be required to pre-register
\nhis credit card, from which the tax payment is intended,
\nwith the Common Portal maintained on GSTN. GSTN m<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nAns. Section 43B(e) of the MGL defines an Electronic
\nCommerce Operator (Operator) as every person who,
\ndirectly or indirectly, owns, operates or manages an
\nelectronic platform which is engaged in facilitating
\nthe supply of any goods and\/or services. Also a person
\nproviding any information or any other services incidental
\nto or in connection with such supply of goods and services
\nthrough electronic platform would be considered as an
\nOperator. A person supplying goods\/services on his own
\naccount, however, would not be considered as an Operator.
\nFor instance, Amazon and Flipkart are e-commerce
\nOperators because they are facilitating actual suppliers
\nto supply goods through their platform (popularly called
\nMarket place model or Fulfillment Model). However, Titan
\n77
\nsupplying watches and jewels through its own website
\nwould not be considered as an e-commerce operator for the
\npurposes of this provision. Similarly Amazon and Flipkart
\nwill not be treated as<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\npersons providing service of a particular kind under the
\nbrand name or trade name of the said aggregator. For
\ninstance, Ola cabs would be an aggregator.
\n78
\nQ6. Is an aggregator required to be registered
\nunder GST?
\nAns. Yes. Section 19 r\/w Schedule-III of the MGL, provides
\nthat the threshold exemption is not available to aggregators
\nand they would be liable to be registered irrespective of the
\nvalue of supply made by them.
\nQ7.
\nWhat is Tax Collection at Source (TCS)?
\nAns. In terms of Section 43C(1) of the MGL, the e-commerce
\noperator is required to collect (i.e. deduct) an amount out
\nof the consideration paid or payable to the actual supplier
\nof goods or services in respect of supplies of goods and\/
\nor services made through such operator. The amount so
\ndeducted\/collected is called as Tax Collection at Source
\n(TCS).
\nQ 8.
\nAt what time\/intervals should the e-commerce
\noperator make such deductions?
\nAns. The timings for such collection\/deduction are ea<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nand the amount collected on their behalf. The Form and
\nManner of the said Statement would be prescribed in the
\nGST Rules.
\nQ 10. How can actual suppliers claim credit of this
\nTCS?
\nAns. Such TCS which is deposited by the operator into
\ngovernment account will be reflected in the cash ledger
\nof the actual registered supplier (on whose account such
\ncollection has been made) on the basis of the statement
\nfiled by the operator. The same can be used at the time of
\ndischarge of tax liability in respect of the supplies by the
\nactual supplier.
\nQ 11. Is the e-commerce operator required to furnish
\ninformation to the Government?
\nAns. Yes. In terms of section 43C(10), an officer not below
\nthe rank of Joint Commissioner may require the operator
\nto furnish details relating to:
\n80
\n(i) supplies of goods \/ services effected through the
\noperator during any period;
\n(ii) stock of goods held by actual supplier making
\nsupplies through such operator in th<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nsuch supplies during the said calendar month.
\nQ 13. What is the concept of matching in e-commerce
\nprovisions and how it is going to work?
\nAns. As per section 43C (6), the details of supplies and the
\namount collected during a calendar month, and furnished
\n81
\nby every operator in his statement will be matched with the
\ncorresponding details of outward supplies furnished by the
\nconcerned supplier in his valid return filed under section
\n27 for the same calendar month or any preceding calendar
\nmonth. Where the details of outward supply, on which
\nthe tax has been collected, as declared by the operator
\nin his statement do not match with the corresponding
\ndetails declared by the supplier the discrepancy shall be
\ncommunicated to both persons.
\nQ 14. What will happen if the details remain
\nmismatched?
\nAns. As per section 43C (8), the value of a supply relating
\nto any payment in respect of which any discrepancy is
\ncommunicated and which is not rectified by the supplier
\ni<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nmust amount to manufacture. Thus the definition of job-
\nwork itself reflects the change in basic scheme of taxation
\nrelating to job-work in the proposed GST regime.
\nQ 2.
\nWhether goods sent by a taxable person to a
\njob-worker will be treated as supply and liable to
\nGST? Why?
\nAns. No. It will not be treated as a supply. In terms of
\nproviso to Para 5 of Schedule I of the MGL the supply of
\ngoods by a registered taxable person (principal) to job-
\nworker, in terms of Section 43A, shall not be regarded as
\nsupply of goods. Therefore, it can be inferred that no GST
\nshall be applicable on the goods supplied by the registered
\nprincipal to a job-worker.
\nQ 3.
\nCan a registered taxable person send goods
\nwithout payment of tax to his job-worker?
\nAns. Yes. Section 43A of the MGL provides that the
\nregistered taxable person (principal) can send the taxable
\n59
\n85
\ngoods to a job-worker for job-work without payment of
\ntax. He ca<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nperson or where the goods have been notified.
\nQ7.
\nUnder what circumstances can the principal
\ndirectly supply goods from the premises of job-worker?
\nAns. The goods can be supplied directly from the place of
\nbusiness of job-worker without declaring it as additional
\n86
\nplace of business in two circumstances namely where the
\njob-worker is a registered taxable person or where the
\nprincipal is engaged in supply of such goods as may be
\nnotified in this behalf.
\nQ 8. What are the provisions concerning taking
\nof ITC in respect of inputs\/capital goods sent to a
\njob-worker?
\nAns. In the MGL, aspects relating to taking input tax credit
\nin respect of inputs\/capital goods sent for job-work have
\nbeen specifically dealt in Section 16A, which provides that
\nthe credit of taxes paid on inputs or capital goods can be
\ntaken in the following manner:
\nPrincipal shall be entitled to take credit of inputs sent to a
\njob-worker if the said inputs, after completion of job-work
\nare receive<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nrespect of CGST Act and {IGST and SGST} in respect of SGST
\nAct, charged on any supply of goods and\/or services to him
\nwhich are used, or are intended to be used, in the course
\nor furtherance of his business and includes the tax payable
\nunder sub-section (3) of section 7.
\nUnder the IGST Act, input tax is defined as IGST, CGST or
\nSGST charged on any supply of goods and\/or services.
\nQ2. What is the implication of different definition of
\n“input tax” in three acts viz CGST, SGST and IGST Acts?
\nAns. It implies that input tax consists of IGST & CGST in CGST
\nAct and IGST & SGST in SGST Act. In the IGST Act, input tax
\nconsists of all three taxes namely, IGST, CGST and SGST.
\nIt further implies that credit of all three can be used for
\ndischarging IGST liability, whereas only credit of IGST &
\nCGST can be taken in CGST Act and that of IGST & SGST
\ncan be taken under SGST Act. Further the credit of CGST &
\nSGST cannot be cross-utilize<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nimmediately preceding the date from which he becomes
\nliable to pay tax under the provisions of this Act. It may be
\nnoted that the credit on pre-registration stock would not be
\nadmissible if the registration has not been obtained within
\na period of 30 days from the date on which he becomes
\nliable to registration.
\nQ 6.
\nA person becomes liable to pay tax on 1st
\nAugust, 2017 and has obtained registration on 15th
\nAugust, 2017. Such person is eligible for input tax
\ncredit on inputs held in stock as on ……..
\nAns. 31st July, 2017.
\n92
\nQ7. What is the eligibility of input tax credit on
\ninputs in stock for a person who obtains voluntary
\nregistration?
\nAns. As per section 16(2A) of MGL, the person who
\nobtains voluntary registration is entitled to take the input
\ntax credit of input tax on inputs in stock, inputs in semi-
\nfinished goods and finished goods in stock, held on the day
\nimmediately preceding the date of registration.
\nQ 8. Where <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nperson. The amount of eligible credit would be calculated
\nin a manner to be prescribed in terms of section 16(7) of
\nthe MGL read with GST ITC Rules (yet to be issued). It is
\nimportant to note that credit on capital goods also would
\nnow be permitted on proportionate basis.
\nQ 10. What would be input tax eligibility in cases
\nwhere there is a change in the constitution of a
\nregistered taxable person?
\nAns. As per section 16(8) of the MGL, the transferor shall
\nbe allowed to transfer the input tax credit that remains
\nunutilized in its books of accounts to the transferee
\nprovided that there is a specific provision for transfer of
\nliabilities.
\nQ 11. What would be input tax eligibility in case where
\nthe goods and\/or services supplied by a registered
\ntaxable person become absolutely exempt?
\nAns. As per section 16(12) of the MGL, the registered
\ntaxable person who supplies goods and \/ or services
\nwhich become absolutely exempt, has to pay an amount
\nequivalent to<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\npayment of the amount on such goods, the balance, if any
\navailable in electronic credit ledger would lapse. The amount,
\nrequired to be paid, is to be calculated as per GAAP in terms of
\nsection 16(13) of the MGL.
\nQ 13. A dealer paying tax on compounding basis
\ncrosses the compounding threshold and becomes
\na regular taxable person. Can he avail ITC and if so
\nfrom what date?
\nAns. As per section 16(3) of the MGL, he can avail ITC
\nin respect of inputs held in stock and inputs contained in
\nsemi-finished or finished goods held in stock on the day
\nimmediately preceding the date from which he becomes
\nliable to pay tax under section 7.
\nQ 14. Mr. B, a registered taxable person was paying
\ntax under composition rate up to 30th July, 2017.
\nHowever, w.e.f 31st July, 2017. Mr. B becomes liable to
\npay tax under regular scheme. Is he eligible for ITC?
\n95
\nAns. Mr. B is eligible for input tax credit on inputs held
\nin stock and inputs contained in <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nSection 16A(2) of the MGL.
\nQ 18. What is the time period within which the
\ninputs sent for job work has to be received back by
\nthe principal?
\nAns. 180 days.
\n96
\nQ 19. Whether principal has to reverse the input tax
\ncredit on inputs which have not been received back
\nfrom the job worker within 180 days?
\nAns. Yes, the principal has to reverse the credit along with
\ninterest on inputs which have not been received back from
\njob worker within 180 days but he can reclaim the credit
\non receipt of inputs.
\nQ 20. Which of the following is included for
\ncomputation of taxable supplies for the purpose of
\navailing credit:
\n(a) Zero-rated supplies;
\n(b) Exempt supplies;
\n(c) Both?
\nAns. Zero rated supplies.
\nQ 21. What is the time period within which the
\ncapital goods sent for job work has to be received
\nback by the principal?
\nAns. Two years.
\nQ 22. What is the liability of the principal if the
\ncapital goods sent to job worker have not been
\nreceived within 2 years from the<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nAns. As per Section 16(11) of the MGL, following four
\nconditions are stipulated:
\n(a) The registered taxable person should be in possession
\nof tax paying document issued by a supplier;
\n(b) The taxable person must have received the goods
\nand\/or services;
\n(c)
\n(d)
\nThe tax charged on such supply has been actually
\npaid to the government either in cash or through
\nutilization of input tax credit; and
\nThe taxable person should have furnished the return
\nunder section 27.
\n98
\nQ26. Where the goods against an invoice are received
\nin lots or instalments, how will a registered taxable
\nperson be entitled to ITC?
\nAns. As per proviso to section 16(11) of the MGL, the
\nregistered taxable person shall be entitled to the credit
\nupon receipt of the last lot or installment.
\nQ 27. Who will get the ITC where goods have been
\ndelivered to a person other than taxable person ('bill
\nto'- 'ship to' scenarios)?
\nAns. As per explanation clause to section 16(11) of the MGL,
\nfor this purp<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(a) motor vehicles, except when they are supplied in the
\nusual course of business or are used for providing the
\nfollowing taxable services\u2014
\n(i) transportation of passengers, or
\n(ii) transportation of goods, or
\n(iii) imparting training on motor driving skills;
\n(b) goods and\/or services provided in relation to food
\nand beverages, outdoor catering, beauty treatment,
\nhealth services, cosmetic and plastic surgery,
\nmembership of a club, health and fitness center,
\nlife insurance, health insurance and travel benefits
\nextended to employees on vacation such as leave
\nor home travel concession, when such goods and\/
\nor services are used primarily for personal use or
\nconsumption of any employee;
\n(c) goods and\/or services acquired by the principal in
\nthe execution of works contract when such contract
\nresults in construction of immovable property, other
\nthan plant and machinery;
\n(d) goods acquired by a principal, the property in which
\nis not transferred (whether<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nregistered taxable person shall pay an amount equal to the
\ninput tax credit taken on the said capital goods reduced
\nby the percentage points as may be specified in this behalf
\nor the tax on the transaction value of such capital goods,
\nwhichever is higher.
\nQ 32. What is the recovery mechanism for wrongly
\navailed credit?
\nAns. As per section 16(16) of the MGL, the wrongly availed
\ncredit would be recovered from the registered taxable
\nperson in terms of section 51 of MGL.
\n101
\nConcept of Input Service
\nDistributor
\nin GST
\n11. Concept of Input Service
\nQ 1.
\nDistributor in GST
\nWhat is Input Service Distributor (ISD)?
\nAns. As per Section 2(56) of MGL, ISD means an office of
\nthe supplier of goods and\/or services which receives tax
\ninvoices issued under section 23 towards receipt of input
\nservices and issues tax invoice or such other document as
\nprescribed for the purposes of distributing the credit of
\nCGST (SGST in Sta<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nthe amount of credit available;
\nC.
\nd.
\nCredit should be distributed only to such suppliers
\nto whom such services are attributable;
\nCredit in respect of services attributable to
\nmore than one supplier should be distributed
\nproportionately on the basis of turnover of
\nrespective supplier during the preceding
\nfinancial year.
\nIs the ISD required to file return?
\nAns. Yes, as per Section 27(6) of MGL, ISD is required to
\nfile monthly return by 13th of the following month in form
\nGSTR-6.
\nQ 5.
\nCan a company have multiple ISD?
\nAns. Yes, different offices like marketing division, security
\ndivision etc. may apply for separate ISD.
\nQ 6.
\nWhat are the provisions for recovery of excess\/
\nwrongly distributed credit by ISD?
\nAns. Sections 18(1) and 18(2) provide for recovery of
\nexcess\/wrongly distributed credit by initiating action
\nagainst the ISD itself or against the recipient of credit so
\ndistributed under section 51 of the Model GST <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ndistributed is yet to be prescribed. The Act provides that
\nthe credit can be distributed only through prescribed
\ndocument.
\nQ 12. How to distribute common credit among all
\nthe units of an ISD?
\nAns. The common credit used by all the units can be
\ndistributed by ISD on pro rata basis i.e. based on the
\nturnover of each unit to the aggregate turnover of all the
\nunits to which credit is distributed.
\n107
\nQ 13. The ISD may distribute the CGST and IGST
\ncredit to recipient outside the State as
\n(a) IGST
\n(b) CGST
\n(c) SGST
\nAns. (a) IGST.
\nQ 14. The ISD may distribute the CGST credit within
\nthe State as
\n(a) IGST
\n(b) CGST
\n(c) SGST
\n(d) Any of the above.
\nAns. (b) CGST.
\nQ 15. The credit of tax paid on input service used by
\nmore than one supplier is
\n(a) Distributed among the suppliers who used such
\ninput service on pro rata basis of turnover in
\nsuch State.
\n(b) Distributed equally among all the suppliers.
\n(c) Distributed only to one supplier.
\n(d) Cannot be distributed.
\nAn<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ndecision;
\ne) Management of audit and anti-evasion programs
\nof tax administration.
\nWho needs to file Return in GST regime?
\nAns. Every registered taxable person – who crosses the
\nthreshold limit for payment of taxes. A supplier needs to be
\nregistered when the aggregate turnover crosses Rs. nine
\nlacs but he become taxable person ONLY when he crosses
\nRs. ten lacs. So he will be required to file returns when he
\ncrosses the threshold limit of Rs. ten lacs. There are some
\nother class of persons who need to be registered and
\ntherefore will have to file returns like interstate suppliers,
\nTDS deductors, e-commerce operators, suppliers supplying
\ngoods through e-commerce operators etc (reference
\nSchedule-III and Question 6 of the Registration Chapter).
\n113
\nQ 3.
\nWhat type of outward supply details are to be
\nfiled in the return?
\nAns. A normal registered taxpayer has to file the outward
\nsupply details in GSTR-1 in relation to various types of
\ns<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nvalue more than Rs.2.5 lacs in inter-state B2B supplies will
\nhave to be uploaded. For intra-state invoices below Rs. 2.5
\n114
\nlacs and all intra-state invoices, state wise summary will
\nbe sufficient.
\nQ6.
\nWhether description of each item in the invoice
\nwill have to be uploaded?
\nAns. No. In fact description will not have to be uploaded.
\nOnly HSN code in respect of supply of goods and Accounting
\ncode in respect of supply of services will have to be fed. The
\nminimum number of digits that the filer will have to upload
\nwould depend on his turnover in the last year.
\nQ7.
\nWhether value for each transaction will have
\nto be fed? What if no consideration?
\nAns. Yes. Not only value but taxable value will also have to
\nbe fed. In some cases both may be different.
\nIn case there is no consideration, but it is supply by
\nvirtue of schedule 1, the taxable value will have to be
\nuploaded.
\nQ 8.
\nCan a recipient feed information in his GSTR-2
\nwhich has been missed by the supplier?
\nA<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nmismatch continues even after it is made known to both
\nand still it is not rectified. Mismatch can be because of two
\nreasons. First, it could be due to mistake at the side of the
\nrecipient, and in such a case, no further action is required.
\nSecondly, it could be possible that the said invoice was
\nissued by supplier but he did not upload it and pay tax on
\nit. In such a case, recovery action shall be taken against the
\nsupplier. In short, all mismatches will lead to proceedings
\nif the supplier has made a supply but not paid tax on it.
\nQ 11. What will be the legal position in regard to the
\nreversed input tax credit if the supplier later realises
\nthe mistake and feeds the information?
\nAns. At any stage, but before September of the next
\nfinancial year, supplier can upload the invoice and pay
\nduty and interest on such missing invoices in his GSTR-3 of
\n116
\nthe month in which he uploaded the invoice. The recipient
\nwill then automatica<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nof GSTR-2 for them and since they do not pass on any
\ncredit to their recipients, there is no relevance of GSTR-1
\nfor them. In their return, they have to declare summary
\ndetails of their outward supplies along with the details
\nof tax payment. They also have to give details of their
\n117
\npurchases in their quarterly return itself, most of which
\nwill be auto populated.
\nQ 15. Do Input Service Distributors (ISDs) need
\nto file separate statement of outward and inward
\nsupplies with their return?
\nAns. No, the ISDs need to file only a return in GSTR-6 and
\nthe return has the details of credit received by them from
\nthe service provider and the credit distributed by them
\nto the subsidiaries. Since their return itself covers these
\naspects, there is no requirement to file separate statement
\nof inward and outward supplies.
\nQ 16. How does a taxpayer get the credit of the tax
\ndeducted at source on his behalf? Does he need to
\nprodu<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ntax at source are not required to file annual return.
\nQ 18. Is an Annual Return and a Final Return one
\nand the same?
\nAns. No. Annual Return has to be filed by every
\nregistered taxable person paying tax as a normal or a
\ncompounding taxpayer. Final Return has to be filed only
\nby those registered taxable persons who have applied for
\ncancellation of registration. This has to be filed within
\nthree months of the date of cancellation or the date of
\ncancellation order.
\nQ 19. If a return has been filed, how can it be revised
\nif some changes are required to be made?
\nAns. In GST since the returns are built from details of
\nindividual transactions, there is no requirement for having
\na revised return. Any need to revise a return may arise
\ndue to the need to change a set of invoices or debit\/credit
\nnotes. Instead of revising the return already submitted, the
\nsystem will allow changing the details of those transactions
\n(invoices or debit\/credit notes) that a<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nGSTR-1 by 10th of next month. How best this can be ensured
\nwill depend on the number of B2B invoices that the taxpayer
\nissues. If the number is small, the taxpayer can upload all the
\ninformation in one go. However, if the number of invoices is
\nlarge, the invoices (or debit\/credit notes) should be uploaded
\non a regular basis. GSTN will allow regular uploading of
\ninvoices even on a real time basis. Till the statement is
\nactually submitted, the system will also allow the taxpayer to
\nmodify the uploaded invoices. Therefore, it would always be
\nbeneficial for the taxpayers to regularly upload the invoices.
\nLast minute rush will make uploading difficult and will
\ncome with higher risk of possible failure and default. The
\nsecond thing would be to ensure that taxpayers follow up
\non uploading the invoices of their inward supplies by their
\n120
\nsuppliers. This would be helpful in ensuring that the input tax
\ncredit is available without any hassle and delay. Recipients
\ncan als<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nreturn filed through a Tax Return Preparer, duly approved
\nby the Central or the State tax administration.
\nQ 23. What is the consequence of not filing the
\nreturn within the prescribed date?
\nAns. A registered taxable person who files return beyond
\nthe prescribed date will have to pay late fees of rupees one
\nhundred for every day of delay subject to a maximum of
\nrupees five thousand.
\n121
\nAssessment and Audit
\n13. Assessment and Audit
\nQ 1.
\nWho is the person responsible to make
\nassessment of taxes payable under the Act?
\nAns. Every person registered under the Act shall himself
\nassess the tax payable by him for a tax period and after
\nsuch assessment he shall file the return required under
\nsection 27.
\nQ2. Is there any provision in MGL for tax treatment
\nof goods returned by the recipient?
\nAns. Yes, Explanation to Section 44 of MGL has such a
\nprovision. It provides that where goods received as an
\ninward supply is returned by the recipient to the supplier<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nfrom the taxpayer which will then have to be permitted
\nby the proper officer. In other words, no tax officer can
\nsuomoto order payment of tax on provisional basis. This
\nis governed by section 44A of MGL. Tax can be paid on a
\nprovisional basis only after the proper officer has permitted
\nit through an order passed by him. For this purpose, the
\ntaxable person has to make a written request to the proper
\nofficer, giving reasons for payment of tax on a provisional
\nbasis. Such a request can be made by the taxable person
\nonly in such cases where he is unable to determine:
\na) the value of goods or services to be supplied by
\nhim, or
\nb) determine the tax rate applicable to the goods
\nor services to be supplied by him.
\nIn such cases the taxable person has to execute a bond in
\nthe prescribed form, and with such surety or security as
\nthe proper officer may deem fit.
\nQ 5.
\nWhat is the latest time by which final
\nassessment i<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nexplanation within 30 days of being informed (extendable
\nby the officer concerned) or does not take corrective
\naction within a reasonable period after accepting the
\ndiscrepancies, the Proper Officer may take recourse to any
\nof the following provisions:
\n(a) Proceed to conduct audit under Section 49 of
\nthe Act;
\n127
\nQ 8.
\n(b) Direct the conduct of a special audit under Section
\n50 which is to be conducted by a Chartered
\nAccountant or a Cost Accountant nominated for
\nthis purpose by the Commissioner; or
\n(c) Undertake procedures of inspection, search and
\nseizure under Section 60 of the Act; or
\n(d) Initiate proceeding for determination of tax
\nunder Section 51 of the Act.
\nWhether Proper Officer is required to give
\nany notice to taxable person before completing
\nassessment u\/s 46?
\nAns. As this provision relates to 'best judgment assessment,
\ngiving a notice to the taxable person is not required.
\nQ 9. If a taxable person fails to file the return
\nrequired under law (under<\/p>\n
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\nbest judgment assessment order.
\nQ 11. What is the time limit for passing order u\/s 46
\nand 47?
\nAns. The time limit for passing an assessment order under
\nsection 46 or 47 is three or five years from the due date for
\nfiling the annual return.
\nQ 12. What is the legal recourse available in respect
\nof a person who is liable to pay tax but has failed to
\nobtain registration?
\nAns. Section 47 of MGL provides that in such a case, the
\nproper officer can assess the tax liability and pass an order
\nto his best judgment for the relevant tax periods. However,
\nsuch an order must be passed within a period of five years
\nfrom the due date of filing of the annual return for the
\nfinancial year to which non-payment of tax relates.
\nQ 13. Under what circumstances can a tax officer
\ninitiate Summary Assessment?
\nAns. As per section 48 of MGL, Summary Assessments can
\nbe initiated to protect the interest of revenue when:
\n129
\na) the proper officer has evidence <\/p>\n
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\npassed against the taxable person?
\nAns. No. In certain cases like when goods are under
\ntransportation or are stored in a warehouse, and the
\ntaxable person in respect of such goods cannot be
\n130
\nascertained, the person in charge of such goods shall be
\ndeemed to be the taxable person and will be assessed to
\ntax (section 48 of MGL).
\nQ 16. Who can conduct audit of taxpayers?
\nAns. As per section 49 of MGL, any officer of CGST or SGST
\nauthorized by his Commissioner by a general or specific
\norder may conduct audit of a taxpayer. The frequency and
\nmanner of audit will be prescribed in due course.
\nQ 17. Whether any prior intimation is required
\nbefore conducting the audit?
\nAns. Yes, prior intimation is required and the taxable
\nperson should be informed at least 15 days prior to conduct
\nof audit.
\nQ 18. What is the period within which the audit is to
\nbe completed?
\nAns. The audit is required to be completed within 3
\nmonths <\/p>\n
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\nupon conclusion of the audit?
\nAns. The proper officer must without delay inform the
\ntaxable person about his findings, reasons for findings and
\nthe taxable person's rights and obligations in respect of
\nsuch findings.
\nQ 22. Under what circumstances can a special audit
\nbe instituted?
\nAns. A special audit can be instituted in limited
\ncircumstances where during scrutiny, investigation, etc. it
\ncomes to the notice that a case is complex or the revenue
\nstake is high. This power is given in section 50 of MGL.
\nQ 23. Who can serve the notice for special audit?
\nAns. The Assistant \/ Deputy Commissioner is to serve the
\n132
\nnotice for special audit only after prior approval of the
\nCommissioner.
\nQ 24. Who will do the special audit?
\nAns. A Chartered Accountant or a Cost Accountant so
\nnominated by the Commissioner may undertake the audit.
\nQ 25. What is the time limit to submit the audit
\nreport?
\nAns. The auditor will have to submit the report w<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(2) of section 38:-
\nQ3.
\n(i) Exports of goods on which export duty is not
\npayable;
\n(ii) Exports of services;
\n(iii) Where credit has accumulated on account of
\nrate of tax on inputs being higher than the rate
\nof taxes on Outputs.
\nCan unutilized ITC be given refund, in case goods
\nexported outside India are subjected to export duty?
\nAns. No (Second proviso to Section 38(2) of MGL).
\nQ4. Can ITC of goods lying in stock at the end of the
\nfinancial year (after introduction of GST) be refunded?
\nAns. No. It is proposed to be carried forward.
\n137
\nQ5. Suppose a taxable person has paid IGST\/
\nCGST\/SGST mistakenly as an Interstate\/intrastate
\nsupply, but the nature of which is subsequently
\nclarified. Can the CGST\/SGST be adjusted against
\nwrongly paid IGST or vice versa?
\nAns. No. He will have to pay the appropriate tax and
\nclaim refund of the tax wrongly paid. (IGST Sec.30 and
\nSec.53 GST).
\nQ 6.
\nWhether purchases made by Embassies or UN
\nbe taxed or exempted?
\nAns.<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 10. Is there any time limit for sanctioning of
\nrefund?
\nAns. Yes, it is 90 days in all cases, excepting in a case
\nwhere the refund to the extent of 80% of the total amount
\nclaimed is refundable to certain categories of exporters
\nreferred to in sub-section (4A) of section 38. If refund is
\nnot sanctioned within the period of three months, interest
\nwill have to be paid by the department.
\nQ 11. Can refund be withheld by the department?
\nAns. Yes, refund can be withheld in the following
\ncircumstances:
\nIf the registered dealer has not submitted
\nreturn(s), till he files the return(s);
\nIf the registered taxable person is required to pay
\nany tax, interest or penalty which has not been
\nstayed by the appellate authority\/Tribunal\/
\ncourt, till he pays such tax interest or penalty;
\n[The proper officer can also deduct unpaid
\ntaxes if any of the dealer from the refundable
\namount].
\n139
\nCommissioner\/Board can withhold refund, if,
\nthe Order o<\/p>\n
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\nsuch conditions and restrictions as may be prescribed –
\nsection 38(4A).
\n140
\nQ 16. In case of refund under exports, whether BRC
\nis necessary for granting refund?
\nAns. Since the exporter has a time period of one year from
\nthe date of export for remitting of export proceeds, BRC
\nmay not be available at the time of refund application.
\nBut if export proceeds are received in advance BRC may
\nbe available. Thus, refund should be subject to submission
\nof BRC details within a period of maximum one year or as
\nextended by RBI. e-BRC module of DGFT will be integrated
\nwith GST module.
\nHowever for export of services BRC would be required
\nbefore sanction of refund.
\nQ 17. Will the principle of unjust enrichment apply
\nto exports or deemed exports?
\nAns. The principle of unjust enrichment is not applicable
\nin case of actual exports of goods or services as the recipient
\nis located outside the taxable territory. However, in case of
\ndeemed exports i<\/p>\n
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\nallowed to obtain duty paid inputs, avail ITC on it and
\nexport goods upon payment of duty (after utilizing
\nthe ITC) and thereafter claim refund of the duty paid
\non exports. Will this system continue in GST?
\nAns. Under the GST regime exports will be zero rated
\nwhich means that the export goods would not suffer
\nany actual tax liability although inputs for such exports
\nwould be tax paid. Under GST, refund will be allowable on
\nthe accumulated inputs as well as on exported finished
\ngoods.
\n****
\n142
\nDemands and Recovery
\n15. Demands and Recovery
\nQ 1.
\nWhich is the applicable section for the purpose
\nof recovery of tax short paid or not paid or amount
\nerroneously refunded or input tax credit wrongly
\navailed or utilized?
\nAns. Section 51A in cases where there is no invocation
\nof fraud\/suppression\/mis-statement etc and Section 51B
\nwhere the ingredients of fraud\/suppression\/mis-statement
\netc are present.
\nQ2.
\nCan the person chargeable with tax pay the
\namount <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ncompleted within the period of 3 years (for Section 51A
\ncases) and 5 years (for Section 51B cases) from the relevant
\ndate.
\nQ6.
\nCan the person chargeable with tax pay the
\namount of demand along-with interest before issue
\nof notice under section 51B?
\nAns. Yes. Before issue of notice under sub section (1) or a
\nstatement under sub-section (2), a person chargeable with
\ntax, shall have an option to pay the amount of tax along
\nwith interest and fifteen percent penalty, ascertained
\neither on his own or informed by the proper officer, and on
\nsuch payment, no notice shall be issued with respect to the
\ntax so paid.
\nQ7. If notice is issued under Section 51B and
\nthereafter the noticee makes payment, is there any
\nneed to adjudicate the case?
\nAns. No if tax\/interest and penalty has been paid. Where
\nthe person to whom a notice has been under sub-section (1)
\nissued, pays the tax along with interest with twenty five percent
\npenalty within 30 days of issue of notice all procee<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 10. What happens if a person collects tax from
\nanother person but does not deposit the same with
\nGovernment?
\nAns. As per Section 52 of MGL, every person who has
\ncollected from any other person any amount as representing
\nthe tax under this Act, shall deposit the said amount to the
\ncredit of the Central or a State Government, regardless of
\nwhether the supplies in respect of which such amount was
\ncollected are taxable or not.
\n147
\nQ 11. In case the person does not deposit tax
\ncollected in contravention of Section 52, what is the
\nproper course of action to be taken?
\nAns. Notice to be issued. Principles of natural justice to
\nbe followed and order to be issued. It is to be noted that
\nsuch order has to be invariably issued within 1 year of
\ndate of issue of notice. However there is no time limit for
\nissue of show cause notice. Thus, in such cases duty can be
\nrecovered even after ten years.
\nQ 12. Is there any time limit to issue notice in cases
\nunder Sec<\/p>\n
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\nthe competent authority, distrain any movable
\nor immovable property belonging to or under
\nthe control of such person, and detain the same
\nuntil the amount payable is paid; if the dues
\nremains unpaid for a period of thirty days after
\nany such distress, he may cause the said property
\nto be sold and with the proceeds of such sale,
\nmay satisfy the amount payable and the costs
\nincluding cost of sale remaining unpaid and pay
\nthe surplus amount, if any, to such person;
\ne) The proper officer may prepare a certificate
\nsigned by him specifying the amount due
\nfrom such person and send it to the Collector
\nof the district in which such person owns any
\nproperty or resides or carries on his business
\nand on receipt of such certificate, the Collector
\nshall proceed to recover from such person the
\namount specified as if it were an arrear of
\nland revenue.
\nQ 14. Can the proper officer allow payment of tax
\ndues in installments?
\nAns. Yes, in c<\/p>\n
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\ndisposal.
\nQ 16. If a person liable to pay tax has certain tax
\nliability and in the meantime he transfers his business
\nto another person, what happens to the existing tax
\nliability?
\nAns. Where any person liable to pay tax, transfers his
\nbusiness in whole\/part, by sale, gift, lease, leave and
\nlicense, hire, or in any other manner, then such person
\nand the person to whom the business is transferred shall
\n150
\njointly and severally be liable to pay the tax, interest or
\npenalty due from the taxable person up to the time of such
\ntransfer, whether such dues has been determined before
\nsuch transfer, but has remained unpaid or is determined
\nthereafter.
\nQ 17. What happens to tax dues where the Company
\n(taxable person) goes into liquidation?
\nAns. When any company is wound up and any tax or other
\ndues determined whether before or after liquidation that
\nremains unrecovered, every person who was a director of
\nthe company during the period for which the ta<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nperson, whose business is carried on by any guardian
\n\/ trustee or agent of a minor?
\nAns. Where the business in respect of which any tax is
\npayable is carried on by any guardian\/trustee \/ agent of
\na minor or other incapacitated person on behalf of and for
\nthe benefit of such minor\/incapacitated person, the tax,
\ninterest or penalty shall be levied upon and recoverable
\nfrom such guardian \/ trustee \/ agent.
\nQ 20. What happens when the estate of a taxable
\nperson is under the control of Court of Wards?
\nAns. Where the estate of a taxable person owning a business
\nin respect of which any tax, interest or penalty is payable
\nis under the control of the Court of Wards\/Administrator
\nGeneral\/Official Trustee\/Receiver or Manager appointed
\nunder any order of a Court, the tax, interest or penalty
\nshall be levied and recoverable from such Court of Wards\/
\nAdministrator General \/ Official Trustee \/ Receiver or
\nManager to the same extent as it would be determined and
\nrecoverable f<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ndirecting a GSTofficer sub-ordinate to him to file an application
\nto First Appellate Authority (FAA). Such application is then
\ntreated by the FAA as if it were an appeal.
\nQ3.
\nWhat is the time limit to file appeal to First
\nAppellate Authority?
\nAns. The time limit is fixed as 3 months from the date of
\ncommunication of order or decision.
\n155
\nQ4.
\nWhether this time limit applies even for the
\ndepartmental appeal\/application filed consequent
\nto order of Commissioner of CGST?
\nAns. Yes. It applies even for such applications filed which
\nare to be treated as appeal and all the provisions of appeal
\nare made applicable for such application as well.
\nQ 5.
\nWhether the first appellate authority has any
\npowers to condone the delay in filing appeal?
\nAns. Yes. He can condone a delay of upto one month from
\nthe end of the prescribed period of 3 months for filing the
\nappeal (3+1), provided there is “sufficient cause” as laid
\ndown in the proviso <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nCredit Rules 201…; and
\n(iii) amount of fee levied or penalty imposed.
\nQ 10. Whether in an appeal the FAA can pass an order
\nenhancing the quantum ofduty\/fine\/penalty\/reduce
\nthe amount of refund\/ITC from the one passed by the
\noriginal authority?
\nAns. The FAA is empoweredto pass an order enhancing the
\nfees or penalty or fine in lieu of confiscation or reducing
\nthe amount of refund or input tax credit provided
\nthe appellant has been given reasonable opportunity of
\nshowing cause against the proposed detrimental order.
\n(First Proviso to Section 79(10)).
\nIn so far as the question of enhancing the duty or deciding
\nwrong availment of ITC is concerned, the FAA can do so
\nonly after giving specific SCN to the appellant against the
\nproposed order and the order itself should be passed within
\nthe time limit specified under Section 51. (Second Proviso
\nto Section 79(10).
\n157
\nQ 11. (only for SGST law) What is the provision
\nrelating to pre-deposit<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\norder passed under the Act by his subordinates?
\nAns. Yes. Section 80(1) of SGST Act authorises
\nCommissioner to call for and examine any order passed by
\nhis subordinates and in case he considers the order of the
\nlower authority to be erroneous in so far as it is prejudicial
\n158
\nto revenue, he can revise the order after giving opportunity
\nof being heard to the noticee.
\nQ 14. Can the Commissioner of SGST order for staying
\nof operation of any order passed by his subordinates
\npending such revision?
\nAns. Yes.
\nQ 15. Are there any fetters to the powers of
\nCommissioner under SGST to revise orders
\nofsubordinates?
\nAns. Yes. The Commissioner shall not revise any order if
\n(a) the order has been subject to an appeal under section
\n79 or under section 82 or under section 87 or under section
\n88; or
\n(b) more than three years have expired after the passing of
\nthe decision or order sought to be revised.
\nFor details of these and some other “fetters”, please refer to
\nSec<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nQ 20. Bring out the differences in appeal (to
\nTribunal) provisions under CGST & SGST?
\n(i) The provisions under Section 82 of SGST Act for
\nappeal by any person aggrieved by the order or
\ndecision passed against him by First Appellate
\nAuthority are essentially similar to provisions
\ncontained in Section 82 of CGST Act and
\ndiscussions made therein are equally applicable
\nto section 82 of SGST as well.
\n160
\n(ii) In addition to the above the provision of Section
\n82 of SGST Act also covers an appeal to be filed
\nto Appellate Tribunal against the revisionary
\norder passed by Commissioner.
\n(iii) However the provisions relating to appeal by
\nthe revenue against the order of first appellate
\nauthority as CGST Act is not provided in SGST
\nAct since the revisionary powers (against the
\norders passed by the FAA, who in the states is
\nlikely to be “subordinate” to the Commissioner)
\nis provided to Commissioner to SGST.
\n(iv) In addition, the person aggrie<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nof a transaction(s) being intra-State or inter-State; or a
\nmatter where two or more States, or a State and Center,
\nhave a difference of views regarding place of supply, then
\nappeal against such order shall lie to the Supreme Court
\nand not High Court.
\nQ 23. What is the time limit for filing an appeal
\nbefore the High Court?
\nAns. 180 days from the date of receipt of the order
\nappealed against. However, the High Court has the
\npower to condone further delay on sufficient cause being
\nshown.
\n****
\n162
\nAdvance Ruling
\n17. Advance Ruling
\nQ 1. What is the meaning of Advance Ruling?
\nAns. As per section 94 of Model CGST\/SGST Law, 'advance
\nruling' means a written decision provided by the authority
\nto an applicant on matters or on questions as enumerated
\nin section 97 and appeals thereon (section 99).
\nQ2.
\nWhich are the matters enumerated in Section
\n97 for which advance ruling can be sought?
\nAns. Advance Ruling can be sought for <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nby the applicant;
\nii. attract Foreign Direct Investment (FDI);
\niii. reduce litigation;
\niv. pronounce ruling expeditiously in transparent
\nand inexpensive manner.
\nWhat will be the composition of Authority for
\nadvance rulings (AAR) under GST?
\nAns.
\n'Authority for advance ruling' (AAR) shall comprise
\none member CGST and one member SGST. They will
\nbe appointed by the Central and State government
\nrespectively. Their qualification and eligibility condition
\nfor appointment will be prescribed in the Model GST Rules.
\n(Section 95).
\nQ 5. What is the Appellate authority for advance
\nruling (AAAR) and what would be its composition?
\nAns. Appellate authority for advance ruling (AAAR) will
\nhear appeal against advance ruling given by the AAR. This
\nwill comprise of two members namely Chief Commissioner
\n166
\nof CGST designated by the Central Board Excise and Customs
\n(CBEC) and Commissioner of SGST having jurisdiction over
\nthe applicant. (Section 96).
\nQ6. How may AAR and AAAR w<\/p>\n