GST stands for Goods and Services Tax. GST will be a single destination based consumption tax that will replace existing taxes, including CENVAT, Octroi, Sales Tax, and Excise Duty, etc. Unlike the old tax structure, where the state of origin received tax revenue, in the new GST model the state in which goods and services are consumed is the state that will receive the revenue.
In order to clear doubts which arises in the mind of public under GST, a list of frequently asked question is prepared which is as given below:
Question 1 : Whether IGST would be levied twice on high seas sales? First on high seas sales and second on custom clearance. IGST paid on 1 available as ITC?
Answer: IGST shall be levied only once on imports.
Question 2 : Will Krishi Mandi Fee (imposed in U.P.) be waived off in GST?
Answer: GST does not concern such fee so GST does not affect it.
Question 3 : Is E-Way Bill applicable from 1st July 2017
Answer: The present system for E-way Bill in States to continue, till the E-Way Bill procedures are finalized.
Question 4 : Is there a sunset clause for Anti-Profiteering law?
Answer: Yes, the sunset clause for Anti-profiteering Authority is of two years.
Question 5 : Which documents should be used in case of inter-state supply of goods until e-way bill rules are notified?
Answer: 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.
Question 6 : 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?
Answer: 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.
Question 7 : 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?
Answer: 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.
Question 8 : Will service charge, as charged by some restaurants, be treated as consideration for a supply and hence considered liable for tax?
Answer: 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.
Question 9 : What to do with stock lying with me on 1.07.2017. Do I need to charge GST?
Answer: Yes, you need to charge GST but you can use transition credit, if available on the said goods.
Question 10 : 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?
Answer: 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.
Question 11 : 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?
Answer: 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.
Question 12 : 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?
Answer: 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.
Question 13 : 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?
Answer: 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.
Question 14 : As a composition dealer, will I have to issue a self invoice if I purchase goods from an unregistered person?
Answer: Yes, a composition dealer will issue a self invoice as he is required to pay GST. He will not be eligible for ITC also.
Question 15 : Can I use my CGST/SGST credit to set off my IGST liability?
Answer: 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.
Question 16 : Can tax paid in one state be used as ITC by the same firm in another state?
Answer: No, if a firm is registered in more than one state, then each such registration will be treated as a separate registered person. Cross utilization of credit available with two different registered persons is not allowed.
Question 17 : Will there be GST in A&N Islands as previously there was no VAT
Answer: Yes. For supplies within A&N, CGST plus UTGST would be leviable.
This FAQ is only for educational and guidance purposes and do not hold any legal validity. For complete details (law, rules, notifications and other information) please refer to the CBEC website (www.cbec.gov.in)
In order to clear doubts which arises in the mind of public under GST, a list of frequently asked question is prepared which is as given below:
Question 1 : Whether IGST would be levied twice on high seas sales? First on high seas sales and second on custom clearance. IGST paid on 1 available as ITC?
Answer: IGST shall be levied only once on imports.
Question 2 : Will Krishi Mandi Fee (imposed in U.P.) be waived off in GST?
Answer: GST does not concern such fee so GST does not affect it.
Question 3 : Is E-Way Bill applicable from 1st July 2017
Answer: The present system for E-way Bill in States to continue, till the E-Way Bill procedures are finalized.
Question 4 : Is there a sunset clause for Anti-Profiteering law?
Answer: Yes, the sunset clause for Anti-profiteering Authority is of two years.
Question 5 : Which documents should be used in case of inter-state supply of goods until e-way bill rules are notified?
Answer: 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.
Question 6 : 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?
Answer: 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.
Question 7 : 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?
Answer: 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.
Question 8 : Will service charge, as charged by some restaurants, be treated as consideration for a supply and hence considered liable for tax?
Answer: 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.
Question 9 : What to do with stock lying with me on 1.07.2017. Do I need to charge GST?
Answer: Yes, you need to charge GST but you can use transition credit, if available on the said goods.
Question 10 : 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?
Answer: 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.
Question 11 : 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?
Answer: 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.
Question 12 : 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?
Answer: 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.
Question 13 : 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?
Answer: 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.
Question 14 : As a composition dealer, will I have to issue a self invoice if I purchase goods from an unregistered person?
Answer: Yes, a composition dealer will issue a self invoice as he is required to pay GST. He will not be eligible for ITC also.
Question 15 : Can I use my CGST/SGST credit to set off my IGST liability?
Answer: 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.
Question 16 : Can tax paid in one state be used as ITC by the same firm in another state?
Answer: No, if a firm is registered in more than one state, then each such registration will be treated as a separate registered person. Cross utilization of credit available with two different registered persons is not allowed.
Question 17 : Will there be GST in A&N Islands as previously there was no VAT
Answer: Yes. For supplies within A&N, CGST plus UTGST would be leviable.
This FAQ is only for educational and guidance purposes and do not hold any legal validity. For complete details (law, rules, notifications and other information) please refer to the CBEC website (www.cbec.gov.in)
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