Introduction on GST
1. What does GST Stand for?
GST
stands for “Goods and Services Tax”. Simply put, GST may be defined as a tax on
goods and services, which is leviable on every supply of goods and / or
services.
2. What are the taxes that will get merged
into GST?
GST would
consolidate into a single tax which would help to overcome the limitations of
current tax structure and create efficiencies in tax administration. It will consolidate various Indirect tax
levies such as:
a. Central Excise Duty
b. Service tax
c. VAT
d. CST
e. Entry Tax
f. Octroi
g. LBT
h. Countervailing Duty
i. Special Additional Customs Duty
j. Surcharges and
k. Cess
3. What are the taxes that will continue
post GST?
The taxes that will
continue after GST are
a.
Basic
Customs Duty
b.
Export
Duties
c.
Stamp
Duties
d.
Electricity
Duties
e.
Taxes
on professions, trades, callings and employments
4. What are key features of GST?
Following are the
key features of GST:
a. GST is collected on value added at each stage
of the supply chain
b. At all stages of production and distribution,
taxes are a pass through and tax is borne by the final consumer
c. All sectors subject to taxes with very few
exceptions / exemptions
d. GST would facilitate seamless credit across
the entire supply chain and across all States under a common tax base. For
example, Central Excise duty paid on purchases and service tax paid on input
services are not eligible to be set off against output VAT paid by dealers / distributors / stockiest. GST
would enable the dealers / distributors / stockiest to take credit of the GST
paid on procurements and offset the same against output GST to be paid on further supply of the
goods.
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5. Why dual GST and what's IGST, CGST and SGST?
India is a federal country where under the Constitution,
both the Centre and the States have been assigned the powers to levy and
collect taxes through appropriate legislation. A dual GST will, therefore, be
in keeping with the Constitutional requirement of fiscal federalism. GST would
have below components –
a. Central GST (CGST) levied and collected by
the Centre
b. State GST (SGST) levied and collected by the
States.
c. In
case of Union territories, the SGST would be replaced by Union Territory GST
(UTGST).
d. Integrated GST (IGST) would be applicable on
all inter-state supplies of goods and services (including imports). IGST rate
would typically be equal to the sum of CGST and SGST rates for any given
product.
e. CGST and SGST would be applicable on
intra-state supplies of goods or services in India (generally supplies of goods
made within the state). Refer further details in Section AAA.
6.
What are potential advantages of GST?
a.
GST
would enable a smoother input credit system, which would shift the balance
towards the organized sector.
b.
There
would be a common base for levy of GST (as against cascading). For example: at
present, VAT is payable on transaction value plus Excise duty, whereas CGST and
SGST would both be levied on a common base
c.
There
would be reduced cascading effect due to better tax credit mechanism.
d.
Non-creditable
CST would be done away with, thereby reducing costs. The same would be replaced
by IGST which would be creditable to the buyer.
e.
GST is
expected to enable ease of administration (common administration).
f.
There
would be increased tax collections due to wider tax base and better compliance.
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Meaning and Scope
of Supply
7.
What is the scope of the term 'supply' as
defined in CGST Act, 2017?
a.
All
forms of supply of goods or services or both such as sale, transfer, barter,
exchange, license, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business;
b.
Import
of services for a consideration whether or not in the course or furtherance of
business;
c.
The
activities specified in Schedule I, made or agreed to be made without a
consideration;
d.
The
activities to be treated as supply of goods or supply of services as referred
to in Schedule II.
8.
Is it required to distinguish whether a
particular supply involves supply of goods or services or both?
Yes. The CGST Act, 2017 specifies certain provisions
separately for supply of goods and supply of services viz., Section 12 and
Section 13 provides for ascertaining time of supply of goods and time of supply
of services respectively; similarly separate provisions have been specified for
ascertaining place of supply of goods and place of supply of services. Further,
the rate of tax applicable to supply of goods and supply of services may be different. Accordingly, it is important to
distinguish whether a particular transaction involves supply of goods or supply
of services.
9. Whether supply of goods or services without
consideration is liable to tax?
The activities enumerated in Schedule I will
qualify as supply even if made without consideration. Accordingly, such
supplies in the absence of consideration are liable to tax. To illustrate,
following are the activities which will qualify as supply in the absence of
consideration and eventually would be liable to tax:
a.
Permanent
transfer or disposal of business assets where input tax credit has been availed
on such assets.
b.
Supply
of goods or services or both between related persons or between distinct
persons as specified in section 25, when made in the course or furtherance of
business:
c.
Provided that gifts not exceeding fifty
thousand rupees in value in a financial year by an employer to an employee shall
not be treated as supply of goods or services or both.
d.
Supply
of goods— by a principal to his agent where the agent undertakes to supply such
goods on behalf of the principal; or by an agent to his principal where the
agent undertakes to receive such goods on behalf of the principal.
e.
Import of services by a taxable person from a
related person or from any of his other establishments outside India, in the
course or furtherance of business.
10. Whether transfer of
goods to another branch located outside the State is taxable?
Every person is required to obtain separate
registration for every branch located in different state or union territory and
shall be treated as distinct persons. Accordingly, the supply of goods (stock
transfers) to a branch located outside the State would qualify as supply liable
to tax in terms of clause 2 to Schedule I of the CGST Act, 2017. Further, it is
important to note that, supply of goods to a branch / unit located within the
same State having separate registration would also be liable to tax since both
such units (supplying unit and recipient unit) would qualify as distinct person
in terms of Section 25(4).
11. Whether supply of
goods by principal to his agent or by agent to his principal is taxable in the
absence of consideration?
Following would qualify as Supply:
a.
Supply
of goods by a principal to his agent where the agent undertakes to supply such
goods on behalf of the principal; or
b.
Supply
of goods by an agent to his principal where the agent undertakes to receive
such goods on behalf of the principal.
12. Whether import of
services will be liable to tax under GST regime?
The following import of service will qualify as supply under CGST Act,
2017:
a.
Import
of service for a consideration whether or not in the course or furtherance of
business is a supply;
b.
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.
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Tax liability on
composite and mixed supplies
13. What is composite supply?
Composite supply means supply consisting of
two or more taxable supplies of goods or services or both, or any combination
thereof, which are naturally bundled and supplied in conjunction with each
other in the ordinary course of business, one of which is a principal supply.
For e.g. Where goods are packed and transported with insurance, the supply of
goods, packing materials, transport and insurance is a composite supply and
supply of goods is a composite supply.
14. How would the tax liability be determined in
case of Composite supply?
Tax liability in case of composite supply
should be determined with reference to the principal supply forming part of
such composite supply.
15. What is mixed Supply?
Mixed supply means two or more individual
supplies of goods or services or any combination thereof, made in conjunction
with each other by a taxable person for a single price where such supply does
not constitute a composite supply.
The illustration of mixed supply is as
follows: A supply of a package consisting of canned foods, sweets, chocolates,
cakes, dry fruits, aerated drink and fruit juices when supplied for a single
price is a mixed supply. Each of these items can be supplied separately and is
not dependent on any other. It shall not be a mixed supply if these items are
supplied separately.
16. How would the tax
liability be determined in case of Mixed supply?
In
terms of Section 8, the tax liability in case of a mixed supply shall be
ascertained with reference to that particular supply which attracts highest
rate of tax.
Thus, GST will ensure
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Registration under
GST
17. What is the
threshold limit for GST registration in India?
Aggregate turnover requirement for GST registration is as below:
States
|
Aggregate
Turnover
|
Arunachal Pradesh, Assam, Manipur,
Meghalaya,
Mizoram, Nagaland, Sikkim,
Tripura, Himachal Pradesh and Uttarakhand
|
Rs 10
lacs
|
Other states
|
Rs 20 lacs
|
18. What is aggregate Turnover?
Aggregate turnover includes the aggregate
value of:
a.
All
taxable and non-taxable supplies, including interstate supplies
b.
Exempt supplies, and
c.
Exports of goods and/or service of a person
having the same PAN.
d.
The
above shall be computed on all India basis and excludes taxes charged under the
CGST Act, SGST Act and the IGST Act. Aggregate turnover does not include value
of supplies on which tax is levied on reverse charge basis, and value of inward
supplies.
19. Which are the cases
in which registration is compulsory?
The following categories of persons shall be
required to be registered compulsorily irrespective of the threshold limit:
a.
persons
making any inter-State taxable supply;
b.
casual
taxable persons;
c.
persons
who are required to pay tax under reverse charge;
d.
non-resident
taxable persons;
e.
persons
who are required to deduct tax;
f.
persons
who supply goods and/or services on behalf of other registered taxable persons
whether as an agent or otherwise;
g.
input
service distributor;
h.
persons
who supply goods and/or services other than specified services, through
electronic commerce operator;
i.
every
electronic commerce operator
j.
every
person supplying online information and data base access or retrieval services
from a place outside India to a person in India, other than a registered
person; and
k.
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.
20. Whether a person
can get registration voluntarily though he may not be liable to pay GST?
Yes. As per GST law, a person, though not
liable to be registered may get himself registered voluntarily, and all provisions
of this Act, as are applicable to a registered taxable person, shall apply to
such person.
21. If a person is
operating in different states, with
the same PAN number, whether he can operate with a single Registration?
No. Every person who is liable to take a
Registration must get registered separately for each of the States where he has
a business operation and is liable to pay GST.
22. Whether a person
having multiple business verticals in a state can obtain for different registrations?
Yes. 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.
23. Whether all
assesses/dealers who are already registered under existing central
excise/service tax/ vat laws will have to obtain fresh registration?
No. GSTN shall migrate all such
assesses/dealers to the GSTN network and shall issue GSTIN number and password. They will be asked to submit all
requisite documents and information required for registration in a prescribed
period. Failure to do so will result in cancellation of GSTIN number. The
service tax assesses having centralized registration must apply afresh in the
respective states wherever they have their businesses.
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24. What is Composition
Levy in GST?
Small
dealers and businesses whose aggregate turnover in the preceding financial year
did not exceed Fifty lakh rupees, may opt for the composition scheme known as
Composition Levy under the GST law. Under this scheme, a Composite Tax Payer
pays tax only at certain a percentage as may be prescribed.
25. Can every taxable
person opt to pay tax under composition scheme?
No.
The registered taxable person whose aggregate turnover in the preceding
financial year does not exceed seventy five lakhs rupees may opt to pay tax
subject to satisfaction of the following conditions:
a.
Registered
person is not engaged in the supply of services other than supplies of food
& beverages as restaurant services except for alcohol for human
consumption;
b.
he is not engaged in making any supply of goods
which are not leviable to tax under this Act;
c.
he is
not engaged in making any inter-State outward supplies of goods;
d.
he is
not engaged in making any supply of goods through an electronic commerce
operator who is required to collect tax at source under section 52; and
e.
he is
not a manufacturer of such goods as may be notified by the Government on the
recommendations of the Council.
26. Whether a supplier of services is eligible to pay tax
under composition scheme?
No. A
supplier of services is not eligible to opt for composition scheme. However, a
supplier supplying composite supply
involving supply of service or goods being food or any other article for human
consumption or any drink (other than alcoholic liquor for human consumption) is
eligible to opt for payment of taxes under composition scheme.
27. A taxable person
having same PAN can opt to pay tax under composition scheme by seeking separate
registration for branches?
No. A registered person shall not be eligible
to opt for the composition scheme unless all such registered persons (branches
having separate registration under a single PAN) opt to pay tax under
composition scheme.
28. Whether a taxable
person under composition Scheme eligible to claim input tax credit?
No, a taxable person under composition scheme
is not eligible to claim input tax credit.
29. Can a customer who
buys from a taxable person who is under composition scheme claim composition tax
as input credit?
No.
The recipient is not eligible to take input tax credit of composition tax paid.
Moreover, a taxable person paying taxes under composition scheme is not
entitled to collect taxes from the recipient in terms of Section 10(4) of the
CGST Act, 2017. Accordingly, there does not arise a question for the recipient
to claim input tax credit.
30. A taxable person
can still pay tax under composition scheme even after the turnover in the
current financial year exceeds seventy five lakh rupees?
In terms of Section 10(3), the option availed
for paying tax under composition scheme shall lapse with eect from the day on which his aggregate turnover
during a financial year exceeds seventy five lakh rupees.
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Levy of GST
31. What are the taxes
that are levied on an intra-State supply?
Intra-State supplies are liable to CGST &
SGST. intra-State supplies eected by a taxable person located in Union Territory (within the Union Territory)
will be liable to CGST & UTGST.
32. Whether MRP
valuation would be applicable under GST?
MRP based valuation for the purpose of
payment of GST would not continue under the GST regime (unlike the current central excise regime) and supplies
should be subject to GST at transaction value (value at which supply takes
place to receiver).
33. How will the
Inter-State supplies of Goods and Services be taxed under GST?
IGST shall be levied and collected by Centre
on inter-state supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable
supplies of goods and services.
The inter-State supplier will pay IGST on
value addition after adjusting available credit of IGST, CGST and SGST on his
purchases.
34. How will
imports/exports be taxed under GST?
All imports/exports will be deemed as
inter-state supplies for the purposes of levy of GST (IGST). Accordingly Import would attract BCD + IGST + Customs
Cess Compensation Cess (as applicable) and export would be zero rated. Further,
under export of goods the exporter shall have option to either export under
bond or export under rebate option.
35. How to ascertain the taxable value for levy of CGST &
SGST/UTGST?
Section 15 of the CGST Act, 2017 specifies
that the value of supply of goods or services or both shall be the transaction
value, which is
a.
the
price actually paid or
b.
payable
for the said supply of goods or services or
c.
both
where the supplier and the recipient of the supply are not related and the
price is the sole consideration for the supply.
d.
Further
Section 15 provides for certain inclusions which will form part of the value
viz., incidental expenses, commission, interest, penalty etc.
e.
In
cases where the supplier and recipient are related persons or where the price
is not the sole consideration, the provisions and method for ascertaining the
value of taxable supply as prescribed in valuation rules shall apply.
36. Who is responsible
to pay taxes?
Generally, the person eecting taxable
supplies is liable to pay taxes. However, following are certain exceptions:
a.
Reverse
charge: Supply of goods or services or both, as may be notified by the
Government on the recommendations of the
Council, the tax on which shall be paid by the recipient under reverse charge;
and
b.
E-Commerce:
Categories of services as may be notified by the Government on the recommendation
of Council the tax on which shall be
paid by the electronic commerce operator if such services are supplied through it
37. What does the
payment of tax under reverse charge mean?
The
terms reverse charge is defined to mean liability to pay tax by the recipient of
supply of goods or services or both
instead of the supplier of such goods or services or both.
38. What are the different types of supplies which are liable to tax under
reverse charge mechanism?
There are two types of supplies which are
liable to tax under reverse charge mechanism which are:-
a.
Specified
categories of supply of goods or services or both as notified by government on
recommendation of the council
b.
Supply
of taxable goods or services or both by an unregistered supplier to a
registered person
39. Would GST be
applicable on stock transfers?
a. Inter-state self-supplies such as stock
transfers will be taxable as a taxable person has to take state wise registration.
Such transactions have been made taxable even if there is no consideration.
b. Intra-state self-supplies within same
registration should not be taxable.
c. Inter-state stock transfers would be subject
to IGST. Stock transfer of goods between the branches located in different states is treated as an inter-state
supply and hence liable to IGST and the stock transfer of goods between the
branches located in same state is not treated as supply and shall not be liable
to GST.
d. Further valuation of supply of goods under
stock transfer would be based on the following Rule 2
a.
open market value (OMV)
b. If
no OMV then value of supply of like kind and quality
c. If not determinable as per above then as
determined applying Rule 4 or 5 sequentially. In case full credit is available to recipient, the declared value in
invoice is deemed as OMV
d. Rule 4 - Value of supply of goods or
services or both based on cost If value is not determinable by preceding Rules, then 110% of Cost of
production/manufacture/cost of acquisition of goods or cost of provision of service
e. Rule 5 - Residual method for determination
of value of supply of goods or services or both If value not determinable by preceding rules then same
shall be determined using reasonable means
consistent with the principles
and general provisions of section 15 and these rules Supplier of service can opt for this Rule disregarding Rule 4
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40. Are transport charges for supply, paid by the supplier
required to be included in the transaction value?
All the expenses incurred by the supplier, in
relation to the supply, -are required to be included in the transaction value
to the extent they are charged for. Even if the contract is for delivery of
goods ex-factory, and the supplier incurs the cost of transportation on behalf
of the recipient for delivery of goods to the recipient, the cost should be
included in the transaction value if the supplier charges the recipient for the
same. However, if the contract price is for delivery of goods is at the
location of the recipient, then the transportation charges incurred by the
supplier would not be required to be added to the transaction value, as the
cost is contained in the said value.
41. Will discounts
given to customers be allowed as deduction from transaction value?
Yes, the following two types of discounts
would be excluded from transaction value:
a. Discount at the time of Sale – Allowed as
a deduction provided if the discount is recorded on the face of invoice.
b.
Post-supply Discount – If such discount is based on the arrangement entered
into before or at the time of supply, AND where the same can be linked to
relevant invoices, then the same is allowed as a discount on the condition that the recipient reverses the
tax credit related to such discount availed earlier.
43. Quantity discounts
are not recorded on the face of the invoice. Can the Quantity discounts be
claimed as deduction while computing GST?
Quantity Discounts are allowed based on the
volume / value of purchases made by the customer for a particular period. The
discount is allowed at the end of a particular period based on the pre-agreed
rates entered into between the supplier and the recipient. Such discounts will
be eligible for exclusions by way of credit notes, only where the supplier is
in a position to link the discount to each and every invoice, and the recipient
reverses the credit to the extent of such discount.
44. Will GST be
applicable on any interest charged for payment after the credit period?
Interest, Penalty or Late fee charged from
the customer would also be liable to GST. However, the law provides that the
GST liability on such values can be paid only on receiving such additional
amounts.
45. In
certain cases, the selling price of the final product is less since subsidy is
received from Government. Are subsidies received from Government required to be
included in the transaction value?
Subsidies received by the supplier, from
Central / State Governments are not required to be included in the transaction
value of supplies eected by him, even if the subsidies are directly linked to
the supplies made by him.
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46. What are types of
GST applicable on different types of
transactions?
A comparative chart has been provided below,
outlining the current indirect taxes typically applicable on various types of
transactions and the GST taxes proposed to be levied on the same transactions
Time of supply of goods & services
47. How are the
provisions relating to 'time of supply' relevant under GST Law?
The provisions relating to time of supply of
goods / services are relevant in ascertaining the time to remit the taxes on a
particular transaction involving supply of goods / services under the GST Law.
The CGST Act, 2017 provides separate provisions for time of supply of goods and
services.
48. What will be the
time of supply of goods, generally?
Generally, the time of supply of goods shall
be the earliest of the following:
a. Date of issue of invoice;or
b. Due date of issue of invoice; or
c. Date on which supplier receives the
payment; or
d. Date on which payment is entered in books
of accounts of the supplier;or
e. Date on which payment is credited to the
bank account.
49. What will be the
date of payment to ascertain the time of supply of goods?
In terms of the Explanation 2 appended to
Section 12, the date of payment shall be the earliest of the following dates:
a. The
date on which supplier receives the payment; or
b.
Date on which payment is entered in books of accounts of the supplier;or
c.
Date on which payment is credited to the bank account.
50. What will be the
time of supply where tax is liable to be paid under reverse charge mechanism?
In
case of tax liable to be paid under reverse charge mechanism, the time of
supply shall be the earliest of the following:
a.
Date of receipt of goods by the recipient; or
b. Date on which the payment is entered in
the books of accounts of the recipient; or
c. Date on which payment is debited in the
bank account of the recipient; or
d. Date immediately following thirty days
from the date of issue of invoice by the supplier. Where the time of supply
cannot be ascertained as above, the date of entry in the books of accounts of
the recipient shall be the time of supply of goods
51. What would be the
'due date of issuance of invoice' with reference to the provisions relating to
time of supply of goods?
Section 31(1) of the CGST Act, 2017
prescribes the time at which the tax invoice should be issued by a registered
taxable person supplying goods. Accordingly, the due date for issuance of
invoice would be as follows:
a.
Supply involves movement of goods – It is provided that the tax invoice should
be issued before or at the time of removal of goods for supply to the
recipient. As such, it is inferred that the date of removal of goods shall be
the 'due date of issuance of invoice';
b. Any
other case – delivery of goods or making goods available to the recipient. As
such, it is inferred that the date on which goods are delivered to the
recipient or the date on which goods are made available to the recipient is the
'due date of issuance of invoice'.
52. Time of supply in case of addition in value by way of
interest, late fee or penalty?
In terms of Section 12(6) of the CGST Act,
2017 the date on which the supplier receives interest, penalty or late fee
which forms part of value will be the time of supply. However, reference can
also be drawn to proviso to Section 12(2) where such additional value is
received in the form of interest, penalty and late fee. Accordingly, the time
of supply with respect to the amount received in excess up to Rs. 1,000/- of
the amount indicated in tax invoice, the time of supply shall be the date of
issue of invoice. Where the amount received exceeds Rs. 1,000/-, the time of
supply of goods shall be the earliest of the following (in case where the
invoice is already issued):
(a) Date on which payment is entered in books
of accounts of the supplier; or
(b) Date on which payment is credited to the
bank account.
53. How to ascertain
the time of supply of services?
In
terms of Section 13, the time of supply of services shall be the earliest of
the following:
a. Date of issue of invoice; or
b. Due date of issue of invoice
under Section 31; or
c. Date when the payment entry in
relation to supply of services is recorded in books of accounts; or
d. Date on which the payment is
credited to suppliers bank account.
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54. Whether the advance
received prior to provision of service is liable to tax under GST Law?
In terms of Section 13 of the CGST Act, 2017
the time of supply of services refers to the date on which payment is received
by the supplier. Accordingly, the service provider should remit the applicable
taxes on such advances in the month in which the money is received in advance
even otherwise the services are not supplied provided.
Subsequently, when the invoice is issued with
respect to the advance payments received earlier, the same shall be declared in
the returns pertaining to the month in which the invoice is issued, by giving
reference of the 'Transaction ID' generated at the time of remitting taxes on
the advance payments (in the earlier tax periods).
55. What would be the
time of supply of services taxable under reverse charge mechanism?
In terms of Section 13(3) of the CGST Act,
2017, the time of supply of services for remittance of tax under reverse charge mechanism shall be the
earliest of the following:
a.
Date of payment recorded in the books of accounts;
b.
Date of debit in bank account;
c.
Sixty days from the date of issue of invoice or any other document by the
supplier; or
d.
Date of entry in the books of accounts of the recipient
56. Time of supply of
services in case of import of services?
In terms of Section 7(1) of the CGST Act,
2017 supply includes import of services for a consideration whether or not in
the course or furtherance of business. Accordingly, the recipient of services
would be liable to pay tax on import of service. The CGST Act, 2017 does not
provide separate provisions for ascertaining the time of supply in case of
import of services. Accordingly, in
terms of Section 13 shall be the earliest of the following:
a. Date of issue of invoice; or
b. Due date of issue of invoice; or
c. Date on which supplier receives the
payment; or
d. Date on which payment is entered in books
of accounts of the supplier;or
e. Date on which payment is credited to the
bank account.
57. Time of supply in
case of addition in value by way of interest, late fee or penalty?
In terms of Section 13(6) of the CGST Act,
2017 the date on which thesupplier receives interest, penalty or late fee which
forms part of value will be the time of supply. However, reference can also be
drawn to proviso to Section 13(2) where such additional value is received in
the form of interest, penalty and late fee. Accordingly, the time of supply
with respect to the amount received in excess up to Rs. 1,000/- of the amount
indicated in tax invoice, the time of supply shall be the date of issue of
invoice. Where the amount received exceeds Rs. 1,000/-, the time of supply of
goods shall be the earliest of the following (in case where the invoice is
already issued):
a.
Date on which payment is entered in books of accounts of the supplier;or
b. Date on which payment is credited to the
bank account.
Invoices
58. When should a Tax
Invoice be issued for supply of Goods?
The
answer depends upon the type of goods. If the goods are such that movement of
goods are involved, then taxable invoice has to be issued before or at the time
of removal of the goods. If supply of goods does not require movement of goods,
then taxable invoice has to be issued at the time the goods are delivered to
the recipient or when the goods are made available to the recipient.
59. How many copies of
an invoice are required for supply of Goods?
The invoice should be prepared in triplicate.
a. The original is for the recipient,
b. triplicate for the supplier and
c. the duplicate for the transporter.
The copies should be marked as 'ORIGINAL FOR
RECIPIENT', 'DUPLICATE FOR TRANSPORTER' and 'TRIPLICATE FOR SUPPLIER', as the
case may be.
60. What
are the content of the Tax invoice?
Following contents are must in the Tax
invoice
a. Supplier's name, address and GSTIN
b. A consecutive serial number in one or
multiple series, containing alphabets or numerals or special characters hyphen or
dash and slash symbolised as “-” and “/” respectively, and any combination
thereof, unique for a financial year
c. Receiver's name, bill to address and
GSTIN/ Unique ID (in case of registered recipient)
d. Date of its issue
e. Receiver's name, address and address of
delivery along with name of the state and its code if taxable value exceeds or is equal to Rs. 50,000 (in case of
unregistered recipient)
f. HSN code of the goods/ Service Accounting
Code ('SAC') for services
g. Place of supply along with name of state
in case of interstate supply
h. Place of delivery (in case it is dierent
from the place of supply)
I . Rate of GST (CGST, SGST, IGST or cess)
j. Quantity in case of goods and unit or
Unique Quantity Code thereof
k. Taxable value of goods and services after
discount or abatement21
l. Amount of tax charged in respect of
taxable goods or services- CGST, SGST, IGST or cess as may be applicable
m. Total value of supply of goods or services
or both
n. Description of goods and / services
o. Whether tax is payable under reverse
charge
p. Signature or digital signature of supplier
or authorised representative
61. What are the
contents of Credit Notes, Debit Notes and Supplementary Tax Invoices?
These documents shall contain the following
details:
a. The word 'revised invoice' or
'supplementary invoice' indicated properly as the case may be with date and
invoice number of original invoice
b. Name, address, GSTIN of the supplier
c. Nature of the Document
d. a consecutive serial number containing
alphabets or numerals or special characters -hyphen or dash and slash symbolised
as “-” and “/” respectively, and any combination thereof, unique for a financial
year
e. Date of Issue
f. Name, and address of the recipient
g. GSTIN/UID of the recipient, if registered
h. Name and address of the recipient and
address of delivery, along with the name of state and its code, if such
recipient I s unregistered
i. Serial number and date of the
corresponding tax invoice/bill of supply
j. Taxable value of goods or services, rate
of tax and the amount of tax credited/debited to the recipient
k. Signature/Digital Signature of the Suppler
or his authorised representative.
62. What are the
specific requirements of an export supply?
The
document should carry one of the following endorsements:
a. Supply Meant For Export On Payment Of IGST
b. Supply Meant For Export Under Bond or
letter of undertaking without Payment of IGST
Also, the document should inter alia contain
the following details of the recipient:
a. Name and Address of the recipient
b. Address of Delivery
c. Name of the country of Destination
d. Number and date of application for removal
of goods for export
63. When is the bill of
supply required to be issued?
A Bill
of Supply would be required to be issued instead of a tax invoice, in case a
registered person is supplying exempted goods or services or both and by assesses
opting for composition scheme.
64. What are the
contents for bill of supply?
The content for bill of supply are as
follows:
a. a consecutive serial number in one or
multiple series, containing alphabets or numerals or special characters -hyphen
or dash and slash symbolised as “-” and “/” respectively, and any combination
thereof,, unique for a financial year and date of issue of invoice
b. Supplier's name, address and GSTIN
c. Receiver's name, address and GSTIN/ Unique
ID number (in case of registered recipient)
d. HSN code of the goods/ SAC for services
e. Description of goods and services
f. Value of goods and services after discount
or abatement
g. Signature or digital signature of supplier
or authorised representative
Input Tax Credit & Payment of Tax
65. What is the
manner/order of utilization of input tax credit?
The manner/order of utilization of input tax
credit is as follows:
a. The amount of IGST credit in the
electronic credit ledger can be utilized in the following order; IGST against
IGST-CGST-SGST
b. CGST against CGST-IGST
c. SGST against SGST-IGST
d. SGST against CGST or CGST against SGST -
Not allowed
66. What are the key
requirements for availing input tax credit under GST?
The key requirements for availing input tax
credit in respect of any supply of goods and/or services are as under
a. The company is in possession of a tax
invoice or debit note issued by a supplier
b. The company has received goods and/or
services
c. Supplier has actually paid tax to the
account of the appropriate Government
d. Supplier has filed returns
e. The said transaction is properly reflected
in the Return filed by the Supplier as well as the company.
f. The company should pay to the supplier
(value of supply of goods and service along with tax thereon) within period of one
hundred and eighty days from date of invoice (not applicable in case of GST
paid under reverse charge)
67. What are the
implications of Purchase from Unregistered / Composite Dealers?
If the purchases are done from Composite
dealer, input tax credit will not be available to the recipient as the Composite
dealer cannot issue Tax invoice to charge GST on supplies made by him.
In
case of purchase from an unregistered dealer, it would attract GST under
reverse charge on recipient i.e. on purchaser as if it is the person liable for
paying the tax in relation to the supply of goods/services or both purchaser
will be eligible to avail input tax credit subject to conditions.
68. Where the goods
against an invoice are received in lots or instalments, how will a registered taxable
person be entitled to ITC?
The registered taxable person shall be
entitled to avail credit upon receipt of the last lot or installment.
69. What is the time
limit for taking ITC?
ITC
cannot be taken beyond the due date of furnishing of the return for the month
of September following the end of Financial Year (FY) to which invoice pertains
or date of ling of annual return, whichever is earlier.
The underlying reasoning for this restriction
is that no change in return is permitted after September of next FY. If annual
return is filed before the month of September then no change can be made after
filing of annual return.
70. Is there any negative list on
which ITC is not permitted?
The
GST law provides for the negative list with respect to the admissibility of ITC.
It has been provided that the ITC on following items cannot be availed:
a. motor vehicles, except when they are
supplied in the usual course of business or are used for providing the following taxable services
i.
further
supply of such vehicle or conveyance;
ii.
transportation
of passengers, or
iii.
transportation
of goods, or
iv.
imparting
training on motor driving skills;
b. food and beverages, outdoor catering,
beauty treatment, health services, cosmetic and plastic surgery except where such inward supply of goods or services
of a particular category is used by a registered taxable person for making an
outward taxable supply of the same category of goods or services; membership of
a club, health and fitness centre; rent-a-cab, life insurance, health insurance
except where the Government notifies the services which are obligatory for an
employer to provide to its employees under any law for the time being in force
or where such inward supply of goods or services of a particular category is
used by a registered taxable person for making an outward taxable supply of the
same category of goods or services; and travel benefits extended to employees on
vacation such as leave or home travel concession.
c. goods and/or services acquired by the
principal in the execution of works contract when such contract results in construction
of immovable property, other than plant and machinery; except where it is an
input service for further supply of works contract service.
d. goods or services or both received by a
taxable person for construction of an immovable property (other than plant and
machinery) on his own account including when such goods or services or both are
used in the course of furtherance of business;
e. goods and/or services on which tax has
been paid under Composition scheme; and
f. goods and/or services used for private or
personal consumption, to the extent they are so consumed.
g. goods lost, stolen, written-off or disposed by way of gifts and free samples
h. of tax assessed on account of fraud and
willful suppression, transport of goods / storage of goods while in transit,
dealing in supply of goods, which is in contravention of the GST law.
71. Can GST paid on
reverse charge be considered as input tax?
Yes.
The definition of input tax includes the tax payable under Reverse Charge. The
credit can be availed if such goods and/or services are used, or are intended
to be used, in the course or furtherance of his business.
72. Does input tax
include tax (CGST/ IGST/SGST) paid on input goods, input services and/ or capital
goods?
Yes.
73. Where goods and/or
services received by a taxable person are used for effecting both taxable and non- taxable supplies, whether
the input tax credit is available to the registered taxable person?
The input tax credit of goods and / or service
attributable to only taxable supplies can be taken by registered taxable
person. The amount of eligible credit would be calculated in a manner to be
prescribed in terms of the GST law read with GST ITC Rules. It is important to
note that credit on capital goods also would now be permitted on proportionate
basis as prescribed under ITC rules in case the registered taxable person is
engaged in taxable and non-taxable supplies.
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74. What would be the
input tax eligibility in cases where taxable person paying tax opts to pay tax
under Composition Scheme?
The registered taxable person, who was paying
tax opts to pay tax under Composition Scheme, has to pay an amount equivalent
to the input tax credit in respect of inputs held in stock and inputs contained
in semi-finished or finished goods held in stock on the day immediately preceding
the date of such switch over. It has also been provided that after payment of
the amount on such goods, the balance, if any available in electronic credit
ledger would lapse. The amount, required to be paid, is to be calculated as per
rules that will be framed in this regard.
75. Where the
registered taxable person has claimed depreciation on the tax component of the
cost of capital goods under the provisions of the Income Tax Act, 1961, will
ITC be allowed in such cases?
The
input tax credit shall not be allowed on the said tax component.
76. Whether Input tax
credit of goods lost, stolen, destroyed, disposed, written off or distributed as free samples is available?
Input
tax credit shall not be available in case of goods lost, stolen, destroyed,
written off or
disposed by way of gift or free samples. Therefore input tax paid on such
taxable goods, is not available. Hence in event of expired goods or stocks are
destroyed or disposed off, or supplied as physician sample, the supplier would be required to
reverse Input tax credit in respect of said stock.
77. What is the
treatment of input tax credit in case of sales return?
Where the goods supplied are returned by the
recipient, or where services supplied are found to be deficient, the registered
taxable person, who has supplied such goods and /or services, may issue to the
recipient a credit note. He may further declare the details of such credit note
in the return for the month when such credit note has been issued but not later
than September following the end of the year in which such supply was made, or
the date of filing of the relevant annual return, whichever is earlier, and the
tax liability shall be adjusted in the manner specified.
78. When
is payment taxes to be made by the supplier?
Payment of taxes by the normal taxpayer is to
be done on monthly basis by the 20th of the succeeding month.
79. Can one use input
tax credit for payment of tax under reverse charge basis?
No.
The amount available in the electronic credit ledger may be used for making any
payment towards 'output tax'. Further, the definition of output tax u/s 2 (82)
specifically excludes tax payable under reverse charge basis. Therefore, input
tax credit cannot be used for payment of tax under reverse charge basis
Returns
80. Who needs to file
Return in GST regime?
Every
registered taxable person is required to file Return in GST regime.
81. What are the key
returns under GST are to be filed by the tax payer and what is the due date for
the same?
82. What type of
outward supply details are to be filed in the return?
A
normal registered taxpayer has to file the outward supply details in GSTR-1 in
relation to various types of supplies made in a month, namely outward supplies
to registered persons, outward supplies to unregistered persons (consumers),
details of Credit/Debit Notes, zero rated, exempted and non-GST supplies,
exports, and advances received in relation to future supply and indicate if the
said supply attracts GST under reverse charge.
83. Is the scanned copy
of invoices to be uploaded along with GSTR-1?
No scanned copy of invoices is to be
uploaded. Only certain prescribed fields of information from invoices need to be
uploaded.
84. GST Law provides
that the ITC would be confirmed only if the inward details filed by the recipient
are matched with the outward details furnished by the supplier in his valid
return. What happens if there is a mismatch?
In
case of mismatch between the inward and outward details, the supplier would be
required to rectify the mismatch within a period of two months and if the
mismatch continues, the ITC would have to be reversed by the recipient. Further
interest shall be leviable from the date of availing the credit till the
corresponding additions to be made. In case the supplier pays the output tax
with interest then the interest shall be refunded to the recipient and will not
exceed the interest as paid by supplier.
85. What is meant by
self-assessment?
Under
the GST regime, the responsibility to compute the correct output tax liability,
eligible input tax credit and output tax liability lies with the assessee. The
assessee must determine the rate of tax, value of supply and the output tax payable.
The assessee must also decide the eligibility of input tax credit in respect of
the various inward supplies. The determination of turnover, rate of tax, value
of supply, eligibility to input tax credit, reversal of input tax credit, etc.
done by the assessee himself is called as self-assessment. Based on such
self-assessment, the assessee has to file the various returns.
86. What
is GSTN?
Goods and Service Tax Network ('GSTN') would
be a common online portal for registrations, payment of taxes, returns,
refunds, etc. Every person engaged in supply of goods or services above basic
threshold limit would need to be registered with the GSTN and would be allotted
a login name and password on the GSTN portal. After the end of the relevant
month, every registered person would be required to upload its outward supply
details on the GSTN portal in a prescribed format and timeline. Based on the
outward details uploaded, the GSTN would auto populate the input tax credit for
every customer / buyer. The buyer would then need to reconcile the input tax
credit as per GSTN vis-à-vis the input tax credit as per his books of accounts.
The GST registered dealer would need to pay the GST liability after reducing
the input tax credit and then file prescribed GST returns on the GSTN portal in
a prescribed format. The GST registered dealer would also be required to file
annual return in addition to monthly returns.
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