- Which are the commodities proposed to be kept outside the purview of GST?
Article 366(12A) of the Constitution as amended by 101st Constitutional Amendment Act, 2016 defines the Goods and Services tax (GST) as a tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption. So alcohol for human consumption is kept out of GST by way of definition of GST on constitution. Five petroleum products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel have temporarily been kept out and GST Council shall decide the date from which they shall be included in GST. Furthermore, electricity has been kept out of GST.
- What will be the status in respect of taxation of above commodities after introduction of GST?
The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities.
3.How will the goods and services be classified under GST regime?
HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime.
Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2-digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4-digit code. Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices.
Services will be classified as per the Services Accounting Code (SAC)
- Whether transaction in securities be taxable in GST?
Securities have been specifically excluded from the definition of goods as well as services. Thus, the transaction in securities shall not be liable to GST.
- What is meant by Reverse Charge?
It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply. Sec 9(3).
- Is the reverse charge mechanism applicable only to services?
No, reverse charge applies to supplies of both goods and services, as notified by the Government on the recommendations of the GST Council.
- What will be the implications in case of receipt of supply from unregistered persons?
In case of receipt of supply from an unregistered person, the registered person who is receiving goods or services shall be liable to pay tax under reverse charge mechanism.
- Will a taxable person, having multiple registrations, be eligible to opt for composition scheme only for a few of registrations?
All registered persons having the same Permanent Account Number (PAN) haveto opt for composition scheme. If one registered person opts for normal scheme, others become ineligible for composition scheme.
- How to compute ‘aggregate turnover’ to determine eligibility for composition scheme?
The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, ‘aggregate turnover’ means value of all outward supplies (taxable supplies+exemptsupplies+exports + inter-state supplies) of a person having the same PAN and it excludes taxes levied under central tax (CGST), State tax (SGST), Union territory tax (UTGST), integrated tax(IGST) and compensation cess. Also, the value of inward supplies on which tax is payable under reverse charge is not taken into account for calculation of ‘aggregate turnover’’.
10.Can a person without GST registration claim ITC and collect tax?
No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.
- Whether the goods of principal directly supplied from the job worker’s premises will be included in the aggregate turnover of the job worker?
No. It will be included in the aggregate turnover of the principal. 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.
- Which are the cases in which registration is compulsory?
As per Section 24 of the CGST/SGST Act, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit:
- persons making any inter-State taxable supply;
- casual taxable persons;
- persons who are required to pay tax under reverse charge;
- electronic commerce operators required to pay tax under sub-section (5) of section 9;
- non-resident taxable persons;
- persons who are required to deduct tax under section 51;
- persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;
- Input service distributor (whether or not separately registered under the Act)
- persons who are required to collect tax under section 52;
- every electronic commerce operator
- every person supplying online information and data base retrieval services from a place outside India to a a person in India, other than a registered person; and,
- such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.
- Whether a person having multiple business verticals in a state can obtain for different registrations?
Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.
- Is it necessary for the Govt. Organization to get registration?
A unique identification number (ID) would be given by the respective state tax authorities through GST portal to Government authorities / PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST registration) but are making inter-state purchases.
- If the taxpayer has different business verticals in one state, will he have to obtain separate registration for each such vertical in the state?
No, however the taxpayer has the option to register such separate business verticals independently in terms of the proviso to Section 25(2) of the CGTST Act, 2017.
16.Whether the job worker will have to be compulsorily registered?
No, a Job worker is a supplier of services and will be obliged to take registration only when his turnover crosses the prescribed threshold of 20/10 Lakhs.
- Whether the goods will be permitted to be supplied from the place of business of a job worker?
Yes. But only in cases where the job worker is registered, or if not, the principal declares the place of business of the job worker as his additional place of business.
- Are self-supplies taxable under GST?
Inter-state self-supplies such as stock transfers, branch transfers or consignment sales shall be taxable under IGST even though such transactions may not involve payment of consideration. Every supplier is liable to register under the GST law in the State or Union territory from where he makes a taxable supply of goods or services or both in terms of Section 22 of the model GST law. However, intra-state self-supplies are not taxable subject to not opting for registration as business vertical.
- An individual buys a car for personal use and after a year sells it to a car dealer. Will the
transaction be a supply in terms of CGST/SGST Act? Give reasons for the answer.
No, because supply is not made by the individual in the course or furtherance of business. Further, no input tax credit was admissible on such car at the time of its acquisition as it was meant for non-business use.
- Whether provision of service or goods by a club or association or society to its members will be treated as supply or not?
Yes. Provision of facilities by a club, association, society or any such body to its members shall be treated as supply. This is included in the definition of ‘business’ in section 2(17) of CGST/SGST Act.
- Are there any activities which are treated as neither a supply of goods nor a supply of services?
Yes. Schedule-III of the model GST law lists certain activities such as (i) services by an employee to the employer in the course of or in relation to his employment, (ii) services by any Court or Tribunal established under any law, (iii) functions performed by members of Parliament, State Legislatures, members of the local authorities, Constitutional functionaries (iv) services of funeral, burial, crematorium or mortuary and (v) sale of land and (vi), actionable claims other than lottery, betting and gambling shall be treated neither a supply of goods or supply of services.
- What is the time of supply of goods in case of tax payable under reverse charge?
The time of supply will be the earliest of the following dates:
- a) date of receipt of goods; or
- b) date on which payment is made; or
- c) the date immediately following 30 days from the date of issue of invoice by the supplier.
- What is the time of supply of service in case of tax payable under reverse charge?
Ans. The time of supply will be the earlier of the following dates: a) date on which payment is made; or
- b) the date immediately following sixty days from the date of issue of invoice by the supplier.
24.What is the time period within which invoice has to be issued where the goods being sent or taken on approval for sale?
Ans. The invoice in respect of goods sent or taken on approval for sale or return shall be issued before or at the time of supply or six months from the date of approval, whichever is earlier.
25.What is the place of supply where movement of goods is involved?
As per section 10(1)(a) of IGST Act, 2017, place of supply involving movement of goods, location where movement of goods terminates for delivery to the recipient.
26.Can a principal send inputs and capital goods directly to the premises of job worker without bringing it to his premises?
Ans. Yes, the principal is allowed to do so. The input tax credit of tax paid on inputs or capital goods can also be availed by the principal in such a scenario. The inputs or capital goods must be received back within one year or three years respectively failing which the original transaction would be treated as supply and the principal would be liable to pay tax accordingly.
27.Can the principal supply the goods directly from the premises of the job worker without bringing it back to his own premises?
Ans. Yes. But the principal should have declared the premises of an unregistered job worker as his additional place of business. If the job worker is a registered person then goods can be supplied directly from the premises of the job worker.
28.What are the provisions concerning taking of ITC in respect of inputs/capital goods sent to a job worker?
Ans. Principal shall be entitled to take credit of taxes paid on inputs or capital goods sent to a job worker whether sent after receiving them at his place of business or even when such the inputs or capital goods are directly sent to a job worker without their being first brought to his place of business. However, the inputs or capital goods, after completion of job work, are required to be received back or supplied from job worker’s premises, as the case may be, within a period of one year or three years of their being sent out.
29.Should job worker and principal be located in same State or Union territory?
Ans. No this is not necessary as provisions relating to job work have been adopted in the IGST Act as well as in UTGST Act and therefore job-worker and principal can be located either is same State or in same Union Territory or in different States or Union Territories.
30.Does input tax includes tax (CGST/IGST/SGST) paid on input goods, input services and capital goods?
Ans. Yes, it includes taxes paid on input goods, input services and capital goods. Credit of tax paid on capital goods is permitted to be availed in one instalment.
31.Can a person take input tax credit without payment of consideration for the supply along with tax to the supplier?
Ans. Yes, the recipient can take ITC. But he is required to pay the consideration along with tax within 180 days from the date of issue of invoice. This condition is not applicable where tax is payable on reverse charge basis.
32.Is credit of tax paid on every input used for supply of taxable goods or services or both is allowed under GST?
Ans. Yes, except a small list of items provided in the law, the credit is admissible on all items. The list covers mainly items of personal consumption, inputs use of which results into formation of an immovable property (except plant and machinery), telecommunication towers, pipelines laid outside the factory premises, etc. and taxes paid as a result of detection of evasion of taxes.
33.A taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid on purchase of such motor vehicle?
Ans. No. ITC on motor vehicles can be availed only if the taxable person is in the business of transport of passengers or goods or is providing the services of imparting training on motor vehicles.
34.Can a registered person get ITC with respect of goods or services used for construction of a building for business purposes?
Ans. No. ITC on goods or services by a person for construction of immovable property, other than plant and machinery, is not allowed. Plant and machinery cover only apparatus, equipment, and machinery fixed to earth by foundation or structural support, and excludes land and building, among other things.
35.What happens where the details of inward supplies furnished by the recipient do not match with the outward supply details furnished by the supplier in his valid return?
Ans. In case of mismatch, the communication would be made to the both parties. If the mismatch is not rectified, then the amount will be added to the output liability of recipient in the return for the month succeeding the month in which discrepancy is communicated
36.Whether import of services will be liable to tax under GST regime?
Ans. The following import of service will qualify as supply under CGST Act, 2017:
- import of service for a consideration whether or not in the course or furtherance
of business is a supply;
- import of service by a taxable person from a related person or from any of his
other establishments outside India, in the course or furtherance of business.
37.Is input tax credit allowed only after matching?
Ans. No, input tax credit is allowed provisionally for two months. The supply details are matched by the system and discrepancies are communicated to concerned supplier and recipient. In case mismatch continues, the ITC taken would be reversed automatically.
38.Is the scanned copy of invoices to be uploaded along with GSTR-1?
Ans. No scanned copy of invoices is to be uploaded. Only certain prescribed fields of information from invoices need to be uploaded.
39.Whether all invoices will have to be uploaded?
Ans. No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies.
For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.
In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lacs in inter-state B2C supplies will have to be uploaded. For inter-state invoices below Rs. 2.5 lacs and all intra-state invoices, state wise summary will be sufficient.
40.Can a recipient feed information in his GSTR-2 which has been missed by the supplier?
Ans. Yes, the recipient can himself feed the invoices not uploaded by his supplier. The credit on such invoices will also be given provisionally but will be subject to matching. On matching, if the invoice is not uploaded by the supplier, both of them will be intimated. If the mismatch is rectified, provisional credit will be confirmed. But if the mismatch continues, the amount will be added to the output tax liability of the recipient in the returns for the month subsequent to the month in which such discrepancy was communicated.
41.Does the taxable person have to feed anything in the GSTR-2 or everything is autopopulated from GSTR-1?
Ans. While a large part of GSTR-2 will be auto-populated, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc.
42.What is the consequence of not filing the return within the prescribed date?
Ans. A registered person who files return beyond the prescribed date will have to pay late fees of rupees one hundred for every day of delay subject to a maximum of rupees five thousand. For failure to furnish Annual returns by due date, late fee of Rs. One hundred for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent [0.25%] of his turnover in a state, will be levied.