Complete GST Information in India

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GST India
(Last Updated On: July 27, 2018)

Question 1. WHAT IS GST?

Answer : Abbreviation of Goods and Service Tax. GST is a 1 indirect tax on goods and services throughout India. It makes INDIA one unified common market. Officially known as the Constitution (One Hundred and Twenty Second Amendment Bill), 2014. GST is Governed by GST Council (setup by Hon’ble President of India- Shri Pranab Mukherjee) and its Chairman is Union Finance Minister of India – Shri Arun Jaitley. Slogan for GST is “one nation one tax”.

Question 2. WHAT ARE THE BENEFITS OF GST IN INDIA?

Answer : After GST rollout essential food items like food grains, rice, wheat are taxed at zero rate. (Goods become cheaper). Also, there is lower rate (i.e. 5%) on education, health care, spices, tea & coffee(except instant), edible oil.

Question 3. WHAT ARE THE COMPONENTS OF GST? 

Answer :

  • CGST (Central GST):- tax levied and collected by Central Govt.
  • SGST (State GST):- tax levied and collected by State Govt.
  • IGST (Inter-State GST):- tax levied and collected by Central Govt. apportioned between Union and States.

Question 4. EXPLAIN THE COMPONENTS OF GST?

Answer :

  • CGST/SGST:– a tax levied on all intra-state supply of goods or services i.e. goods or services supplied within same state. For example location of supplier of goods/services is in “Jaipur” and Place of supply (Buyer) is in “Bikaner”.
  • IGST:– a tax levied on all inter-state supply of goods or services i.e. goods or services supplied from one state to another state. For example location of supplier of goods/services is in “Rajasthan” and Place of supply (Buyer) is in “Gujarat”.

Question 5. WHAT WHERE THE PROBLEMS IN PAST INDIRECT STRUCTURE WHICH GST HAS BEEN TO REPLACE?

Answer :

  • It was complicated,
  • Urban population was taxed far higher than the rural rich,
  • Different tax rates in different states resulting in economic imbalance,
  • No Input Tax Credit in supply chain resulting in inflation in prices of goods and services,
  • Scope for tax evasion is higher,
  • ITC of Central Sales Tax(CST) not available to manufacturer/Traders,
  • ITC of Excise/Service tax not eligible for traders,
  • ITC of VAT not eligible for service providers,
  • High compliance cost due to multiple compliances (i.e. return filings),
  • Cascading effect i.e. tax on tax,
  • Tax burden on consumers is higher,
  • Barrier in free-trade because State Govt. levies entry tax at state borders,
  • Confusion/lack of clarity/interpretational issues.

Question 6. MAJOR EVENTS IN CHRONOLOGICAL ORDER WHICH GIVE RISE TO GST INTRODUCTION IN INDIA.

Answer : GST has been introduced in India after a 13 year long journey since it was first discussed in the report of the “Kelkar Task Force on indirect taxes”. A brief chronology outlining the major milestones on the proposal for introduction of GST in India is as follows:

a)  In 2003, the Kelkar Task Force on indirect tax had suggested a comprehensive Goods and Services Tax (GST) based on VAT principle.

b) A proposal to introduce a National level Goods and Services Tax (GST) by April 1, 2010 was first mooted in the Budget Speech for the financial year 2006-07.

c) Since the proposal involved reform/ restructuring of not only indirect taxes levied by the Centre but also the States, the responsibility of preparing a Design and Road Map for the implementation of GST was assigned to the Empowered Committee of State Finance Ministers (EC).

d) Based on inputs from Govt. of India and States, the EC released its First Discussion Paper on Goods and Services Tax in India in November, 2009.

e) In order to take the GST related work further, a Joint Working Group consisting of officers from Central and State Government was constituted in September, 2009.

f) In order to amend the Constitution to enable introduction of GST, the Constitution (115th Amendment) Bill was introduced in the Lok Sabha in March 2011. As per the prescribed procedure, the Bill was referred to the Standing Committee on Finance of the Parliament for examination and report.

g) Meanwhile, in pursuance of the decision taken in a meeting between the Union Finance Minister and the Empowered Committee of State Finance Ministers on 8th November, 2012, a ‘Committee on GST Design’, consisting of the officials of the Government of India, State Governments and the Empowered Committee was constituted.

h) This Committee did a detailed discussion on GST design including the Constitution (115th) Amendment Bill and submitted its report in January, 2013. Based on this Report, the EC recommended certain changes in the Constitution Amendment Bill in their meeting at Bhubaneswar in January 2013.

i) The Empowered Committee in the Bhubaneswar meeting also decided to constitute three committees of officers to discuss and report on various aspects of GST as follows:-

(i) Committee on Place of Supply Rules and Revenue Neutral Rates;
(ii) Committee on dual control, threshold and exemptions;
(iii) Committee on IGST and GST on imports.

j) The Parliamentary Standing Committee submitted its Report in August, 2013 to the Lok Sabha. The recommendations of the Empowered Committee and the recommendations of the Parliamentary Standing Committee were examined in the Ministry in consultation with the Legislative Department. Most of the recommendations made by the Empowered Committee and the Parliamentary Standing Committee were accepted and the draft Amendment Bill was suitably revised.

k) The final draft Constitutional Amendment Bill incorporating the above stated changes were sent to the Empowered Committee for consideration in September 2013.

l) The EC once again made certain recommendations on the Bill after its meeting in Shillong in November 2013. Certain recommendations of the Empowered Committee were incorporated in the draft Constitution (115th Amendment) Bill. The revised draft was sent for consideration of the Empowered Committee in March, 2014.

m) The 115th Constitutional (Amendment) Bill, 2011, for the introduction of GST introduced in the Lok Sabha in March 2011 lapsed with the dissolution of the 15th Lok Sabha.

n) In June 2014, the draft Constitution Amendment Bill was sent to the Empowered Committee after approval of the new Government.

o) Based on a broad consensus reached with the Empowered Committee on the contours of the Bill, the Cabinet on 17.12.2014 approved the proposal for introduction of a Bill in the Parliament for amending the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The Bill was introduced in the Lok Sabha on 19.12.2014, and was passed by the Lok Sabha on 06.05.2015. It was then referred to the Select Committee of Rajya Sabha, which submitted its report on 22.07.2015.

Question 7. WHEN GST ROLLOUT IN INDIA?

Answer :  1st July 2017

Question 8. WHAT TRIGGER GST?

Answer : The “Supply” of Goods and/or Services to anyone in India. Supply includes:- Sale, Transfer, Barter (goods and services are traded in exchange for other goods), Exchange, License, Rental, Lease, or Disposal of goods.

Question 9. WHAT ARE THE INDIRECT TAXES SUBSUMED IN GST?

Answer : 

  1. TAXES LEVIED AND COLLECTED BY CENTRAL GOVERNMENT
  • Central Excise Duty
  • Additional Excise Duty
  • Excise Duty levied under Medicinal and Toiletries Preparation Act, 1955
  • Service Tax
  • Additional Custom Duty, commonly known as Countervailing Duty (CVD)
  • Special Additional Duty of Customs – 4% (SAD)
  • Central Sales Tax (collected by State Government)
  • Cesses and Surcharges
  1. TAXES LEVIED AND COLLECTED BY STATE GOVERNMENT

  • VAT/ State Tax
  • Entertainment Tax
  • Octroi and Entry Tax (all forms)
  • Purchase Tax
  • Luxury Tax
  • Taxes on lottery, betting and gambling
  • State Cesses and Surcharges

Question 10. HOW MANY STATES HAVE PASSED THE STATE GST ACT?

Answer : 

  • 1st – Telangana on 9th April, 2017
  • 2nd – Bihar on 24th April, 2017
  • 3rd – Rajasthan on 26th April, 2017
  • 4th – Jharkhand on 27th April, 2017
  • 5th – Chhattisgarh on 28th April, 2017
  • 6th – Uttarakhand on 2nd May, 2017
  • 7th – Madhya Pradesh on 3rd  May, 2017
  • 8th – Haryana on 4th May, 2017
  • 9th –  Gujarat on 9th May, 2017
  • 10th – Goa on 9th May, 2017
  • 11th – Odisha on 11th May, 2017
  • 12th – Assam on 11th May, 2017
  • 13th – Arunachal Pradesh on 12th May, 2017
  • 14th – Uttar Pradesh on 16th May, 2017
  • 15th – Andhra Pradesh on 16th May, 2017
  • 16th – Puducherry on 17th May, 2017
  • 17th – Maharashtra on 22nd May, 2017
  • 18th – Tripura on 24th May, 2017
  • 19th – Sikkim on 25th May, 2017
  • 20th – Mizoram on 26th May, 2017
  • 21st – Nagaland on 27th May, 2017
  • 22nd – Himachal Pradesh on 27th May, 2017
  • 23rd – Delhi on 31st May, 2017
  • 24th – Manipur on 5th June, 2017
  • 25th – Meghalaya on 12th June, 2017
  • 26th – Karnataka on 16th Jun,e 2017
  • 27th – Punjab on 19th June, 2017
  • 28th – Tamil Nadu on 19th June, 2017
  • 29th – Jammu and Kashmir on July 5th, 2017
  • 30th – West Bengal passed the GST Bill on 7th August, 2017 replaced the ordinance for GST on 15th June, 2017.
  • 31st – Kerala passed the GST Bill on 16th September, 2017 replaced the ordinance for GST on 21st June, 2017.

 Question 11. EXPLAIN DIFFERENT TYPES OF SUPPLY UNDER GST LAW?

Answer :

  1. COMPOSITE SUPPLY:- (Defined under section 2(30) of CGST Act, 2017.) Composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. For example, A consumer buys T.V and gets 1 year warranty and maintenance with supply of T.V. Supply of T.V is principal supply, warranty and maintenance are ancillary.
  2. MIXED SUPPLY:- (Defined under section 2(47) of CGST Act, 2017.) Mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax. For example, A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed supply (If these items are supplied separately, it shall not be a mixed supply).
  3. EXEMPTED SUPPLY:- (Defined under section 2(47) of CGST Act, 2017) means supply of goods or services at nil rate (0%).
  4. INWARD SUPPLY:- (Defined under section 2(47) of CGST Act, 2017.) It in relation to a person means receipt of goods or services. In short it means buying of goods or services or both.
  5. OUTWARD SUPPLY:- (Defined under section 2(83) of CGST Act, 2017.) It means selling of goods or services or both.
  6. TAXABLE SUPPLY:- (Defined under section 2(108) of CGST Act, 2017.) It means supply of goods or services on which tax is levied.
  7. ZERO RATED SUPPLY:- means export of goods and/or services or supply of goods and/or services to a SEZ (Special Economic Zone) developer or a SEZ Unit.

Question 12. HOW MANY GST COUNCIL MEETINGS HAVE HELD SO FAR?

GST Council meetings All

Answer : Following 20 meetings have been held since its constitution on September, 2016:-

1st Meeting on 22nd September, 2016:- Exemption limit Rs.10 Lac for North-Eastern and Rs. 20 Lac for Rest of India.

2nd Meeting on 30th September, 2016:- Finalized 5 sets of draft rules relating to Payment, Returns, Refunds, Invoice, And Registration.

3rd Meeting on 19th October, 2016:- A 4 tier- rate structure 6%, 12%, 18%, 26% were proposed.

4th Meeting on 3rd November, 2016:- 4 tier- rate structure 5%, 12%, 18%, 28% were proposed. Essential items including food will be taxed at 0%.c

5th Meeting on 3rd December, 2016:- Certain headway was made on finalization of the draft legislations.

6th Meeting on 11th December, 2016:- Contentious issue of dual control of assesses could not be sorted. Draft GST legislations were discussed at the meeting.

7th Meeting on 23rd December, 2016:- No consensus was reached on issue of dual control.

8th Meeting on 4th January, 2017:- No major decision.

9th Meeting on 16th January, 2017:- Consensus for GST to be rolled out from 1st July, 2017.

10th Meeting on 18th February, 2017:- Approved only one draft law compensation to states.

11th Meeting on 4th March, 2017:- Approved CGST (Central GST) and the IGST (Integrated GST).

12th Meeting on 16th March, 2017:- Cleared remaining legislations UTGST Law (Union Territory GST Law) and the SGST (State GST Law).

13th Meeting on 31st March, 2017:- 5 sets of draft rules relating to Registration, Refunds, Returns, Payment & Invoice, Debit Note & Credit Note that were originally approved have to be partly amended and altered. Also, council gave its tentative nod to 4 more new sets of draft rules dealing with GST input tax credit, Valuation, Transitional provision, composition scheme.

14th Meeting on 18th May, 2017:- 9 rules finalized relating to Composition, Valuation, Transition, Input Tax Credit, Invoice, Payment, Refund, Registration and Return.

15th meeting on 3rd June, 2017. The main objective of the meeting was to decide tax rates on six items which included gold, textiles and footwear. The major highlights of the meeting are:

  • The GST Council has cleared all the pending rules related to transition provisions and returns.
  • All the states have agreed to rollout GST from July 1, 2017
  • Gold, Gems, Jewellery to be taxed at 3 percent
  • GST on apparel below Rs 1,000 fixed at 5 percent
  • GST on all biscuits to be 18%
  • Readymade garments to attract 12% GST; Yarn and fabric cotton 5 per cent
  • Footwear priced below Rs 500 to be taxed at 5%, the rest at 18%
  • Bidi to be taxed at 28% without cess. However Beedis are still under discussion, no proposal of cess for beedis
  • A nominal rate of 0.25 percent imposed on rough diamond
  • GST Council will set up committee to look into complaints regarding anti-profiteering clause.

16th meeting on 11th June, 2017. Main agenda items of the 16th GST Council Meeting include confirmation of the minutes of the 15th GST Council meeting held on 3rd June, 2017, approval of amendments to draft GST Rules and Rate Adjustment, if any, based on the representations received from different trade and industry and their associations.

17th meeting on 18th June, 2017. The main agenda items of the 17th GST Council Meeting include confirmation of the minutes of the 16th GST Council meeting held on 11th June, 2017, approval of draft GST Rules and related Forms for (i) Advance Ruling, (ii) Appeals and Revision, (iii) Assessment and Audit, (iv) E-Way Bill & (v) Anti-Profiteering, and Fitment/adjustment of GST Rates on certain items among others.

18th meeting on 30th June, 2017. The last GST Council Meeting before the final GST Rollout was held today at Vigyan Bhawan at New Delhi. The major highlights of the meeting are:- The tax rate on fertilizers have been reduced to 5% from previously decided 12% and Tax rate on Exclusive parts of tractors has been cut to 18% from 28%

19th meeting on 17th July, 2017 The 19th GST council meeting held on 17th july 2017 in New Delhi. Council here decided to increase the cess applied on cigarettes by as much as 31% in certain categories, effective from July 18. Outcomes of 19th GST council meeting.

20th meeting on 5 August, 2017 The 20th GST Council meeting held on 5th August, 2017 in New Delhi. The Council here gave approval to the e-way bill rules. All kinds of Job work on textiles will be taxed at 5%. Council also discussed on Anti-Profiteering. Tax rate on tractor parts has been cut down to 18%. These are some outcomes of 20th GST Council meeting.

Question 13. WHAT ARE THE GOODS THAT HAS BEEN KEPT OUTSIDE THE GST?

Answer : 

  • Alcohol for human consumption.
  • Tobacco and Tobacco products.
  • Petrol and petroleum products (GST will apply at a later date) viz. Petroleum crude, High speed diesel, Motor Spirit (petrol), Natural gas, Aviation turbine fuel.

Question 14. WHAT ARE THE BENEFITS OF GST INTRODUCTION INDIA?

Answer : 

  1. Elimination of multiple current indirect taxes VAT, CST, Service tax, CAD, SAD, Excise etc. which caused burden on ultimate consumers to pay more tax. Consumers will pay less tax and save more money.

benefits of GST In India

  1. Compliances such as registrations, returns, payments, etc. would be available to the taxpayers online on GSTN a common portal in India, which would make tax compliance easy and transparent.GST Returns and payments compliances 
  2. Uniform State GST (1 tax rate on goods and services) across all states in India.
  3. Ease of doing business due to elimination of entry tax.Transportation under GST
  4. Removes cascading effect of taxes i.e. tax on tax, resulting in reduced cost of production making goods cheaper.
  5. Increased production due to cheaper goods manufacturing will lead to more job opportunities in the long run.
  6. Zero rating of supplies to exporters. Reduction in cost of locally manufactured goods and services will increase competitiveness of Indian products and services in international market which will boost Indian exporters.
  7. Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry.

Exporters under GST

Question 15. WHY IT IS NECESSARY TO GET REGISTERED UNDER GST LAW? WHO ARE LIABLE TO GET COMPULSORY REGISTRATION UNDER GST LAW?

GST registration benefits

Answer : 

  1. Benefits of getting registered under GST are:-
  • A person applying for registration will be legally recognized as registered taxable supplier of goods and/or services in India.
  • He upon registration can collect GST from his customers and can claim Input Tax Credit of GST paid by him.
  • After getting registered if a person opts for composition scheme under Section 10 of CGST Act, 2017, he just have to furnishes Quarterly Return only & need not to worry about record keeping and hectic compliance procedures, and can therefore fully concentrate more on running his business. Another advantage is that tax rate is nominal i.e. 1% for manufacturers 5% for Restaurant and Catering sectors; Service Providers are not eligible for Composition scheme.
  • Registration will ensure that the business is compliant because returns are automated, resulting in a good GST rating and it will give boost to business.
  • In present indirect tax structure, there are multiple VAT registrations but in GST there is single registration which will be applicable everywhere in India.
  1. Following persons liable for Compulsory GST registration:
  • Supplier conducting business in Special Category States (North-East India) whose aggregate turnover exceeds Rs.10 Lac.
  • Supplier conducting business in rest of India whose aggregate turnover exceeds Rs. 20 Lac.
  • Person making Inter-State taxable supply (e.g. A supplier in Delhi making taxable supply of goods and/or services to a buyer in Udaipur).
  • Casual Taxable Person [defined under section 2(20) of CGST Act, 2017] making taxable supply.
  • Persons paying tax under Reverse Charge Mechanism.
  • Persons paying tax under Section 9(5) of CGST Act, 2017. This section provides that Govt. on GST council’s recommendation, by notification, specify categories of services the tax on Intra-State supplies of which to be paid by the electronic commerce operator if such services supplied through it.
  • Non- resident taxable person [defined under section 2(77) of CGST Act, 2017] making taxable supply.
  • Person (i.e. a department or establishment of Central/ State Govt.; or local authority; or Govt. agencies; or person(s) notified by Govt. on GST council’s recommendation) deducting TDS under Section 51 of CGST Act, 2017.
  • Agent making taxable supply on behalf of other registered taxable persons.
  • Input Service Distributor (ISD)
  • Person making taxable supply of goods or services [other than those mentioned in section 9(5)] through electronic commerce operator collecting tax at source (TCS) under section 52 of CGST Act, 2017.
  • Every electronic commerce operator (irrespective of threshold limit)
  • Person from outside India supplying online information & data base access or retrieval services to unregistered person in India.

Question 16. IS THERE ANYONE WHO IS NOT LIABLE FOR REGISTRATION UNDER GST LAW?

Answer : Yes, there are persons not liable for registration under GST. According to Section 23 of CGST Act, 2017 following persons aren’t liable to get themselves registered:-

  1. Person making Non-taxable or wholly exempt supply of goods and/or services under CGST Act or IGST Act.
  2. An agriculturist, to the extent of supply of produce out of land cultivation.

Question 17. WHAT ARE THE FEATURES OF REGISTRATION PROCESS?

Answer : 

  • Existing Central Excise/ VAT/ Service tax payers need not apply for fresh (new) registration.
  • New dealers need to apply for online registration under GST.
  • PAN based registration which will serve purpose for Centre and States. Persons required to deduct tax at source (TDS) u/s 51 shall have TAN in lieu of PAN. Non-resident taxable person may be granted registration on the basis of any other document.
  • Application to be filed within 30 days of becoming liable to pay tax.
  • State-wise registration for entities having presence in more than one State.
  • Need not apply separately for each State.
  • Deemed approval within three days.
  • Registration Certificate valid till it is surrendered, cancelled, suspended or revoked.
  • The validity period of the Registration Certificate issued to Casual Taxable Person and Non-resident Taxable Person is Earliest of 90 days from the effective date of registration, OR Period specified in the registration application.

Question 18. WHAT IS THE DIFFERENCE BETWEEN CASUAL TAXABLE PERSON AND NON- RESIDENT TAXABLE PERSON UNDER GST?

Answer : 

CASUAL TAXABLE PERSON  NON-RESIDENT TAXABLE PERSON
Defined under Section 2(20) of CGST Act, 2017  Defined under Section 2(77) of CGST Act, 2017
Occasional undertakes transactions involving supply of goods or services in a state or UT where he has no fixed place of business.  Occasional undertakes transactions involving supply of goods or services but has no fixed place of business residence in India.
Has a PAN Number Do not have a PAN Number; if having PAN number may take registration as a casual taxable person
Same application form for registration as for normal taxable persons viz. GST REG- 01

 

Separate application form for registration by non-resident taxable person viz.

GST REG-9

 

Has to undertake transactions in the course or furtherance of business

 

No such concept in definition
Has to file FORM GSTR-1, GSTR-2 and GSTR-3

 

Has to file a separate simplified return in the format GSTR-5
Can claim ITC of all inward supplies Can get ITC only in respect of import of goods and /or services.

Question 19. WHAT IS INCLUDED AND EXCLUDED IN AGGREGATE TURNOVER?

  1. Answer

  2. Trunover under GST

Question 20. HOW TO CLASSIFY GOODS AND SERVICES UNDER GST LAW?

Answer : 

  • HSN (Harmonized System of Nomenclature) code shall be used for classifying the goods and SAC (Services Accounting Code) shall be used for classifying services under GST.
  • Turnover below Rs. 1.5 crores No need to mention HSN code in invoice.
  • Turnover between Rs. 1.5 crores to Rs. 5 crores 2 digit HSN code
  • Turnover above Rs. 5 crores 4 digit HSN code.

Question 21. WHAT IS HSN and SAC CODE?

Answer : HSN stands for Harmonized System Nomenclature. HSN code is used for classifying the goods and has been mandated for suppliers to mention the code in the invoices upto certain digits based on their turnover. When preparing Tax Invoice for GST, the HSN number must be mentioned on GST invoice. All products under the same HSN code will have the same rate of GST. These codes are uniform throughout the country and also in sync with the global classifications. This greatly reduces chances of errors made while doing inter-state trades as previously, every state had it’s own code for each product (for purchase and sale of the product).

GST covers both goods and services. So, there are codes to identify services too. They are called Services Accounting Codes (SAC).

Question 22. WHAT IS GST INVOICE?

Answer : In the GST regime two types of invoices will be issued i.e. Tax Invoice by a registered taxable person supplying goods or services or both; and Bill of Supply by a Composite dealer and a person supplying exempted goods or services or both.

Question 23. HOW MANY COPIES OF TAX INVOICES ARE TO BE ISSUED?

Answer : When goods are supplied, the supplier is required to issue 3 copies of the invoice– Original to buyer, Duplicate to transporter (carrier of goods), and Triplicate retained by supplier for his own record.

Question 24. WHAT IS BILL OF SUPPLY?

Answer : It is also an invoice in GST which does not contain tax i.e. taxes cannot be collected from the purchaser of goods or services. It is a proof of tax free supply. Purchasers buying something by Bill of Supply cannot claim ITC. Bill of Supply is not required to be issued if value of supply is less than Rs. 200; if recipient is not a registered person under GST Act; if recipient does not wish to take such a copy of the bill of supply.

Question 25. WHAT IS RECEIPT VOUCHER?

Answer : It is issued by supplier when he receives advance money from buyer of goods or services. It is issued when supplier receives advance. Supplier issues 2 copies of it i.e. original to buyer; and Duplicate retained by supplier for his own record.

Question 26. WHAT IS REFUND VOUCHER?

Answer : If advance is received by supplier but no activity has been performed i.e. no supply has been made and no tax invoice has been issued, buyer will issue refund voucher to supplier for refund of his advance money.

Question 27. WHAT IS PAYMENT VOUCHER?

Answer : A registered person who is paying tax under reverse charge mechanism shall a payment voucher at the time of making payment to the supplier.

Question 28. WHAT IS REVISED INVOICE?

Answer : For all the invoices issued between the period i.e. date of implementation of GST (1st July, 2017) and date of issue of registration certificate, the suppliers will have to issue a revised invoice against the invoice already issued between the said period.

Question 29. WHAT IS SUPPLEMENTARY INVOICE?

Answer : Supplementary tax invoice has to be issued by taxable person in case where any deficiency is found in a tax invoice already issued by a taxable person. It can be in form of a debit note or a credit note.

Question 30. WHAT IS DEBIT NOTE?

Answer : Debit note is to be issued by supplier where original tax invoice has been issued and taxable value in the invoice exceeds actual taxable value OR where Original tax invoice has been issued and tax charged in the invoice exceeds actual tax to be paid.

Question 31. WHAT IS CREDIT NOTE?

Answer : Credit note is to be issued by supplier where original tax invoice has been issued and taxable value in the invoice exceeds actual taxable value OR original tax invoice has been issued and tax charged in the invoice exceeds actual tax to be paid OR Buyer returned the goods to supplier OR Services are found to be deficient.

Question 32. WHAT IS DELIVERY CHALLAN?

Answer : Delivery challan is required to transfer the goods from principal office to branch or to the premises of job worker.

Question 33. WHAT IS THE TREATMENT FOR IMPORT AND EXPORT OF GOODS UNDER GST?

Answer : 

  • IMPORTS:- will be treated as inter-state supplies and IGST will be levied. Set-off of GST paid on imports is available.
  • EXPORTS:- will be treated as Zero-Rated supplies. No tax on exports will be leviable. Exporter will have an option to either pay tax on the output and claim refund of IGST or export under Bond without payment of IGST and claim refund of Input Tax Credit (ITC).

Question 34. HOW GST WILL BE PAYED?

Answer : GST will be managed through the GSTN (GST NETWORK) a common portal for all tax payers in India – http://gstn.org/. All tax payments will be online and there will be no manual filing of returns. After generation of E-challan, one can pay GST by one of the following modes :-

  • Credit Card/ Debit Card; or
  • Internet Banking; or
  • Cash/ Cheque at Bank Branch (available for payments up to Rs. 10,000/- per challan only); or
  • Payment through NEFT/RTGS.

Question 35. HOW CAN SOMEONE APPLY ITC?

Answer : 

  • CGST ITC can only be used to pay CGST first and then IGST (with SGST not allowed).
  • SGST ITC can only be used to pay SGST first and then IGST (with CGST not allowed).IGST ITC can be used to pay IGST first, CGST second, and then SGST.
  • It means one will need to maintain separate records of ITC utilization or credit refund for State and Center taxes.

Question 36. WHO IS ELIGIBLE TO FILE RETURNS UNDER GST?

Answer : 

PERSON FILING RETURN OUTWARD SUPPLY(SALES) RETURN

(GSTR-1)

INWARD SUPPLY(PURCHASE) RETURN

(GSTR-2)                        

MONTHLY RETURN (GSTR-3) ANNUAL RETURN

(GSTR-9)

Registered taxable person

[Section 39(1)] of CGST Act, 2017

✔   ✔   ✔         ✔  
Composition dealer

[Section 39(2)] of CGST Act, 2017

    x        x ✔   By 18th Quarterly ✔  
TDS Deductor [Section 39(3)] of CGST Act, 2017 ✔     x ✔       x
Input Service Distributor (ISD)      [Section 39(4) of CGST Act, 2017    x        x ✔      x
Non-resident taxable person [Section 39(5)]    x        x ✔      x
TCS/ e-commerce operator

[Section 52(4)] of CGST Act, 2017

✔   ✔   ✔   ✔  

Question 37. WHAT IS THE DUE DATE OF FILING RETURNS MONTHLY, QUARTERLY, MONTHLY STATEMENT UNDER GST?

Answer : 

PERSON FILING RETURN PERIOD DUE DATE GST FORM
Registered taxable person

[Section 39(1)]  of CGST Act, 2017

Monthly By 10th of next month

 

By 15th of next month

 

By 20th of next month

GSTR – 1 (Outward Supplies)

GSTR – 2 (Inward Supplies)

GSTR – 3

Composition dealer

[Section 39(2)] of CGST Act, 2017

Quarterly Within 18 days GSTR – 4
TDS Deductor

[Section 39(3)] of CGST Act, 2017

Monthly Within 10 days GSTR – 7
Input Service Distributor (ISD)

[Section 39(4)] of CGST Act, 2017

Monthly Within 10 days GSTR – 6
Non-resident taxable person

[Section 39(5)] of CGST Act, 2017

Monthly Within 20 days GSTR – 5
TCS/ e-commerce operator

[Section 52(4)] of CGST Act, 2017

Monthly Statement Within 13 days GSTR –  8

Question 38. IN CASE A TAX PAYER FAILS TO FILE A RETURN OR RETURNS, WHAT GST LAW PROVIDES FOR IN THIS CASE?

Answer : 

TAX PAYER FAILS TO FILE GST RETURN

Annual Return (GSTR-9) under GST

Question 39. WHO IS E-COMMERCE OPERATOR?

Answer : Electronic commerce means supply of goods and/or services online i.e. through electronic network (internet). Electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Flipkart, Amazon, Snapdeal, E-bay, Limeroad or Paytm and other marketplaces are covered under this definition.

Cbec.gov.in notification no. 17/2017-Central Tax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of services, the tax on intra-State supplies shall be paid by the electronic commerce operator –

  1. services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
  2. services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act.

Cbec.gov.in notification no. 14/2017-IntegratedTax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of services, the tax on intra-State supplies shall be paid by the electronic commerce operator –

  1. services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
  2. services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under clause (v) of section 20 of the Integrated Goods and Services Tax Act, 2017 read with sub-section (1) of section 22 of the said Central Goods and Services Tax Act.This notification shall come into force with effect from the 1st day of July, 2017.

Check Latest Central Tax Notifications here

Question 40. WHAT IS REVERSE CHARGE MECHANISM?

Answer : Generally tax is paid by the supplier. But in some cases tax is paid by the recipient, this is called reverse charge mechanism. Under earlier indirect laws, reverse charge was only for services and service tax was used to be paid by the recipient of services. But now in GST law, in some cases, tax will be payable on both goods and services under reverse charge mechanism by the recipient of goods and services.

Cbec.gov.in notification no. 13/2017-Central Tax (Rate) dated. 28th June, 2017, notifies that on certain categories of supply of services Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of such services.

Cbec.gov.in notification no. 8/2017-Central Tax (Rate) dated. 28th June, 2017 exempts supplies of goods or service or both received by a registered person from any or all the unregistered suppliers below Rs. 5,000 in a day.

Cbec.gov.in notification no. 5/2017-Central Tax dated. 19th June, 2017 specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration. This notification shall come into force on the 22nd day of June, 2017.

Cbec.gov.in notification no. 4/2017-Central Tax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of goods, the tax on intra-State supplies shall be paid by the recipient of goods:-

  1. Cashew nuts, not shelled or peeled by Agriculturist
  2. Bidi wrapper leaves (tendu) by Agriculturist
  3. Tobacco leaves by Agriculturist
  4. Silk yarn
  5. Supply of lottery by State Government, Union Territory or any local authority

Cbec.gov.in notification no. 10/2017-Integrated Tax dated. 28th June, 2017

notifies that on certain categories of supply of services the whole of integrated tax leviable under section 5 of the said Integrated Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services.

Cbec.gov.in notification no. 4/2017- Integrated Tax (Rate) dated. 28th June, 2017, notifies that in case of the following categories of goods, the tax on intra-State supplies shall be paid by the recipient of goods:-

  1. Cashew nuts, not shelled or peeled by Agriculturist
  2. Bidi wrapper leaves (tendu) by Agriculturist
  3. Tobacco leaves by Agriculturist
  4. Silk yarn
  5. Supply of lottery by State Government, Union Territory or any local authority

Download notification no. 4/2017- Integrated Tax (Rate) : Click Here

Question 41. WHY REVERSE CHARGE MECHANISM?

Answer : Motive of this charge is mainly more tax compliance and increased tax revenues. Government was unable to collect tax from various unorganized sectors but through Reverse charge mechanism compliance has gone up.

Question 42. WHAT IS COMPOSITION SCHEME?

Answer : It is a scheme available to small tax payers whose aggregate turnover is less than Rs. 75 lakhs in states other than special category states; and to small tax payers whose aggregate turnover is less than Rs. 50 lakhs in special category states as per Cbec.gov.in notification no. 8/2017-Central Tax dated. 27th June, 2017.

Question 43. WHAT IS THE TAX RATE UNDER COMPOSITION SCHEME?

Answer : As per Cbec.gov.in notification no. 8/2017-Central Tax dated. 27th June, 2017., (i) 1 per cent. of the turnover in State in case of a manufacturer, (ii) 2.5 per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and (iii) 0.5 per cent. of the turnover in State in case of other suppliers.

Question 44. WHAT IS SPECIAL CATEGORY STATE?

Answer : As per Cbec.gov.in notification no. 8/2017-Central Tax dated. 27th June, 2017., Special category states are (i) Arunachal Pradesh, (ii) Assam, (iii) Manipur, (iv) Meghalaya, (v) Mizoram, (vi) Nagaland, (vii) Sikkim, (viii) Tripura, (ix) Himachal Pradesh.

Question 45. IS THERE ANYONE WHO IS PROHIBITED TO AVAIL COMPOSITION SCHEME?

Answer : As per Cbec.gov.in notification no. 8/2017-Central Tax dated. 27th June, 2017., the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 if such person is a manufacturer of Ice cream and other edible ice, whether or not containing cocoa; Pan masala; Tobacco and manufactured tobacco substitutes.

It is to be noted that CGST Act, 2017 also prohibits services providers (except restaurant service provider) and suppliers effecting inter-state supplies; Casual Taxable Person (CTP) or Non-Resident Taxable Person; suppliers supplying non-taxable goods.

Question 46. WHAT IS TDS AND WHO IS ITS DEDUCTOR?

Answer : TDS stands for Tax Deducted at Source (TDS). TDS has been introduced to collect tax from the source from where an Individual’s income is generated.
TDS deductor under GST are Government and Government undertakings and other notified entities making contractual payments where total value of such supply under a contract exceeds Rs. 2.5 Lakhs to suppliers. While making any payments under such contracts, the concerned Government/authority shall deduct 1% of the total payment made and remit it into the appropriate GST account.

Cbec.gov.in notification no. 9/2017-Central Tax(Rate) dated. 28th June, 2017,  exempts intra-State supplies of goods or services or both received by a TDS deductor from any unregistered suppliers from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the said Act, subject to the condition that the deductor is not liable to be registered otherwise than under sub-clause (vi) of section 24 of the CGST Act.

Question 47. WHAT IS THE DIFFERENCE BETWEEN CASUAL TAXABLE PERSON AND NON-RESIDENT TAXABLE PERSON?

Answer : A person who occasionally supplies goods and/or services in a territory where GST is applicable but he does not have a fixed place of business. Such a person will be treated as a casual taxable person as per GST. A person who has place of business in Delhi supplies taxable services in Mumbai where he has no place of business would be treated as casual taxable person in Mumbai.

When a non-resident (i.e. a taxable person residing outside India and coming to India to occasionally undertake transaction in the country) supplies goods/services in a territory where GST applies, but he does not have a fixed place of business in India will be treated as a non-resident taxable person as per GST.

Question 48. WHO IS INPUT SERVICE DISTRIBUTOR (ISD)?

Answer : It means an office of the manufacturer of goods or provider of services. ISD gets tax invoice for purchase of input services from input service provider. ISD distributes ITC by issuing invoices, bill or challan to supplier of goods and/or services. A separate registration shall be taken as Input Service Distributor (ISD) even though the office may be registered as a taxable person. The ISD may distribute credit of CGST as CGST or IGST; ISD may distribute credit of IGST as IGST or CGST; ISD may distribute credit of SGST as SGST or IGST.

ISDs registered under previous indirect tax law is required to take fresh i.e. new registration under GST. An Input Service Distributor invoice/ credit note shall contain name, address and Goods and Services Tax Identification Number of the Input Service Distributor; a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters- hyphen or dash and slash symbolised as- “-”, “/” respectively, and any combination thereof, unique for a financial year; date of its issue; name, address and GSTIN of the recipient to whom the credit is distributed; amount of the credit distributed; and signature or digital signature of the Input Service Distributor or his authorised representative. Where the Input Service Distributor is an office of a banking company or a financial institution, including a non-banking financial company, a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the information as mentioned above.

Question 49. WHO SHALL FILE RETURNS UNDER GST? 

Answer :

  • Registered taxable supplier
  • Registered taxable recipient
  • Composition dealer
  • TDS Deductor
  • Input Service Distributor
  • Non-resident taxable person
  • TDS collector i.e. an e-commerce operator
  • Person having UIN and claiming refund

 

Question 50. WHICH RETURN SHALL BE FILED BY ABOVE PERSONS?

Answer :  

  • Registered taxable supplier shall file GSTR-1
  • Registered taxable recipient shall file GSTR-2
  • Composition dealer shall file GSTR-4
  • Non-resident taxable person shall file GSTR-5
  • Input Service Distributor shall file GSTR-6
  • TDS Deductor shall file GSTR-7
  • TDS collector i.e. an e-commerce operator shall file GSTR-8
  • Person having UIN and claiming refund shall file GSTR-11

 

Question 51. WHAT IS THE TIME LIMIT FOR FILING ABOVE RETURN?

Answer : 

  • GSTR-1 shall be filed by 10th of the next month
  • GSTR-2 shall be filed by 15th of the next month
  • GSTR-4 shall be filed by 18th of the month following end of quarter
  • GSTR-5 shall be filed by 20th of the next month
  • GSTR-6 shall be filed by 13th of the next month
  • GSTR-7 shall be filed by 10th of the next month
  • GSTR-8 shall be filed by 10th of the next month
  • GSTR-11 shall be filed by 28th of the month following the month for which statement is filed

 

Question 52. WHO SHALL FILE ANNUAL AND FINAL RETURN UNDER GST?

Answer : 

  • Annual return shall be filed in FORM GSTR-9 by every registered taxable person, other than (i.e. not by) an ISD, TDS deductor, TCS collector, a casual taxable person and a non-resident taxable person. It shall be filed by 31st December of next Financial Year. A Composition Dealer shall file annual return in GSTR-9A. 
  • Final return shall be filed in FORM GSTR-10 by every registered taxable person whose registration has been cancelled or surrendered.

Question 53. EXPLAIN GST WITH THE HELP OF AN EXAMPLE?

Answer : 

Manufacture to wholesaler:- Without GST With GST
Cost of production 8000 8000
Add:- Profit Margin @10% 2000 2000
Price of manufacturer 10,000 10,000
Add:- excise duty @12% 1200  
Add:- VAT @12.5% 1400  
Add:- CGST @12%   1200
Add:- SGST @12%   1200
Value 12600 12400

 

Wholesaler to retailer:- Without GST With GST
Total value (1) 11200 10,000
Add:- Profit Margin @10% 1120 1000
Total value (2) 12320 11,000
Add:- VAT @12.5% 1540  
Add:- CGST @12%   1320
Add:- SGST @12%   1320
Value 13860 13640

 

Retailer to consumer:- Without GST With GST
Total value (2) 12320 11,000
Add:- Profit Margin @10% 1232 1100
Total value (3) 13552 12100
Add:- VAT @12.5% 1694  
Add:- CGST @12%   1452
Add:- SGST @12%   1452
Final price to consumer 15246 15004

 

4 COMMENTS

  1. I must say that You’ve done some great work here. This Page covering complete Information about GST india. Please update this page on daily basis for latest changes on GST.

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