CBEC's Compilation of FAQs answered by GST Policy Wing on emails

CBEC's Compilation of FAQs answered by GST Policy Wing on emails

The emails were received by the GST Policy Wing from various sources and were scrutinized& developed into a short FAQ of 100 emails. It should be noted that the emails received orthe replies quoted are only for educational and guidance purposes and do not hold any legalvalidity.

• FAQs asked on Composition

Query :Whether a person can avail the compositionscheme on Small Retail Trading of goods if he isholding both incomes like Sale of business: Rs.25lakh (Small Retail Trader) and Rental income:Rs.12 lakhs, whereas the person was registeredearlier in VAT Composition Scheme and was payingService Tax on rental incomeReply :Renting is a service and supplier of service,except restaurant service, cannot opt forcomposition scheme. Since you aresupplying both goods & services, you arenot eligible for composition scheme. Query : Can traders selling on e commerce portals availcomposition scheme if their turnover is less than75 lakhs Reply :No, Sub-section (2) of section 10 refers

• FAQs asked on Exports

Query : Whether every registered person who intends toexport requires fresh Bond/LUT even if the samewas issued on or before 30 Jun, 2017 and is stilllive i.e. not one year old. Reply :Circular No. 4/4/2017 - GST dated07.07.2017 clarifies this. Old LUT/bond isvalid till 31.07.2017, after which fresh LUT/Bond in the new format is required tobe submitted. Query :Some assessees had multiple central exciseregistrations under the earlier regime and were having different LUT/ Bond for each premises. InGST, there will be single registration for suchassesses. Do they require furnishing freshbond/LUT for their principal place of business orthe existing Bond / LUT issued to them prior to30.06.2017 shall be applicable for the exportpurpose.Reply :Circular No. 4/4/2017 - GST dated07.07.2017 clarifies this. Old LUT/bond isvalid till 31.07.2017, after which fresh LUT/Bond in the new format is required tobe submitted. Query :With reference to clause 5 of Rule 96 A as insertedvides Ntf No. 15/2017 Central Tax dated 01st July2017 (5) The Board, by way of notification, mayspecify the conditions and safeguards under whicha Letter of Undertaking may be furnished in placeof a bond. It may be clarified as to whether any conditions and safeguard has been notified by theBoard as on date, as certain parties have filed LUT for export in this office. Reply : Yes, conditions and safeguards have beenspecified by Notification No. 16/2017-Central Tax dated 07.07.2017 and clarifiedin detail in Circular No. 4/4/2017 - GSTdated 07.07.2017. The sum and substanceof these documents is that the facility ofLetter of Undertaking in place of a bond isavailable to a registered person who iseither (a) a status holder as specified in the Foreign Trade Policy 2015-2020; or (b) whohas received the due foreign inwardremittances amounting to a minimum of10% of the export turnover, which shouldnot be less than one crore rupees, in the preceding financial year. The person shouldnot have been prosecuted for any offenceunder the Central Goods and Services TaxAct, 2017 (12 of 2017) or under any of theexisting laws in a case where the amount oftax evaded exceeds two hundred and fiftylakh rupees. Query :In case of export of services, who will pay theservice tax as for Bhutan, Nepal and BangladeshReply :The place of supply is outside India but asthe supplier is located in India, it is a case ofinter-State supply and subject to IGST. It willbe zero rated if the sale proceeds arerealized in convertible foreign exchange. Query :Will GST be debited in duty credit scrips such asMerchandise Exports from India Scheme (MEIS)and Service Exports from India Scheme (SEIS) Reply :No. Query :In view of definition of export of goods given inSection 2(5) of the IGST Act, 2017, the supply ofgoods by the manufacturer to merchant exportercannot be treated as exports as he is not taking out the goods out of India. He is supplying thegoods to the merchant-exporter. Therefore, is the manufacturer required to pay CGST and SGST in allcases of exports by merchant-exporter eventhough the goods are being sealed in container forexport from the premises of manufacturer exporterDoes the merchant-exporter have theoption either to avail option of Bond/LUT or to payIGST for export of such goodsReply :YesThe manufacturer would be liable to payCGST and SGST.The merchant-exporter has the optioneither to avail option of Bond/LUT or to payIGST for export of such goods.There is no provision on the lines of Form Hunder the CST Act in the GST. Query :As per Rule 96A of Central Tax, the LUT is to beaccepted by the Jurisdictional Commissioner, Udaipur whereas in pre GST era the same wasaccepted by the jurisdictional Deputy/Assistant Commissioner Kota. The Commissioner of Kotaregion has office at Udaipur which is 290Kilometers away from Kota due to which it isimpractical to file LUT at Udaipur withCommissioner as compared to previous procedure.Reply :Circular No. 2/2/2017-GST dated04.07.2017 has clarified that an exporterwishing to export without payment ofintegrated tax may approach thejurisdictional AC/DC for acceptance ofbond/LUT. Circular No. 4/4/2017-GST dated07.07.2017 has further clarified that thebond /LUT shall be accepted by thejurisdictional Deputy/AssistantCommissioner having jurisdiction over theprincipal place of business of the exporter. Query :As per sub-rule 5 of rule 96A of Central Tax Rule,Board will notify where LUT is to be furnished inplace of Bond. Since Board has not notified so far,therefore, this office is of the view that Bond is tobe furnished in all cases as of now. Please clarifyReply :The Board has, vide Notification 16/2017 -Central Tax dated 07.072017, specified theconditions and safeguards under which anexporter may file a LUT instead of a bond. Query :Whether in case of assesses exporting goods underLUT in Central Excise Act 1944, can export goodsafter 01.07.2017 under GST on the basis of the saidLUT filed under Central Excise Act, 1944 until thatLUT expires.Reply :In terms of Para 6 of Circular No. 4/4/2017dated 07.07.2017 exports are allowed underexisting LUTs/ Bonds till 31st July 2017.Exporters shall submit the LUTs/bond in therevised format latest by 31st July, 2017. Query :There is lack of clarity in the trade regarding theeligibility conditions for the LUT/Bond as per theNotification No. 16/2017 Central Tax. Para i(b) ofthe said notification requires the exporter to receive the due foreign inward remittancesamounting to a minimum 10% of the exportturnover, which should not be less than one crorerupees, in the preceding financial year. It is notclear for the exporters having an export turnoverof say Rs. 5 Crore. For such people whose 10% ofthe export turnover is below one crore, what is theimplication Are those exporters who havereceived their total due inward remittance of e.g.Rs. 5 Crore eligible for availing the facility of LUT Reply :Condition i(b) in the said Notification meansthat:the registered person should have receivedat least 10% of his/her export turnover asforeign inward remittance in the precedingfinancial year and the foreign inwardremittance in the preceding financial yearshould not be less than one crore rupees.E.g. if a registered person has an exportturnover in FY 2016-17 of Rs. 5 crores andhas received foreign inward remittance ofRs. 5 crores in the same FY, then he shallsatisfy Condition i(b), and shall be eligiblefor execution of LUT.

• FAQs asked on Invoice & returns

Query : If an Assessee has two or more units with singleregistration, how the invoices are to be maintainedviz., separate invoices unit wise or single invoicefor all units Reply :He can issue unit-wise invoice also. Butthere should not be any duplication innumbering system. Query : Do we have clarity on when invoice data uploadingwill begin on the GSTNReply :Govt. is ready to launch this.However, a simpler return called GSTR-3Bhas also been devised due to the demandsfrom the trade and industry for extension oftime limit for filing of normal returns. Query :Would head offices providing centralized HR,Finance and IT functions also need to raise invoicesto its branches Reply :Yes, if the head office and branches aredistinct persons as specified in section25(4), invoice is required to be issued and ST should also be paid. Query : Kindly clarify the accounting treatment of CreditNote while raising Invoice after implementation ofGSTReply :For the purpose of GST law, credit note canbe issued to reduce the taxable value or toreduce tax payable or to claim goods return,where the relevant invoice had already been issued and taxable value or taxcharged in that tax invoice is in excess.Section 34 of CGST Act, 2017 may bereferred to for further details. Query : Whether any trader having turnover of less thanRs. 20 lakh needs to sell his goods on proper invoice/billingReply :Only registered persons are required toissue tax invoices as per provision of Section31 read with rules. An unregistered personmay supply goods on ordinary commercialinvoices and he cannot issue tax invoice. Query : What is the procedure/documents required forsending free replacement to the customers at freeof costReply :Where free replacement is provided to thecustomers without consideration under warranty, no GST is chargeable on suchreplacement. In such cases goods may besent on delivery challan as provided in rule55 of the CGST Rules, 2017. Query : If we are only dealing in exempted items what isthe type of invoice we are required to issue to ourbuyers Is it bill of supply or regular GST InvoiceReply : You may issue a commercial invoice in suchcases. However, if you are a registeredperson, you may issue a bill of supply forexempt supplies. Query :How the invoicing should be done for free goodsgiven along with sale so that corresponding inputtax credit is not required to be reversed forproducts under schemeReply :Invoice value would include value of allgoods including those supplied free. In suchcases, ITC is not required to be reversed. Query : Under GST, how to send demonstration equipmentand instruments to customers or branch officeswith in India on returnable basis No sale isinvolvedReply : As the goods are sent on returnable basis and no transfer of title is involved, it is not asupply of goods. If some element of service is involved, the same will be a taxablesupply. The goods may be sent on deliverychallan without invoice as it is not a supplyof goods. Query : How to send equipment and instruments tomanufacturers factory for repairs and calibration with in India on returnable basis No sale isinvolved.Reply :Challan for movement of goods withoutsupply is to be issued in terms of Rule 55 ofCGST Rules. Query : Clarification is sought on the following: Revision inGSTR ReturnsReply :Mistakes can be corrected in subsequentreturns to be filed through amendmentTable (For example Table 11 of GSTR-1).Such mistakes can be corrected till the duedate for filing of the return for the month ofSeptember subsequent to end of the year orfiling of the annual return, whichever isearlier.

• FAQs asked on Input tax credit

Query :How can a trader avail ITC while sellinggoods/services to unregistered/exempted GST tradersReply :The fact that a registered person issupplying goods to an unregistered orexempted person has no consequence onavailment of ITC by the supplier. Query : Please clarify the procedure of availing ITC onAdditional Compensation Cess on some productslike Tobacco, Coke, Cigarettes Reply :ITC of cess can be used only for payment ofcess Query :Please clarify ITC Credit status for the followingcondition: If Recipient (Good & Service) is registered under GST & Re-seller/Supplier is underexemption OR composition schemes Reply : In case of unregistered dealer, recipient willpay tax on reverse charge basis. He can getthe ITC provided he fulfills other conditionsas mentioned in section 16 of the CGST Act,2017.In case of purchase from compositiontaxable person, the composition personcannot charge any tax and hence thequestion of availing ITC does not arise Query :Please clarify ITC Credit status for the followingcondition: On GST Deducted Commission for Distributor registered under GST Taxpayer Reply :Any deductions under TDS/TCS provisions from amount paid or credited to thesupplier shall be credited to the electroniccash ledger which can be used for paymentof tax. Query : Please clarify ITC Credit status for the followingcondition: if Commission received Without Deducting GST in cases where distributor underExemption OR composition SchemeReply :The section concerning GST deduction(Section 51 of CGST Act, 2017) has not beenoperationalized till now. But if thedistributor is under threshold exemption orunder composition scheme, therequirement for GST deduction dependsupon the taxable supply and value ofcontract rather than the nature of the supplier. Query :How should importers take credit of clean energycess paid on goods lying as stock 30.06.17 Reply :No credit for clean energy cess can betaken. Query :Since our products are under 0% and we are usingvarious services like telephone, professional charges for which we will be paying GST to ourregistered service providers and this amount willnot be utilized towards any payment of outwardgoods. Are we eligible for refund on the servicesobtained and GSTN paid for the same If yes whatis the procedure If no what is the accountingeffect Reply :You are not eligible for refund of unutilizedInput Tax Credit as there is no tax on outputsupply.Tax paid on such services may beaccounted along with the services availedi.e. booked as expenses. Query :Whether ITC Transition provisions on goodspurchased within the State on which tax on MRP has been paid, covered under 140(3) or 140(1) Ifcovered under 140(1) then how a credit claim bemade, as presently in Vat return only the amountis reflected and it is non-adjustableReply :Section 140 (1) of CGST Act is applicable fora person who was registered under theexisting laws (e.g. under Central Excise,Service Tax, VAT). Andtherefore, credit of taxes paid on inputs wasgetting recorded in the returns filed. Section140(3) of CGST Act is applicable for personswho were not liable for registration underexisting laws or who were selling/providingnon-taxable, exempt goods/services buttheir supplies are liable to tax under GST.Please also refer to Section 140 of the SGSTAct of your respective state and theassociated rules. Query : Please clarify on availment of input tax credit ofGST paid on trucks, commonly used for G.T.A business, Safex, Multi-modal and packingbusiness Reply :No ITC is permitted to GTA engaged in providing GTA services which are underRCM and are treated as exempted suppliesin the hand of GTA. However, if GTA is alsoliable to pay tax under forward charge assupplier, he is not permitted to avail ITC ifhe is claiming the concessional rate of 5%.If ITC is claimed, the GST rate for GTA inforward charge will be 18%. Query :What will be the Input Credit of newly launchedproject of building construction after 01.07.2017Reply :ITC is permitted to pay output tax ofconstruction/work contract services. Please see section 17(5) (c ) and (d) of CGST Act,2017. Query :What are the provisions under CGST Act as to theeligibility of CENVAT credit of service tax on invoices which are received after the appointeddate for the services received under the service taxregimeReply :ITC is available in terms of section 140(5) ofCGST Act, 2017. Query :How a service Provider can get input GST creditbenefit in pure labour Contract under Input CreditReply :He needs to use input for furtherance ofbusiness and should fulfill the conditions mentioned in section 16 of CGST Act, 2017. The input should not fall within the negativelist provided in section 17(5) of the CGSTAct, 2017. Query : GSTR-1 (Point 9) As banks are eligible to claimonly 50% of Input credit consider excluding banksfrom reporting of exempt/ non-GST supplies in GSTR -1 Reply :Return Rules have already been notified. Itis not possible to make exception for onesector. Query : Clarification is sought for the following: PenalInterest on loans and advances Reply :Penal interest is a consideration fortolerating an act and it is a supply ofservice and will be taxable. Query : In case of takeover of a Partnership firm by aPrivate Limited Company, then who will get the ITCcredit And who should file the GST TRAN-1 Reply :If the business is transferred as a going concern, and liabilities are also transferredthen ITC can be transferred to the company.The company can file TRAN-1.

• FAQs asked on Job work

Query : Whether the job worker (who converts barley intoMalt) has to charge GST from the Principal only on the Job Work charges or full value of goods, i.e.(Value of Raw Material + Job Work Charges) Reply :The job worker has to pay GST on job workcharges only. Query : In case of job workers not operating underNotification 214/86-CE (i.e. registered under excise at present), whether they can carry forward thecredit availed on RM/PM supplied to them by the principal manufacturer Also is there anyrestriction on carry forward of the credit on inputservices distributed to them by the principal as ISDunder Rule 7 of the Credit Rules and remainingunutilized on the day of GST implementation Reply : The credit on RM/PM supplied by theprincipal manufacturer can be availed bythe manufacturer rather than the jobworker. Section 141 of CGST Act, 2017refers. Further if job worker is registered underexisting law, Cenvat Credit in respect ofinput services received from ISD as shown inreturn can be carried forward.

• FAQs asked on levy

Query :Should GST be charged on labour charges in aninvoiceReply :Yes, if the activity is taxable. Query :Would tax be payable on sale of business assets onwhich no credit was claimedReply :Yes provided the aggregate value ofsupplies is more than Rs. 20 lakhs (Rs. 10lakhs in special category States). Query :What kind of facilities provided by employer toemployee would be liable to GST For instance, whether club membership provided will beconsidered as " service"Reply :The compensation to employees in the formof money is not a supply. However, fringebenefits are supply of goods or services andare liable to tax if not exempted. These aretransactions in furtherance of business andeven if supplied without consideration, thesame are deemed supply. Query :PayPal is USA based company. It provides servicesto its account holders spread worldwide. Whetherservices given by PayPal would be covered underSection 13(8) of IGST ActReply :If the place of supply is in India, theregistered recipient will have to pay taxunder reverse charge and if the recipient isunregistered, PayPal will pay GST inaccordance with section 14 of IGST Act. Query :Whether 5% GST applicable to the Transportservice provider is to be charged on the total freight amount billReply :It will be on the invoice value of GTAservices determined in terms of section 15 Query :Does Rental Income less than Rs. 20 Lac perannum attract GSTReply :No. That said, where the rental income froma single property is less than Rs. 20 lakhsbut the aggregate rental income from various properties exceed rupees twentylakhs, the requirement for registration andGST payment will be there. Query :In reference to Section 15 of GST, CTT and STT arestatutory levy under Income Tax. Is there any GSTtax on another governmental Tax, SEBI Fees andStamp Duty as per Various State Government ratesReply :As per Section 15 the value will be inclusiveof all taxes except CGST, SGST, UTGST and IGST. So all taxes will be included in thevalue for the purpose of GST except wherebenefit of Pure agent as provided in Rule 33of CGST Rules, 2017 is availed. Query :Provisions of Notification no. 7/2017 areapplicable under CGST only. Kindly clarify whether provisions of notification no. 7/2017 will beapplicable for SGST ACT, IGST ACT and UTGST ACTReply :Separate notifications are issued underSGST Act, IGST Act and UTGST Act. Query :Whether GST would be payable in case of demandof excise duty made upon finalization of provisional excise assessment in post GST periodReply :Demands arising from finalization of provisional assessments under the CentralExcise Act, unless recovered under the saidAct, shall be recovered as an arrear of taxunder GST Act. Query :What option shall be opted while clearing samplesfrom factory to warehouse location: a) No GST should be levied but corresponding ITCshould be reversed b) GST should be levied but GST (ITC) paid onsamples cleared should be reversed at receiving warehouse location.Reply : Depends upon the location of the factoryand warehouse. If both are located in thesame State and not registered separately,no GST is to be charged. Once finallysupplied to any other recipient, no GST is tobe charged but ITC on the same is to bereversed. Query :What is the taxable treatment of the servicesprovided by a Service Provider in respect of such services which are covered under circular 25/2012-Mega Exemption Notification for Government, railways and other Departments Such Services areexempt from Service Tax, hence who will bear the GST tax element of 18%, the Service Provider or thePrincipal EmployerReply :Exemption nofication for services have beennotified. Refer Not. No. 12/2017- Central Tax(Rate) & Not. No. 9/2017-Integrated Tax(Rate). Query : Normally the Service Provider does not issue invoicein Government Jobs. The Sectional /departmentalengineers prepare the measurement books andrecord the details of work done on a subsequentdate. Hence how Point of Service will be reckonedsince the Service Provider does not raise the InvoiceReply :Time of supply of services has been explainedin Section 13 of CGST Act. The supplier ofservices will have to issue a tax invoice within30 days of supply of service (themeasurement is finalized by thedepartmental engineers or service providerwhichever is earlier.)In case of reverse charge , Govt. Dept. willraise invoice accordingly. [Refer Section13(3)]. Query :In construction work, after raising of the Invoice,physical verification of the same is done by theEngineers of the Client and this work is delayedabnormally: in some instances the period taken goes up to two months, then how the Point of Service willbe determinedReply :Time of supply of services has been explainedin Section 13 of CGST Act.The date of issue of Invoice will the time ofsupply Query :Is it practically feasible that Service Provider submitsan Invoice after execution of work and the PrincipalEmployer makes arrangement for payment of the billafter three months whereas as per point of servicerule, the Point of Service stands for one month fromthe date of issue of raise invoice or serviceswhichever is earlier and the Service Provider has topay Service Tax @ 18% on value of work donealthough he has not received any payment from theclient till dateReply :Time of supply of services has been explainedin Section 13 of CGST Act. The terms forpayment do not decide the taxability of aparticular transaction. So even if payment fora particular supply has not been received it will still be liable for GST. Query :Clarification is sought for the following:- 1.Intermediary services and services provided by Banking Company to its Account Holders Intrastateor Inter-state supplyReply :Place of supply provisions in sub-section (12)of section 12 of IGST Act may be referred to. Query :Is cross border service, provided by an Indian branch toan offshore branch/head office, zero rated under GSTReply : No. Since in this case, the supplier of service andthe recipient of service are merely establishmentsof a distinct person as per Explanation 1 ofSection 8 of IGST Act, the service does notsatisfy the definition of export of service asprovided in Section 2(6) of the IGST Act.Therefore, such services cannot be zero ratedunder GST. Query :Pure Agent Issuance of a circular similar to CBECCircular on STT/Stamp duty dated 17th Sept. 2010Reply :Detailed Rule provided. Pl see Rule 33 ofCGST Rules. Query :Charging of GST in case of travel by a passenger tobeyond India's border viz., to Pakistan or BangladeshReply :The place of supply is the place ofembarkation for the continuous journey. If a passenger embarks at Amritsar for journey toa place in Pakistan, it is taxable because theplace of embarkation is in the taxableterritory Query :Levy of GST in respect of ticket booked in India ifplace of boarding is outside IndiaReply : The place of supply is outside India but as thesupplier is located in India, it is a case of inter State supply and subject to IGST. It will bezero rated if the sale proceeds are realized inconvertible foreign exchange.

• FAQs asked on Reverse charge

Query :If an Assessee pays GST on behalf of an unregisteredsupplier/SSI/exempted unit, will he be able to takeInput Tax Credit of the GST paid on reverse chargebasis Reply :Yes, input tax credit of tax paid on reversecharge basis by the recipient is allowed to therecipient and the credit can be taken even inthe same month. Query :Whether, any Indian providing services to PayPal oncontract basis is required to pay reverse charges oncharges deducted by PayPal Reply : It depends on the nature of chargesdeducted.The place of supply is outside India but as thesupplier is located in India, it is a case of inter Statesupply and subject to IGST. It will bezero rated if the sale proceeds are realized inconvertible foreign exchange. Query :Under the new GST Act, the liability or payment ofGST still with consignee or consignor Reply : Reverse charge mechanism has beenprovided in GST law for GTA and the recipient of GTA service ( he may be consignor orconsignee) is required to pay GST. Notification No 13/2017-Central tax (rate)may be referred to Query :Whether RCM is applicable on payments made forhiring of transport from unregistered GST tradersReply :RCM under section 9(3) is applicable for GTAand not for transport of goods. Where thevehicle is taken on rent or lease , it will besupply of service under 9966 or 9973 andsupply of service will be taxable under RCMunder section 9(4). Query :We are also paying small payments like unloadingcharges, detention charges and under miscellaneouspayments to petty contractors. Is GSTN underreverse charge applicable for these paymentsIf you are not registered, payment on reversecharge under section 9(4) of CGST Act, 2017 is not required. That said, if such services availed fall within the domain of any servicethat is subject to reverse charge undersection 9(3) of CGST Act, 2017 you have toget yourself registered and GST has to bepaid. Query :Can any unregistered transporter having a turnoverbelow 20 lacks carry the goods for a registereddealer Reply :Yes, GTA can carry the goods. GST on GTAservices is liable to be paid on RCM basis bythe recipient. The supply of services of goodstransport by road transporter other than a GTA and a courier is exempted underNotification No. 9/2017- Central Tax (rate). Query :Whether reimbursement of expenses to staff comesunder RCMReply :Re-imbursement is an expense in the courseor furtherance of business and if the same isagainst a taxable supply taken from anunregistered supplier, RCM will apply. Query :Whether tax under RCM is applicable for expensesincurred towards doctor sponsorship programmeReply :As per notification no. 13/2017-Central Tax(Rate), Sl. No. 4 sponsorship to anybodyCorporate/Partnership firm comes underRCM.

• FAQs asked on Registration

Query :Do dealers having turnover below Rs. 20 lakhs needto compulsorily register if they are supplying throughonline portals like Amazon Reply :Yes, as per Section 24(ix) of the CGST Act2017, persons who supply goods or servicesor both, other than supplies specifiedunder sub-section (5) of section 9, throughsuch electronic commerce operator who isrequired to collect tax at source under section52, shall be compulsorily required to registerunder the Act. Query :Does a Medical Service Provider needs to getregistered under GST if his aggregate turnover (u/s 2(6) is more than Rs. 20 Lakhs but has taxable supplyof only an amount of Rs.2.4 Lakh p.a. Reply : Yes, he should get registered and also payGST on taxable supply. Query : Whether the registration under GST is compulsoryby Transport Service Provider.Reply : No, if the entire services supplied by thetransporter are covered under the reversecharge mechanism under section 9 (3). Query : Will from 1/7/17, my corner kariyanawala charge meGST on goods or services depending on his turnoveror both and give me an authentic/printed memo forpurchasesReply : Liability for registration under GST arises ifthe aggregate turnover is more than Rs. 20Lakhs. If the corner kariyanawla has turnovergreater than Rs. 20 lakhs in the precedingfinancial year he is liable to be registered,charge GST and provide you an invoice foryour purchase.   Query :How will I know if his turnover is below Rs 20 L and ifhe is exempt from GST and that he will not chargeme any GST Reply :Person having turnover over Rs. 20 lakhs willtake registration and registration certificatewill be displayed at a prominent locationalong with GSTIN on the name board. If yoususpect that he has not taken registration, acomplaint can be made and suo-motoregistration will be given under rule 16 of CGST Rules, 2017. Query :Will all establishments display a certificate fromgovernment (displaying his turnover category) andtheir GST Registration No. which should appear onall his cash memos/billsReply :Yes. For details, rule 18 of CGST Rules, 2017may be referred to. Query :Does a trader who has turnover of less than 20 lakhand are selling on e commerce websites, have toregister for GSTReply :Yes, if such e-commerce operator is requiredto collect tax at source. Please see Section 24of CGST Act, 2017. Query :Can a trader whose account has been blocked bye commerce portal apply for GST and still be eligibleto sell for some period of time without GST, till theyget their GST registrations completed Reply :Supply can take place during the process ofregistration and revised invoices can beissued in accordance with the provisions ofsection 31(3) of the CGST Act, 2017. Query :Do traders having turnover less than Rs. 20 Lakhsneed to get registered under GST If not, how canthey purchase primary goods from other stateswithout having GST Registration No Reply :Traders having turnover of less than Rs 20lakhs can buy from other States also withoutregistration except in case of those goodswhich are subject to reverse charge. Query :Do I, a Mutual fund Distributor working in Delhi,need to register under GST, having income Less thanRs. 20 Lakhs but working for offices that areregistered in Mumbai and have branch offices in Delhi Reply :If you are supplying services to the branchoffice in the same State, it will be intra-State supply and you will not be liable forregistration. If you are making inter-Statesupply, you will be liable for registration andbenefit of threshold exemption would not be admissible. Query :We are a private ltd. Co. having Head Office atMumbai and Branch Office in Gujarat and U.P. dealing in products having Tax Rate @0% dealingintra state and interstate supply: Since the products are 0% GST products are we require to registerunder GST if turnover is above 20 LakhsReply : No Query :We are purchasing from Haryana and selling inHaryana and also interstate sales. Currently we donot have any GST registration in Haryana. Since theProduct is 0% GST are we suppose to register in HaryanaReply : No. Registration is not required as you aredealing exclusively in products that are whollyexempted. Query :We are paying freight charges to our GTA for whichcurrently we are paying service tax at applicablerate. In case of GST what we understand is GTA isexempt from obtaining GST registration no. Are werequired to pay GSTN @5% on freight fortransportation of goods which are 0%. In case we arenot required to obtain registration under GST if weare under 0% products how do we make payment for the sameReply : As you are business entity and availing GTAservices you are liable to pay GST on GTAservices on reverse charge basis andtherefore liable to be registered. Section 24of CGST Act, 2017 may be referred. Query : Please clarify the position of GST in case of licensedTour Guides having registered office in one state butproviding services Pan IndiaReply : If the presence of tour guide is required ineach State and he is supplying services fromthose States then registration requirement ineach state would be there. Query : If I already have a GSTIN, do I need to registerseparately as an Input Service Distributor Reply : Yes, as per Section 24(viii) of the CGST Act2017, an Input Service Distributor is requiredto take separate registration under the Act.

• FAQs asked on Transition

Query : How the deemed credit of available stock and Workin progress (WIP) to be availed by an Assessee Reply : The provisions relating to deemed credit arecontained in the proviso to section 140(3) ofthe CGST Act, 2017 and rule 117 (4) of theCGST Rules, 2017. ITC at the rate of 60% is allowed where the Central tax rate on goodsis 9% or more; it is allowed at the rate of 40%in other cases. It is allowed only after thepayment of applicable tax. It can be taken inthe first six tax periods only. Deemed credit is allowed only to traders andnot to manufacturers. Query : Is there any provision/ instruction under the CGSTAct for taking/verifying the physical stock of theunits as on 30th June 2017. It is pertinent to mentionhere that the Punjab Excise & Taxation departmentis undertaking the exercise of stocktaking/verification of the units which were earlier registered with them. Matter may please beclarified. Reply :There is no such bar under the CGST Act, 2017. Query : Till the time E-way bill system is fully developedwhich documents/ procedure should be followed forinter-state supply of goodsReply : The goods can be transported withdocuments like tax invoice, bill of supply anddelivery challan. Document as may beprescribed under Rule 138 of the SGST Rules,2017 will also have to be carried by theperson in charge of the conveyance. Query : Government has allowed increase in MRP due toadditional incidence of GST. Can it be done for stocklying with dealers & retailers or only for stock lyingwith manufacturer or importersReply : The prices can be revised where the incidenceof tax has increased under the GST. However,one should adhere to the requirements underother statutes like the Legal Metrology Actalso. Query : Does tax need to be paid on advances in hand as ofJune 30th for goods to be supplied from July 1 Reply : No Query : Builder is demanding balance money due to tax ratechanged under GST. Do we have to pay service taxon entire amount of registration under GST, also ifabatement provided before GST is available or notReply : GST is operational from 01.07.2017. Only onthe balance amount GST will be applicable onfuture payments. For tax paid under theearlier law, section 142(11) of the CGST Act, 2017 may be referred to. Query : How to avail credit on raw material and packingmaterials stored outside factory on which creditcould not have been availed due to the specificrestriction in the permission given by the Excise department Whether these goods can be treated asin-transit and credit be availed under Section 140(5) within 30 days of GST implementationReply : Goods can be treated in transit only when the same have not been received by the recipientwhich is not the case in this scenario. Query : Clarity is needed on the period for which details ofturnover needs to be given in Table 5(b) and 5(c ) ofForm GST TRAN-1.Reply : Period is given in the form itself i.e.01.04.2015 to 30.06.2017. Query : The tax paid in excess in one month is allowed to beadjusted against the tax liability due for the nextmonth. What would be treatment of such excesspayment of tax (service tax/ VAT) for the last monthprior to appointed dateReply :Under transitional provisions all such excessITC and Cash can be carried forward and GSTcan be paid from this amount. Query : Will the facility of deemed credit of 60/40 percent ofCGST under Rule 117(4) CGST Rules be available to both traders and manufacturers Reply :The facility will be available to all persons other than manufacturers or supplier of services.Proviso to Section 140(3) of CGST Act 2017 refers.   Query :There is a GST of 28% on a product of MRP Rs.100and the costing price of that product is Rs. 90.90/-(taxable value + 14.5% VAT) so the taxable value ofthat product will be 79.38 and if the GST of 28% willbe added to the amount without adding any profitthen it will be 79.38+22.22(28% GST) and the totalvalue of the product will be Rs.101.60/- which ishigher than MRP. So how it will be sold at the valuehigher than the MRP Reply :MRP can be revised albeit with certainprecautions and for only for certain timeperiod. Press Note of Ministry of ConsumerAffairs, Food & Public Distribution dated 04.07.17 may be referred to. Query :Section 16 of IGST Act, 2017 has a provision for ZeroRated supply under GST for supply of goods andservices to SEZ Units Need explicit clarity whetherthis also covers for supply of goods and services byone SEZ unit to another SEZ unit. E.g. Exchangelevying fees and penalty to its trading members whoare also IFSC Units. Reply : Yes, supply of goods and services by one SEZunit to another SEZ unit would be consideredzero rated supplies under section 16 of theIGST Act, 2017, which deals with zero ratedsupplies. Section 16 provides for zero ratingof "supply of goods or services or both to aSEZ developer or a SEZ Unit". As supply in thequestion is to a SEZ developer or a SEZ unit, it is covered under section 16. Query :What shall be impact of tax on the works after30.06.2017 for which tenders have been processedbut acceptance letters not issuedReply : GST is payable on services supplied after01.07.17 Query :Certain fabrics were exempt from payment ofcentral excise duty vide Notification No. 30/2004-CEdated 09-07-2004. This exemption was subject tothe condition that the manufacturer has not availedCenvat credit of duty paid on inputs. Thus the saidexemption was not unconditional. Will ITC @40% ofCGST be admissible to the taxable person in respectof such fabrics held in stockReply : Yes, ITC would be admissible.

• FAQs asked on Other miscellaneoustopics

Query : When would advance ruling applications submissionbegin Reply :The Government is in the process ofconstituting the Authority. It would benotified soon. Query : When are the recommendations of the sector wisetask force expected to be submitted to the GSTCouncil. Can representations still be made to thesectoral task force Reply : Representation can be submitted to thesectoral working groups. Query : How will I know whatever GST I pay is really paid togovernment by various makers/sellers and notpocketed by the sellerReply :Person, selling to you, would have purchasedhis products/ inputs from some supplier. Thatsupplier while filing his outward supply details (GSTR- 1) will quote the GSTIN of the yourseller. And he will have to accept the same inhis GSTR- 2. Therefore the system captures thedata of your seller. Action can besubsequently taken in case of evasion of tax. Query : Is stock transfer possible without paying GST in caseof takeover of a Partnership firm by a Private LimitedCompanyReply : One has to see the conditions given in entry 4of Schedule II of the CGST Act, 2017. If it is asupply as per this entry, it is taxable.