Information Resources

GST

GST- Goods and Service Tax

At the stroke of midnight of June 30, 2016, India has crossed over to an all new indirect tax regime called Goods and Services Tax that has been in the works for decades paving the way for One Nation, One Tax ideology. GST will abolish all indirect taxes and implement a single taxation system.

The wait is over- GST kicks in on July 1

 

  • A surfeit of indirect taxes we have been paying so far will finally end. Take a look:
  • "The rollout of the Goods and Services Tax on July 1 will, in a single stroke, convert India into a unified, continent-sized market of 1.3 billion people"

    Hon'ble PM Mr. Narendra Modi

    Indirect taxes before GST - Central taxes/State taxes include excise duty, service tax, additional custom duty or countervailing duty (CVD), special additon custom duty, general surcharges and cesses/VAT, entry tax and octroi, luxury tax, purchase tax, state surgaces and cesses. Indirect taxes after GST - All of the above taxes are subsumed into GST and can be broadly categorised into Central GST (CGST) which will be levied by the centre and State GST (SGST) which will be levied by the state.





 

Say Goodbye to byzantine taxes and welcome the biggest ever tax reform with open arms!

WASME's GST Platter

GST 101

According to Central Board of Excise and Customs (CBEC), "GST is a destination-based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff.

 


Q&A

Why should there be an SGST and CGST, and not one GST governed by a single body?

 

The dual GST would give equal powers to both the Centre and the States to levy GST. This will ensure that the fiscal autonomy of the States and the overall spirit of cooperative federalism are maintained.

 

Why is it a big deal?

 

For Manufacturers and Traders: Ease of compliance, single tax rates and structure, no cascading or compounding effect of tax, better competitiveness, common national market.

For Central and State government: Simple and easy administration, enhanced compliance and revenue collections, Improved revenue effectiveness.

For Consumers: Payment of the single and transparent tax, reduction of burden of the tax payers.

 

 

How is GST structured?

GST will be levied at four rate slabs: 5%, 12%, 18% and 28% for all goods and services. Besides, there will be a nil tax for items like milk, fresh fruits, vegetables, bread, newspapers and hotels and lodges with a tariff less than Rs 1000.

 


Why GST Registration

Every business entity whose turnover exceeds the threshold limit of Rs.20 lakh/10 lakh as applicable will be required to obtain GST registration.

GST registration will give you access to various benefits available under GST regime such as the input tax credit. Multiple taxes are being clubbed under GST and thus the cascading of taxes that is prevailing currently will no longer be the case.


Q&A

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 or if he is engaged in inter-State supplies.

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.


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.


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. New registrations are being opened from 0800 hrs. on 25.06.2017.


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.

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

There will be only one registration per State for all activities.


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 July 31, 2017.

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 from 0800 hrs. on 25th June 2017


Know GSTIN

Business entities registering under GST will be given a Unique identification number called GSTIN or GST identification number.


Q&A

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 and final GSTIN would be same.


Refund
Q&A

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 per cent refund on provisional basis within 7 days from filing of registration.


CESS
Q&A

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
Q&A

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
Q&A

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
Q&A

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 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

Under GST, you can claim taxes you have already paid on inputs at the time of paying tax on final output.

Q&A

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 utilised 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 and 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.

Invoice
Q&A

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 and adjust his liability.

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.

Returns
Q&A

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 lakh.

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
Q&A

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 5,000 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 has 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 5,000 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.

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 the 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 between 'Nil rated', 'taxable at 0 per cent' and exempted goods and services?

Especially in relation with ITC exempt supply includes Nil rated (taxable at zero per cent) and non-taxable supplies and no ITC is available for such supplies.

Will professional tax be abolished in Maharashtra after introducing 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 coupons, telephone at residence, gives vehicle for official and personal uses, 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 50,000 in a financial year.

The definition of composite supply and the description of the same under Section 8 differs. 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.

Transition
Q&A

How do I avail transition credit?

Transition credit can be availed by filing the respective forms under transition rules upto September 30, 2017.

Please provide the clarity on area based exemption 50/2003 in UK and HP.

Area based exemptions will not be continued under GST. It will be operated through the route of reimbursement as prescribed.

We manufactured excisable goods. But unit availed the exception benefits 50/2003. What about my dealers’ stock?

The dealer will get deemed credit at the rate of 40 per cent / 60 per cent of the CGST paid on supply of such goods in GST. If the goods are branded and greater than Rs 25,000, full credit using CTD can be availed.

A trader buys from manufacturer not registered in excise as his turnover is below 1.5cr. Then in such case can trader take ITC on stock up to 40 per cent?

Yes, deemed credit will be available subject to satisfaction of other conditions as prescribed.

I am a trader. I have excise paid purchase invoice. Whether I can claim credit of full excise duty on closing stock of July 1, 2017?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

If a trader purchases directly from manufacturer and has documents showing excise, will he get full excise credit or 40 per cent of CGST?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

If an FSD purchases directly from manufacturer and has value cum excise duty and excise duty is not separately shown, will he get full credit?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

Is the full excise credit also available to traders who purchases directly from manufacturers and excise is separately shown in invoice?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

In June 17 VAT return no amount carried forward and held stock of Rs 50 lakh. Then can we take credit of that stock or not?

The supplier would be eligible to carry forward the closing balance of ITC from VAT return for June 17.

What will be the impact of closing stock which has been already paid vat on 1st July?

The supplier would be eligible to carry forward ITC on such stock from VAT return for June 17.

If in VAT return refund claimed in June 17 and no balance credit in GST. Then what's the position of submission of Form C?

Refund claimed under existing law will be handled as per the provisions of the existing law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules.

Some service was provided on June 28, 2017, but invoice will be raised on July 5, 2017. Whether we have to charge Service Tax or GST?

If Point of Tax arises after appointed date, then GST will be chargeable on such supply.

Would we be eligible for credit on Capital Goods in transit and received post GST?

No provision for such credit is there in GST law.

What about VAT balance pending on transition date?

Balance VAT credit in the return will be transferred to new provisional ID as SGST Credit.

What about deemed export against Form H?

Form H will not be there in GST.

Who will bear tax difference on closing stocks as on June 30, 2017? Whether the manufacturer/dealer or government?

Closing ITC in VAT return will be allowed to be carry forward in GST.

How will we get input credit on stock in hand for spare parts billed from other state, excise, CST and entry tax paid?

For all inputs with duty paying documents available respective CGST/SGST credit will be available. But credit of CST will not be available.

A trader buys from manufacturer not registered in excise as his turnover is below 1.5 crore. Then in such case can traders take ITC on stock up to 40 per cent?

Deemed credit will be available on stock in hand provided the conditions of section 140(3) read with Rule 1(4) of Transition Rules are satisfied.

Whether we will be eligible for credit of duty paid on Capital Goods in transit and received post GST?

No such provision in GST.

Can ITC of Swachh Bharat Cess or Krishi Kalyan Cess be carried forward under GST?

No.

Will Clean Energy CESS on imported Coal at the rate of Rs 400 PMT continue to be applicable in GST?

No. Clean Energy Cess is being repealed. Coal, however, will be subject to compensation cess at the rate of Rs 400 per tonne.

Whether closing balance of education cess and secondary higher education cess prior to March 1, 2015 can be carried forward in GST?

No, it will not be carried forward in GST as it is not covered by definition of "eligible duties and taxes" under Section 140 of the CGST Act.

Can you clarify for 40 per cent benefit on closing stock does one-year limit apply or not?

Deemed credit will be available for all stock procured within a 1-year period.

Till what time is transition credit available? Where do I need to declare my input stock?

The window to declare transition credit forms is three months from the appointed day. Please refer to transition rules for more details.

UTGST
Q&A

Will there be GST in Andaman and Nicobar Islands as previously there was no VAT?

Yes. For supplies within Andaman and Nicobar Islands, CGST plus UTGST would be leviable.

Others
Q&A

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 July 1, 2017?

The present system for E-way Bill in states will continue till the E-Way Bill procedures are finalised.

Is there a sunset clause for Anti-Profiteering law?

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