1. What is GST? How does it work?

GST is one indirect tax for the whole nation, which will make India one unified common market.
1. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer;
2. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage;
3.The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

2.What are the benefits of GST?

The benefits of GST can be summarized as under:
 For business and industry
1) Easy compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India.Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent;
2) Uniformity of tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business.In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business;
3) Removal of cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes.This would reduce hidden costs of doing business;
4) Improved competitiveness: Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry;
5) Gain to manufacturers and exporters:The subsuming of major Central and State taxes in GST, complete and comprehensive setoff of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services.This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports.The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
 For Central and State Governments
1) Simple and easy to administer: Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State levied so far;
2) Better controls on leakage: GST will result in better tax compliance due to a robust IT infrastructure - due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders;
3) Higher revenue efficiency: GST is expected to decrease the cost of collection of tax revenues of the Government, and will therefore, lead to higher revenue efficiency.
 For the consumer
1) Single and transparent tax proportionate to the value of goods and services:Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits available at progressive stages of value addition, the cost of most goods and services in the country today are laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer;
2) Relief in overall tax burden:Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers.

3. Which taxes at the Centre and State level are being subsumed into GST?

At the Central level, the following taxes are being subsumed:
1) Central Excise Duty; 2) Additional Excise Duty; 3) Service Tax; 4) Additional Customs Duty commonly known as Countervailing Duty; and 5) Special Additional Duty of Customs.
At the State level, the following taxes are being subsumed:
1) Subsuming of State Value Added Tax/Sales Tax; 2) Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States); 3) Octroi and Entry Tax; 4) Purchase Tax; 5) Luxury tax; and 6) Taxes on lottery, betting and gambling.

4.How would GST be administered in India?

Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST); Both Centre and States will simultaneously levy GST across the value chain;
Tax will be levied on every supply of goods and services;
Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State;
The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage;
Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output;
No cross utilization of credit would be permitted.

5. How will technology be used for the implementation of GST?

For the implementation of GST in the country, the Central and State Governments have jointly registered Goods and Services Tax Network (GSTN) as a not-for-profit, non-Government Company to provide shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders;
The key objectives of GSTN are to provide a standard and uniform interface to the taxpayers, and shared infrastructure and services to Central and State/UT governments;
A team is working on developing a state-of-the-art comprehensive IT infrastructure including the common GST portal providing front-end services of registration, returns and payments to all taxpayers, as well as the backend IT modules for certain States that include processing of returns, registrations, audits, assessments, appeals, etc.;
All States, accounting authorities, RBI and banks, are also preparing their IT infrastructure for the administration of GST;
There would no manual filing of returns and all taxes can also be paid online;
All mis-matched returns would be auto-generated, and there would be no need for manual interventions since most returns would be self-assessed.

6. What are the major features of the proposed registration procedures under GST?

The major features of the proposed registration procedures under GST are as follows:
1) Existing dealers: Existing VAT/Central excise/Service Tax payers will not have to apply afresh for registration under GST; 2) New dealers: Single application to be filed online for registration under GST; 3) The registration number will be PAN based and will serve the purpose for Centre and State; 4) Unified application to both tax authorities; 5) Each dealer to be given unique ID GSTIN; 6) Deemed approval within three days; 7) Post registration verification in risk based cases only.

7. What are the major features of the proposed returns filing procedures under GST?

The major features of the proposed returns filing procedures under GST are as follows:

1) Common return would serve the purpose of both Centre and State Government; 2) There are eight forms provided for in the GST business processes for filing for returns; 3) Most of the average tax payers would be using only four forms for filing their returns; 4) These are return for supplies, return for purchases, monthly returns and annual return; 5) Small taxpayers who have opted composition scheme shall have to file return on quarterly basis; 6) Filing of returns shall be completely online. All taxes can also be paid online.

8. Who is an Existing Taxpayer?

An existing taxpayer is an entity currently registered under any of the Acts as specified below:-

a. Central Excise

b. Service Tax

c. State Sales Tax / VAT (except exclusive liquor dealers if registered under VAT)

d. Entry Tax

e. Luxury Tax

f. Entertainment Tax (except levied by the local bodies)

9. What does the word enrolment under GST system portal mean?

Enrolment under GST means validating the data of existing taxpayers and filling up the remaining key fields.

10. Do I need to enroll for GST?

All existing taxpayers registered under any of the Acts as specified in Q1 will be transitioned to GST. Enrolment for GST will ensure smooth transition to GST regime. The data available with various tax authorities is incomplete and thus fresh enrolment has been planned. Also, this will ensure latest data is available in GST Database without any recourse to amendment process, which is the norm to update the data under tax statutes today.

11. Why do I need to enroll myself as a user on the GST System Portal?

GST System portal has been created for this purpose as no paper based enrolment will be allowed.

You need to enroll as a user on the GST system portal, so that you may be enabled as a registrant for GST Compliance requirement viz. return filling, tax payment, etc.

12. When do I need to enroll with the GST Systems Portal?

The taxpayers registered under any Acts as specified under Q1 are required to enroll at GST System Portal. State VAT and Central Excise can start enrolling from October, 2016 on GST System Portal as per plan indicated on GST System portal. The taxpayers registered under Service Tax will be enrolled on a later date for which separate intimation will be sent.

13. Is there any concept of deemed enrolment on GST System Portal?

No. There is no deemed enrolment on GST system portal. All the taxpayers registered under any of the Acts as specified in Q1, are expected to visit the GST System Portal and enroll themselves.

14. Is there any fee/charge levied for the enrolment on GST System Portal?

No. There is no fee/charge levied for the enrolment of a taxpayer with GST System Portal.

15. Is the enrolment process different for taxpayers registered under Centre /State/UT tax Acts as specified in Q1?

No. The enrolment process is common for all taxpayers registered under Centre /State/UT tax Acts as specified in Q1

16. Are taxpayers required to enroll separately with Central and State authorities under GST?

No, any person who wants to seek enrolment under the GST Act has to apply on the GST System Portal. Enrolment under the GST is common for both Central GST and the State GST. There will be common registration, common return and common Challan for Central and State GST.

17. What is the format of Provisional ID?

                    Format of GSTIN

         22           AAAAA0000A          1     Z      5

   StateCode            PAN                 1*    2*   3*

 

*1 = Entity number for the same PAN holder in a State.

*2 = Alphabet " Z " by default.

*3 = Check Sum Digits.

 

 

18. What information should be readily available with me before I begin to enroll with GST?

Before enrolling with GST System Portal, you must ensure to have the following information/ documents available with you:-

I. Provisional ID received from State/Central Authorities;

II. Password received from the State/Central Authorities;

III. Valid Email Address;

IV. Valid Mobile Number;

V. Bank Account Number

VI. Bank IFSC

Documents

a. Proof of Constitution of Business:

I. In case of Partnership firm: Partnership Deed of Partnership Firm (PDF and JPEG format in maximum size of 1 MB)

II. In case of Others: Registration Certificate of the Business Entity (PDF and JPEG format in maximum size of 1 MB)

b. Photograph of Promoters/ Partners/Karta of HUF (JPEG format in maximum size of 100 KB)

c. Proof of Appointment of Authorized Signatory (PDF and JPEG format in maximum size of 1 MB)

d. Photograph of Authorized Signatory (JPEG format in maximum size of 100 KB)

e. Opening page of Bank Passbook / Statement containing Bank Account Number of < Account Number>, Address of Branch, Address of Account holder and few transaction details (PDF and JPEG format in maximum size of 1 MB)

19. Which username do I need to provide during first time login. Can I use the same username and password which I used to login as State registrant?

For the first time login, you need to provide username and password that you received from the State VAT/Centre Tax Department. For subsequent login, you need to enter username and password as created by you while enrolling with GST System Portal.

20. What user ID can I choose after first login?

You may choose any user ID of your choice, provided it is available in the database while you are registering

21. I have not received my username and password to apply for enrolment with what do I do now?

In case you have not received your user name and password, you can contact your jurisdictional State/Centre authorities.

22. Can I give email address and mobile number of my Tax Professional during enrolment with GST?

No, you should not give the email address and mobile number of Tax Professional or anyone else. You MUST provide the email address and mobile number of the primary Authorized Signatory appointed by you or yourself. All future correspondence/communication from the GST System Portal will be sent on the registered mobile Number and email address only.

Tax professionals will be given separate user ID and password from GST system and they will provide their own email Id and mobile number for that purpose.

23. What Is the enrolment process different for taxpayers registered under Centre /State/UT tax Acts as specified in Q1?

No. The enrolment process is common for all taxpayers registered under Centre /State/UT tax Acts as specified in Q1.

24. Who can be the Primary Authorized Signatory?

A Primary authorized signatory is the person who is primarily responsible to perform action on the GST System Portal on behalf of taxpayer. All communication from the GST System Portal relating to taxpayer will be sent to him. For example:- in case of proprietor, the proprietor himself or any person authorized by him, in case of partnership any of the partner authorized or any person authorized, in case of Company/LLP, Society, Trust, the person who is authorized by Board or Governing Body etc. can act as Primary authorized signatory. Copy of authorization needs to be uploaded.

In case of multiple authorized signatory for single business entity, one authorized signatory should be designated as primary authorized signatory and email and mobile number of that person shall be provided at the enrolment.

In case of single authorized signatory for a business entity, he shall be assumed as primary authorized signatory for that business entity.

25. How long the OTP is valid?

The OTP sent to your email address and mobile number is valid for <15> minutes. It expires after 15 minutes.

26. I have not received the OTP on my mobile? What do I do now?

Your OTP would be sent on your registered mobile number and e mail address on GST System Portal. If you have not received the OTP within 15 minutes, you may choose to receive it again by clicking the RESEND OTP button.

27. What if I dont receive the OTP even after clicking the RESEND OTP button?

If you do not receive the OTP via SMS on your mobile number even after clicking the RESEND OTP button, please verify if the mobile number provided by you is correct.
If you do not receive the OTP on your email address even after clicking the RESEND OTP button, please verify that your email address entered is correct and the Internet and mobile network are available.

28. Why I have received two One Time Passwords (OTPs) for email and mobile?

Separate OTPs are sent to on email address and mobile number to validate them. Thus two separate OTPs are sent.

All future correspondence from the GST System Portal will be sent on the registered email address and mobile number only. Therefore, there is need to validate both mobile number and email address.

29. I have received OTP in my mobile. I have entered the same OTP in the OTP verification page for Email OTP and Mobile OTP. Are these OTPs different?

You must have received two different One Time Passwords (OTPs) on your email address and mobile number. Enter the OTP received on your email address and mobile number in the Email OTP and Mobile OTP fields respectively. If you have entered same OTP in both of your email and mobile OTP fields, your validation would be failed with error message.

30. Which details are prefilled in the enrolment application for enrolling with GST?

Following details are auto-populated in the enrolment application based on your existing data:

• PAN of the Business

• Legal Name of Business

• State

• Reason of liability to obtain registration

• Email Address and Mobile number of primary Authorized Signatory entered during enrolling with GST System Portal.

Red asterisk (*) indicates mandatory field. Any field marked with the red asterisk need to be filled in necessarily to proceed ahead with the enrolment application.

31. Can I make changes in in my Legal Name, State Name and PAN in the enrolment application?

You cannot make changes to Legal Name, State name and PAN as appearing in the enrolment application. These details have been migrated from existing tax systems of State or Center, as the case may be.

32. How to find out my State Jurisdiction?

Refer your VAT Registration Certificate to find your State Jurisdiction. It is the same jurisdiction as given in your existing VAT Registration Certificate.

33. How to find out my Ward / Circle / Sector No?

Refer to your VAT Registration Certificate to find your Ward / Circle / Sector No. It is the same ward /Circle/ Sector where you are registered.

34. How to find out my Center Jurisdiction?

If you are registered with Central Excise, refer the Registration Certificate to find your Centre Jurisdiction.

If you are only a VAT registered dealer, you need to find your central jurisdiction based on the address of your Principal place of Business. You may visit CBEC website www.cbec.gov.in for details

(Refer URL-http://www.cbec.gov.in/resources//htdocs-cbec/deptt_offcr/cadrerestruct/cadre-restructg-notifications.pdf).

35. I am not able to upload any document. Why?

You first need to check your internet connectivity. You should also ensure that the format of document must be either PDF or JPEG with maximum size of 1 MB. In case of photographs, the format should be in JPEG and maximum size allowed is 100 KB.

36. I filled all the details in the Business Details page while filling the form. But now all the fields are appearing blank. Why?

You need to save every page after filling all the details. Click the Save & Continue button at the bottom of the page to save the entered details and then proceed further to enter details in the other tabs.

37. What is DIN?

DIN stands for Director Identification Number given to Directors of a Company by Ministry of Corporate Affairs. To know your DIN, refer your DIN allotment letter issued by Ministry of Corporate Affairs or visit the MCA portal – www.mca.gov.in.

38. I dont have my Aadhaar Is it mandatory to provide the Aadhaar Number?

For filing of enrolment application Aadhaar is not mandatory. However, at the time of submission of your enrolment application at GST System Portal, you would be required to use DSC or Aadhaar based E-Signing.

39. What is Principal Place of Business?

Principal Place of Business is the primary location within the State where a taxpayer’s business is performed. The principal place of business is generally where the business’s books of accounts and records are kept and is often where the head of the firm or at least top management is located.

40. What is Additional Place of Business?

Additional Place of business is the place of business where taxpayer carries out business related activities within the State, in addition to the Principal Place of Business.

41. What is HSN and SAC code?

HSN stands for Harmonized System of Nomenclature which is internationally accepted product coding system to maintain uniformity in classification of goods.

Service Accounting Codes (SAC) are adopted by the Central Board of Excise and Customs (CBEC) for identification of the services.

42. Which bank account should I provide while enrolling with GST System Portal?

The Bank accounts used for the purpose of carrying out business transactions must be provided while enrolling with GST System Portal.

43. Is DSC mandatory for enrolment?

DSC is mandatory for enrolment by Companies, Foreign Companies, Limited Liability Partnership (LLPs) and Foreign Limited Liability Partnership (FLLPs).

For other taxpayers, DSC is optional.

44. My DSC is not registered with GST System Portal? Will I be able to submit my enrolment application with DSC?

You cannot submit the enrolment application if your DSC is not registered with GST System Portal. Therefore, you need to register your DSC on GST System Portal by clicking 3 register your DSC’.

45. How can I register my DSC with GST Portal?

If you have valid DSC, you can visit GST System Portal and click on “Register your DSC” link. The PAN of the DSC holder should match with the PAN database of the CBDT. After validation the user should select the certificate link which is to be registered. Only class -2 or Class 3 DSC can be registered in the GST System Portal.

46. What is E-Sign? How does it work?

E-Sign stands for Electronic Signature. E-Sign is an online electronic signature service to facilitate an Aadhaar holder to digitally sign a document. If the Applicant opts to electronically sign using the E-Sign service, the following actions are performed:-

Taxpayer need to click on “E sign” button.

System will ask to enter Aadhaar number of Authorized signatory.

After validating the Aadhaar Number, the GST system Portal will send a request to UIDAI system to send a One Time Password (OTP).

UIDAI system will send OTP to email address and mobile number registered against Aadhaar number.

System will prompt user to enter OTP.

The user will enter the OTP and submit the document. The e-Signing process is complete.

47. Is there any charge applicable on submission of the application for enrolment?

No, there is no charge applicable on submission of the application for enrolment with GST System Portal.

48. What is ARN?

ARN is the Application Reference Number generated after the submission of the enrolment application with E-Sign or Digital Signature (DSC). It is a unique number assigned to each transaction completed at the GST System Portal. Note the ARN can be used for future correspondence with GSTN.

49. What is the format of ARN?

                                                    Format of ARN

         AA           07            07         16                     000000                                    1

 Alphabets    Statecode    Month     Year    Six Digit System Generated Code        Check Sum Digit

50. I am an existing taxpayer registered under Central Excise/ Service Tax and State VAT legislations. I have successfully submitted the details sought by GSTN as per application prescribed under model GST Law. What will happen next?

Application Reference Number (ARN) will be generated after the successful submission of the enrolment application at the GST System Portal. You can use this ARN to track the status of your application.

51. I have not yet received the Application Reference Number (ARN). What should I do now?

If you don’t receive ARN within 15 minutes, an email will be sent to you with detailed instructions for further course of action.

52. While entering the details, internet connection was lost. How can I retrieve the saved enrolment form?

To retrieve the saved enrolment form, login to the GST System Portal with valid credentials. Go to Dashboard > My Saved Application menu. Click the Edit button to retrieve the saved enrolment form.

53. I got an email that there is a mismatch during PAN validation. What should I do now?

You need to login to the GST System Portal and fill the details as per your PAN details and resubmit the enrolment application.

54. My DSC has expired / revoked? What do I do now?

You need to re-register your valid DSC with GST. Login to the GST System Portal with valid credentials. Go to Dashboard > Register / Update DSC menu. In case of revocation, another valid DSC has to be registered with GST System Portal.

55. Is there any Help Desk Facility available?

Yes, Help Desk facility will be available and it will be displayed on the GST System Portal.

56. Can application for enrolment get rejected?

Yes, the application for enrolment with GST System Portal can be rejected in case you have furnished/uploaded wrong or fake or incorrect document with your DSC or E-Sign. However, the applicant will be provided reasonable opportunity of being heard where applicant taxpayer can present his/her viewpoints.

57. Can I make amendments after I submit the enrolment application?

You can make amendments to the enrolment application from appointed date onwards.

58. Can I change mobile no. and email id as given at the time of enrolment?

You can change mobile no. and email id as given at the time of enrolment application after appointed date onwards through amendment process.

59. When will I get Provisional Registration Certificate?

It will be available on your dashboard on the appointed date if you have filled enrolment application successfully.

60. When will I get Final Registration Certificate?

The final Registration Certificate will be provided to you after verification of documents (within 6 months) by proper officer(s) center/state of concerned jurisdiction (s) after appointed date.

61. I have multiple businesses in one state under the same PAN. Do I need to enroll each business separately with GST?

As one PAN allows one GST Registration in a state, you may register one business entity first. For the remaining business verticals within the State please get in touch with your jurisdictional authority.

62. What is ISD Registration?

ISD stands for Input Service Distributor. An Input Service Distributor means the person who distributes credit, in respect of the tax invoices of the services received at the head office, to its branches where the services have been supplied actually. Tax invoice here means, the invoice issued under section 23 of the Model Goods and Services Act, if you are an existing ISD Taxpayer, you need to apply afresh in the GST System Portal for the State where you desire to seek registration. For that you need to inform your Central jurisdictional authority.

63. Where is the power to levy GST derived from?

Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both parliament and state legislatures to make laws with respect to GST. However, -clause 2 of Article 246A read with Article 269A provides exclusive power to the Parliament to legislate with respect to inter-state trade or commerce.

64. What is the taxable event under GST?

Supply of goods and/or services. CGST & SGST will be levied on intra-state supplies while IGST will be levied on inter-state supplies. The charging section is section 7 (1) of CGST/SGST Act and Section 4(1) of the IGST Act.

65. Is the reverse charge mechanism applicable only to services?

No, reverse charge applies to supplies of both goods and services.

66. What will be the implications in case of purchase of goods from unregistered dealers?

The receiver of goods will not be able to get ITC. Further, the recipients who are registered under composition schemes would be liable to pay tax under reverse charge.

67. In respect of exchange of goods, namely gold watch for restaurant services will the transaction be taxable as two different supplies or will it be taxable only in the hands of the main supplier?

No. In the above case the transaction of supply of watch from consumer to the restaurant will not be an independent supply as the same is not in the course of business. It is a consideration for a supply made by the restaurant to him. The same will be a taxable supply by the restaurant.

68. Whether supplies made without consideration will also come within the purview of Supply under GST?

Yes only those cases which are specified under Schedule I to the Model GST Law.

69. Who can notify a transaction to be supply of goods and/or services?

Central Government or State Government on the recommendation of the GST Council can notify a transaction to be the supply of goods and/or services.

70. Will a taxable person be eligible to opt for composition scheme only for one out of 3 business verticals?

No, composition scheme would become applicable for all the business verticals/registrations which are separately held by the person with same PAN.

71. Can composition scheme be availed if the taxable person effects inter-State supplies?

No, composition scheme is applicable subject to the condition that the taxable person does not affect interstate supplies.

72. Can the taxable person under composition scheme claim input tax credit?

No, taxable person under composition scheme is not eligible to claim input tax credit.

73. Can the customer who buys from a taxable person who is under the composition scheme claim composition tax as input tax credit?

No, customer who buys goods from taxable person who is under composition scheme is not eligible for composition input tax credit because a composition scheme supplier cannot issue a tax invoice.

74. Can composition tax be collected from customers?

No, the taxable person under composition scheme is restricted from collecting tax. It means that a composition scheme supplier cannot issue a tax invoice.

75. What is the threshold for opting to pay tax under the composition scheme?

The threshold for composition scheme is Rs. 50 Lakhs of aggregate turnover in financial year.

76. How to compute aggregate turnover to determine eligibility for composition scheme?

The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, ‘aggregate turnover’ means ‘Value of all supplies (taxable and non-taxable supplies + Exempt supplies + Exports) and it excludes Taxes levied under CGST Act, SGST Act and IGST Act, Value of inward supplies + Value of supplies taxable under reverse charge of a person having the same PAN.

77. What are the penal consequences if a taxable person violates the condition and is not eligible for payment of tax under the Composition scheme?

Taxable person who was not eligible for the composition scheme would be liable to pay tax, interest and in addition he shall also be liable to a penalty equivalent to the amount of tax payable. (Section 8 (3) of the MGL).

78. What is the minimum rate of tax prescribed for composition scheme?

1%

79. When exemption from whole of tax collected on goods and/or services has been granted unconditionally, can taxable person pay tax?

No, the taxable person providing such goods or services shall not collect the tax on such goods or services.

80. What is remission of tax/duty?

It means relieving the tax payer from the obligation to pay tax on goods when they are lost or destroyed due to any natural causes. Remission is subject to conditions stipulated under the law and rules made there under.

81. Whether remission is allowed under GST law?

Yes, proposed section 11 of Model GST law permits remission of tax on supply of goods.

82. Whether remission is allowed for goods lost or destroyed before supply?

Remission of tax will apply only when tax is payable as per law i.e. taxable event should have happened and tax is required to be paid as per law. Under GST Law, levy is applicable upon supply of goods. Where goods are lost or destroyed before supply, taxable event does not occur in order to pay tax. Accordingly, question of remission of tax does not rise.

83. Whether remission is allowed on goods lost or destroyed for all reasons?

No, on plain reading of the language of proposed Section 11, remission is allowed only for those cases where supply of goods is found to be deficient in quantity due to natural causes.

84. Does the model GST Law empower the competent government to exempt supplies from the levy of GST?

Yes. Under Section 10 of the Model GST Law, the Central or the State Government, on the recommendation of the GST council can exempt the supplies from the levy of GST either generally or subject to conditions.

85. What is the meaning of Advance Ruling?

As per section 94 of Model CGST/SGST Law, ‘advance ruling’ means a written decision provided by the authority to an applicant on matters or on questions as enumerated in section 97 and appeals thereon (section 99).

86. Which are the matters enumerated in Section 97 for which advance ruling can be sought?

Advance Ruling can be sought for the following matters:
a) Classification of any goods or services under the Act;
b) Applicability of a notification issued under provisions of the Act having a bearing on the rate of tax;
c) The principles to be adopted for the purposes of determination of value of the goods or services under the provisions of the Act;
d) Admissibility of input tax credit of tax paid or deemed to have been paid;
e) Determination of the liability to pay tax on any goods or services under the Act;
f) Whether applicant is required to be registered under the Act;
g) Whether any particular thing done by the applicant with respect to any goods or services amounts to or results in a supply of goods or services, within the meaning of that term.

87. What is the objective of having a mechanism of Advance Ruling?

The broad objective for setting up such an authority is to:
a) Provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant;
b) Attract Foreign Direct Investment (FDI);
c) Reduce litigation;
d) Pronounce ruling expeditiously in transparent and inexpensive manner.

88. What will be the composition of Authority for advance rulings (AAR) under GST?

Authority for advance ruling (AAR) shall comprise one member CGST and one member SGST. They will be appointed by the Central and State government respectively. Their qualification and eligibility condition for appointment will be prescribed in the Model GST Rules. (Section 95).

89. What is the Appellate authority for advance ruling (AAAR) and what would be its composition?

Appellate authority for advance ruling (AAAR) will hear appeal against advance ruling given by the MR. This will comprise of two members namely Chief Commissioner of CGST designated by the Central Board Excise and Customs (CBEC) and Commissioner of SGST having jurisdiction over the applicant (Section 96).

90. How may AAR and AAAR will be constituted under GST?

There will be one AAR and AAAR for each State (sections 95 and 96).

91. To whom will the Advance Ruling be applicable?

Section 102 provides that an advance ruling pronounced by AAR or AAAR shall be binding only on the applicant and on the jurisdictional tax authority of the applicant This clearly means that an advance ruling is not applicable to similarly placed taxable persons in the State. It is only limited to the person who has applied for an advance ruling.

92. What is the time period for applicability of Advance Ruling?

The law does not provide for a fixed time period for which the ruling shall apply. Instead, in section 102, it is provided that advance ruling shall be binding till the period when the law, facts or circumstances supporting the original advance ruling have changed.

93. Can an advance ruling given be nullified?

Section 103 provides that an advance ruling shall be held to be ab initio void if the MR or AAAR finds that the advance ruling was obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts In such a situation, all the provisions of the CGST/SGST Act shall apply to the applicant as if such advance ruling had never been made (but excluding the period when advance ruling was given and up to the period when the order declaring it to be void is issued). An order declaring advance ruling to be void can be passed only after hearing the applicant.

94. What is the procedure for obtaining Advance Ruling?

Section 97 and 98 deals with procedure for obtaining advance ruling. Section 97 provides that the applicant desirous of obtaining advance ruling should make application to MR in a prescribed form and manner. The format of the form and the detailed procedure for making application will be prescribed in the Model GST Rules.

Section 98 provides the procedure for dealing with the application for advance ruling. The MR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant records. The MR may then examine the application along with the records and may also hear the applicant there after he will pass an order either admitting or rejecting the application.

95. Under what circumstances will the application for Advance Ruling are compulsorily rejected?

Application has to be invariably rejected in certain situations as prescribed under section 98 (2) which are enumerated as below:

a) If the question raised in the application is already pending in the applicant’s case before any First Appellate Authority, the Appellate Tribunal or any Court;

b) If the question raised in the application is the same as in a matter already decided by the First Appellate Authority, the Appellate Tribunal or any Court;

c) If the question raised in the application is the same as in a matter already pending in any proceedings in the applicant’s case under any of the provisions of the Act;

d) If the question raised in the application is the same as in a matter in the applicant’s case already decided by the adjudicating authority or assessing authority, whichever is applicable.

If the application is rejected, it should be by way of a speaking order giving the reasons for rejection.

96. What is the procedure to be followed by AAR once the application is admitted?

If the application is admitted, the AAR shall pronounce its ruling within ninety days of receipt of application. Before giving its ruling, it shall examine the application and any further material furnished by the applicant or by the concerned departmental officer.
© Udyog Software (India) Ltd. Wednesday, 28th September 2016
Before giving the ruling, AAR must hear the applicant or his authorized representative as well as the jurisdictional officers of CGST/SGST

97. What happens if there is a difference of opinion amongst members of AAR?

If there is difference of opinion between the two members of AAR, they shall refer the point or points on which they differ to the AAAR for hearing the issue. If the members of AAAR are also unable to come to a common conclusion in regard to the point(s) referred to them by AAR, then it shall be deemed that no advance ruling can be given in respect of the question on which difference persists at the level of AAAR.

98. What are the provisions for appeals against order of AAR?

The provisions of appeal before AAAR are dealt in section 99 and 100 of Model GST Law.

If the applicants aggrieved with the finding of the AAR, he can file an appeal with AAAR. Similarly, if the prescribed or jurisdictional officer of CGST/SGST does not agree with the finding of AAR, he can also file an appeal with AAAR. The word prescribed officer of CGST/SGST means an officer who has been designated by the CGST/SGST administration in regard to an application for advance ruling. In normal circumstances, the concerned officer will be the officer in whose jurisdiction the applicant is located. In such cases the concerned officer will be the jurisdictional CGST/SGST officer.

Any appeal must be filed within thirty days from the receipt of the advance ruling. The appeal has to be in prescribed form and has to be verified in prescribed manner. This will be prescribed in the Model GST Rules.

The Appellate Authority must pass an order after hearing the parties to the appeal within a period of ninety days of the filing of an appeal. If members of AAAR differ on any point referred to in appeal, it shall be deemed that no advance ruling is issued in respect of the question under appeal.

99. Can the AAR & AAAR order for rectification of mistakes in the ruling?

Yes. Section 101 of the Act gives power to AAR and AAAR to amend their order to rectify any mistake apparent from the record within a period of six months from the date of the order. Such mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant or the prescribed or the jurisdictional CGST/SGST officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit, the applicant must be heard before the order is passed.

100. Whether any person aggrieved by any order or decision passed against him has the right to appeal?

Yes. Any person aggrieved by any order or decision passed against him has the right to appeal. It must be an order or decision passed by an adjudicating authority.

However, some decisions or orders (as provided for in Section 93) are not applicable.

101. When Commissioner of CGST feels that the order passed is not legal and proper, whether he can revise the order himself?

No. The Commissioner of CGST cannot revise the order. In the model law, for CGST and SGST; there are different provisions in this regard. For CGST; as per Section 79(2), the Commissioner of CGST if finds an order or decision (passed by an adjudicating authority) to be not legal or proper, can pass an order setting out the points for determination where he is of the view that the order is not legal and proper and directing a GST officer sub-ordinate to him to file an application to First Appellate Authority (FAA). Such application is then treated by the FAA as if it were an appeal.

102. What is the time limit to file appeal to First Appellate Authority?

The time limit is fixed as 3 months from the date of communication of order or decision

103. Whether this time limit applies even for the departmental appeal/application filed consequent to order of Commissioner of CGST?

Yes. It applies even for such applications filed which are to be treated as appeal and all the provisions of appeal are made applicable for such application as well.

104. Whether the first appellate authority has any powers to condone the delay in filing appeal?

Yes. He can condone a delay of upto one month from the end of the prescribed period of 3 months for filing the appeal (3+1), provided there is sufficient cause as laid down in the proviso to section 79(4).

105. Whether the first appellate authority has any powers to allow additional grounds not specified in the appeal memo?

Yes. He has the powers to allow additional grounds if he is satisfied that the omission was not wilful or unreasonable.

106. The order passed by First Appellate Authority has to be communicated to whom?

First appellate authority has to communicate the copy of order to the appellant and the adjudicating authority with a copy to jurisdictional Commissioner of CGST and SGST.

107. What is the amount of mandatory pre-deposit which should be made along with every appeal?

10% of amount in dispute (however, for SGST, there are additional provisions for which the model law may be referred to, see question no 12 and 13).

108. What is the amount in dispute?

As per explanation to Section 79(6) of MGL, the expression “amount in dispute” shall include‑

I. Amount determined under section 46 or 47 or 48 or 51;

II. Amount payable under rule—— of the GST Credit Rules 201…; and

III. Amount of fee levied or penalty imposed.

109. Whether in an appeal the FAA can pass an order enhancing the quantum of duty/fine/penalty/reduce the amount of refund/ITC from the one passed by the original authority?

The FAA is empowered to pass an order enhancing the fees or penalty or fine in lieu of confiscation or reducing the amount of refund or input tax credit provided the appellant has been given reasonable opportunity of showing cause against the proposed detrimental order. (First Proviso to Section 79(10)).

In so far as the question of enhancing the duty or deciding wrong availment of ITC is concerned, the FAA can do so only after giving specific SCN to the appellant against the proposed order and the order itself should be passed within the time limit specified under Section 51. (Second Proviso to Section 79(10).

110. (Only for SGST law) What is the provision relating to pre-deposit before filing appeal to file appeal to First Appellate Authority under SGST?

10% of the amount in dispute has to paid before filing appeal. This is common for both CGST and SGST. However, for SGST, in addition to this 10%, the appellant has to also pay “in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him”

Further, if the Commissioner of SGST considers any case to be a “serious case’; the departmental authority can apply to the first Appellate Authority for ordering a higher amount of pre-deposit not exceeding 50% of the amount in dispute.

111. (Only for SGST law) What is the meaning of serious case ?

It is defined to mean a case involving a disputed tax liability of not less than Rs. 25 Crores and where the Commissioner of SGST is of the opinion (for reasons to be recorded in writing) that the department has a very good case against the taxpayer.

112. Can the Commissioner of SGST revise any order passed under the Act by his subordinates?

Yes. Section 80(1) of SGST Act authorises Commissioner to call for and examine any order passed by his subordinates and in case he considers the order of the lower authority to be erroneous in so far as it is prejudicial to revenue, he can revise the order after giving opportunity of being heard to the notice.

113. Can the Commissioner of SGST order for staying of operation of any order passed by his subordinates pending such revision?

Yes.

114. Are there any fetters to the powers of Commissioner under SGST to revise orders of subordinates?

Yes. The Commissioner shall not revise any order if:

a) The order has been subject to an appeal under section 79 or under section 82 or under section 87 or under section 88; or

b) More than three years have expired after the passing of the decision or order sought to be revised.

For details of these and some other ‘fetters”, please refer to Section 80 of the MDL.

115. When the Tribunal is having powers to refuse to admit the appeal?

In cases where the appeal involves –

I. Tax amount or

II. Input tax credit or

III. The difference in tax or

IV. The difference in input tax credit involved or

V. Amount of fine,

VI. Amount of fees or

VII. Amount of penalty ordered

Less than Rs. 1, 00,000/-, the Tribunal has discretion to refuse to admit such appeal (Section82 (2) of MGL)

116. What is the time limit within which appeal has to be filed before the Tribunal?

3 months from the date of receipt of the order appealed against.

117. Can the Tribunal condone delay in filing appeal before it beyond the period of 3 months? If so till what time?

Yes the Tribunal has powers to condone delay of any period of time beyond the period of 3 months provided sufficient case is shown by the appellant for such delay.

118. What is the time limit for filing memorandum of cross objections before Tribunal?

45 days from the date of receipt of appeal.

119. Bring out the differences in appeal (to Tribunal) provisions under CGST & SGST?

i. The provisions under Section 82 of SGST Act for appeal by any person aggrieved by the order or decision passed against him by First Appellate Authority are essentially similar to provisions contained in Section 82 of CGST Act and discussions made therein are equally applicable to section 82 of SGST as well.

ii. In addition to the above the provision of Section 82 of SGST Act also covers an appeal to be filed to Appellate Tribunal against the revisionary order passed by Commissioner.

iii. However the provisions relating to appeal by the revenue against the order of first appellate authority as CGST Act is not provided in SGST Act since the revisionary powers (against the orders passed by the FAA, who in the states is likely to be subordinate to the Commissioner) is provided to Commissioner to SGST.

iv. In addition, the person aggrieved under SGST Act has to pre-deposit full deposit of admitted tax, interest, fine, fee and penalty arising from the impugned order.

120. Whether interest becomes payable on refund of pre-deposit amount?

Yes. As per Section 85 of MGL Where an amount deposited by the appellant under sub-section (6)7(4) of section 79 or under sub-section (10)7(7) of section 82 is required to be refunded consequent to any order of the First Appellate Authority or of the Appellate Tribunal, as the case may be, interest at the rate specified under section 39 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount.

121. An appeal from the order of Tribunal lies to which forum?

High Court if the High Court is satisfied that such an appeal involves a substantial question of law. (Section 87(1)). However, if the order passed by the Tribunal relates to a matter where two or more States, or a State and Centre, have a difference of views regarding the treatment of a transaction(s) being intra-State or inter-State; or a matter where two or more States, or a State and Center, have a difference of views regarding place of supply, then appeal against such order shall lie to the Supreme Court and not High Court.

122. What is the time limit for filing an appeal before the High Court?

180 days from the date of receipt of the order appealed against. However, the High Court has the power to condone further delay on sufficient cause being shown.

123. Who is the person responsible to make assessment of taxes payable under the Act?

Every person registered under the Act shall himself assess the tax payable by him for a tax period and after such assessment he shall file the return required under section 2Z.

124. Is there any provision in MGL for tax treatment of goods returned by the recipient?

Yes, Explanation to Section 44 of MGL has such a provision. It provides that where goods received as an inward supply is returned by the recipient to the supplier within six months from the date of the relevant invoice, the tax payable on such supplies shall be equal to the input tax credit availed earlier on such inward supply. This provision essentially ensures that if the recipient returns the goods to the supplier within six months of the date of its original supply, his tax liability on such returned goods will be the same as was at the time of the original supply. If goods are returned after six months of the date of the original supply invoice, the rate of tax applicable will be the rate prevailing on date of such return.

125. A supplied goods to B in April 2017, these goods were returned by B to A on June 2017. The tax rate charged by A on such goods was 18%. In May 2017, the rate was amended to 18.5%. What is the tax payable on return of such inward supply by B to A?

18%

126. When can a taxable person pay tax on a provisional basis?

As a taxpayer has to pay tax on self-assessment basis, a request for paying tax on provisional basis has to come from the taxpayer which will then have to be permitted by the proper officer. In other words, no tax officer can suomoto order payment of tax on provisional basis. This is governed by section 44A of MGL. Tax can be paid on a provisional basis only after the proper officer has permitted it through an order passed by him. For this purpose, the taxable person has to make a written request to the proper officer, giving reasons for payment of tax on a provisional basis. Such a request can be made by the taxable person only in such cases where he is unable to determine:

a) The value of goods or services to be supplied by him, or

b) Determine the tax rate applicable to the goods or services to be supplied by him.

In such cases the taxable person has to execute a bond in the prescribed form and with such surety or security as the proper officer may deem fit.

127. What is the latest time by which final assessment is required to be made?

The final assessment order has to be passed by the proper officer within six months from the date of the communication of the order of provisional assessment However, on sufficient cause being shown and for reasons to be recorded in writing; the above period of six months may be extended:

a) By the Joint/Additional Commissioner for a further period not exceeding six months, and

b) By the Commissioner for such further period as he may deem fit.

128. Where the tax liability as per the final assessment is higher than in provisional assessment, will the taxable person be liable to pay interest?

Yes. He will be liable to pay interest from the date the tax was due to be paid originally till the date of actual payment.

129. What recourse may be taken by the officer in case proper explanation is not furnished for the discrepancy detected in the return filed under section 45 of MGL?

If the taxable person does not provide a satisfactory explanation within 30 days of being informed (extendable by the officer concerned) or does not take corrective action within a reasonable period after accepting the discrepancies, the Proper Officer may take recourse to any of the following provisions:
a) Proceed to conduct audit under Section 49 of the Act;
b) Direct the conduct of a special audit under Section 50 which is to be conducted by a Chartered Accountant or a Cost Accountant nominated for this purpose by the Commissioner; or
c) Undertake procedures of inspection, search and seizure under Section 60 of the Act; or
d) Initiate proceeding for determination of tax under Section 51 of the Act.

130. Whether Proper Officer is required to give any notice to taxable person before completing assessment u/s 46?

As this provision relates to best judgment assessment giving a notice to the taxable person is not required.

131. If a taxable person fails to file the return required under law (under section 27 or 31), what legal recourse is available to the tax officer?

The proper officer has to first issue a notice to the defaulting taxable person under section 32 of MGL requiring him to furnish the return within a specified period of time, which has to be a minimum of fifteen days as per section 46 of MGL. If the taxable person fails to file return within the given time, the proper officer shall proceed to assess the tax liability of the return defaulter to the best of his judgement taking into account all the relevant material available with him. This power is given under section 46 of MGL.

132. Under what circumstances can a best judgment assessment order issued under section 46 be withdrawn?

The best judgment order passed by the Proper Officer under section 46 of MGL shall automatically stand withdrawn if the taxable person furnishes a valid return for the default period (i.e. files the return and pays the tax as assessed by him), within thirty days of the receipt of the best judgment assessment order.

133. What is the time limit for passing order u/s 46 and 47?

The time limit for passing an assessment order under section 46 or 47 is three or five years from the due date for filing the annual return.

134. What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?

Section 47 of MGL provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non-payment of tax relates.

135. Under what circumstances can a tax officer initiate Summary Assessment?

As per section 48 of MGL, Summary Assessments can be initiated to protect the interest of revenue when:

a) The proper officer has evidence that a taxable person has incurred a liability to pay tax under the Act, and

b) The proper officer believes that delay in passing an assessment order will adversely affect the interest of revenue.

Such order can be passed after seeking permission from the Additional Commissioner/Joint Commissioner.

136. Other than appellate remedy, is there any other recourse available to the taxpayer against a summary assessment order?

A taxable person against whom a summary assessment order has been passed can apply for its withdrawal to the jurisdictional Additional/Joint Commissioner within thirty days of the date of receipt of the order. If the said officer finds the order erroneous, he can withdraw it and direct the proper officer to carry out determination of tax liability in terms of section 51 of MGL. The Additional/Joint Commissioner can follow a similar course of action on his own motion if the finds the summary assessment order to be erroneous (section 48 of MGL).

137. Is summary assessment order to be necessarily passed against the taxable person?

No. In certain cases like when goods are under transportation or are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax (section 48 of MGL).

138. Who can conduct audit of taxpayers?

As per section 49 of MGL, any officer of CGST or SGST authorized by his Commissioner by a general or specific order may conduct audit of a taxpayer. The frequency and manner of audit will be prescribed in due course.

139. Whether any prior intimation is required before conducting the audit?

Yes, prior intimation is required and the taxable person should be informed at least 15 days prior to conduct of audit.

140. What is the period within which the audit is to be completed?

The audit is required to be completed within 3 months from the date of commencement of audit or within a further period of a maximum of 6 months subject to the approval of the Commissioner.

141. What is meant by commencement of audit?

The term commencement of audit is important because audit has to be completed within a given time frame in reference to this date of commencement of audit means the later of the following:

a) The date on which the records/accounts called for by the audit authorities are made available to them, or

b) The actual institution of audit at the place of business of the taxpayer.

142. What are the obligations of the taxable person when he receives the notice of audit?

The taxable person is required to:

a) Facilitate the verification of accounts/records available or requisitioned by the authorities,

b) Provide such information as the authorities may require for the conduct of the audit, and

c) Render assistance for timely completion of the audit

143. What would be the action by the proper officer upon conclusion of the audit?

The proper officer must without delay inform the taxable person about his findings, reasons for findings and the taxable person’s rights and obligations in respect of such findings.

144. Under what circumstances can a special audit are instituted?

A special audit can be instituted in limited circumstances where during scrutiny, investigation, etc. it comes to the notice that a case is complex or the revenue stake is high. This power is given in section 50 of MGL.

145. Who can serve the notice for special audit?

The Assistant/ Deputy Commissioner is to serve the notice for special audit only after prior approval of the Commissioner.

146. Who will do the special audit?

A Chartered Accountant or a Cost Accountant so nominated by the Commissioner may undertake the audit.

147. What is the time limit to submit the audit report?

The auditor will have to submit the report within 90 days or within the further extended period of 90 days.

148. Who will bear the cost of special audit?

The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner.

149. What action the tax authorities may take after the special audit?

Based on the findings / observations of the special audit, action can be initiated under Section 51 of the MGL.

150. What is the taxable event under GST?

The taxable event under GST shall be the supply of goods and / or services made for consideration in the course or furtherance of business. The taxable events under the existing indirect tax laws such as manufacture, sale, or provision of services shall stand subsumed in the taxable event known as supply.

151. What is the meaning of Supply?

The term ‘supply’ is wide in its import and includes all forms of supply of goods and / or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It also includes import of service. The model GST law also provides for including certain transactions made without consideration within the scope of supply.

152. What is a Taxable supply?

A taxable supply means a supply of goods and / or services which is chargeable to good and services tax under the GST Act.

153. What are the necessary elements that constitute supply under MGL?

In order to constitute a ‘supply’, the following elements are required to be satisfied, i.e.-

i. Supply of goods and / or services;

ii. Supply is for a consideration;

iii. Supply is made in the course or furtherance of business;

iv. Supply is made in the taxable territory;

v. Supply is a taxable supply; and

vi. Supply is made by a taxable person.

154. Can a transaction in which any one or more of the above criteria is not fulfilled, be still considered as supply under GST?

Yes. Under certain circumstances such as importation of service (Section 3(1) (b)) or supplies made without consideration, specified under Schedule-I of MGL, where one or more ingredients specified in answer to question no. 4 are not satisfied, it shall still be treated as supply under GST Law.

155. Importation of Goods is conspicuous by its absence in Section 3. Why?

Importation of goods is dealt separately under the Customs Act, 1962, wherein IGST shall be levied as additional duty of customs in addition to basic customs duty.

156. Are self-supplies taxable under GST?

Inter-state self-supplies such as stock transfers will be taxable as a taxable person has to take state wise

Registration in terms of Schedule 1(5). Such transactions have been made taxable even if there is no consideration. However, intra-state self-supplies are not taxable.

157. Whether transfer of title and/or possession is necessary for a transaction to constitute supply of goods?

Title as well as possession both have to be transferred for a transaction to be considered as a supply of goods. In case title is not transferred, the transaction would be treated as supply of service in terms of Schedule II (1). In some cases, possession may be transferred immediately but titled may be transferred at a future date like in case of sale on approval basis or hire purchase arrangement Such transactions will also be termed as supply of goods.

158. What do you mean by supply made in the course or furtherance of business?

No definition or test as to whether the activity is in the course or furtherance of business has been specified under the MGL. However, the following business test is normally applied to arrive at a conclusion whether a supply has been made in the course or furtherance of business:

1. Is the activity, a serious undertaking earnestly pursued?

2. Is the activity is pursued with reasonable or recognisable continuity?

3. Is the activity conducted in a regular manner based on sound and recognised business principles?

4. Is the activity predominantly concerned with the making of taxable supply for consideration/ profit motive?

The test may ensure that occasional supplies, even if made for consideration, will not be subjected to GST.

159. An individual buys a car for personal use and after a year sells it to a car dealer. Will the transaction be a supply in terms of MGL? Give reasons for the answer.

No, because supply is not made by the individual in the course or furtherance of business. Further, no input tax credit was admissible on such car at the time of its acquisition as it was meant for non-business use.

160. A dealer of air-conditioners transfers an air conditioner from his stock in trade, for personal use at his residence. Will the transaction constitute a supply?

Yes. As per Schedule-I (1) business assets put to a private or non-business use without consideration will be treated as supply.

161. Whether provision of service or goods by a club or association or society to its members will be treated as supply or not?

Yes. Provision of facilities by a club, association, society or any such body to its members shall be treated as supply. This is included in the definition of ‘business’ in section 2(17) of MGL.

162. What are inter-state supplies and intra-state supplies?

Inter-state and intra-state supplies have specifically been defined in Section 3 & 3A of IGST Act respectively. Broadly, where the location of the supplier and the place of supply are in same state it will be intra-state and where it is in different states it will be inter-state supplies.

163. Whether transfer of right to use goods will be treated as supply of goods or supply of service? Why?

Transfer of right to use goods shall be treated as supply of service because there is no transfer of title in such supplies. Such transactions are specifically treated as supply of service in Schedule-II of MGL

164. Whether Works contracts and Catering services will be treated as supply of goods or supply of services? Why?

Works contract and catering services shall be treated as supply of service as specified in Schedule-II of MGL.

165. Whether goods supplied on hire purchase basis will be treated as supply of goods or supply of services? Why?

Supply of goods on hire purchase shall be treated as supply of goods as there is transfer of title, albeit at a future date.

166. Which is the applicable section for the purpose of recovery of tax short paid or not paid or amount erroneously refunded or input tax credit wrongly availed or utilized?

Section 51A in cases where there is no invocation of fraud/suppression/mis-statement etc and Section 51B where the ingredients of fraud/suppression/mis-statement etc are present.

167. Can the person chargeabl

Yes. In such cases no notice can be issued by the proper officer.

168. If notice is issued under Section 51A and thereafter the notice makes payment, is there any need to adjudicate the case?

Where the person to whom a notice has been issued under sub-section (1) of section 51A, pays the tax along with interest within 30 days of issue of notice, no penalty shall be payable and all proceedings in respect of such notice shall be deemed to be concluded.

169. What is the relevant date for issue of Show Cause Notice under Section 51A/B?

The relevant date is the date of filing of annual return where such returns of actually filed or where such returns are not filed, the due date for filing of annual return.

170. Is there any time limit to issue SCN or adjudicate the case u/s 51A/B?

There is no time limit to issue SCN. However the issuance of SCN and adjudication of the case has to be completed within the period of 3 years (for Section 51A cases) and 5 years (for Section 51B cases) from the relevant date.

171. Can the person chargeable with tax pay the amount of demand along-with interest before issue of notice under section 51B?

Yes. Before issue of notice under sub section (1) or a statement under sub-section (2), a person chargeable with tax, shall have an option to pay the amount of tax along with interest and fifteen percent penalty, ascertained either on his own or informed by the proper officer, and on such payment, no notice shall be issued with respect to the tax so paid.

172. If notice is issued under Section 51B and thereafter the notice makes payment, is there any need to adjudicate the case?

No if tax/interest and penalty has been paid. Where the person to whom a notice has been under sub-section (1) issued, pays the tax along with interest with twenty five percent penalty within 30 days of issue of notice all proceedings in respect of such notice shall be deemed to be concluded.

173. In case a notice is adjudicated under Section 51B and order issued confirming tax demand and penalty, does the notice have any option to pay reduced penalty?

Yes. He needs to pay tax/interest and 50% of penalty within 30 days of communication of order. Where any person served with an order issued under sub-section (6) of Section 51B pays the tax along with interest and a penalty equivalent to fifty percent of such tax within thirty days of the communication of order, all proceedings in respect of the said tax shall be deemed to be concluded.

174. What happens in cases (both under Section 51A & B) where notice is issued but order has not been passed within 3 years (51A)/5 years (51B)?

The Model GST Law provides for deemed conclusion of the adjudication proceedings if the order is not issued within three years as provided for in section 51A (7) or within five years as provided for in section 51B (7).

175. What happens if a person collects tax from another person but does not deposit the same with Government?

As per Section 52 of MGL, every person who has collected from any other person any amountas representing the tax under this Act, shall deposit the said amount to the credit of the Central or a State Government, regardless of whether the supplies in respect of which such amount was collected are taxable or not.

176. In case the person does not deposit tax collected in contravention of Section 52, what is the proper course of action to be taken?

Notice to be issued. Principles of natural justice to be followed and order to be issued. It is to be noted that such order has to be invariably issued within 1 year of date of issue of notice. However there is no time limit for issue of show cause notice. Thus, in such cases duty can be recovered even after ten years.

177. Is there any time limit to issue notice in cases under Section 52- tax collected but not paid?

No. There is no time limit. Notice can be issued on detection of such cases without any time limit. Once notice is issued, the order has to be passed within 1 year from the date of issue of notice.

178. What are the modes of recovery of tax available to the proper officer?

 The following options are available to the proper officer:

 I. The proper officer may deduct or may require ny other specified officer to deduct the amount so payable from any money owing to such person;

II. The proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person;

III. The proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government;

IV. The proper officer may, on an authorization by the competent authority, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; if the dues remains unpaid for a period of thirty days after any such distress, he may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and pay the surplus amount, if any, to such person;

V. The proper officer may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and on receipt of such certificate, the Collector shall proceed to recover from such person the amount specified as if it were an arrear of land revenue.

179. Can the proper officer allow payment of tax dues in installments?

Yes, in cases other than self-assessed tax. The Commissioner/Chief Commissioner may extend the time for payment or allow payment of any amount due under the Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 36 with such restrictions and conditions as may be prescribed. However, where there is default in payment of any one instalment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and recovered without any further notice.

180. What happens in cases where the tax demand confirmed is enhanced in appeal/revision proceedings?

The notice of demand is required to be served only in respect of the enhanced dues. In so far as the amount already confirmed prior to disposal of appeal/revision, the recovery proceedings may be continued from the stage at which such proceedings stood immediately before such disposal.

181. If a person liable to pay tax has certain tax liability and in the meantime he transfers his business to another person, what happens to the existing tax liability?

Where any person liable to pay tax, transfers his business in whole/part, by sale, gift, lease, leave and license, hire, or in any other manner, then such person and the person to whom the business is transferred shall jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer, whether such dues has been determined before such transfer, but has remained unpaid or is determined thereafter.

182. What happens to tax dues where the Company (taxable person) goes into liquidation?

When any company is wound up and any tax or other dues determined whether before or after liquidation that remains unrecovered, every person who was a director of the company during the period for which the tax was due, shall jointly and severally be liable for payment of dues unless he proves to the satisfaction of the Commissioner that such non-recovery is not attributed to any gross neglect, misfeasance or breach of duties on his part in relation to the affairs of the company

183. What is the liability of partners of a partnership firm (Taxable person) to pay outstanding tax?

Partners of any firm shall jointly and severally liable for payment of any tax, interest or penalty. Firm/ partner shall intimate the retirement of any partner to the Commissioner by a notice in writing – liability to pay tax, interest or penalty up to the date of such retirement, whether determined on that date or subsequently, shall be on such partner. If no intimation is given within one month from the date of retirement, the liability of such partner shall continue until the date on which such intimation is received by the Commissioner.

184. What happens to the tax liability of a taxable person, whose business is carried on by any guardian / trustee or agent of a minor?

Where the business in respect of which any tax is payable is carried on by any guardian / trustee / agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian / trustee / agent.

185. What happens when the estate of a taxable person is under the control of Court of Wards?

Where the estate of a taxable person owning a business in respect of which any tax, interest or penalty is payable is under the control of the Court of Wards/Administrator General/Official Trustee/Receiver or Manager appointed under any order of a Court, the tax, interest or penalty shall be levied and recoverable from such Court of Wards/ Administrator General / Official Trustee / Receiver or Manager to the same extent as it would be determined and recoverable from a taxable person.

186. What is E-Commerce?

Section 43B(d) of the MGL defines an Electronic Commerce to mean the supply or receipt of goods and/ or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, web services, universal description Discovery and integration (UDDI), File Transfer Protocol (FTP) and Electronic Data Interchange (EDI) whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.

187. Who is an E-Commerce Operator?

Section 43B(e) of the MGL defines an Electronic Commerce Operator (Operator) as every person who, directly or indirectly, owns, operates or manages an electronic platform which is engaged in facilitating the supply of any goods and/or services. Also a person providing any information or any other services incidental to or in connection with such supply of goods and services through electronic platform would be considered as an Operator. A person supplying goods/services on his own account, however, would not be considered as an Operator. For instance, Amazon and Flipkart are e-commerce Operators because they are facilitating actual suppliers to supply goods through their platform (popularly called Market place model or Fulfillment Model). However, Titan supplying watches and jewels through its own website would not be considered as an e-commerce operator for the purposes of this provision. Similarly Amazon and Flipkart will not be treated as e-commerce operators in relation to those supplies which they make on their own account (popularly called inventory Model).

188. Is it mandatory for e-commerce operator to obtain registration?

Yes. Section 19 r/w Schedule-III of the MGL, provides that the threshold exemption is not available to e-commerce operators and they would be liable to be registered irrespective of the value of supply made by them.

189. Whether a supplier of goods/services supplying through e-commerce operator would be entitled to threshold exemption?

No. Section 19 r/w Schedule-III of the MGL, provides that the threshold exemption is not available to such suppliers and they would be liable to be registered irrespective of the value of supply made by them.

190. Who is an aggregator?

Section 43 B (a) of the MGL defines aggregator to mean a person, who owns and manages an electronic platform, and by means of the application and communication device, enables a potential customer to connect with the persons providing service of a particular kind under the brand name or trade name of the said aggregator. For instance, Ola cabs would be an aggregator.

191. Is an aggregator required to be registered under GST?

Yes. Section 19 r/w Schedule-III of the MGL, provides that the threshold exemption is not available to aggregators and they would be liable to be registered irrespective of the value of supply made by them.

192. What is Tax Collection at Source (TCS)?

In terms of Section 43C(1) of the MGL, the e-commerce operator is required to collect (i.e. deduct) an amount out of the consideration paid or payable to the actual supplier of goods or services in respect of supplies of goods and / or services made through such operator. The amount so deducted/collected is called as Tax Collection at Source (TCS).

193. At what time/intervals should the e-commerce operator make such deductions?

The timings for such collection/deduction are earlier of the two events:
(i) The time of credit of any amount to the account of the actual supplier of goods and / or
services;
(ii) The time of payment of any amount in cash or by any other mode to such supplier.

194. What is the time within which such TCS is to be remitted by the e-commerce operator to Government account? Is the operator required to file any returns for this purpose?

In terms of Section 43C(3) of the MGL, the amount collected by the operator is to be paid to the
credit of appropriate government within 10 days after the end of the month in which amount was so
collected. Further, in terms of Section 43C(4) of the MGL, the operator is required to file a Statement,electronically, containing details of all amounts collected by him for the outward supplies made through his Portal, within 10 days of the end of the calendar month to which such statement pertains.The said statement would contain the names of the actual supplier(s), details of respective supplies made by them and the amount collected on their behalf. The Form and Manner of the said Statement would be prescribed in the GST Rules.

195. How can actual suppliers claim credit of this TCS?

Such TCS which is deposited by the operator into government account will be reflected in the cash ledger of the actual registered supplier (on whose account such collection has been made) on the basis of the statement filed by the operator. The same can be used at the time of discharge of tax liability in respect of the supplies by the actual supplier

196. Is the e-commerce operator required to furnish information to the Government?

Yes. In terms of section 43 C(10), an officer not below the rank of Joint Commissioner may require the operator to furnish details relating to:

(i) Supplies of goods / services effected through the operator during any period;

(ii) Stock of goods held by actual supplier making supplies through such operator in the godowns or warehouses belonging to the operator and registered as additional place of business by the actual supplier.

The operator is required to furnish the above information within 5 working days from the date of service of notice asking such information. In case of failure to furnish such information, the penalty could be extended to Rs. 25, 00%.

197. Is the e-commerce operator required to submit any statement? What are the details that are required to be submitted in the statement?

Yes, in terms of Section 43C (4), every operator is required to furnish a statement, electronically, of all amounts collected as TCS towards outward supplies of goods and/or services effected through it during a calendar month within ten days after the end of such calendar month. The statement shall contain, inter alia, the details of the amount collected on behalf of each supplier in respect of all supplies of goods and/ or services effected through the operator and the details of such supplies during the said calendar month.

198. What is the concept of matching in e-commerce provisions and how it is going to work?

As per section 43C (6), the details of supplies and the amount collected during a calendar month, and furnished by every operator in his statement will be matched with the corresponding details of outward supplies furnished by the concerned supplier in his valid return filed under section 27 for the same calendar month or any preceding calendar month. Where the details of outward supply, on which the tax has been collected, as declared by the operator in his statement do not match with the corresponding details declared by the supplier the discrepancy shall be communicated to both persons.

199. What will happen if the details remain mismatched?

As per section 43C (8), the value of a supply relating to any payment in respect of which any discrepancy is communicated and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output liability of the said supplier, for the calendar month succeeding the calendar month in which the discrepancy is communicated. The concerned supplier shall, in whose output tax liability any amount has been added shall be liable to pay the tax payable in respect of such supply along with interest, at the rate specified under sub-section (1) of section 36 on the amount so added from the date such tax was due till the date of its payment.

200. What is GSTN?

Goods and Services Tax Network (GSTN) is a non-profit 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.

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