GST SERVE
 

FAQ

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FREQUENTLY ASKED QUESTIONS

Registration

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

You may do so at any time on the government portal gst.gov.in. We can guide you to obtain the registration.

2. What happens if I change the status from a sole proprietorship to a partnership?

New registration would be required as the partnership firm would have a new Permanent Account Number (PAN).

3. I have separate businesses; in each business, the turnover is less than 20 lakhs. Would I be required to take a GST registration?

If all your businesses are conducted under a single PAN and the aggregate turnover from your all businesses exceeds Rs 20 lakhs, you would be required to take GST registration.

4. 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?

A person (or business) liable to register if the aggregate turnover (all India) is more than 20 lacs (Rs. 10 lacs in Special Category States – currently 11 states) or if a person is engaged in inter-State supplies regardless of the turnover.

5. Whether a 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. For e.g., a contractor based in Kerala offering services in Tamil Nadu will have to obtain registration in Tamil Nadu.

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

Outward supplies on which tax is paid on reverse charge by the recipient will be included in the aggregate turnover of the supplier. Reverse Charge Mechanism (RCM) is expected to be valid only from 1 April 2018.

7. Does aggregate turnover include value of inward supplies received on which RCM is payable?

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

8. When is registration in other state required? Will giving service from Ernakulam to other state require registration in other state?

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

9. Does 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.

10. If someone trades exclusively in 0% GST items (grains, pulses) or exempt goods and services then is it necessary to register for GST, if the turnover exceeds ₹20 lacs?

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

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

There will be only one registration per State for all activities. But, you have the option to be registered as a separate business vertical. You cannot opt for composition in a vertical if you are paying tax normally (under section 9) for other vertical(s).

12. I am registered in Kerala and getting the service from unregistered dealer of Tamil Nadu, should I take registration in Tamil Nadu to discharge GST under RCM?

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

13. 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 (i.e., when the aggregate turnover crosses Rs 20 lakhs or Rs 10 lakhs in 11 special category states) to obtain registration.

14. Is there any concept of area based exemption under GST?

There is no area based exemptions in GST.

15. If a company in Kerala holds only one event in Chennai, will they have to register in Tamil Nadu? Will paying IGST from Kerala suffice?

Only if you provide any supply from Chennai you need to take registration in Tamil Nadu. Else, registration in Kerala is sufficient (and pay IGST on supplies made from Kerala to Tamil Nadu).

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

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

17. If an existing taxpayer registers a branch office in another state, will this come under a fresh registration or under the existing tax payer’s registration?

The registration in the other state would come under a fresh registration.

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

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

19. If I am starting a new business today, will I need to obtain a TIN and then apply for GST? Or can I directly register with GST?

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

20. All my outward supplies are export services. In this case is it compulsory to register under GST?

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

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

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

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

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

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

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

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

– Ice cream and other edible ice, whether or not containing cocoa.
– Panmasala
– All goods, i.e. Tobacco and manufactured tobacco substitutes are not eligible for benefit of composition scheme.

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

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

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

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

27. I have registered as a composition dealer. If my turnover crosses Rs. 1.5 crore*, can I continue in the scheme for the remaining financial year?

No, taxpayer becomes ineligible for the composition scheme on the day the turnover crosses Rs. 1.5 crore*.

* – Subject to changes by the GST council from time to time

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

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

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

There is no such requirement under GST law.

Tax rates and applicability, Input credits, Refunds and fungibility

30. Can SGST of Tamil Nadu charged by supplier on purchase from Tamil Nadu can be utilized for payment of SGST in Kerala?

SGST of one state cannot be utilized for discharging of output tax liability of another State. Please refer to an article on fungibility of CGST, IGST and SGST on our blog here <insert link>

31. 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.Please refer to an article on fungibility of CGST, IGST and SGST on our blog here <insert link>

32. 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.Please refer to an article on fungibility of CGST, IGST and SGST on our blog here <insert link>

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

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

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

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

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

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

36. If I buy raw material or goods from a supplier unregistered in GST, do I have to pay GST in RCM and can I avail Input Tax Credit (ITC) of the same?

In the current regime, RCM is suspended till 31 March 2018.It is expected that you will have to pay GST via RCM from 1 April 2018 onwards. You can avail ITC of the GST so paid if you are otherwise eligible.

37. Suppose I am in composition scheme in GST. If I purchase goods from an unregistered person, will GST be payable by me?

Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered person. In the current regime, RCM is suspended till 31 March 2018.It is expected that you will have to pay GST via RCM from 1 April 2018 onwards.

38. 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.

39. In the case of a service provided, 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.

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

Like in the case of an 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.

41. A shop sells taxable & exempt products to the same person (Business to Consumer or 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.

42. 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.

43. 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.

44. 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.

45. 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.

46. 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.In the current regime, RCM is suspended till 31 March 2018.It is expected that you will have to pay GST via RCM from 1 April 2018 onwards.

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

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

48. 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 the GST return.

49. Should we discharge GST liability under RCM for all transactions with unregistered dealers or is there an exemption for small amounts?

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

50. 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.

51. Will the stipend paid to an intern or trainee fall under the RCM?

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

52. Will salary by partnership firm to partners as per the Income Tax Act liable to GST?

Salary paid to partners will not be liable for GST.

53. Whether GST will be attracted in the case of returnable packing material like drums supplied with finished goods?

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

54. 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.

55. I am from Kerala and providing service to a customer in Karnataka. I outsource the work to a service provider in Karnataka, what tax am I needed to charge?

Generally, these will be two supplies where the outsourced service provider from Tamil Nadu will charge you IGST. You will be required to charge IGST from your customer in Karnataka.

56. If address of the buyer is in Delhi and place of supply is same state of supplier (Kerala), 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.

57. Why is bifurcation of deposit as CGST-SGST-IGST required?

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

58. Will the provision of bus service, meal coupons, telephone at residence, vehicle for official and personal use, uniform and shoes, by an employer attract GST?

As long as the value of such supplies is in the nature of gifts, and value of such gifts does not exceedRs. 50,000 in a financial year, GST will not be applicable.

59. Can we get ITC for capital expenditures like vehicles, solar panels etc for company use?

ITC on capital goods is generally available if they are used in the course or furtherance of business. However, credit is not available on cars, unless you are in a business of imparting driving training, or supplying such cars. A list of items on which ITC is not available is provided in Section 17 of the CGST Act, 2017.

60. If my turnover is less than 1.5 crores, do I need to mention HSN code on my invoice?

Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5 crores.

61. I was an unregistered person earlier. Now I want to register under the composition scheme. Can I take ITC of the GST I paid on my stock?

No, a person registering under the composition scheme cannot take ITC on inputs.

62. Will there be GST in Andaman &Nicobar Islands as previously there was no VAT in that union territory?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CGST credit can be first used to set off CGST liability. Whatever is left can be used to set off IGST liability. It cannot be used to set off SGST liability. Similarly, SGST credit can be used to set off SGST and IGST liability, in that order. It cannot be used to set off CGST liability. Please see Section 49 of the CGST Act, 2017.Please refer to an article on fungibility of CGST, IGST and SGST on our blog here <insert link>

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

No, if a firm is registered in more than one state, then each such registration will be treated as a separate registered person. Please refer to an article on fungibility of CGST, IGST and SGST on our blog here <insert link>

Other Matters

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

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

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

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

73. How to incorporate two supplies in a return for items with the same four digits HSN code but having different tax rates?

The returns provide for furnishing details by tax rates.

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

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

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

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

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

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