Frequently Asked Questions on Goods & Service Tax

Transcription

1 Frequently Asked Questions on Goods & Service Tax 1 P a g e

2 Foreword The Goods and Services Tax (herein after referred to as GST ) is made effective from 1st July, 2017 which is just older than a year. GST is a game changer in each of the areas viz., business, profession, etc. There have been major changes in the way businesses are being run viz., major revamp in business structuring. GST was a much awaited tax reform not only by the industry but even by the Government. The introduction of GST has lead to subsuming of taxes both at the Center and State. During the journey of GST in the past one year, there have been number of challenges due to changes in the law by issuance of notifications, circulars, etc., The challenges faced by the industry could be in various areas such as classification, place of supply, time of supply, filing of return, registration, closure of business, movement of goods, reverse charge, etc., There have been a number of changes with regard to the procedural aspects of the law. This material is an attempt to address the basic doubts that a businessmen or professionals could encounter in dealing GST, based on the latest position of law. Lastly, we would thank the Team - Indirect Taxes of M/s Shekar & Yathish, Chartered Accountants, Bangalore whose efforts are to be recognized. The illiterate of 21 st Century is not the one who doesn t know how to read and write but the one who doesn t change. You can count on the phrase Change is the only constant. By CA Chandrashekar B D Chartered Accountant 2 P a g e

3 Contents OVERVIEW OF GST... 4 DEFINITIONS... 6 REGISTRATION LEVY UNDER GST REVERSE CHARGE TIME OF SUPPLY (TOS) PLACE OF SUPPLY (POS) INPUT TAX CREDIT (ITC) VALUATION CONCEPT OF PURE AGENT TAX INVOICE, DEBIT & CREDIT NOTES ACCOUNTS AND RECORDS AUDIT RETURNS E-WAY BILL REFUNDS ANTI PROFITEERING DEEMED EXPORTS TRANSITIONAL PROVISION READY RECKONER FOR VARIOUS PROVISIONS UNDER GST QUICK REFERENCE QUERIES & FEEDBACK P a g e

4 OVERVIEW OF GST 1) What is Goods and Service Tax (GST)? It is a destination-based tax levied on consumption of goods and services. It is levied at all stages (i.e. from manufacturer up to consumer) on the value addition of goods or services. With the elimination of multiple taxes leading to seamless flow of credit, cascading effect of tax would be reduced. GST is expected to bring down the cost to final consumer. 2) What exactly is the concept of destination-based tax on consumption? Consumption based tax or Destination based tax means the amount of tax collected will flow to the State where consumption takes place. This concept is very well brought out in place of supply provisions. The authority to collect tax will be the state in which the place of supply is warranted. In earlier taxation regime, the point of taxation was different i.e. manufacture in case of Excise, Sale in case of VAT and Provision or agreeing to provide, in case of service. With the convergence towards supply, a state consuming the supply would get the revenue. 3) Which of the taxes are subsumed under GST? Following are taxes subsumed: i. Central Taxes Central Excise duty; Duties of Excise (Medicinal and Toilet Preparations); Additional Duties of Excise (Goods of Special Importance); Additional Duties of Excise (Textiles and Textile Products); Additional Duties of Customs (commonly known as CVD); Special Additional Duty of Customs (SAD); Service Tax; 4 P a g e

5 Central Surcharges and Cesses so far as they relate to supply of goods and services. ii. State taxes: State VAT; Central Sales Tax; Luxury Tax; Entry Tax (all forms); Entertainment and Amusement Tax (except when levied by the local bodies); Taxes on advertisements; Purchase Tax; Taxes on lotteries, betting and gambling; State Surcharges and Cesses so far as they relate to supply of goods and services. 4) Which are the commodities proposed to be kept outside the purview of GST? Alcohol for human consumption; Petroleum Products namely petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel; The erstwhile taxation system of State Excise & VAT would continue with respect to the above commodities. 5) What will be the status of Tobacco and Tobacco products under the GST regime? Tobacco and tobacco products would be subject following levy: a. Central Excise duty under Central Excise Act, 1944 b. National Calamity Contingency Duty (NCCD) [on few items] c. GST under CGST Act, 2017 & d. Compensation Cess under Compensation Cess Act, P a g e

6 6) How imports will be taxed under GST? Import of goods or services from another country will be treated as interstate supply and IGST will be levied on such supplies as per IGST Act, 2017 read with Customs Tariff Act, ) Are Exports liable to GST? Exports are held to be Zero Rated supplies under GST, meaning there will be no tax on export of Goods or Services or both. Supplies to SEZ are also treated in par with Exports and are Zero Rated supplies. However, Supplies to 100% EOUs, STPs, EHTP are not considered as Zero Rated Supplies. DEFINITIONS 8) What are exempted supplies under GST? Section 2(47) of CGST Act, 2017 defines exempt supplies which means any supply of goods or services or both which attracts nil rate of tax or which are wholly exempt from levy of GST and includes non-taxable supplies. 9) Whether Aggregate turnover includes Exempted Supplies? Yes, Aggregate turnover includes Exempt Supplies, Taxable Supplies, and Export of goods or services but excludes inward supplies liable to reverse charge, taxes under GST viz., Central tax, State Tax, Integrated Tax & Cess. As per definition of Exempt supplies, Non-taxable i.e. Non-GST Supplies are to be included under Exempt supplies. Hence Aggregate turnover includes all types of supplies. 10) A person availing composition scheme during a financial year crosses the turnover of Rs.1 Crore in the month of December. Will he be allowed to pay 6 P a g e

7 tax under composition scheme for the remaining period of the year i.e. till 31st March? No, the option of Composition scheme availed shall lapse from the day on which his aggregate turnover during the financial year exceeds Rs.1 Crore. He will have to convert into regular scheme and file GST returns. 11) Whether the goods directly supplied from the job worker s premises will be included in the aggregate turnover of the job worker? No, it will not be included in aggregate turnover of job-worker but the same will be included in aggregate turnover of the principal supplier. However, the value of goods or services used by the job worker for carrying out the job work will be included in the value of services supplied by the job worker. 12) Whether transaction in securities is covered under the scope of levy of GST? One of the ingredients for a levy to be attracted under GST is that there shall be supply of goods or services or both. Definition of Goods provided under Section 2(52) of the CGST Act, excluded securities from the definition and hence the same is outside the scope of levy. 13) Whether dealing in foreign currency or money exchange is classified as a good or a service? Section 2(52) of CGST Act, 2017 specifically excludes money and securities from the definition of goods. However, as per Section 2(102) of CGST Act, 2017, Services means anything other than goods, money and securities but includes use of money or its conversion from one currency or denomination to another currency or denomination. Hence dealing in foreign currency or money exchange is classified as Service. Value of such supply of services shall be determined as per Rule 32 of CGST Rules, P a g e

8 14) What is composite supply under GST? What rate of tax to be applied for Composite supply? A Composite Supply is a transaction where two or more goods or services are supplied together and one of the ingredients of supply, known as Principal Supply, gives the essential character for the entire supply. In such a case, rate of tax applicable to Principal Supply would apply for the entire bundle. For instance, Air conditioner (A.C.) is sold, compulsory installation to be nominal cost by the seller only. Here the dominant intention of the buyer is to buy A.C., Installation is ancillary to the supply of A.C. So, the rate of tax applicable for A.C. should be applied for installation charges as well. 15) What is mixed supply under GST? What rate of tax to be applied for Mixed supply? Whether Dry fruits box with chocolates are supplied in a single package with one MRP. Can this be treated as Mixed Supply? A Mixed Supply is a transaction where two or more goods or services are supplied together for a single price and none of the ingredients of supply gives the essential character for the entire bundle. In such a case, rate of tax applicable to commodity having highest tax rate would apply for the entire bundle of mixed supply. In the instant case, neither the dry fruits nor the chocolates provide the essential character for the entire supply and it is for a single price. So the transaction is a Mixed Supply and rate of tax for the package will be the rate of chocolate or dry fruit, whichever is higher. 16) What is the tax liability i.e. Rate of tax on mixed and composite supply? Composite supply The tax rate applicable to the principle supply. Mixed supply The tax rate which is highest amongst all the supplies. 8 P a g e

9 17) Whether Works contract will be treated as Supply of goods or services under GST? Works contract is a transaction where there is both transfer of goods as well as service and the same is towards construction, erection, fitting out etc. of an immovable property. As per Schedule II to CGST Act, 2017 Works contract is a deemed to be a Service under GST. 18) Whether supplies made without consideration will also come within the purview of supply under GST? Yes, supply made without consideration will also be liable to GST, but restricted to only those activities which are specified in Schedule I to the CGST Act, ) Some capital goods like jigs and fixtures are non-usable after their use and normally sold as scrap. What is the treatment of such items in job work provisions if same is not returned within 3 Years? Generally, capital goods have to be returned within 3 years to the person sending such goods for job work. If the same is not returned within this period, it shall be treated as outward supply to the sender of capital goods. However, such condition is not applicable to moulds, dies, jigs and fixtures or tools sent to job-work. 20) Mr. Raghuram organizes various business exhibitions and is registered under GST in the state of Karnataka. Mr. Raghuram had gone for providing such services in the state of Andhra Pradesh for 30 days. Is he required to take registration in the state of Andhra Pradesh? Yes, as per Section 2(20) of CGST Act 2017, Mr. Raghuram falls under the category of Casual Taxable Person which means a person who occasionally undertakes transactions involving supply of goods or services or both in the 9 P a g e

10 course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. Therefore, Mr. Raghuram is required to be registered as casual taxable person for providing the services in Andhra Pradesh. 21) Whether Petroleum crude, high speed diesel, motor spirits included in Non- Taxable Supply? Yes, Non-taxable Supply means a supply of goods or services or both which is not leviable to tax under CGST Act, 2017 or under the IGST Act, All the goods mentioned above are not leviable to tax and hence included under Non-taxable supply. 22) Whether inward supplies on which recipient of goods/services has paid tax (RCM0 are to be considered in calculation of Aggregate Turnover? a. The value of Inward supplies on which the recipient is required to pay tax under Reverse charge is not to be included while calculating the value of aggregate turnover of recipient. b. However, the value of such supplies would be part of aggregate turnover of the supplier of such supplies even though supplier is not liable to pay tax on the same. 23) Will interest income be included in calculating aggregate turnover? As per Section 2(6) of CGST Act, 2017, aggregate turnover means the aggregate value of all taxable supplies, exempt supplies, export of goods or services or both, inter-state supplies of person having same PAN computed on all India basis excluding taxes. Interest income is an exempted supply and hence the same shall be included in Aggregate supply definition 10 P a g e

11 REGISTRATION 24) What are the cases for which registration is mandatory? Persons making interstate taxable supply, except person making interstate supply of certain handicraft goods; Casual taxable persons making taxable supply; Persons who are required to pay tax under reverse charge; Nonresident taxable persons making taxable supply; Persons who makes taxable supply of goods or services or both on behalf of other taxable person as an agent or otherwise; Input service distributor whether registered or not under this act; Every electronic commerce operator. 25) Can a person without GST registration claim input tax credit and collect taxes? If person is unregistered he is not liable to collect taxes from customer and also ineligible to claim any input tax credit which is paid for purchases. 26) What is the maximum time limit for taking registration? A Taxable person is required to take registration within 30 days from the day when he is liable to take registration. 27) A, a non-resident, commences his business on and he applied registration on , is it valid? No, the application is not valid since a non-resident taxable person and casual taxable person should apply for registration under GST at least 5 days prior to commencement of business. It is presumed that such non-resident taxable person propose to undertake taxable supplies and hence liable to take registration prior to commencement of business. 11 P a g e

12 28) If person having number of branches in different states with same PAN number, can he apply single registration? No, every person who is liable to take registration will have to take registration separately for each of the state where he has business operation. 29) Whether PAN is mandatory for registration in GST? Yes, as per Sec 25(6) of CGST Act, 2017, every person who has been issued Permanent Account Number (PAN) under Income Tax Act 1961 is eligible for grant of registration. Exception: PAN is not mandatory for nonresident taxable persons. 30) Is every person who occasionally undertakes supply of goods or services in a state without having a fixed place of business, required to take registration as a Casual Taxable person (CTP) under GST? Generally, there is no threshold limit for registration as CTP. Hence it may be concluded that every person is required to take CTP registration. However, a Casual taxable person making supply of specified handicraft goods need to register only if their aggregate turnover crosses Rs. 20 Lakhs or Rs. 10 Lakhs in case of special category states. 31) How many days is a registration certificate valid for the non-resident taxable person and casual taxable person? The registration certificate is valid for the period specified in application for registration or 90 days from effective date of registration, whichever is earlier. This can be further extended for another 90 days. 12 P a g e

13 32) Whether a person is required to take registration if he earns commission up to Rs 20 lakhs by referring clients. However, supply of goods is made by Supplier only? Section 24 (vii) envisages that a person making taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise is required to be registered irrespective of turnover criteria. In the given situation, supply of goods is made by the supplier only. Therefore, Section 24(vii) doesn t apply and hence turnover criteria of Rs. 20 Lakhs shall be applicable as per Section 22(1) of the Act. However, the commission earned is up to Rs.20 Lakhs, registration under GST is not mandatory. 33) Person making export of Services having turnover less than Rs. 20 lakhs, is he required to register compulsorily? He is not required to take compulsory registration if such person is making export of services having turnover less than Rs. 20 lakh. (Notif No. 10/2017- IT) 34) What happens when a taxable person hasn t filed GST returns from the date of registration? What is the remedy available? If a taxable person hasn t filed GST returns for a continuous period of six months, then the proper officer may cancel the registration of such person as per the provisions of Section 29(2) of CGST Act, 2017 only upon issuance of Show Cause Notice and upon providing the person an opportunity of being heard. In such circumstances, such person may request the officer with a valid reason for such non-filing of returns. If the officer is satisfied, he may provide an opportunity for such person to file the returns within the time frame allowed by the officer. 13 P a g e

14 35) How to reply to SCN received for cancellation of GST registration in the portal. Under which menu is the option to reply is available? Presently, the online feature is not available. One may prepare reply in REG- 18 (Prescribed format) and submit physically to the jurisdiction officer within 7 days of the receipt of notice. 36) A cloth dealer pays commission to his agents to facilitate the sale; will the agent be covered u/s 24 for compulsory registration? Sec 24 of the act states that any person who supplies goods or services or both on behalf of other taxable person needs to get registered compulsorily. In the instant case the agent only facilitates the sale and does not effect the supplies. Therefore, such agent is required to be registered only if his turnover exceeds Rs. 20L. LEVY UNDER GST 37) What are the ingredients for Levy of GST to attract? There should be Goods or Services involved; Goods or Services should be supplied Supply should be between persons Supply should be in the course or furtherance of business Supply should be for a consideration. Activities specified in Schedule I 38) Is it required to distinguish whether a particular supply involves supply of goods or services or both? Yes, CGST Act, 2017 & IGST Act, 2017 specifies certain provisions separately for goods and separately for services. For instance, time of supply, place of 14 P a g e

15 supply etc. provisions is prescribed for goods and services separately. Moreover rate applicable for supply of goods and services are different, hence there is a need to distinguish. 39) Mr. A, a registered person, manufacturer of computer, selling computer to his son without consideration. Is it a supply under GST? As per Schedule I to CGST Act, 2017 any supply of goods or services or both without a consideration between related person or distinct person is considered as supply. Son of Mr. A is a related person as per Explanation to Sec 15. Hence the sale of computer by Mr. A to his Son is treated as supply. 40) The employee providing services to employer in the course of employment, is it a supply under GST? No, as per Schedule III of CGST Act, the services by employee to employer in the course of employment are neither a supply of goods nor supply of services and hence it is not a supply under GST. 41) Reliance fresh, a retail trader selling combination of Ashirvad Atta, packed sugar and loose eggs for a price of Rs.600/-. What is the tax rate applicable here? The combination of Ashirvad Atta, packed sugar and loose eggs are not naturally bundled in the ordinary course of business. It shall be considered as a Mixed supply. Therefore, the tax rate which is highest amongst all the supplies in a mixed supply shall be rate for such supply. The tax is to be levied on total value of supply including exempt supply (i.e. Exempt supply in the above case is loose eggs). 42) XYZ.com, an E-commerce operator providing services by way of transportation of passengers by a radio taxi. E-commerce operator does not 15 P a g e

16 have physical presence in India and don t have any representative in India. Is the XYZ.com is liable to pay GST? Since the services provided by e-commerce operator by way of transportation of passengers by a radio taxi is notified service for payment of taxes by such E-commerce operator, XYZ.com is liable to pay GST even though such E- commerce operator does not have the physical presence in India. The said E- commerce operator must appoint the legal representative to pay tax on behalf the company. 43) Can the GST council recommend rate of CGST above 20%? CGST Act, 2017 specifies highest rate of tax on any supply not to exceed 20%. Hence it is not possible for the GST Council to recommend rate more than 20% until amendment to CGST Act takes place for specifying a higher rate. 44) Under Service tax law property tax paid on Commercial property was allowed as deduction from the gross rent collected and then Service tax liability was calculated. Can Property tax paid be deducted from gross rent collected under GST Law? Are there any other deductions allowable? Unlike Service Tax Law, there is no such provision in GST allowing deduction of Property Tax paid on commercial property from the Rent collected. Also there are no other deductions allowable under GST towards rent collected. 45) Can a company having its presence allover India claim credits on common costs incurred by Head Office for creating a website, upkeep and maintenance? In case of common services such as website charges in the instant case, benefit of such services is not limited to the head office claiming such expense. It relates to all its branches allover India. Considering that GST comes with a state wise registration/business vertical wise registration, each 16 P a g e

17 of the entities, though coming under same PAN would be considered as a separate entity for the purpose of GST levy. Considering that credits on such common services relates to all the branches of such entity, there is a requirement to apportion the credit to all branches. For this, following are the probable options i) Input Service Distributor registration can be taken Where the credits would be apportioned among the entities in the ratio of turnover as per GST provisions. ii) Head office receiving such credits has to cross-charge to other branches located in different state with respective on some rational basis. 46) Is it required to issue an invoice or any other documents by the owner for reimbursement of water/electricity charges from tenant? Water and electricity finds its mention in exempted goods. For supply of exempted goods, there is a requirement to raise a bill of supply in terms of Rule 49 of CGST Rules, ) An apartment is booked on paying 30% as advances before the OC (Occupancy Certificate) is received. The remaining 70% is paid post OC Certificate. On what value GST is to be paid? This is a case where the apartment is sold before obtaining OC. As per levy provisions, entire consideration would be liable to 18%. Valuation for such supply shall be two third towards construction portion which is liable to GST and one third is towards un-divided share in land, which is out of GST. Therefore effective rate will be 12% (18% X 2/3). 48) Cash prize received in a contest, is GST applicable? In order to attract levy under GST, there shall be supply. Following are the ingredients of supply: 17 P a g e

18 a. There shall be goods or services; b. There shall be consideration; c. It shall be in the course or furtherance of business. Since, the cash prize received in a contest doesn t satisfy the definition criteria of supply, levy of GST doesn t attract. 49) Is GST applicable on procurement and selling of goods outside India? No, the GST is not applicable on the procurement and selling of goods outside India. Section 7 of CGST Act, 2017 which deals with definition of supply, does not cover the procurement and selling of goods outside India. 50) Value of service made to employee at discount is shown in invoice. Which value is to be adopted for valuation purpose? The transaction between the Employer-Employee is a related party transaction for which the transaction value would not be applicable for levy of GST. Rule 28 of CGST Rules 2017 is applicable for valuation of supply which should be considered by employer as follows: a) Open Market Value b) If Open Market Value is not available, value of like kind or quality c) If value is not determinable according to a) or b) above, then cost of services + 10% or residual method should be adopted. 51) How is servicing of cars involving both supply of goods (spare parts) and services (labour), where the value of goods and services are shown separately, to be treated under GST? Where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately. Hence in the instant case supply of spare parts shall be 18 P a g e

19 leviable to tax as goods and supply of Labour shall be leviable to tax as service. 52) School collecting fees for uniform, books and in the receipt, they give bifurcation for the amount collected towards uniform, caps, sweater, blazer, note books, text book. Can we take a stand that it is a composite supply and therefore exempt from GST? We can say that all the amounts collected towards various elements is towards imparting education and can be categorized as composite supply in relation to provision of Education Services. The said composite supply is covered under the exemption notification vide entry no. 66 (a) to Notification 12/2017 Central Tax (Rate) dated by way of services provided by an educational institution to its students, faculty and staff and hence are exempt from GST. 53) Will the provision of development rights from Land owner to builder be liable to GST? Is this activity a service and liable to GST? Is there a requirement for all land owners to register in GST and charge GST on transferring development rights? Yes, the said activity will be considered as provision of Service and liable to GST and all the land owners are required to register in GST and charge GST on Transferring Development rights. However, the liability to pay tax arises upon transfer of possession or right in the constructed complex, building or civil structure by builder to land owner by entering into a conveyance deed or similar instrument which is clarified vide Notification No.4/2018- Central Tax (Rate) dated ) Residential premises rented out to a company fora) Use as residence of its employees b) Use as guest house for its employees. Is it taxable in GST for both situations? 19 P a g e

20 The letter of the law requires basically two conditions to be reviewed: 1. Is it a residential property? The plan sanction, occupancy certificate and the property tax payment from the Corporation would clarify this aspect. 2. Is it being used as a residence? On the basis of rental agreement, it can be depicted as to whether the said premise is used for business or residential purposes. Therefore, if answer for both the questions is affirmative, rent from residential premises is exempt from GST for both of the above questions. 55) For exports with payment of IGST, how tax rate and tax amount are to be mentioned on invoice? GST is not to be charged to customer i.e. to say total value of invoice should not include GST portion. The amount of GST should be mentioned in inside column on the invoice i.e. to say the amount of GST is just indicated on invoice and not added to total invoice value. Eg: Agreed value for Export is Rs 2,00,000, GST on 18% is Rs 36,000, such amount is to be shown in inner column on invoice for GST purpose. Total invoice value shall be Rs. 2,00,000/- only. However, Invoice should contain the following statement Supply meant for Export on payment of Integrated tax of Rs. 36,000/- 56) Whether sale of duty credit Scrips attract GST? Levy under GST attracts on sale of duty credit scrips. However, Government has exempted such transaction from payment of taxes vide Notification No.35/2017- Central Tax (Rate) dated ) Medicine used in providing treatment to patients admitted in a hospital. What is the tax implication of such medicines? 20 P a g e

21 Services by clinical establishment to patients are exempt under GST. During supply of such services some medicines are used for treatment viz medicines used during an operation, etc. This supply shall be considered as composite supply which involves supply of two or more goods or services. In such cases principal supply shall be treatment to patients which is exempt. Hence GST shall not be leviable on sale of medicine to patients. 58) Is supply of Alcohol to be reported under GST as Non GST Supply? Alcohol is out of GST as per charging section of GST Act i.e. Sec 9. Hence the same is Non-GST supplies and to be reported under Non GST supply. 59) Whether a housing society formed under the respective acts for the welfare of its members, required to get registered under GST? Co-operative/Housing society is required to get registered only if its aggregate turnover exceeds Rs.20 Lakhs. 60) Is there any exemption for a housing/co-operative society against its contributions received from its members? Yes, if such contributions are towards reimbursement of charges or towards sourcing of goods or services from a third party for its common use, exemption upto Rs.7,500/- per month per member has been provided in Notification no.12/2017- Central Tax (Rate) dated ) What are the different rate of taxes applicable for supply of food or drinks or catering services provided in trains or platforms etc.,? Central Government with the approval of GST implementation committee has clarified that the rate of tax applicable for supply of food or drinks or providing catering services in trains, platforms or static units would be 5% without ITC. 21 P a g e

22 62) Whether services of accommodation, conferencing, etc., provided to SEZ developer or SEZ unit within the same state, be treated as inter-state or intrastate supply transaction? As per the provisions of IGST Act, 2017, supply of goods or services or both to a SEZ unit or a SEZ developer shall be treated as an inter-state supply. However, as per the place of supply provisions, supply of services by way of accommodation in any immovable property for organizing any functions shall be the location at which the immovable property is located. In this case, location of supplier and place of supply is in the same state, it would be treated as an intra-state supply transaction. It is an established principle of interpretation of statutes that in case of an apparent conflict between two provisions, the specific provision shall prevail over the general provision. Therefore, the said transaction shall be an inter-state transaction. Clarified vide Circular no. 48/22/2018-GST. REVERSE CHARGE 63) What is Reverse Charge? Generally, taxes are to be collected and paid by supplier of Goods or Services. There are certain exceptions to this general rule wherein the receiver is liable to pay taxes. Sec 9(3) & 9(4) of CGST Act, 2017 prescribes certain situations where the receiver of Goods or Services is required to pay tax. 64) What are the notified services for which the tax is payable by recipient on reverse charge u/s 9(3)? 22 P a g e

23 The services of transportation of goods by a Goods Transport Agency, if GTA is not charging tax at the rate of 12%. The services provided by an advocate to any business entity. Services provided by an arbitral tribunal to any business entity. Sponsorship services provided to any body corporate or partnership firm. Services provided by the central government, state government or union territory to any business entity. Excluding the following: o Renting of immovable property; o Services of department of post such as speed post, express parcel post, life insurance and agency services to a person; o Services in relation to an aircraft or a vessel; o Transport of goods or passenger; Renting of immovable property service provided by the central government, state government or union territory to a person Registered under CGST Act, Services supplied by a director of company to the said company. Services by an insurance agent to any person carrying on insurance business. Services by a recovery agent to banking or financial institution or a nonbanking company. Supply of services by an author, music composer, and photographer, artist to a publisher, music company, and producer. Any service received from a person located in a non-taxable territory. 65) When is tax payable under Sec 9(4)? Sec 9(4) As per the provisions, when any goods or services are supplied by a non-registered person to a registered person, such registered person receiving goods or services is required to pay tax. ITC on such RCM can be taken subject to conditions relating to claiming of ITC. Currently there exists exemption till for Reverse Charge under Sec 9(4). However, there is no exemption for Reverse Charge Tax u/s 9(3). 23 P a g e

24 66) Mr. A registered supplier providing accommodation services through yatra.com, an E-commerce operator. Who is liable to pay tax? Accommodation service is notified by the central government on which tax is payable by the E-commerce operator. Hence, e-commerce operator has to pay taxes on such services. 67) Mr. B has two manufacturing units in Karnataka and eligible for the composition levy? Can he opt for composition scheme only for one unit and act as a normal tax payer for other unit? The person eligible for composition levy can opt only if all the units of business having same registration opts for composition scheme. 68) The manufacturer of computer components has a turnover of Rs.1.20 crore, which includes a taxable supply of 70 lakhs, exempt supply of 29 lakhs and 21 lacs of inward supply on which tax is payable on RCM. Can he opt for composition scheme? The manufacture can opt for composition scheme as Aggregate turnover excluding the value of supply on which tax is payable/paid on RCM is less than Rs.1 Cr i.e. 1.2 Cr - 21 lakhs = Rs. 99 lakhs. In case of manufacturer, current rate of Composition Tax is 1%, to be paid even on exempted turnover, whereas a trader is required to pay tax only on his taxable turnover. 69) Mr. Arun, a manufacturer of ice cream has a turnover of 75 lakhs; can he opt for composition levy even if he satisfied all the conditions related to composition levy? Mr. Arun cannot opt for composition levy even though his aggregate turnover less is than 1 Crore. Because as per the Notification No. 8/2017-Central Tax, a manufacturer of ice cream is excluded specifically from exercising option for composition levy. 24 P a g e

25 70) Whether temporary transfer of business assets without any consideration would attract levy under GST? No, temporary transfer of business assets without any consideration is not leviable to GST as the basic ingredient of supply being consideration is absent. Further, this transaction does not fall under Schedule I of CGST Act, 2017 which considers transactions as supply even without consideration. 71) Whether transfer of goods or provision of services from one branch to another branch of same establishment located within the same state is leviable to GST? Since GST is state specific registration, multiple branches located within same state will get registered under single GSTIN. Such transfers are not leviable to GST, unless business vertical registrations are taken. Such business entity shall transfer goods under the cover of a delivery challan as prescribed under CGST Rules, ) What is the treatment of transfer of goods or provision of service by one branch to another branch located at different states? As GST registration is state specific, branches located in different states of same business entity will be registered separately under respective states as they are treated as distinct person s u/s-25 (5) of CGST Act, Such transfers attract GST and the business entity is liable to pay tax. 73) Whether salary earned by employee in the course of employment is leviable to tax under GST regime? Supply of service by employee to employer is neither a supply of service nor a supply of goods in terms of Schedule III to CGST Act. Hence the same is not leviable to GST. 25 P a g e

26 74) What is the treatment of gifts given by employer to employee under GST? The term gift is not defined under GST. However, gift is something given without consideration, voluntarily and occasionally having no right to demand. Gifts upto Rs.50,000/- in a financial year given to an employee is outside the purview of GST. However, gifts of value exceeding Rs. 50,000/- attracts Levy and the employer is liable to pay GST. Schedule III to CGST Act, ) Whether services imported for a consideration though not in the course of business amounts to Supply to attract levy under GST? As per the definition of supply under Section 7 of CGST Act, 2017, supply includes import of services for a consideration whether or not in the course or furtherance of business. Hence, the same attracts levy under GST. 76) What is the GST impact on the government organization providing sponsorship services? It is liable under Reverse Charge Mechanism. There is no exemption for government organization providing sponsorship services. However, there is a residuary exemption entry which provides a blanket exemption upto Rs. 5,000/- in case of services provided by Government. 77) Will GST be applicable on Royalty paid to Government for mining? Services by Government to a business entity are liable to reverse charge. There is no specific exemption for royalty related services provided by Government. Hence GST is applicable. 78) Whether RCM is applicable for the directors sitting fee to co-operative banks director? 26 P a g e

27 No, RCM is not applicable in case sitting fee is paid to directors of Cooperative banks. Since, as per Notification No.13/2017 Central tax (Rate) dated services supplied by a director of a company or a body corporate to the said company or a body corporate is liable to RCM and such company or body corporate is liable to pay RCM. Body corporate is defined to have the same meaning as referred under Section 2(11) of Companies Act, 2013 which excludes co-operative society from its definition. Hence, RCM is not applicable. 79) Is RCM applicable under Sec 9(3) for fee paid to Ministry of Corporate Affairs (MCA) for enhancing share capital? RCM is applicable for any services provide by Government to business entity. Hence RCM is applicable for any fee paid to MCA for enhancing share capital. However, if value of such fee doesn t exceed Rs. 5,000, the same is exempted from levy as per Entry no. 9 of Notification 12/2017- Central Tax (Rate) dated ) Is there any case of forward charge for GTA who is paying 5% without input tax credit? If recipient of services of GTA is any person other than those mentioned in notification (RCM notification) GTA has to collect taxes and pay to Government. i.e. forward charge will apply. Eg. GTA providing services to Individual person who is not registered. Persons mentioned under RCM notification are: i) Any factory registered under or governed by the Factories Act, 1948 (63 of 1948) ii) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India iii) any co-operative society established by or under any law; or 27 P a g e

28 iv) any person registered under the GST Act v) any body corporate established, by or under any law vi) any partnership firm whether registered or not under any law including association of persons vii) any casual taxable person; located in the taxable territory 81) If GTA provides services to a registered person and they charge GST in their invoice. Whether Service recipient again needs to pay GST under RCM? Liability to pay GST in case of GTA services 5%) is on the recipient of service. GTA has no power to collect taxes as per GST law. Hence, if GTA has charged tax on its 5%, still the recipient of service being registered person needs to pay tax. However, the recipient is not required to pay tax when GTA collects 12%, since the same is under forward charge. 82) Where GTA charges 12% and he Claims ITC, does the recipient of service still liable for RCM u/s 9(3)? As per Notification No. 20/2017-CT dt Supply of GTA services to any person is 5% (without ITC) and under 12% (with ITC). Due to change from one rate to two rates for GTA services, amendment was also done in RCM notification, wherein it is stated that a GTA collecting 12%, RCM shall not apply for such cases as per Notif 22/2017-CT Dt Hence, where a GTA collects 12% GST, the recipient shall not pay tax under RCM. 83) Payment made to Advocate without making TDS, Rs.25,000/- later the client has done TDS (Rs.2,500/-) and not recovered from Advocate and considered as cost. Query for the purpose of 9(3) would it be Rs. 25,000/- or Rs. 27,500/-? 28 P a g e

29 As per Sec 15 of CGST act- Value of supply shall be the value actually paid or payable to the buyer. In the instant case, amount actually paid or payable is Rs. 27,500/- and hence RCM needs to be paid on Rs. 27,500/- TIME OF SUPPLY (TOS) 84) What is the significance of Time of Supply (TOS) Provisions? Liability to pay taxes depends upon TOS. Tax rates, Exemptions and Abatements keep changing from time to time. Thus, it is required to know precise date & time when the charging event takes effect. 85) What is the Time of supply for the cases specified below? Nature of Supply In respect of Goods In respect of Services Supply of vouchers when Date of issue of voucher Date of issue of voucher the final supply is identifiable (single purpose vouchers) Multi-purpose vouchers Date of redemption of Date of redemption of i.e. the precise supply is not identifiable voucher voucher Tax payable under Earlier of the following Earlier of the following Reverse charge dates: a) Receipt of goods; dates: a) Date of payment; b) Date of payment; b) Date immediately c) date immediately following 60 days following 30 days of of invoice date if payment invoice date not done 29 P a g e

30 In case of associated enterprises located outside India Levy of interest, late fees or penalty for delay in payment of consideration If cannot be done as above: the date of entry in the books of accounts of the recipient of supply. Not applicable Date on which the supplier receives such addition to value If cannot be done as above: the date of entry in the books of accounts of the recipient of supply. Earlier of the following: a) date of entry in books of accounts; or b) date of payment; Date on which the supplier receives such addition to value If it cannot be done by any of the above rules the time of supply will be: When a periodical return has to be filed, the date on which such return is to be filed; In any other case, the date of payment of tax. PLACE OF SUPPLY (POS) 86) What is the significance of Place of Supply Provisions? GST is primarily a destination-based consumption tax which means that the tax collected on supply of goods or services should accrue to the State in which those goods or services are consumed. While for goods determination of place of supply is relatively easier, it is difficult for services considering the intangible nature of services. Place of Supply provisions provide the place where the goods or services are said to be consumed. 30 P a g e

31 87) What are different Place of Supply Provisions? Place of Supply Goods Services Imports & Exports Other than Imports & Exports Supplier & Receiver located in India Supplier or Receiver located Outside India 88) When is a transaction liable to CGST & SGST? If Location of supplier and Place of Supply happens to be same state, then the transaction is stated as intra-state transaction and liable to CGST & SGST. 89) When is a transaction liable to IGST? If Location of supplier and Place of Supply happens to be in two different state or two different union territories or one union territory and one state, then the transaction is stated as inter-state transaction and liable to IGST. 90) What is Place of Supply for Goods for below transactions? Transaction Ans: Place of Supply Supply involves movement of Location at which goods are Goods delivered to the recipient Supply without movement of Location at which goods are Goods delivered to the recipient Assembly or installation at site Place of such assembly or installation Supplier delivering to a recipient on 1 st Leg: POS will be 3 rd person s 31 P a g e

32 direction of a third person (Bill to Ship to Transaction) 1 st leg: Supplier to the 3 rd person 2 nd leg: 3 rd person to the Recipient principle place of business & 2 nd Leg: POS will be Location at which goods are delivered to the recipient. 91) What is the place of Supply in case of Architect Services for a Building? Place of Supply for all direct services in relation to immovable property would be the Location of such Immovable Property. Since the architectural services are principally in relation to immovable property, the place of supply would be the place where the building/structure is located or intended to be located. 92) What is the place of Supply in case of Restaurant Service? Place of Supply for Restaurant Service, Catering services and like services which require the receiver to be along with the provider of Service would be the place where services are actually performed. In restaurant services, place of supply is where restaurant is located. 93) What is the place of Supply for Training Service, when supplier as well as receiver is located in India? If training service is provided to registered person, then POS will be the location of registered person receiving the service. If training service is provided to unregistered person, then POS will be the place where services are performed. 94) What is the Place of Supply of services by way of transportation of goods, including by mail or courier, when supplier as well as receiver are located in India? To Registered person POS will be the location of such person. 32 P a g e

33 To any other person POS will be the location at which such goods are given to transporter for their transportation. 95) What is the Place of Supply of Passenger Transportation Service, when supplier as well as receiver is located in India? To Registered person Pos will be the location of such person. To any other person POS will be the location where passenger gets on the conveyance for a continuous journey. 96) What is place of supply for Events, sponsorship services etc. when the supplier and recipient are locate in India? To Registered person POS will be the location of such person. To any other person POS will be the location where event is actually held If event held outside India- POS will be the location of recipient. 97) What is place of supply in case of goods which are made physically available to the supplier of service, where the supplier or the recipient is outside India? The Place of supply in such cases will be the place where the services are actually performed. Where the services are provided from remote location by electronic means POS will be the location of goods. 98) What will be the place of supply for Intermediary services where either of recipient or supplier is located outside India? Whether IGST needs to be paid or CGST+SGST? Place of supply in case of intermediary services is the Location of supplier. In case of intermediary services, the Location of supplier and place of supply is in the same state/union territory i.e. where the supplier is located and hence 33 P a g e

34 the transaction is considered as intra-state transaction. Therefore CGST+SGST needs to be paid on such transaction. 99) How to furnish Letter of Undertaking (LUT) in RFD-11 on GST Portal? All registered tax payers who export the goods or services will now have to furnish Letter of Undertaking (LUT) in GST RFD-11 form on the common portal of GSTN in order to make exports without payment of IGST. After logging into common portal, one has to select Services User Services Furnish Letter of Undertaking (LUT). An LUT shall be deemed to be accepted as soon as an acknowledgement for the same bearing the Application Reference Number (ARN) is generated online. INPUT TAX CREDIT (ITC) 100) Circumstances where input tax credit is available and not available? Use of goods/services for Taxable Supplies Zero-rated Supplies Nontaxable Supplies Exempt Supplies Nil-rated Supplies ITC Available ITC not available 101) What is the time limit for claiming ITC? Due of filing of return for the month of September of succeeding financial year (or) 34 P a g e

35 Date or filing of Annual Return (Due date is 31 st Dec of succeeding FY), whichever is earlier. 102) Supplier forgot to mention recipients GSTIN in the Sales invoice, can recipient claim ITC on such invoice? No, the recipient cannot claim ITC because one of the pre-requisite for claiming ITC as per Sec 16 of CGST Act, 2017 is that recipient should be in possession of tax invoice as prescribed under Rule 46 of CGST rules. Rule 46 states that invoice should contain GSTIN of the recipient of goods/services. Hence the recipient cannot claim ITC on such invoice. However, the recipient can request the supplier to update GSTIN in order to not lose out the credit. 103) Can a bank claim 100% ITC? A bank shall have two options as mentioned below for claiming of credit A banking company or a financial institution including a nonbanking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either comply with the provisions of reversal of credits as mentioned in Rule 42 and Rule 43 of CGST Rules, 2017 i.e. proportionate reversal based on exempt turnover Or Avail every month, an amount equal to 50% of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse. 104) Can a registered person claim Input Tax credit on sale of exempted goods or services? No, Section 17 (2) of CGST Act, 2017, restricts claim of input tax credit if the supplier only deals in nil rated/exempted goods/service. If the supplier deals 35 P a g e

36 in both exempted and taxable goods he needs to reverse Input tax credits as per Rule 42 and Rule 43 of CGST rules, ) Recipient ordered food for staff and received a Tax invoice from XYZ Hotel, can recipient claim ITC? No, as per Sec 17 (5) of CGST Act, 2017, ITC shall not be available in respect of food and beverages. 106) Can a Registered person claim Input Tax credit on Rent a Cab Service? No, as per Sec 17(5) of CGST Act, 2017, ITC shall not be available in respect of Rent-a-cab service. However ITC is available if the said services are utilized for further supply of rent-a-cab service. Or Government has notified that such services are obligatory for employer to provide to employees. 107) Recipient mentioned date of commencement of Business as 01/01/2018 in GST portal while applying for fresh registration and received certificate on 15/01/2018, recipient received invoice from supplier on 10/01/2018. Can he claim the ITC? Yes, ITC can be claimed from date of commencement of business provided it s a compulsory registration and applied for registration within 30 days from the date liable to register. However, supplier can issue a revised tax invoice within 30 days to the recipient updating his GSTIN in order to make it a valid document for claiming input tax credit. 108) What are the different rates of taxes under GST? The following are the various rate of taxes under GST: 36 P a g e

37 a. Regular Scheme: i. 5% ii. 12% iii. 18% iv. 28% b. Composition Levy Scheme: i. Trader- 1% ii. Manufacturer- 1% iii. Hotelier- 5% c. Diamond 0.25% d. Jewellery 3.00% 109) Mr. A has the IGST credit of 4,90,000/- and IGST liability 10,000, CGST liability 2,45,000 and SGST liability 2,45,000. How will he offset the tax liabilities? The credit offset mechanism is described as follows: Set-off of Credit Particulars Amount IGST Credit 4,90,000 IGST Liability 10,000 CGST Liability 2,45,000 SGST Liability (Left over balance from IGST) 2,35, P a g e

38 SGST to be paid in Cash 10, ) Whether common credit needs to be reversed in terms of Rule 42 & Rule 43, if there is an interest income on Fixed Deposits. Interest income is an Exempt income under GST. As per Rule 42 & 43 of CGST Rules, there is a requirement to restrict the Input tax credit in case there is both taxable as well as exempted sales. However, an explanation is added after Rule 42 & 43 of the said rules that interest income need not be considered as exempted turnover in arriving at the credit to be reversed. 111) If a taxable person has taxable turnover of Rs 1,00,000/- and exempted turnover of Rs 50,000/- in a month, will he be able to claim full credit of Rs 10,000 on account of services from Chartered Accountant for Auditing his accounts? In the above scenario, CA services are not specific to taxable or exempted activity but common for the business as a whole. In terms of Rule 42, credit is to be restricted to the ratio of taxable activity. Particulars Amount Taxable Turnover 1,00,000 Exempted Turnover 50,000 Total 1,50,000 Ratio of Exempted to Total Turnover 33% (50,000/150,000) Total Common Credit 10,000 Reversal under Rule 42 3,333 ITC available for setoff 6, ) A Capital Good is commonly used in manufacture of exempted and taxable goods. ITC on Capital goods available is Rs 6,000/-, Taxable turnover in the 38 P a g e

39 month of Purchase is 2,00,000 and exempted turnover 1,00,000/-. What is the credit implication? In terms of Rule 43, credit of Capital Goods used commonly for Taxable as well as Exempted turnover is spread over a period of 60 months. Every 1/60th portion has to be multiplied with the ratio of exempted turnover to total turnover to arrive at reversal. In the first month, calculation would be as follows Particulars Amount Total Credit 6,000/- 1/60 th portion 100/- Reversal ratio (1,00,000/3,00,000) 0.33 Credit to be reversed for the month 33/- Credit available on Capital goods 6,000/- Credit available for utilization ( ) 5,967/- Reversal of credit in 1 st month 33/- 113) Capital good on which Input Tax Credit is claimed is sold after 2 years. How to discharge GST on sale of such Capital good (CG), if ITC claimed was Rs 60,000/- and sale price after 2 Years is Rs 10,00,000/-, Rate of GST on asset is 5%. Section 18(6) of CGST Act, 2017 read with Rule 40 of CGST Rules, 2017 provides a mechanism to deal with such transaction which is described as follows: Tax to be paid on such sale shall be higher of the two amounts i) Balance ITC available on Capital goods= ITC claimed on purchase of CG (Less) ITC X (Multiplied by) 5% per quarter from the date of purchase. = [60,000-(60000*5%*8 quarters)] = 36,000 ii) Tax on sale of CG = 10,00,000 X 5% = 50, P a g e

40 Therefore, the tax payable on supply would be higher of the two values i.e Rs 50,000/-. 114) If damaged goods are sold at a nominal rate, do we need to reverse ITC? No. Only if the goods are written off, ITC is to be reversed in terms of Sec 17 (5) (h) of CGST Act, In case of sale at nominal price, GST would apply on such value at rate applicable as per HSN. Hence no ITC needs to be reversed. 115) In case of slump sale of business, is there a requirement to reverse the Input Tax Credit in Electronic Credit Ledger/lying in stock? The GST Input claimed need not be reversed. It can be transferred to the buying entity if liabilities are also transferred to the other company. Form ITC- 02 is the form to be filed along with CA Certificate for transfer of credit. 116) Exempted Goods are manufactured in State A and stocks transferred to State B, both units in different states are of the same company, for ultimate export out of country. Whether ITC is allowed to be taken in state A considering it to be export? Stock transfer is required as bulk cargo can be transported to one place and from there can be exported Generally, credits in relation to exempted product would be ineligible in terms of Rule 42 of CGST Rules. However, if the goods are exported, credits would be eligible irrespective of the fact that such goods are exempted. Generally, supply/transfer between two units of same entity located in different states would be considered as distinct person for levy of GST and there will be tax on such transfers. On conjoint reading of the above, supply from State A to State B is an interstate supply which is liable to GST. Since, the product in question is 40 P a g e

41 exempted; there is no tax to be paid. On obtaining these goods in State B, such goods are exported. So, it would be an interstate transaction for State A and Export transaction for State B. Due to this, unit in State A would not be eligible for any credit. 117) Mr. X a registered person under GST is constructing a commercial property for letting the property on rent/lease. The construction activity also involves purchase of lift, generator, transformer, etc. Whether the registered person will be eligible to avail ITC for these purchases and set off against the rental income? There is a specific restriction on credits in relation to expenditure for construction of Immovable property in Sec 17(5) of CGST Act, In case of materials used in construction like cement, steel, bricks, plumbing material, etc., credits will not be available as it is a part of construction and hit by Sec 17(5) restriction. However, the equipment s such as lifts, generator & transformer are plant and machinery and are not covered by Sec. 17 (5). Hence the credit may be claimed in this regard. 118) Can ITC be claimed on a landline bill if the phone is issued in the name of the partner in a partnership firm? ITC can be claimed on a landline bill, only if it is registered in the name of a partnership firm and if the phone is used for the purpose of business. If it is partially used for non-business purpose, credits would be restricted to the extent of business purpose and 5% of common credit is also to be reversed. In the present case, ITC can t be claimed since the landline bill is in the name of partner of the firm. 119) Can ITC be claimed on Architect s service in construction of immovable property, when the recipient is engaged in software industry? 41 P a g e

42 Any goods or services used in construction of immovable property would not be eligible for claim of credit in terms of Sec 17(5)(d). 120) How to transfer GST credit for sole proprietor while converting it into a firm in GST regime? Section 18(3) of CGST act, 2017 allows for transfer of ITC in case of change in constitution of a registered person. Illustrative procedure of the same is as follows: 1. First, sole proprietor has to make an application for cancellation of registration under GST. 2. The reason to be furnished for cancellation of proprietor s GST registration should be given as "change in constitution of business leading to change in PAN" from drop-down provided on the portal. 3. Further, GSTIN of firm should be quoted while surrendering registration of proprietor and the proprietor s GSTIN should be quoted while taking GST registration of the firm. 4. Upon making application for cancellation of registration, Form ITC-02 will be enabled for the sole proprietor for transferring the unutilized input tax credit lying in electronic Credit ledger. 5. Further, a Chartered Accountant or a Cost Accountant has to certify that there exist specific provision for transfer of liability, if any, from sole proprietor to Partnership firm in the transfer deed and details of such certification has to be mentioned in Form ITC ) A business unit is being set up, deriving partial taxable income and partial exempt income. Further, it had incurred pre operational expenses. Whether ITC can be fully availed in such eligible items and whether any reversal is required to be done in future? Credit with respect to pre-operational expenses can be claimed as the same are used or intended to be used in the course or furtherance of business as per Section 16 of the said act. 42 P a g e

43 However, if such credits are used partly for effecting taxable supplies and partly for exempt supplies, ITC shall be restricted to the extent of taxable supplies effected as per section 17(2) of the said act. 122) A new subsidiary company not having much funds in hand, and its holding company is reimbursing all the costs incurred by subsidiary company like rent, freight expense, etc. All these costs are reimbursed at cost basis, No margin is given to subsidiary. Whether such reimbursement is taxable and who will be eligible to claim ITC on such expenses incurred? There can be two situations to the said transaction. Taxability of the same is discussed as follows: 1. If such reimbursements are in the nature of loan in the books of Holding company, then Subsidiary company shall be eligible to claim input tax credit provided if all other conditions for claiming the credit has been satisfied. 2. If such reimbursements are not in the nature of loan in Holding company books, then Subsidiary Company has to cross-charge to its Holding Company as per Valuation rule 34 of CGST rules read with section 15(4) of the CGST Act. In such case, subsidiary company will book the expenses and claim ITC and cross-charge to Holding. 123) Whether ITC on purchase of Two Wheeler motor-vehicle can be taken? As per Sec 17 (5) of CGST Act, 2017, which deals with blocked credits, ITC on motor vehicle and other conveyance cannot be claimed generally. However, any person who is a: 1. Dealer of such motor vehicle or conveyance 2. Transporter of passengers 3. Imparting training on such vehicle or other conveyance 4. Uses such motor-vehicle or other conveyance for transporting goods can claim credit. 43 P a g e

44 124) Car is taken on lease for 3 years. Is ITC available on leased charges of Motor Car? As per Sec 17(5) which deals with Blocked credit- ITC shall not be available in respect of Motor vehicle or any other conveyance except in certain cases. The term used is ITC in respect of which connotes a wider reference. Hence, it is suggested not to take credit of GST on Lease rental in respect of motor vehicle or any other conveyance. 125) What is the GST impact on goods lost, stolen, destroyed? The Registered person should reverse the ITC on goods lost, stolen, destroyed. VALUATION 126) What are the conditions to be satisfied for considering transaction value? There shall be price actually paid or payable; Supplier and recipient are un-related; Price is the sole consideration Then transaction value can be taken as taxable value for discharge of tax 127) Mrs. Jaya purchases a Samsung television set costing Rs. 85,000 from ABC and Co., in exchange of her existing TV set. After an hour of bargaining, the shop manager agrees to accept Rs. 78,000 instead of his quote of Rs. 81,000, as he would still be in a profitable position (the old TV can be sold for Rs. 8,000). Where the price is not the sole consideration for the supply, the open market value would be the value of the supply. Therefore, Rs. 85,000 would be the value of the supply and taxes needs to be paid on such value. 44 P a g e

45 128) Is there any specific valuation mechanism provided for composite supplies and mixed supplies? No, Section 15 and the rules prescribed under this Section are common for supply of goods and supply of services. The provisions of valuation and the rules would apply to composite supplies and mixed supplies equally. 129) Is contract price not sufficient to determine valuation of supply? Contract price (adjusted to the specific inclusion and exclusions provided in sub. Sec. (2) & (3) of Sec. 15) can be referred to as transaction value and that is the basis for computing tax. However, the transaction will not be accepted as the value of supply where the supply is between related persons (including different registrations of the same PAN and principal-agent supplies), or where the consideration payable is not wholly in money. 130) If related persons transact at arm s length price, can the valuation still be questioned? Sec 15 of CGST Act, 2017 mandates a reference to the CGST Rules where the supply is between related persons. Since the supply is at arm s length price, the fact that the prices charged to the transaction is an open market value should be established. 131) Will GST be applicable on any interest charged for payment after the credit period? Interest, Penalty or Late fee charged from the customer for delayed payment of any supply shall not be separate stand-alone supply rather it shall be included in the value of original supply. The law provides that the GST liability on such values can be paid only on receiving such additional amounts. 45 P a g e

46 132) Mr. A staying in Mumbai wanted to sell goods through his agent in Karnataka, what will be the value of supply of goods? The value of supply of goods between the principal and his agent shall be: (a) open market value of the goods being supplied or 90% of the price charged for the supply of goods of like kind and quality by the recipient to his unrelated customer [Supplier has the option to choose either of the two methods] (b) Where value of a supply is not determinable as above, the same shall be determined as per Rule 30 or Rule 31 in that order. CONCEPT OF PURE AGENT 133) Define pure agent? In terms of explanation to Rule 33 of the CGST Rules, pure agent means a person who a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; c) does not use for his own interest such goods or services so procured; d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. 134) Whether all expenses incurred by supplier are excluded from the value of supply? 46 P a g e

47 No, in terms Rule 33 of the CGST Rules, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied: (a) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorization by such recipient; (b) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (c) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. 135) Customs duty or other taxes paid on behalf of other person in addition to supply of services, whether GST needs to be charged on this? Customs duty or other taxes paid on behalf of customers satisfy the conditions laid down for pure agent and hence there is no GST will not apply on such on behalf payment. TAX INVOICE, DEBIT & CREDIT NOTES 136) What is Tax invoice? Tax invoice is an important primary document/indicator of time of supply of goods or service. It is an evidence of supply of goods or service by the supplier. It is the document based on which Input tax credit can be claimed by the supplier. 137) Who will issue the Tax Invoice? A registered person supplying taxable goods or services shall, before or at the time of supplying the goods or services but within a prescribed period, issue a tax invoice. 47 P a g e

48 138) What should Tax invoice contain? a) Name, address and GSTIN of the supplier; b) A consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters, hyphen or dash and slash symbolized as - and / respectively, and any combination thereof, unique for a financial year. c) Date of its issue of invoice. d) Name, address and GSTIN or Unique Identity Number, if registered, of the recipient. e) Harmonized System of Nomenclature code for goods or services; f) Description of goods or services; g) Total value of supply of goods or services or both; h) Taxable value of the supply of goods or services or both taking into account discount or abatement, if any; i) Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess) j) Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess); k) Place of supply along with the name of the State, in the case of a supply is in the course of inter-state trade or commerce; l) Whether the tax is payable on reverse charge basis; and m) Signature or Digital Signature of the supplier or his authorized representative. 139) When is Bill of Supply issued? A registered person supplying exempted goods or services or both shall issue a bill of supply. Composition dealer should also issue a bill of supply. 140) What are the contents of Bill of Supply? a) Name, address and GSTIN of the supplier 48 P a g e

49 b) A consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters -hyphen or dash and slash symbolized as - and / respectively, and any combination thereof, unique for a financial year c) Date of its issue d) Name, address and GSTIN or UIN, if registered, of the recipient e) HSN code of goods or Accounting code for services f) Description of goods or services or both g) Value of supply of goods or services or both taking into account discount or abatement, if any; and h) Signature or digital signature of the supplier or his authorized representative. 141) What are the circumstances wherein credit note could be issued? If a tax invoice issued for supply is found to exceed the taxable value or tax charged in respect of such supply or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient Registered person, who has supplied such goods or services or both, may issue to the recipient a credit note. 142) What are contents of credit note? a) Name, address and Goods and Services Tax Identification Number of the supplier b) Nature of the document c) A consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as - and / respectively, and any combination thereof, unique for a financial year d) Date of issue 49 P a g e

50 e) Name, address and Goods and Services Tax Identification Number or Unique Identity number, if registered, of the recipient f) Name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered g) Serial number and date of the corresponding tax invoice or, as the case may be, bill of supply h) Value of taxable supply of goods or services, rate of tax and the amount of the tax credited to the recipient; and i) Signature or digital signature of the supplier or his authorized representative. 143) What are the circumstances wherein debit note is issued? If the value of tax invoice issued for supply of goods or services or both is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note. 144) What are contents of debit note? a) Name, address and Goods and Services Tax Identification Number of the supplier b) nature of the document c) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as - and / respectively, and any combination thereof, unique for a financial year d) date of issue; e) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient f) name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered 50 P a g e

51 g) serial number and date of the corresponding tax invoice or, as the case may be, bill of supply; h) value of taxable supply of goods or services, rate of tax and the amount of the tax debited to the recipient i) Signature or digital signature of the supplier or his authorized representative. 145) Can invoice no. exceed 16 digits or characters? No, invoice number shall not exceed 16 digits or character. Rule 46 of CGST Rules, 2017 specifies that the invoice should have a consecutive serial number not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters, hyphen or dash and slash symbolized as - and / respectively, and any combination thereof, unique for Financial year. 146) Is HSN mandatory to be specified in invoice for sale of goods or services? If the turnover limit is less than Rs. 1.5 crore, quoting of HSN in invoice is optional but the description of goods is mandatory. If turnover lies between Rs. 1.5 to Rs. 5 crore, first 2 digits of HSN code is required to be mentioned, if turnover is more than Rs. 5 crore, 4 digits of HSN code is required to be mentioned. 147) How many copies of invoice should be raised for goods? The invoice shall be prepared in triplicate, in the case of supply of goods, in the following manner, namely,- Original copy being marked as ORIGINAL FOR RECIPIENT; Duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and Triplicate copy being marked as TRIPLICATE FOR SUPPLIER 148) How many copies of invoices are required for services? 51 P a g e

52 The invoice shall be prepared in duplicate, in the case of supply of service, in the following manner, namely,- Original copy being marked as ORIGINAL FOR RECIPIENT; and Duplicate copy being marked as DUPLICATE FOR SUPPLIER. 149) Ramesh, a registered person under GST has made sales with the taxable value Rs. 1,00,000/- to Anil, but the taxable value mentioned in invoice is 10,000/-, should Ramesh raise a revised invoice for the mistake happen in invoice? The concept of issuance of revised invoice comes only when a registered person had already issued invoices for effecting taxable supplies during the period starting from the effective date of registration till the date of the issuance of the certificate of registration. In the given case, Ramesh has to raise a debit note for the differential amount instead of a revised invoice. 150) Some of the credit notes in relation to invoice raised on unregistered person in the month of January were missed out to be shown in GSTR 3B and GSTR 1, further how should I disclose the same? In this situation one can reduce the values of Taxable outward supplies in any of the subsequent month in GSTR 3B. Such missed credit notes is required to be shown in any subsequent GSTR 1 to be filed but before filing September month returns or Annual return which-ever is earlier. Circular No. 26/26/2017-GST Dt. 29/12/ ) What is the time limit for issuing tax invoice? In case of Goods, Tax invoice needs to be issued before or at the time of removal of goods for supply to recipient. 52 P a g e

53 In case of supply of services, invoice shall be issued within a period of thirty days from the date of the supply of service. In case of banking companies, the time limit is 45 days from the date of supply of service. 152) What declaration an Tax Invoice should contain for Export/SEZ with payment of tax and without payment of Tax? Particulars Exports under LUT/Bond Exports without Bond/LUT Supplies to SEZ under LUT/Bond Supplies to SEZ without LUT/Bond Clause in Invoice Supply ment for Export under Letter of Undertaking / Bond without payment of Integrated tax Supply ment for Export on Payment of Integrated tax Supply to SEZ unit/sez Developer for authorized operations under Letter of Undertaking/Bond without payment of Integrated tax Supply to SEZ unit/sez Developer for authorized operations on payment of Integrated tax 53 P a g e

54 ACCOUNTS AND RECORDS 153) Where should the registered person maintain accounts and records? 154) What are the details that should be maintained in accounts and records by registered person? production or manufacture of goods; inward and outward supply of goods or services or both; stock of goods; input tax credit availed; output tax payable and paid and Such other particulars as may be prescribed 155) What is the turnover limit for registered person to get his accounts audited? Every registered person whose turnover during a financial year exceeds the Rs.2 Crores shall get his accounts audited under GST perspective by a Chartered Accountant or a Cost Accountant. 156) How long the books of accounts should be retained by registered person? Every registered person required to keep and maintain books of account or other records until the expiry of 72 months from the due date of furnishing of annual return for the year pertaining to such accounts and records. 54 P a g e

55 Effectively for Financial Year the books of accounts have to be maintained for 81 months from end of such year (Since due date to file Annual return is December of subsequent year). 157) What are the details that should be maintained in accounts and records by registered person in case of sales and purchases made by him? Names and Complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act; Names and Complete addresses of the persons to whom he has supplied goods or services, where required under the provisions of this Chapter; The complete address of the premises where goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein. 158) How should books of accounts be maintained in case of works contracts? Every registered person executing works contract shall keep separate accounts for works contract showing The names and addresses of the persons on whose behalf the works contract is executed; Description, value and quantity (wherever applicable) of goods or services received for the execution of works contract; Description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract; The details of payment received in respect of each works contract; and The names and addresses of suppliers from whom he received goods or services. 55 P a g e

56 159) Can books of accounts be maintained electronically? The records under the provisions of this Chapter may be maintained in electronic form and the record so maintained shall be authenticated by means of a digital signature. 160) Can a person giving turnover-based discounts to customers on meeting a specified quota/target, raise credit note with GST? A credit note with GST can be raised, on complying following conditions i) Such discounts are specifically linked to invoices; ii) An agreement is entered prior to the issue of invoice on discount and iii) The receiver of discount reduces GST on credit note from his ITC balance. AUDIT 161) Mr.A has aggregate turnover of 2.5 crores. Whether the accounts maintained by him needs to be audited? Yes, every registered person whose aggregate turnover during a financial year exceeds the prescribed limit of Rs. 2 Crore shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited annual accounts, the reconciliation statement (duly certified, in FORM GSTR-9C) under Section 44(2) and such other documents in the form and manner as may be prescribed. Further, the Annual return is required to be audited by a Chartered Accountant or Cost Accountant. 162) During the course of inspection, the department has pointed out certain omissions or incorrect particulars in the returns. Whether the assessee can rectify the returns to correct the omissions or incorrect particulars in its returns? 56 P a g e

57 As per Section 39(9), where the omission / incorrect particulars are pointed out by the department during audit/inspection/scrutiny/enforcement, the assessee can rectify such omissions/incorrect particulars in the returns. In the month/quarter in which such omission/ incorrect particulars are noticed, the due tax and interest shall be payable thereon. 163) How will a return under scrutiny be processed and what will be the mode of intimation of discrepancies? Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation and where possible quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy. 164) Under what circumstances notice for special audit shall be issued? If the proper officer (not below the rank of Assistant Commissioner) is of the opinion that the value has not been correctly declared or credit availed is not within the normal limits, a special audit may be ordered. A Chartered Accountant or a Cost Accountant as may be nominated by the Commissioner may undertake the audit. The auditor will have to submit the report within 90 days or the further extended period of 90 days. The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner. 57 P a g e

58 RETURNS 165) What is a Return? A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. 166) What is the purpose of returns? Transfers information to tax authorities. Provides inputs for taking decisions by government Provides data base for intelligence and other departments of the government to analyze the activities and proceed. 167) Who all are required to file GST returns? Every registered taxable person is required to file his returns. Registration may be required on following counts Aggregate turnover crosses Rs. Twenty lacs Person making Interstate suppliers TDS / TCS deductor E-commerce operators Suppliers supplying goods through e-commerce operators etc., 168) What are the different types of GST returns? As per the provisions of GST law, various returns to be filed by dealers are GSTR 3B, GSTR1, GSTR 2, GSTR 4, GSTR 5, GSTR 6 GSTR 7, GSTR 8, GSTR9 9A. However, facility has not yet been provided for all the aforementioned returns. Following are the returns relevant for time being: GSTR 3B Monthly Summary Return by all regular tax payers GSTR 1 Monthly Outward Supply Return by all regular tax payers GSTR 4 Quarterly Composition Return 58 P a g e

59 GSTR 5 Non Resident s return GSTR 6 Input Service Distributor Return GSTR 7 TDS Return by Deductor 169) What is First Return? Every registered person who has made outward supplies after the grant of GST registration is required to file his first return for the tax period falling immediately succeeding the date of registration. 170) Who all need to file Annual Returns? Every registered person, other than an Input Service Distributor, E Commerce Operator, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year on or before the thirty-first day of December following the end of such financial year. 171) What is Final return? Every registered person whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later. 172) What is the consequence of not filing the return within the prescribed date? A registered taxable person who files return beyond the prescribed date, will have to pay late fees of Rs. 25/- for every day of delay subject to a maximum of Rs.5,000/-. This amount is to be separately paid for CGST as well as SGST. In case of Nil returns, fee is Rs 10/- per day of delay. CGST and SGST fee would add up to Rs 20/- per day of nil return filing delay. It may be noted that late fee for delay in filing is applicable for both GSTR-3B and GSTR-1 separately. 59 P a g e

60 173) What are the Due dates for various forms of filing GST returns? The following are the due dates for various form of filing GST returns FORMS MONTH DUE DATES JULY TH AUGUST 2017 GSTR- 3B FROM AUGUST 2017 TILL 20 TH OF SUBSEQUENT JUNE 2018 MONTH* GSTR- 1 MONTHLY RETURN** JULY-NOVEMBER TH JANUARY 2018 DECEMBER TH FEBRUARY 2018 JANUARY TH MARCH 2018 FEBRUARY TH APRIL 2018 MARCH TH MAY 2018 APRIL ST MAY 2018 MAY TH JUNE 2018 JUNE th JULY 2018 GSTR- 1 QUARTERLY RETURN*** JULY-SEPTEMBER TH JANUARY 2018 OCTOBER-DECEMBER TH FEBRUARY 2018 JANUARY-MARCH TH APRIL 2018** APRIL-JUNE ST JULY 2018 GSTR- 5 RELEVANT TAX PERIOD 20 TH OF SUBSEQUENT MONTH GSTR- 6 JULY 17- JUNE ST JULY 2018 GSTR- 4 APRIL-JUNE TH JULY 2018 *GSTR- 3B Due date for filing the GSTR 3B for the respective month will be 20th of succeeding month of that respective month except Dec 2017(Due date for Dec 17 is ), April 2018 (Due date for April 18 is ) **GSTR- 1 Monthly return for registered persons with aggregate turnover of more than Rs Crores. 60 P a g e

61 **GSTR- 1 Quarterly return for registered persons with aggregate turnover of less than Rs Crores. 174) What is the late fee in case of delayed filing form GSTR 3B & GSTR 1? The amount of late fee payable by any registered person for failure to furnish the details of outward supplies for any month/quarter in FORM GSTR-1 by the due date, which is in excess of an amount of Rs. 25/- for every day during which such failure continues. Provided that where there are no outward supplies in any month/quarter, the amount of late fee payable by such registered person for failure to furnish the said details by the due date, shall stand waived to the extent which is in excess of an amount of ten rupees for every day during which such failure continues. 175) How can the amounts be utilised in electronic cash ledger? The amount of Cash deposited for CGST/SGST/UTGST/IGST/Cess in the Electronic Cash Ledger can be used for payment of CGST/SGST/UTGST/IGST/Cess liabilities respectively. No inter head adjustment is allowed for major heads. 176) What is the priority of utilizing the amount under cash ledger? Amount under Cash Ledger will be used in the following priority order: a) Self-assessed tax, and other dues related to returns of previous tax periods; Previous month tax liability covers: Tax liability reported but not paid Interest/penalty/fee arising out of previous month return period declarations b) Self-assessed tax, and other dues related to return of current tax period; 61 P a g e

62 Current month tax liability includes: Liability for invoices and amendments uploaded for previous months ITC reversal due to mismatch of invoice (Reversal under Section 42 (5) & (6) for Tax Period) Tax amount increased in Tax period as a consequence of reduction of liability by supplier in tax period but without corresponding reduction in ITC by the receiver (Section 43(6)) Liability for invoices and other consolidated declarations uploaded for current month. c) Any other amount payable under the Act or the rules made there under including the demand determined under Section 73 or ) If GSTIN is wrongly mentioned, say GSTIN of L&T Maharashtra instead of GSTIN of L&T Gujarat, in a particular month s GSTR1, how should it be corrected? There is an option to amend the GSTIN of an entry made in GSTR 1 of earlier months. B2B (i.e. registered dealer selling to registered dealer) entries amendment can be done in table 9A of GSTR ) What is the recourse available if the registered person has wrongly declared sales made in GSTR-1 in the month of April, 2018 to unregistered person located in Tamilnadu and Andhra Pradesh? Amendment to B2C (others) can be made in GSTR-1 in the month of May, 2018 with respect to sales made to person located in Tamilnadu and in the month of June, 2018 with respect to sales made to person located in Andhra Pradesh. 62 P a g e

63 179) B2B invoice of March shown as B2C in March GSTR-1. How to rectify the same? Amendment to B2C has to be done in the subsequent month by reducing such amount from the aggregate values and such invoice has to be added in B2B in subsequent return during which the mistake is identified. Procedure discussed is the only practical solution for such issue as there is not option to add B2B entry in original return or to convert the B2C entry to B2B from original return. 63 P a g e

64 E-WAY BILL 180) What is an E-way bill? E-way bill is a document or receipt issued by the supplier or recipient which contains the details with regard to the transportation, destination, and name of consignor, consignee and route of consignment 181) When is a supplier liable to create an E-way bill? A supplier is liable to create an E-way bill when the consignment value of the goods transported exceeds the value of Rs.50, 000/-. 182) What is the date from which E-Way bill is made Compulsory? E-way bill for inter-state movement of goods has been rolled out from 1st April, E-way bill for intra-state movement of goods has been rolled out on the following dates for different states: S.No. States Implementation 1 Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, 30 th May, 2018 Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Nagaland, Rajasthan, Sikkim, Telangana, Tripura, Uttarakhand and Uttar Pradesh along with the Union Territories of Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep and Puducherry 2 Chhattisgarh, Goa, Jammu & Kashmir, Mizoram, 01 st June, 2018 Odisha & Punjab 3 Tamil Nadu 02 nd June, West Bengal 3 rd June, P a g e

65 183) What are the types of movement on which an E-way bill must be generated? The movement could be in: For Supply of Goods; Reasons other than supply of goods - For E.g. - Job Work, Line sales, Free Samples, etc., Purchase from an unregistered person. 184) What are the special cases wherein an E-way bill must be created even though the consignment value doesn t exceed Rs.50,000/-? The E-way bill must be created compulsorily in the following cases If goods are moving outside the state for the purpose of Job Work, irrespective of the value of goods, E-Way bill is required. Transportation of handicraft goods outside the state by a person exempted from obtaining the registration under section 24(i) & (ii), is also required to furnish e-way bill irrespective of the value of the consignment. 185) Should a supplier create an E-way bill in case he is making transport of taxable goods through his own vehicle or using public transportation? Yes, a supplier who is using public transport like bus, railway etc or his own vehicle for the transportation of goods is liable to create an E-way bill if the consignment value of such goods exceeds Rs. 50,000/- in Form GST EWB ) What is consignment value? Consignment value is the value of goods as determined under Section 15 of CGST Act, The value of such consignment must include central tax, state tax or union territory tax, integrated tax or any cess charged if any on the invoice, bill of supply or delivery Challan. 65 P a g e

66 187) What is the procedure for registration of a registered tax payer on the E-way bill portal? The registered taxpayer can use his GSTIN to register on the E-way bill portal and upon using that GSTIN he shall receive an OTP to the mobile number registered with the GST portal. Upon the confirmation of the same he shall have to set a username and password for such account. 188) What is the procedure of registering a transporter on the E-way bill portal? The transporter can register on the E-way bill portal by providing certain business details such as PAN, trade name, State etc then an OTP shall be sent to the mobile number provided to the portal and upon the confirmation of the same the portal provides opportunity to create user name and password and a 15 digit transporter ID is generated. 189) Should a supplier with a GSTIN need to create a TRAN ID to also be a transporter? No, a supplier can use his GSTIN itself to register himself as a transporter; he is provided with the option to change his status as a transporter on the portal. Therefore, only an unregistered transporter needs to register himself to generate a TRAN ID for his business. 190) What is the validity of an E-way bill? Particulars Up to 100 Kms For Every 100 Kms or part thereof thereafter Up to 20 kms For every 20 km. or part thereof thereafter Validity 1 Day other than Over Dimensional Cargo 1 Additional day for every additional 100 Kms of distance other than Over Dimensional Cargo 1 Day in case of Over Dimensional Cargo 1 additional day for every additional 20 Kms of distance in case of Over Dimensional Cargo 66 P a g e

67 191) Should an E-way bill be created in case of a stock transfer? Yes, as the E-way bills specifically covers transaction where goods are sent for reasons other than supply an E-way bill. However, it is compulsory only if the consignment value exceeds Rs.50,000/-. 192) What are the some of the features of part-b of an E-way bill? The part-b of an E-way bill can be updated multiple number of times within its validity period and there is no limit on the number of times it can be updated till it reaches its destination. The part-b of an E-way bill need not be filled in case the distance of transportation is less than 50 kilometers from consignor to transporter for its further movement 193) What are the cases which do not require an E-way bill to be generated? Goods outside the coverage of GST, Ex: Petrol, Diesel, alcoholic liquor for human consumption. If they are covered under Schedule-III as neither goods nor supply If they are transported in a non-motorized vehicle/conveyance If such goods are covered in the annexure to Rule 138. where empty cargo containers are being transported; where the goods being transported are transit cargo from or to Nepal or Bhutan; 194) What are the features regarding cancellation and rejection of an E-way bill? An E-way bill can be cancelled only by the person who has created the same within 24 hours of its generation. An E-way bill can be rejected by the recipient only within 72 hours of the same being raised on him and beyond such time period it is deemed as 67 P a g e

68 accepted by the recipient. So the person registered on the E-way portal must keep a constant check with regard to E-way bills raised on him An E-way bill cannot be deleted it can only be cancelled or rejected. With regard to cancellation of an E-way bill if the E-way bill is verified by an officer within 24 hours the same cannot be cancelled. So the time period of cancellation would be 24 hours or till time of verification by officer whichever is earlier. 195) Is it mandatory to mention HSN codes in the E-way bill even if the turnover is less than 1.5 crores? Yes, it is mandatory to mention HSN codes in an E-way bill even if the turnover is less than 1.5 crores in Part-A of an E-way bill with regard to the goods mentioned in Part-A. A relaxation with regard to the same is expected. 196) An E way bill is generated for an interstate sale and 24 hours expired. The sale got cancelled as the recipient is not available to receive the goods. What would be the consequence as the e-way bill in website with all invoice details? Is there any option to cancel or substantiate that sale did not happen? Cancellation cannot be done after 24 hours. The option available at this point would be, to ask the customer to reject the e-way bill in the portal and to raise another e-way bill for the sale return. In case of an unregistered customer, the registered person has to make e-way bill for inward movement, since the transportation is to be done by him. 197) In case of transportation of goods by railways, whether goods can be delivered even if the e-way bill is not produced at the time of delivery? As per proviso to rule 138(2A) of the Central Goods and Services Tax Rules, 2017 (CGST Rules for short), the railways shall not deliver the goods unless the e-way bill is produced at the time of delivery. 68 P a g e

69 198) Whether e-way bill is required to be raised where there is goods transit through another State while moving from one area in a State to another area in the same State? It may be noted that e-way bill generation is not dependent on whether a supply is inter-state or not, but on whether the movement of goods is inter- State or not. Therefore, if the goods transit through a second State while moving from one place in a State to another place in the same State, an e- way bill is required to be generated. REFUNDS 199) What are various types of refund? Refund of Excess Balance in Electronic Cash Ledger Refunds in case of inverted duty structure including merchant exports made Export of goods or services made with or without payment of tax Refund on account of Deemed Exports made Payment of taxes under wrong head Refund in case of supplies to SEZ with or without payment of taxes Refund of taxes on purchases made by UN or embassies etc., 200) What is the time limit for grant of order from officer for refund? Within 60 days from submission of application order will be issued after satisfying completeness of application in all respects. 201) What is the minimum amount for filing refund claim? Rs.1,000/- is the minimum amount for claiming refund. 69 P a g e

70 202) Can unutilized ITC be given as refund, in case goods exported outside India? No refund of unutilized input tax credit of goods exported out of India which are subjected to export duty. In relation to all other goods exported, refund is allowed. 203) When payments are made to wrong ledgers i.e. CGST/SGST is paid instead of IGST or vice versa, what is the recourse available? Such wrong payment cannot be adjusted but those amounts can be refunded. 204) Can refund be withheld by the department? Yes, Proper officer can withhold refund of accumulated ITC in following situations: If the person has failed to furnish any return till he files such return; If the registered taxable person is required to pay any tax, interest or penalty which has not been stayed by the appellate authority/tribunal/ court, till he pays such tax interest or penalty; If the registered taxable person is required to pay any tax, interest or penalty which has not been stayed by the appellate authority/tribunal/ court, till he pays such tax interest or penalty 205) Will delay in sanction of refund include any interest? If refund application is not processed or refunded within 60days, from the date of receipt of application, then such refund amount includes interest not exceeding six per cent. 206) Is LUT required to be applied manually or is there an option to obtain the same online? 70 P a g e

71 At present, LUT can be applied only through online facility by filing Form RFD-11. LUT shall be deemed to be accepted as soon as acknowledgement for the same is generated online bearing Application reference Number (ARN) upon submission of Form RFD-11. Such ARN generated shall act as LUT number for future reference. Further, there is no requirement for submission of any documents manually to the jurisdictional officer for acceptance of LUT. 207) Exempted goods are exported. Whether ITC on procurement of goods or services for export of such exempted goods or services be claimed? Whether refund can be claimed of such ITC? As per Sec 16 (2) of IGST Act, 2017 ITC on procurement of goods or services for export of Exempted goods or services are allowed. Refund of unutilized ITC can be claimed. 208) Mr. A has obtained LUT but wants to opt for refund through Export of goods or services on payment of duty. Is Mr. A required to cancel/surrender LUT? LUT is mandatory for making zero rated supplies. Zero rated supplies include Exports and supplies to SEZ unit or developer. If the exporter hasn t obtained LUT, the exporter has to make zero rated supplies On payment of Duty. On obtaining LUT, the exporter has an option to make zero rated supplies either with payment of duty or without payment of duty. So, there is no requirement to cancel or surrender LUT or there is no need to intimate to department. 209) Mr. A in America pays commission to Mr. I in India for providing buyers to him for his goods anywhere in world. Is this an export of service? If yes, then can the refund be claimed? If Location of supplier and Place of supply are in the same state or same Union territory, then the supply shall be treated as intra-state supplies. 71 P a g e

72 Definition of Intermediary - It means any person who arranges or facilitates supply of goods or services between two or more persons but does not supplies such goods or services on his own account. So the person in India is an intermediary. Place of supply of such intermediary services is the location of supplier i.e. India and location of service provider is also India hence the same shall be treated as intra-state transaction with taxes as CGST & SGST and not export. 210) Is separate refund application required to be furnished for export of goods with payment of IGST? What is the procedure dealt with? For processing of refund against export of goods with payment of IGST, there is no separate refund application. Filing of GSTR-1 by filling table-6 providing all the details along with shipping bill data and port code, for respective month for which export consignment has taken place would act as refund application. The data so furnished will be matched with data on ICEGATE portal before processing the refund of IGST paid. 211) What is the pre-requisite for a transaction to be considered as an export of services? What document has to be submitted mandatorily for filing refund application in this regard? Realization of convertible foreign exchange is one of the conditions for a transaction to be considered as an export of service. However, such condition is not required to classify a transaction in case of export of goods. Further, at the time of filing refund application for export of service, furnishing of e-brc (Bank Realization Certificate) is mandatory at present. It may be noted that Bank has discontinued issuing FIRC in this regard and issues only e-brc electronically. 72 P a g e

73 212) What is the procedure for processing of refund claim? Following is the procedure for claiming of refund: Application form for claiming refund can be filed through the GSTN portal. An acknowledgement number would be shared with applicant via sms or , once the application is filed electronically. Adjustment would be made to return and cash ledger and reduce the carry-forward input tax credit automatically. Refund application and documents submitted shall be scrutinized within a period of 30 days of filing the refund application. Concept of unjust enrichment would be examined for reach refund application. If it does not qualify, then the refund would be transferred to CWF (consumer welfare fund). If refund claimed exceeds the predetermined amount, then it will go through pre-audit process for sanctioning the refund. Refund will be credited electronically to the account of applicant via ECS, RTGS or NEFT. Application for refund can be made at end of each quarter. No refund shall be provided for an amount of less than Rs ANTI PROFITEERING 213) What is the purpose of constitution of Anti profiteering board? National Anti-profiteering Authority is constituted by the central Government to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a reduction in the price of the goods or services or both supplied by him, this is to ensure that the consumer is protected from arbitrary price increase in the name of GST. 73 P a g e

74 214) What is the recourse available under Anti-profiteering if the consumer s interest is affected? Affected consumers may file an application, in the prescribed format, before the Standing Committee on Anti-profiteering if the profiteering has all-india character or before the State Screening Committees if the profiteering is of local nature. DEEMED EXPORTS 215) What are Deemed Exports? The Government, on recommendations of the Council, can notify certain supplies of goods as deemed exports, where - Goods supplied do not leave India, and Payment for such supplies is received either in Indian rupees or in convertible foreign exchange, Such goods are manufactured in India 216) What are different kinds of supplies covered under deemed Exports? The following supplies are covered under Deemed Export Supply of goods by a registered person against Advance Authorization Supply of capital goods by a registered person against EPCG Supply of goods by a registered person to Export Oriented Unit Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorization. It may be noted that only supply of goods against the aforementioned routes are considered as Deemed exports. Supply of services is not covered. 74 P a g e

75 217) Is there a requirement that goods supplied as deemed exports should leave India or amount to be realized in convertible foreign exchange? Supplies made through prescribed forms shall be considered as deemed exports. Goods do not leave India in case of deemed exports. Amount to be realized against such supplies can be either in Indian Rupees or in convertible Foreign exchange. 218) Whether taxes are required to be paid in case supplies made are in the nature of deemed exports or can the supplier make supplies without payment of taxes under LUT/bond? Yes, supplier has to made supplies on payment of taxes and cannot make such supplies under a bond/lut. However, he can go for refund of taxes paid if the recipient hasn t availed the input tax credit upon obtaining an undertaking from such recipient. 219) Who can apply for refund in case of deemed exports? Refund of tax paid on the supply regarded as deemed export is admissible to either the supplier or the recipient upon fulfillment of prescribed conditions. TRANSITIONAL PROVISION 220) Whether closing balance of EDU Cess, SHE Cess & Krishi Kalyan Cess credit is eligible for carry forward of credit in to GST? No, since those credits are not eligible duties as per explanation 2 to section 140, vide rule 117 CGST Rules, ) How to distribute the accumulated credit by service provider having centralized registration under old regime? 75 P a g e

76 The credit can be transferred to any of the branches which were registered under centralized registration without any restrictions. 222) What options are available in case where service tax credit was not claimed in the last service tax return as well as in Trans 1? Can such credits be availed under GST, if not what needs to be done with the cenvat balance as per books? There is no option to avail such credit. Credits are to be forgone and the cenvat balance as per books can be expensed based on applicable accounting standard. 223) What are the entries to be passed to claim the ITC in Tran 2 to record in the books of accounts, and what ledgers will get affected from the entries passed? The consumption or cost of goods sold account should be credited and the CGST input tax account should be debited. 224) Whether a dealer having closing stock of goods as on appointed day but not in possession of any document evidencing payment of central excise duty be eligible to claim any transitional credit? Yes, Section 140(3) of CGST Act, 2017 read with rule 117(4) of the said rules provides a mechanism for claiming transitional credit for a dealer who doesn t possess any document evidencing payment of central excise duty. 225) What is the mechanism for claiming transitional credit under Sec 140(3)? Registered dealer having closing stock lying as on the appointed date can avail transitional credit upon sales made after the appointed date upon six tax periods. 76 P a g e

77 226) What is the due date for filing transitional returns and how will the transitional credit be available for the registered person? Due date for filing Form GST Tran-1 is 27 th December, 2017 and due date for filing Form GST Tran-2 for six tax periods is 30 th June, Such transitional credit will be available in the form of CGST & SGST in electronic credit ledger of the registered person upon filing of transitional returns. 227) During Excise Audit of an assessee, some of the findings led to: a. Reversal of Excise Credit b. Levy of Interest & penalty Considering provisions of Sec. 142(8) (a), can excise reversal be compensated by CGST reversal? Or needs to be paid in cash only? Ministry has clarified vide Circular 42/16/2018-GST dated with regard to procedure for recovery of arrears under earlier law. Such recovery of tax, interest, fine or penalty shall first be recovered under earlier law. Any further recovery can be done as arrears of tax under CGST Act through utilization of amounts available in the electronic credit ledger or electronic cash ledger of the registered person. 77 P a g e

78 READY RECKONER FOR VARIOUS PROVISIONS UNDER GST a. General provisions 78 P a g e

79 b. Rate of tax under Composition scheme c. Registration 79 P a g e

80 d. Composite supply & mixed supply e. Levy related provisions 80 P a g e

81 f. Meaning of inter-state supply g. Levy of IGST 81 P a g e

82 h. Time of supply i. In case of change in rate of tax 82 P a g e

83 j. Invoicing related provisions k. Eligibility of Input tax credit Use of input tax credit: Partly for Taxable Supplies Zero-rated Supplies Nontaxable Supplies Exempt Supplies Nil-rated Supplies ITC Available ITC not available 83 P a g e

84 l. Blocked input tax credits Section 17(5): 84 P a g e

85 m. Input Service Distributor(ISD) Example as to how the credits shall be transferred by ISD: 85 P a g e

86 n. Capital goods o. ITC in case of change in constitution 86 P a g e

87 p. Utilization of credits q. Manner of payment of taxes 87 P a g e

88 r. Returns s. Rate of interest 88 P a g e

89 t. Various returns prescribed for various tax payers u. Procedure for Advance Ruling 89 P a g e

90 v. Offenses & penalties QUICK REFERENCE Particulars Reference Section/ Rule Registration under GST Section 22 to 30 r/w Rule 8 to 26 of CGST rules, 2017 Composition scheme Section 10 r/w Rule 3 to 7 of CGST rules, 2017 Section 24 r/w 27 r/w Rule 8 & 15 of CGST Casual Taxable Person Rules, 2017 Online information and database access or retrieval Section 24 r/w Rule 14 of CGST Rules, 2017 services (OIDAR) Input Service Distributor (ISD) Section 20 r/w Rule 39 of CGST Rules, 2017 Section 9(3) of CGST Act, 2017 r/w notification 04/2017- Central Tax (Rate) Dt with respect to goods Section 9(3) of CGST Act, 2017 r/w notification 13/2017- Central Tax (Rate) Dt with respect to services Section 9(4) r/w Notification 12/ Central Tax (Rate) Dt Distinguishing goods or services Schedule II read with Section 7 of CGST Act, 2017 List of exempted goods Notification 02/2017- Central Tax (Rate) Dt (Principal notification followed by multiple amendments) List of exempted services Notification 12/2017- Central Tax (Rate) Dt (Principal notification followed by multiple amendments) Composite supply Section 2(30) r/w Section 8(a) of CGST Act, 2017 Mixed supply Section 2(74) r/w Section 8(b) of CGST Act, 2017 Time of supply for goods or Section 12 & 13 r/w Section 31 of CGST Act, services 2017 Place of supply for goods or Section 10 to 14 under chapter V of IGST Act, services 2017 Valuation under GST Section 15 r/w Rule 27 to 35 of CGST Rules, 90 P a g e