FAQ's – GOODS AND SERVICE TAX

Registration

Does aggregate turnover include value of inward supplies received on which RCM is payable? Refer Section 2(6) of CGST Act. Aggregate turnover does not include value of inward supplies on which tax is payable on reverse charge basis.

What if the dealer migrated with wrong PAN as the status of firm was changed from proprietorship to partnership?

New registration would be required as partnership firm would have new PAN.

A taxable person’s business is in many states. All supplies are below 10 Lakhs. He makes an Inter State supply from one state. Is he liable for registration?

He is liable to register if the aggregate turnover (all India) is more than 20 lacs (Rs. 10 lacs in Special Category States) or if he is engaged in inter-State supplies.

Can we use provisional GSTIN or do we get new GSTIN? Can we start using provisional GSTIN till new one is issued?

Provisional GSTIN (PID) should be converted into final GSTIN within 90 days. Yes, provisional GSTIN can be used till final GSTIN is issued. PID & final GSTIN would be same.

Whether trader of country liquor is required to migrate to GST from VAT as liquor is out of GST law?

If the person is involved in 100% supply of goods which are not liable for GST, then no registration is required.

Not liable to tax as mentioned u/s 23 of CGST means nil rated supply or abated value of supply?

Not liable to tax means supplies which is not leviable to tax under the CGST/SGST/IGST Act. Please refer to definition under Section 2(78) of the CGST Act.

Whether civil contractor doing projects in various states requires separate registration for all states or a single registration at state of head office will suffice?

A supplier of service will have to register at the location from where he is supplying services.

Whether aggregate turnover includes turnover of supplies on which tax is payable by the recipient under reverse charge?

Outward supplies on which tax is paid on reverse charge basis by the recipient will be included in the aggregate turnover of the supplier.

If there are two SEZ units within same state, whether two registrations are required to be obtained?

SEZs under same PAN in a state require one registration. Please see proviso to rule 8(1) of CGST Rules.

Is an advocate providing interstate supply chargeable under Reverse Charge liable for registration?

Exemption from registration has been provided to such suppliers who are making only those supplies on which recipient is liable to discharge GST under RCM.

When is registration in other state required? Will giving service from Nasik to other state require registration in other state?

If services are being provided from Nasik then registration is required to be taken only in Maharashtra and IGST to be paid on inter-state supplies.

I have migrated under GST but want to register as ISD. Whether I can apply now & what is the procedure?

A separate & new registration is required for ISD.

I have enrolled in GST but I forgot to enter SAC codes. What should I do? The status is migrated.

The same can be filled while filing FORM REG-26 for converting provisional ID to final registration.

I have ST number on individual name and have migrated to GST.I wish to transfer this on my proprietorship firm.

This conversion may be done while filling FORM REG-26 for converting provisional ID to final registration.

Please tell if rental income up to 20 lacs attracts GST or attracts any other charge?

GST is leviable only if aggregate turnover is more than 20 lacs. (Rs. 10 lacs in 11 special category States). For computing aggregate supplies turnover of all supplies made by you would be added.

If someone trades only 0% GST items (grains, pulses) then is it necessary to register for GST, if the turnover exceeds ₹20 lacs?

A person dealing with 100% exempted supply is not liable to register irrespective of turnover.

Is it correct that person dealing exclusively in NIL rated or exempt goods/ services liable to register if turnover > 20/10 Lakh?

There is no liability of registration if the person is dealing with 100% exempt supplies.

If I register voluntarily though turnover is less than 20 Lakhs, am I required to pay tax from 1st supply I make post registration?

Yes, you would be treated as a normal taxable person.

Whether a separate GSTIN would be allotted to a registered person for deducting TDS (he has PAN and TAN as well)?

Separate registration as tax deductor is required.

Is separate registration required for trading and manufacturing by same entity in one state?

There will be only one registration per State for all activities. But, you have the option to be registered as a separate business vertical.

I am registered in TN and getting the service from unregistered dealer of AP, should I take registration in AP to discharge GST under RCM?

Any person who makes make inter-state taxable supply is required to take registration. Therefore in this case AP dealer shall take registration and pay tax.

Is there any concept of area based exemption under GST?

There will be no area based exemptions in GST.

If a company in Maharashtra holds only one event in Delhi, will they have to register in Delhi? Will paying IGST from Maharashtra suffice?

Only if you provide any supply from Delhi you need to take registration in Delhi. Else, registration at Mumbai is sufficient (and pay IGST on supplies made from Mumbai to Delhi)

How long can I wait to register in GST?

An unregistered person has 30 days to complete its registration formalities from its date of liability to obtain registration.

What If I am not liable to register under GST but I was registered under Service tax?

You can apply for cancellation of Provisional ID on or before 31st July 2017.

When turnover of agents will be added to that of the principal for registration?

If I am not an existing taxpayer and wish to newly register under GST, when can I do so?

You would be able to apply for new registration at the GST Portal gst.gov.in

If I buy raw material from supplier unregistered in GST, do I have to pay GST in RCM and can I avail ITC of the same?

Yes, you have to pay GST via RCM. You can avail ITC of the GST so paid if you are otherwise eligible.

Can an unregistered dealer supply goods to other States if his turnover is below Rs. 20 lakhs?

No. The supplier would be liable to obtain registration in case of inter-State supplies irrespective of his turnover.

Existing taxpayer registering a branch office in another state comes under fresh registration or under existing tax payer registration?

The registration in other State would come under fresh registration.

Is registration necessary if only interstate supply of Nil rated goods is being made?

If exclusively making supplies of Nil rated supplies, registration is not compulsory. Kindly refer section 23 of CGST Act.

Whether franchisor company will have to take registration in each state where outlets are located?

No, a franchisor company need not take registration in a state where only its franchisee is located.

If I’m starting new business today, still need to get TIN and then apply for GST? Or can I directly register with GST?

You may directly take GST registration on www.gst.gov.in

A firm dealing exclusively in exempted products has GST registration; does it need to file return?

If registered, then you need to file returns. You may choose to cancel your registration since you are dealing only in exempted products.

My all outward supplies are export services. In this case is it compulsory to register under GST?

Yes. Since, exports are zero rated, one needs to register for GST to claim refunds.

Can a person operating two different companies with different names but with same PAN get two GST registrations?

One PAN holder gets one registration in every state, but he has the option of getting different registrations for different business verticals.

Whether job worker is required to register? Whether composition scheme is available to a job worker?

Job workers making taxable supplies above the threshold aggregate turnover need to register. Composition scheme is not available to job-workers. They, however, can avail benefit of section 143 of the CGST Act.

I am a service provider with turnover of Rs. 50 lakhs in one state only. Am I eligible for the composition scheme?

Service providers, except restaurants/caterers, are not eligible for composition scheme.

I am an ice cream manufacturer with sales in one state only. Can I avail the option of composition?

No. The following three classes of persons, namely

- Ice cream and other edible ice, whether or not containing cocoa.

- Pan masala

- All goods, i.e. Tobacco and manufactured tobacco substitutes are not eligible for benefit of composition scheme.

If I register under the composition scheme, can I opt out of it later? What happens to my stock if I do so?

Those availing composition can exit and opt for normal tax scheme anytime. They would be eligible for ITC on stocks available on the date of switchover in terms of section 18(1)(c ) of CGST Act, 2017.

Can I register as a normal taxable person now and avail of the composition scheme later?

You can opt for composition scheme from the beginning of the next financial year on submitting the option to avail composition scheme before beginning of the financial year. It may please be noted that composition scheme cannot be availed from the middle of a financial year.

I have registered as a composition dealer. If my turnover crosses Rs. 75 lakhs, can I continue in the scheme for the remaining financial year?

No, taxpayer becomes ineligible for composition scheme on the day the turnover crosses Rs. 75 lakhs.

If I was registered earlier but am not required to register under GST, what to do about provisional ID and accumulated ITC?

Please apply for cancellation of registration under Section 29(1) of the CGST Act, 2017 read with Rule 24(4) of CGST Rules, 2017. You will be required to calculate and pay ITC availed on goods held in stock on the date of cancellation of registration.

I was registered under Central Excise or Service Tax, but could not migrate and therefore have taken a new registration. Will I be eligible for transitional credit?

In your new registration application, if you have referred to your past registration no. of Central Excise or Service Tax, you will be eligible for transitional credit under Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017.

I have migrated and received provisional ID but not GSTIN, how do I supply goods or services or both?

Provisional ID (PID) will be your GSTIN. You can supply goods or services or both specifying PID as your GSTIN on Invoice.

I have not received ARN or have received ARN but not GSTIN, how do I supply goods or services or both?

You can supply goods or services or both on bill of supply without mentioning GSTIN and/or ARN. On receipt of GSTIN, you will need to issue revised invoice mentioning GSTIN. You are required to reflect this supply in your return and also pay tax thereon.

I am a supplier of exempted goods based out of Delhi and procure raw material from Kerala. My supplier from Kerala insists that I have to be registered in Delhi for procurement of Inter-State goods. Is he right?

No, if you are dealing in 100% exempted supplies you are not liable to be registered in GST. There is no requirement of registration for making inter-state purchases.

Is GST registration mandatory for small retailers to buy from dealers/wholesalers?

There is no such requirement under GST law.

Refund

I have a pending export refund in Service Tax. What will happen?

Refunds under earlier laws will be given under the respective laws only

As an exporter, how do I ensure that my working capital is not blocked as refunds?

Appropriate provisions have been made in the law by providing for grant of 90% refund on provisional basis within 7 days from filing of registration.

Cess

What will be the impact of GST on coal? Will the clean energy Cess on coal go or will it stay?

Clean Environmental Cess on coal will be replaced by GST Compensation Cess.

Composition Scheme

Suppose I am in composition scheme in GST. If I purchase goods from unregistered person, then GST will be paid to Government by me or not?

Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered person.

Customs

What duties will be levied on import of goods?

Customs duty and cess as applicable + IGST+ GST compensation cess. IGST and GST compensation cess shall be paid after adding all customs duty and customs cess to the value of imports.

Exports

Present Procedures have Service Tax on Nepal, But no Goods Tax on Nepal. But, With GST, what tax will apply?

The export procedure for Nepal would be same as that to other Countries.

Are there exemptions for SEZ? How will a SEZ transaction happen in GST regime?

Supplies to SEZs are zero-rated supplies as defined in Section 16 of IGST Act.

How would the sale and purchase of goods to and from SEZ will be treated? Will it be export / input?

Supply to SEZs is zero rated supplies and supplies by SEZs to DTA are treated as imports.

Please clarify status of international export freight under GST as the same was exempt under POPS rules. It is zero rated in most countries.

POS for transport of goods determinable in terms of sec 12(8) or sect 13(8) of IGST Act, 2017, depending upon location of service provider/service receiver. Exports are treated as zero rated supplies.

When goods are being imported from SEZ who will pay IGST?

Such supply is treated as import and present procedure of payment of duty continues with the variation that IGST is levied in place of CVD.

Who will pay IGST when goods are procured from SEZ? Today importer is paying both BCD and CVD.

Such supply is treated as import and present procedure of payment continues with the variation that IGST is levied in place of CVD.

Input Tax Credit

Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize for payment of SGST in Madhya Pradesh?

SGST of one State cannot be utilized for discharging of output tax liability of another State.

How one can use SGST credit for the payment of IGST on another state?

SGST Credit can be used for payment of IGST liability under the same GSTIN only.

Can one State CGST be used to pay another state CGST?

The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only.

In case of service supplied, should the credit be given to the state where it is billed or the state it is rendered?

Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit.

Company is engaged in manufacturing of cement & power. Which rule to be referred for reversal of credit related to power business?

Detailed rules for reversal of ITC when the supplier is providing exempted and non-exempted supplies have been provided in ITC Rules.

How will the credit / debit note from unregistered supplier be reported to GSTN and ITC claimed in the same?

Like invoice, credit/debit notes on behalf of unregistered person will be given by registered person only. Further, GSTR2 provides for reporting of same by the recipient.

Whether credit is restricted under the GST Act, especially for rent-a-cab Service?

Input tax credit for rent-a-cab service is not available under GST.

Invoice

A shop sells taxable & exempt products to the same person (B2C), is it required to issue tax invoice and bill of supply separately?

In such a case the person can issue one tax invoice for the taxable invoice and also declare exempted supply in the same invoice.

Do registered dealers have to record Aadhaar/PAN while selling goods to unregistered dealers?

There is no requirement to take Aadhaar / PAN details of the customer under the GST Act.

All expenses like freight / transport / packing which are charged in Sales Invoice are taxable in GST? How to charge in bill?

All expenses will have to be included in the value and invoice needs to be issued accordingly. Please refer to Section 15 of CGST Act and Invoice Rules.

Can we move construction material to builders on delivery challan and issue tax invoice post completion of activity?

If the goods are meant to be supplied in the course of construction an invoice is necessary. If the goods are tools which are to be used for construction then delivery challan should be issued.

How to treat following transaction in GST (i) Delivered supply shortages in Transit. (ii) Customer gets less quantity and pays less.

The supplier may issue credit note to the customers.

Should we issue Self Invoice for GST liability discharge on RCM or GST can be discharge through expenses booking voucher?

For RCM liabilities tax invoice has to be issued on self.

Whether taxi aggregators can issue any other document in lieu of invoice and issue consolidated invoice for such services?

The law provides flexibility to such service providers to issue tickets or tax invoice within one month from the date of supply of service. Except banking and financial service providers, service providers such as taxi aggregators do not have the option to issue consolidated invoices. Whereas, the proposal for providing consolidated invoices for various service providers may be explored.

Can a provision be made in the GST Act, to ensure that the invoice number becomes part of the bank statement every time a payment is made?

The suggestion to include Invoice №/Bill № in the bank statement itself, wherever a payment is made for any service or goods, can be examined further.

Returns

What would be done on tax paid on advance receipt if advance has to be refunded in any circumstance?

Advance refunded can be adjusted in return.

Do registered dealers have to upload sale details of unregistered dealers also in GST?

Generally not. But required in case of inter-State supplies having invoice value of more than Rs 2.50 Lakhs.

How to incorporate two supplies in return for Pharma with same HSN code of four digits but having different tax rates?

Returns provide for furnishing rate wise details.

Supply

Should we discharge GST liability for all reverse charge having small amounts of Transaction or any amount limit is there?

It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered person. For supplies above this amount, a monthly consolidated bill can be raised.

What is treatment of promotional item given free to end consumers by FMCG companies?

Tax will be charged only on the total consideration charged for such supply

How to comply with 9(4) of CGST Act if POS is in another State of the unregistered supplier?

Any person making inter-state supply has to compulsorily obtain registration and therefore in such cases, section 9(4) will not come into play.

Under supply from unregistered dealer the purchaser have to pay GST on RCM basis.so whether stipend paid to intern will also come under RCM?

Stipend paid to interns will be employer-employee transactions. Hence, not liable for GST.

Salary by partnership firm to Partners as per Income Tax Act liable to GST?

Salary will not be liable for GST.

Sec 9(4) of CGST Act 2017. Do I need to pay under RCM if I purchase stationary worth Rs.100 from an unregistered stationery shop?

It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered person.

What is the treatment of promotional item given free to end consumers by FMCG companies? If taxable, whether ITC is allowed?

Tax is payable on consideration received for the supply and ITC will be available accordingly.

Whether GST will be leviable in case of returnable packing material like drums supplied with finished goods?

GST will be levied on the value charged for the supply only.

How will disposal of scrap be treated in GST?

If the disposal is in the course or furtherance of business purposes, it will be considered as a supply.

I am from MP and providing service to a customer in Maharashtra. I outsource the work to a service provider in Maharashtra, what tax i need to charge?

Generally these will be two supplies where the supplier from MP will charge IGST from the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge IGST from the recipient in MP.

If address of buyer is Punjab and place of supply is same state of supplier (Rajasthan), then IGST will apply or CGST/SGST?

If the place of supply and the location of the supplier are in the same State then it will be intra-State supply and CGST / SGST will be applicable.

Why is bifurcation of cash deposit as CGST-SGST-IGST required? Is cash held against a GSTIN, to be adjusted via return u/s 39?

Three levies are under three different statutes and are required to be separately accounted for.

What is the difference in between 'Nil rated', 'taxable at 0%' and exempted goods and services? Especially in relation with ITC?

Exempt supply includes Nil rated (taxable at 0%) and non-Taxable supplies and no ITC is available for such supplies.

Will professional tax will be abolished in Maharashtra after introducing of GST?

Professional tax is not a tax on supply of goods or services but on being in a profession. Professional tax not subsumed in GST.

Employer provides bus service, meal coupon, telephone at residence, gives vehicle for official and personal use, uniform and shoes, any GST?

Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds Rs. 50000/- in a financial year.

The definition of composite supply and the description of same under Section 8 differ. Please explain consequences.

Section 2(30) defines what will be considered as a composite supply. Whereas, Section 8 provides that in case of a composite supply, the treatment for tax rate etc. will be that of principal supply.

Whether slump sale will attract GST. If yes then under which Section?

It will have the same treatment as normal supply.

Salary by Partnership firm to Partners as per Income Tax Act liable to GST? Partners are not employees of the firm.

Salary will not be leviable of GST.

Other Relevant Points

Whether IGST would be levied twice on high seas sales? First on high seas sales and second on custom clearance. IGST paid on 1 available as ITC?

IGST shall be levied only once on imports.

Will Krishi Mandi Fee (imposed in U.P.) be waived off in GST?

GST does not concern such fee so GST does not affect it.

Is E-Way Bill applicable from 1st July 2017?

The present system for E-way Bill in States to continue, till the E-Way Bill procedures are finalized.

Is there a sunset clause for Anti-Profiteering law?

Yes, the sunset clause for Anti-profiteering Authority is of two years.

Which documents should be used in case of inter-state supply of goods until e-way bill rules are notified?

The documents specified under Rule 48 of the CGST Rules, 2017 may please be referred. Triplicate copy of invoices for supply of goods and duplicate copy of invoice for supply of services may be used.

If I use my credit card to pay utility bills, will I end up paying GST twice; once for the service and second time for the credit card bill?

No, GST is not leviable on the entire credit card bill; it is charged only on the fee/commission charged by the credit card company.

We currently transport material on delivery challan and make a single bill at the end of the month. Can the same be done under GST?

If on every instance you are making a supply then an invoice needs to be issued. For any other movement of goods other than supply (as specified in Rule 55 of CGST Rules, 2017), a delivery challan may be issued.

Will service charge, as charged by some restaurants, be treated as consideration for a supply and hence considered liable for tax?

There is no distinction between goods or services under GST. Service charge like any other supply will be leviable to GST. It is also clarified that service charge is not a statutory levy. It is not levied by the Government.

What to do with stock lying with me on 1.07.2017. Do I need to charge GST?

Yes, you need to charge GST but you can use transition credit, if available on the said goods.

I am a small manufacturer who supplies cycle parts to two manufacturing units in the same area. For every supply, I generate an invoice and take 500 Rs. flat for cartage and loading charges. What tax rate to be charged on the cartage and loading expenses?

This will be a composite supply where the principal supply (the goods) cannot be supplied without the cartage / unloading / transportation expenses. Therefore, the GST rate applicable will be the same as that of the principal supply, i.e, cycle parts, as provided under Section 8 of the CGST Act, 2017.

I run a restaurant where I serve alcohol and provide food etc. How do I generate my invoices. What will attract GST and what will attract VAT?

Since, you are providing both taxable and non-taxable supply. You will charge VAT on the non-taxable supply (which is alcohol for human consumption) and GST on all other taxable supplies.

In big bazaar, if I purchase some vegetables and one bottle of coke where one of them is exempt and the other is to be charged with 40% GST. Will I be charged 40% on the whole amount?

No, these are two independent supplies at two different prices, they will be charged at the GST rate applicable to them even if they are purchased on the same invoice.

I am going to a jewellery shop and selling 10 gm gold and purchasing a 20 gm set in return. GST will be charged on 10 gm or 20 gm?

The value to be charged on such transaction will be the open market value of the entire transaction as per Rule 27(a) of the CGST Rules, 2017. Therefore, GST be charged on entire 20 gm.

As a composition dealer, will I have to issue a self invoice if I purchase goods from an unregistered person?

Yes, a composition dealer will issue a self invoice as he is required to pay GST. He will not be eligible for ITC also.

Can I use my CGST/SGST credit to set off my IGST liability?

CGST credit can be first used to set off CGST liability. Whatever is left can be used to set off IGST liability. It cannot be used to set off SGST liability. Similarly, SGST credit can be used to set off SGST and IGST liability, in that order. It cannot be used to set off CGST liability. Please see Section 49 of the CGST Act, 2017.

Can tax paid in one state be used as ITC by the same firm in another state?

No, if a firm is registered in more than one state, then each such registration will be treated as a separate registered person. Cross utilization of credit available with two different registered persons is not allowed.

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