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Frequently Asked
Questions (FAQ) on
GST
Foreword
vi
TABLE OF CONTENTS
1. Overview of Goods and Services Tax (GST)................................ 3
5. Time of Supply...................................................................................... 53
6. Valuation in GST................................................................................... 59
7. GST Payment of Tax............................................................................ 65
8. Electronic Commerce........................................................................ 77
9. Job Work.................................................................................................. 85
14. Refunds...............................................................................................137
15. Demands and Recovery...............................................................145
viii
(Medicinal
and
Toilet
g. Service Tax
h. Central Surcharges and Cesses so far as they
relate to supply of goods and services
(ii) State taxes that would be subsumed under the GST
are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i.
of
GST
is
proposed
to
be
tax compliance. Last but not the least, this tax, because of
its transparent character, would be easier to administer.
Q 13. What is IGST?
Ans. Under the GST regime, an Integrated GST (IGST)
would be levied and collected by the Centre on inter-State
supply of goods and services. Under Article 269A of the
Constitution, the GST on supplies in the course of interState trade or commerce shall be levied and collected by
the Government of India and such tax shall be apportioned
between the Union and the States in the manner as may be
provided by Parliament by law on the recommendations of
the Goods and Services Tax Council.
Q 14. Who will decide rates for levy of GST?
Ans. The CGST and SGST would be levied at rates to be
jointly decided by the Centre and States. The rates would
be notified on the recommendations of the GST Council.
Q 15. What would be the role of GST Council?
Ans. A GST Council would be constituted comprising the
Union Finance Minister (who will be the Chairman of the
Council), the Minister of State (Revenue) and the State
Finance/Taxation Ministers to make recommendations to the
Union and the States on
(i) the taxes, cesses and surcharges levied by the
Centre, the States and the local bodies which
may be subsumed under GST;
(ii) the goods and services that may be subjected to
or exempted from the GST;
10
14
15
16
19
20
21
Registration
3. Registration
will
be
the
effective
date
of
28
29
31
34
of
Registration
35
40
41
45
47
Time of Supply
5. Time of Supply
Q 1.
Ans. The time of supply fixes the point when the liability
to charge GST arises. It also indicates when a supply is
deemed to have been made. The MGL provides separate
time of supply for goods and services.
Q 2. When does the liability to charge GST arise in
respect of supply of goods?
Ans. Section 12 of the MGL provides for time of supply of
goods. The time of supply of goods shall be the earliest of
the following namely,
(i) the date on which the goods are removed by
the supplier, where the supply of goods require
removal; or
(ii) the date on which the goods are made available
where the supply does not require removal; or
(iii) the date on which the supplier issues invoices
with respect to the supply where the above two
situations do not apply; or
(iv) the date on which the recipient shows the receipt
of the goods in his books of accounts.
Q 3. What is time of supply of continuous supply
of goods?
Ans. The time of supply of continuous supply of goods is;
a) where successive statements of accounts or
successive payments are involved, the date of
expiry of the period to which such successive
statements of accounts or successive payments
relate.
53
Valuation in GST
6. Valuation in GST
60
claimed
separately
by
Q 5.
Paperless transactions;
70
71
72
74
Electronic Commerce
8. Electronic Commerce
Q 1.
What is e-commerce?
Who is an aggregator?
78
79
80
82
Job Work
9. Job Work
Q 1.
What is job-work?
94
95
Both?
(b)
(c)
(d)
101
109
Ans.
program
of
tax
all
invoices
will
have
to
be
115
117
118
119
121
127
128
133
Refunds
14. Refunds
Q 1.
What is refund?
139
141
142
150
151
152
157
158
tax amount or
amount of fine,
159
amount of fees or
162
Advance Ruling
169
171
Settlement Commission
174
177
the
powers
of
Settlement
182
183
i.
188
189
190
194
195
196
197
198
199
200
Ans. Decision to arrest needs to be taken on case-tocase basis considering various factors, such as, nature
and gravity of offence, quantum of duty evaded or credit
wrongfully availed, nature and quality of evidence,
possibility of evidences being tampered with or witnesses
being influenced, cooperation with the investigation,
etc. Power to arrest has to be exercised after careful
consideration of the facts of the case which may include:
i.
are
the
guidelines
for
issue
of
204
Police;
ii. Customs;
iii. Officers of State/Central Government engaged
in collection of GST;
iv. Officers of State/Central Government engaged
in collection of land revenue;
v. All village officers;
vi. Any other class of officers as may be notified by
the Central/State Government.
****
207
Ans. The Model GST Law codifies the offences and penalties
in Chapter XVI. The Act lists 21 offences in section 66, apart
from the penalty prescribed under section 8 for availing
compounding by a taxable person who is not eligible for it.
The said offences are as follows:1) Making a supply without invoice or with false/
incorrect invoice;
2) Issuing an invoice without making supply;
3) Not paying tax collected for a period exceeding
three months;
4) Not paying tax collected in contravention of the
MGL for a period exceeding 3 months;
5) Non deduction or lower deduction of tax
deducted at source or not depositing tax
deducted at source under section 37;
6) Non collection or lower collection of or nonpayment of tax collectible at source under
section 43C;
7) Availing/utilizing input tax credit without
actual receipt of goods and/or services;
8) Fraudulently obtaining any refund;
9) Availing/distributing input tax credit by an Input
Service Distributor in violation of Section 17;
211
regarding
goods
without
prescribed
any
goods
212
Q 2.
213
A sum of Rs.10,000/-.
Rs.10,000.
217
Punishment (Imprisonment
extending to--)
Section 73(2) provides that a second or any
subsequent conviction for an offence in this section shall
be punishable with imprisonment for a term that may
extend to 5 years and a fine. However, no imprisonment
for any of the offences shall be for a period less than six
months.
Q 18. What are cognizable and non-cognizable
offences under MGL?
Ans. In terms of Section 73(3) and 73(4) of MGL
all offences where the evasion of tax is less
than Rs.250 lakh shall be non-cognizable and
bailable,
all offences where the evasion of tax exceeds
Rs.250 lakh shall be cognizable and nonbailable.
Q 19. Is prior sanction of competent authority
mandatory for initiating prosecution?
Ans. Yes. No person shall be prosecuted for any offence
without the prior sanction of the designated authority.
Q 20. Is mensrea or culpable mental state necessary
for prosecution under MGL?
Ans. Yes. However, Section 75 presumes the existence of
a state of mind (i.e. culpable mental state or mensrea)
required to commit an offence if it cannot be committed
without such a state of mind
221
is attributable to negligence of
222
223
Rs.10,000.
Rs.30,000.
224
What is IGST?
235
the input tax credit for payment of future taxes. For B2B
transactions the location of recipient takes care in almost
all situations as further credit is to be taken by recipient.
The recipient usually further supplies to another customer.
The supply is consumed only when a B2B transaction is
further converted into B2C transaction. In respect of B2C
transactions, the supply is finally consumed and the taxes
paid actually come to the government.
Q 5. What would be the place of supply where
goods are removed?
Ans. The place of supply of goods shall be the location of the
goods at the time at which the movement of goods terminates
for delivery to the recipient. (Section 5(2) of IGST Act)
Q 6. What will be the place of supply if the goods are
delivered by the supplier to a person on the direction
of a third person?
Ans. It would be deemed that the third person has received
the goods and the place of supply of such goods shall be the
principal place of business of such person. (Section 5(2A)
of IGST Act)
Q 7. What will be the place of supply where the goods
or services are supplied on board a conveyance, such
as a vessel, an aircraft, a train or a motor vehicle?
Ans. In respect of goods, the place of supply shall be the
location at which such goods are taken on board. (Section
5(5)of IGST Act)
236
239
What is GSTN?
Ans. Goods and Services Tax Network (GSTN) is a nonprofit non-government company, which will provide
shared IT infrastructure and service to both central
and state governments including tax payers and other
stakeholders. The Frontend services of registration,
Returns and payments to all taxpayers will be provided by
GSTN. It will be the interface between the government and
the taxpayers.
Q 2.
24.5%
State Govts
24.5%
HDFC
10%
HDFC Bank
10%
ICICI Bank
10%
10%
11%
248
(New,
surrender,
251
Q 9.
between the App user and the GSP and the second between
the GSP and the GST System.
Q 11. What are the benefits to taxpayers in using the
GSPs?
Ans. A GSP providing tax accounting software will have
the advantage of already providing the tax payer with
a vast majority of the taxation functionality. It will help
the tax payer if the delta process of upload of the invoice/
return and reconciliation of the same is also provided
by the GSP. Whereas in case of GST portal, another set of
exercise manually or otherwise will have to be done to
upload the invoice data or the return. The interface and
features exposed by GST portal will be uniform for all
taxpayers and might be basic in form and design. On the
other hand GSPs are expected to have richer interfaces
and features required by specific group (large taxpayers
with completely automated financial system,SME with
semi-automated system and small size with no system) of
taxpayers. Also, by sheer size the GST portal will not be as
nimble as that provided by a GSP.
GSPs can come up with application to provide GST filing
facility in existing software or develop end-to-end solution
for SME and small taxpayer to manage their sale/purchase
and GST filing e.g. an offline utility like spread sheet, which
taxpayer can fill their invoice details and then upload on
GST portal for processing. Similarly, for Tax Consultants
(TC), GSPs can provide dashboard to display list of his/her
all clients and clicking on a particular client can give TC
the snapshot of the actions/ pending actions by client.
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Transitional Provisions
265
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268