A Complete Guide to Goods and Services Tax Ready Reckoner in Q & A Format-Second Edition

Contents at a glance About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Preface to Second Edition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 How to use this Book. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 CD Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10

PART A – GENERAL Indirect Tax Structure in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 GST: An Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 GST: New Concepts and Models. . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Understanding GST Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 GST: Constitutional frame work. . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Administration of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Compensation Cess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 GST Compliance Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Anti-Profiteering Measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 GSTN Common Portal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279

Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26

PART B – CGST/SGST Charge of GST (Charging Provision of Levy and Collection) . . . . . 289 Supply of Goods and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Exempted Supply under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Classification and Rates under GST. . . . . . . . . . . . . . . . . . . . . . . . . . 323 Time of Supply of Goods and Services. . . . . . . . . . . . . . . . . . . . . . . 327 Threshold Exemption under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 Composition Levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Valuation under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 Payment of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 Reverse Charge Mechanism in GST. . . . . . . . . . . . . . . . . . . . . . . . . 411 Tax Deduction at Source in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . 419 Tax Collection at Source (TCS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Liability to pay tax in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . 447 Invoices, credit notes and debit notes . . . . . . . . . . . . . . . . . . . . . . . . 459 13

GST Ready Reckoner in Q & A Format

Chapter 27 Chapter 28 Chapter 29 Chapter 30 Chapter 31 Chapter 32 Chapter 33 Chapter 34 Chapter 35 Chapter 36 Chapter 37 Chapter 38 Chapter 39 Chapter 40 Chapter 41 Chapter 42 Chapter 43 Chapter 44 Chapter 45 Chapter 46 Chapter 47 Chapter 48 Chapter 49

Filing of Returns under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Job Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 GST on E-commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 E Way Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Scrutiny and Audit under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555 Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567 Input Service Distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589 Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595 Demand and Recovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 Offences and Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629 Search, Seizure and Summons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641 Arrest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659 Prosecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667 Compounding of offences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679 Appeals and revision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687 Advance ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721 Information returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741 GST Practitioners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751 Authorised Representative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 Transitional Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763 Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791

Chapter 50 Chapter 51 Chapter 52 Chapter 53 Chapter 54 Chapter 55 Chapter 56 Chapter 57 Chapter 58 Chapter 59

PART C – INTEGRATED GST Levy and collection of IGST (Charging provisions). . . . . . . . . . . . . 803 Nature of supplies (Inter-state supply of goods and services). . . . . . 811 Exports, Imports & Zero Rated Supplies. . . . . . . . . . . . . . . . . . . . . . 819 Special Economic Zones. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 Place of Supply of Goods and/or Services. . . . . . . . . . . . . . . . . . . . . 835 Payment of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871 Apportionment of Tax and Settlement of Funds . . . . . . . . . . . . . . . . 875 Refund of IGST to International Tourists . . . . . . . . . . . . . . . . . . . . . 881 Miscellanous and Transitional Provisions. . . . . . . . . . . . . . . . . . . . . 885

Chapter 60

PART D – UNION TERRITORY GST Union Territory GST – Overview and Specific Provisions. . . . . . . . 891

List of abbreviations used. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 897 14

Table of contents About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Preface to Second Edition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 How to use this Book. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Contents at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CD Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 PART A – GENERAL Chapter 1 Indirect Tax Structure in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Q.1 What are the powers of Government to levy taxes?. . . . . . . . . . . . . . . . . . . 103 Q.2 What are the stages for imposing any tax?. . . . . . . . . . . . . . . . . . . . . . . . . . 103 Taxes can be direct or indirect. What is meant by direct and Q.3 indirect taxes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Q.4 What was the pre-GST indirect taxation structure in India?. . . . . . . . . . . . . 105 Other Important Indirect Taxes/Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Q.5 What were the indirect taxes levied and collected by the Union of India (Central Government) prior to levy of GST?. . . . . . . . . . . . . . . . . . . . 106 Q.6 What were the present indirect taxes levied and collected by the States Governments in pre-GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Q.7 What are the advantages of levy of indirect taxes? Are there any disadvantages of indirect taxes? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Disadvantages of levy of Indirect Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Q.8 What were the deficiencies in the pre-GST indirect tax system?. . . . . . . . . 111 Q.9 How does the Goods & Services Tax (GST) and pre-GST system of Value Added Tax (VAT) compare? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Q.10 What is the relevance of GST in present day context?. . . . . . . . . . . . . . . . . 112 Chapter 2 GST: An Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Q.1 What is the justification for levy of GST in India?. . . . . . . . . . . . . . . . . . . . 115 Q.2 What is GST and why is it required? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Features of GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Q.3 What is the need for GST as an improved indirect tax?. . . . . . . . . . . . . . . . 118 Q.4 What was the scope of ‘service’ under Service Tax law?. . . . . . . . . . . . . . . 119 Q.5 What is the concept of GST and how does GST work? . . . . . . . . . . . . . . . . 121 Q.6 What shall be scope of ‘service’ under the GST?. . . . . . . . . . . . . . . . . . . . . 122 Q.7 What is the scope of ‘goods’ under the GST?. . . . . . . . . . . . . . . . . . . . . . . . 122 15

GST Ready Reckoner in Q & A Format

Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28 Q.29 Q.30 Q.31 Q.32 Q.33 Q.34 Q.35 Q.36 Q.37 Q.38 Q.39

16

Many Central and State taxes have been subsumed under GST? What principles have been observed for this?. . . . . . . . . . . . . . . . . . . . . . . . 123 What Central and State Taxes shall be subsumed in GST?. . . . . . . . . . . . . . 123 What are the Central and State taxes/duties which have not been subsumed in GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 What are the objectives of implementation of GST in India?. . . . . . . . . . . . 125 What are the pre-requisites for effective GST regime?. . . . . . . . . . . . . . . . . 125 At what point, GST shall be levied?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 When does the liability to pay GST arise? . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Will GST benefit India economically? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 What are the likely implications of GST in Indian context?. . . . . . . . . . . . . 127 What are the advantages of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 How does GST benefit industry, trade and exporters? . . . . . . . . . . . . . . . . . 130 How will GST impact professionals?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 How does GST benefit the small entrepreneurs and small traders? . . . . . . . 132 How does GST benefit the exchequer and Government?. . . . . . . . . . . . . . . 132 How does GST benefit the common consumers?. . . . . . . . . . . . . . . . . . . . . 133 What are the likely disadvantages of GST? . . . . . . . . . . . . . . . . . . . . . . . . . 133 Will implementation of GST and its preparedness be costly for companies? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 What impact would GST have on overall prices?. . . . . . . . . . . . . . . . . . . . . 134 What will be the tax on alcoholic beverages under GST? . . . . . . . . . . . . . . 134 What will be the taxation on tobacco products under GST?. . . . . . . . . . . . . 134 What will be the taxation on petroleum products under GST?. . . . . . . . . . . 134 Whether e-commerce will come under the scope of GST?. . . . . . . . . . . . . . 135 What are the challenges considered in implementation of GST?. . . . . . . . . 135 If any loss to states arises due to the introduction of GST, would such loss be compensated?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 What has been the experience of other countries with GST?. . . . . . . . . . . . 139 Which countries follow the methodology of Dual GST?. . . . . . . . . . . . . . . 141 Which is the latest country to introduce GST?. . . . . . . . . . . . . . . . . . . . . . . 141 What are the GST rates generally prevalent across the world?. . . . . . . . . . . 141 What role can professionals play under GST regime? . . . . . . . . . . . . . . . . . 141 What professional opportunities is GST expected to bring in for professionals? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 What role can the professionals play in GST regime? . . . . . . . . . . . . . . . . . 142 What are the specific professional opportunities provided in GST law? . . . 144

Table of contents

Chapter 3

GST: New Concepts and Models . . . . . . . . . . . . . . . . . . . . . . . . . . 145

GST Models. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Q.1 What are the salient features of the GST model implemented in India?. . . . 145 Q.2 What will the tax matrix in GST regime and how GST will work?. . . . . . . 147 Q.3 What will be the taxability of imports under GST regime? . . . . . . . . . . . . . 147 Q.4 What about tax treatment of exports of goods and/or services?. . . . . . . . . . 147 How are pre-GST provisions different from the GST model? . . . . . . . . . . . 148 Q.5 Q.6 What are the pre-requisites for GST implementation?. . . . . . . . . . . . . . . . . 148 What is meant by dual GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Q.7 Q.8 Why is dual GST required?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Q.9 What benefits shall accrue from dual GST?. . . . . . . . . . . . . . . . . . . . . . . . . 149 Q.10 What is Central Goods and Services Tax (CGST)?. . . . . . . . . . . . . . . . . . . . 149 Features of CGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Q.11 What is State Goods and Services Tax (SGST)?. . . . . . . . . . . . . . . . . . . . . . 150 Features of SGST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Q.12 How would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)? . . . . . 151 Q.13 Illustrate how would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Q.14 What is Inter-state Goods and Services Tax (IGST)?. . . . . . . . . . . . . . . . . . 153 Features of IGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Q.15 What are the benefit of IGST model?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Q.16 How will inter-state transactions of goods and services be taxed under GST under IGST method?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 Q.17 How will imports be taxed under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Q.18 How will exports be treated under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 Q.19 What is Union Territory Goods and Services Tax (UTGST)?. . . . . . . . . . . . 156 Features of UTGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Q.20 What are the Union Territories covered under UTGST Act, 2017? . . . . . . . 156 GST Rate/Revenue Neutral Rate (RNR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Q.21 What will be the rate of GST and who will decide the rate of tax? . . . . . . . 157 Q.22 What is meant by Revenue Neutral Rate (RNR)?. . . . . . . . . . . . . . . . . . . . . 157 Q.23 What are the factors which have been considered for determination of RNR?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Cascading Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Q.24 What is meant by tax cascading? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Q.25 How will GST mitigate tax cascading?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 17

GST Ready Reckoner in Q & A Format

Cesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Q.26 With GST coming into force w.e.f. 1st July 2017, whether various cesses which were levied in pre-GST period will continue to be levied?. . . 159 Q.27 What are the cesses which will continue to be levied in GST regime?. . . . . 160 Chapter 4

Understanding GST Terminology. . . . . . . . . . . . . . . . . . . . . . . . . . 161

SGST Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Other Meanings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 IGST Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 UTGST Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 Terminology under CGST ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Actionable Claim [Section 2(1)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Q.1 What is meant by actionable claim under GST?. . . . . . . . . . . . . . . . . . . . . . 163 Q.2 What are the essential elements of any claim to be considered as actionable claim?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Q.3 What type of claims are included in actionable claims?. . . . . . . . . . . . . . . . 163 Q.4 Suggest few examples of claims or rights which can be considered as actionable claims or not?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Whether actionable claims will be classified as ‘goods’ or ‘services’ Q.5 under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Q.6 Explain the taxability of actionable claim under erstwhile regime and under GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Q.7 Whether any actionable claims be such which are neither goods nor services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Address of Delivery [Section 2(2)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Q.8 What is meant by ‘Address of delivery’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Q.9 What is meant by ‘address’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Q.10 What is a ‘tax invoice’ in relation to address of delivery? . . . . . . . . . . . . . . 167 Q.11 Who is a ‘taxable person’ in relation to address of delivery?. . . . . . . . . . . . 167 Q.12 What is the importance of ‘Address of delivery’ under GST? . . . . . . . . . . . 167 Address on Record [Section 2(3)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Q.13 What is ‘Address on record’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Q.14 What is the difference between ‘address of delivery’ and ‘address on records’ under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Agent [Section 2(5)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Q.15 Who is an ‘agent’ under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Q.16 What are the essential attributes of an ‘agent’?. . . . . . . . . . . . . . . . . . . . . . . 168 Q.17 Is it necessary that ‘agent’ must be known? . . . . . . . . . . . . . . . . . . . . . . . . . 169 Q.18 Whether an ‘agent’ is a taxable person and is required to take registration?.169 18

Table of contents

Q.19 Q.20

Whether an ‘agent’ is liable to be registered?. . . . . . . . . . . . . . . . . . . . . . . . 169 Will the supply of goods by or to agent without consideration be treated as supply? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Q.21 Whether an ‘agent’ is considered as an intermediary? . . . . . . . . . . . . . . . . . 169 Aggregate Turnover [Section 2(6)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Q.22 What is the scope of ‘aggregate turnover’ under GST?. . . . . . . . . . . . . . . . 170 Q.23 What does a person having the same PAN mean? . . . . . . . . . . . . . . . . . . . . 172 Q.24 What ‘aggregate turnover’ does not include?. . . . . . . . . . . . . . . . . . . . . . . . 172 Q.25 What does ‘inward supply’ mean and include?. . . . . . . . . . . . . . . . . . . . . . . 173 Q.26 What is meant by exempt supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Q.27 What is meant by non-taxable supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Q.28. How will aggregate turnover be computed for the purpose of composition?.173 Q.29 Whether supplies made by job-worker on behalf of his principal, beincluded in value of aggregate turnover of such job-worker?. . . . . . . . . . 174 Q.30 What is the difference in scope of ‘aggregate turnover’ under GST and erstwhile service taxation regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Q.31 What is the difference between aggregate turnover and turnover in a State?.174 Agriculturist [Section 2(7)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Q.32 Who is an agriculturist for the purpose of agriculture under GST? . . . . . . . 174 Q.33 How should cultivation of land be done?. . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Q.34 Whether agriculturist is required to take registration as a taxable person?. . 175 Q.35 What is agricultural produce?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Assessment [Section 2(11)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Q.36 What does ‘assessment’ mean under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . 176 Q.37 What is provisional assessment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Q.38 Whether interest be payable/receivable on account of short/excess tax liability in provisional attachment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 Associated enterprise [Section 2(12)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Q.39 What is meant by ‘associated enterprise’ under GST Law?. . . . . . . . . . . . . 178 Q.40 What is meant by associated enterprises in relation to different enterprises?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Q.41 Enumerate the cases where two or more enterprises shall be deemed to be associated enterprises? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Q.42 What special provisions are attracted in GST with regard to associated enterprises? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Business [Section 2(17)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Q.43 What does the term ‘business’ mean and what does it include under GST?. 180 Q.44 What is the relevance of scope of ‘business’?. . . . . . . . . . . . . . . . . . . . . . . . 182 Q.45 Whether ‘agriculture’ is covered under the scope of ‘business’?. . . . . . . . . 182 19

GST Ready Reckoner in Q & A Format

Business Vertical [Section 2(18)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Q.46 What is meant by ‘business vertical’ under the GST Law?. . . . . . . . . . . . . . 182 Q.47 What are the factors to be considered for deciding upon business verticals?.183 Q.48 Whether a person can have two registrations for two distinct business verticals?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 Q.49 What is the relevance of business verticals or segments in GST? . . . . . . . . 184 Q.50 Whether input tax credit can be distributed to a business vertical? . . . . . . . 185 Casual Taxable Person [Section 2(20)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Q.51 What is meant by ‘casual taxable person’?. . . . . . . . . . . . . . . . . . . . . . . . . . 185 Q.52 What are the essential pre-requisites for a person to be called a ‘casual taxable person’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Q.53 Are there any special provisions for casual taxable person?. . . . . . . . . . . . . 186 Q.54 Whether casual taxable person has to be make advance deposit of tax? . . . 187 Deemed Exports [Section 2(39)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Q.55 What is meant by deemed exports?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Q.56 What are the essential conditions for a transaction to be ‘deemed exports’?.187 Government [Section 2(53)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Q.57 What is meant by Government? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Q.58 What is meant by the ‘Central Government’?. . . . . . . . . . . . . . . . . . . . . . . . 188 Q.59 What is excluded from the scope of ‘Government’?. . . . . . . . . . . . . . . . . . . 188 Q.60 Would a statutory body, corporation or an authority constituted under an Act passed by the Parliament or any of the State Legislatures be regarded as ‘Government’ or ‘local authority’ for the purposes of the GST Acts? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Q.61 Are various regulatory bodies formed by the Government covered under the definition of ‘Government’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 Q.62 Are various corporations formed under the Central Acts or State Acts or various government companies registered under the Companies Act, 1956/2013 or autonomous institutions set up by special Acts covered under the definition of ‘Government’? . . . . . . . . . . . . 190 India [Section 2(56)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 Q.63 What is meant by ‘India’ as per GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . 190 Q.64 What ‘India’ does not include?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Q.65 What is meant by territorial waters, continental shelf and exclusive economic zones?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Local Authority [Section 2(69)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Q.66 What does ‘local authority’ means and includes?. . . . . . . . . . . . . . . . . . . . . 192 Q.67 What is meant by ‘Panchayat’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Q.68 What is meant by ‘municipality’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 20

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Market Value [Section 2(73)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Q.69 What is meant by ‘market value’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Q.70 What is implied by ‘market value’ and what is its relevance in GST?. . . . . 194 Non-resident taxable person [Section 2(77)]. . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Q.71 What is meant by ‘non-resident taxable person’?. . . . . . . . . . . . . . . . . . . . . 194 Non-taxable & Taxable Territory [Section 2(79, 109)] . . . . . . . . . . . . . . . . . . . 195 Q.72 What is meant by non- taxable territory under GST?. . . . . . . . . . . . . . . . . . 195 Q.73 What is meant by ‘taxable territory’ under GST law?. . . . . . . . . . . . . . . . . . 195 Person [Section 2(84)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Q.74 What is meant by ‘person’ under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Q.75 Is there any difference in the scope of ‘person’ as per GST Act and Finance Act, 1994?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Place of Business [Section 2(85)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Q.76 What is meant by ‘place of business’ under GST?. . . . . . . . . . . . . . . . . . . . 197 Q.77 Enumerate the places that may be covered or included under the scope of ‘place of business’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Q.78 What is the relevance of place of business in GST?. . . . . . . . . . . . . . . . . . . 198 Principal Place of Business [Section 2(89)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 Q.79 What is meant by ‘principal place of business’ under GST? . . . . . . . . . . . . 198 Q.80 What types of accounts and other records are required to be maintained at principal place of business by a registered person?. . . . . . . . 198 Recipient [Section 2(93)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Q.81 Who is the recipient of supply under GST? . . . . . . . . . . . . . . . . . . . . . . . . . 199 Q.82 Whether an ‘agent’ will be included under the scope of the term ‘recipient’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Q.83 Who is the recipient in contracts of supply, with and without consideration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Securities [Section 2(101)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Q.84 What is meant by ‘securities’ and what all securities are included therein?. 200 Q.85 What are ‘government securities’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Q.86 Whether ‘securities’ are goods or services? . . . . . . . . . . . . . . . . . . . . . . . . . 201 Services [Section 2(102)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Q.87 What is meant by ‘services’ and what is its scope?. . . . . . . . . . . . . . . . . . . . 201 Supplier [Section 2(105)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Q.88 Who is the ‘supplier’ under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Turnover in a State [Section 2(112)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Q.89 What is meant by ‘turnover in a State’ under GST?. . . . . . . . . . . . . . . . . . . 202 Usual Place of Residence [Section 2(113)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Q.90 What is meant by ‘usual place of residence’ under GST?. . . . . . . . . . . . . . . 202 21

GST Ready Reckoner in Q & A Format

Q.91

As per the erstwhile tax law (Service Tax), what was ‘usual place of residence’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Voucher [Section (118)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Q.92 What does ‘voucher’ mean? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Q.93 Can ‘voucher’ be accepted as consideration?. . . . . . . . . . . . . . . . . . . . . . . . 204 Works Contract [Section 2(119)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Q.94 What is meant by ‘works contract’ under GST?. . . . . . . . . . . . . . . . . . . . . . 204 Q.95 What are the features of ‘works contract’ under GST?. . . . . . . . . . . . . . . . . 204 Q.96 What will be the treatment of work contracts under GST?. . . . . . . . . . . . . . 206 Q.97 Whether construction of building etc shall be treated as service or goods?. 206 Q.98 How will works contract including transfer of property in goods shall be treated for GST purpose?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Q.99 What is meant by ‘competent authority’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Q.100 What is meant by ‘construction’ and what does it includes? . . . . . . . . . . . . 207 Government Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Q.101 What is meant by ‘Governmental Authority’? . . . . . . . . . . . . . . . . . . . . . . . 207 Q.102 What are the conditions stipulated to qualify as ‘Governmental Authority?.208 Q.103 What are the functions of Municipality as per article 243W of Constitution of India?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Q.104 What are the functions of a Panchyat as per article 243G of Constitution of India?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Health Care Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Q.105 What is meant by ‘Health care Services’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Q.106 What is meant by clinical establishment?. . . . . . . . . . . . . . . . . . . . . . . . . . . 212 Q.107 Whether services provided by clinical establishment are taxable?. . . . . . . . 212 Education Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Q.108 What is the scope of education services? . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Q.109 What is the scope of education services as stipulated in the definition?. . . . 213 Q.110 What type of education services shall be exempt from levy of GST? . . . . . 214 Terminology under IGST LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Continuous Journey [Section 2(3)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Q.111 What is meant by ‘continuous journey’ for GST purposes?. . . . . . . . . . . . . 214 Q.112 What does ‘stop over’ mean? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Q.113 Can continuous supply have stop overs?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Q.114 Who can provide supply of service in relation to continuous journey? . . . . 215 Export of Goods [Section 2(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Q.115 What is meant by export of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Q.116 Whether export of goods are considered as zero ratio supplies? . . . . . . . . . 215 Q.117 Whether supply of goods to Nepal or Bhutan be considered as exports?. . . 216 22

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Q.118 What is the scheme of exports and benefits under GST? . . . . . . . . . . . . . . . 216 Export of Services [Section 2(6)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 Q.119 What is understood by export of services?. . . . . . . . . . . . . . . . . . . . . . . . . . 216 Q.120 What is meant by establishments of distinct persons? . . . . . . . . . . . . . . . . . 217 Q.121 Whether exports of software services attract GST? . . . . . . . . . . . . . . . . . . . 217 Import of Goods [Section 2(10)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Q.122 What constitutes ‘import’ of goods under GST?. . . . . . . . . . . . . . . . . . . . . . 217 Q.123 What are the necessary conditions for a transaction to be considered as import of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Q. 124 How and in what manner tax will be paid for import of goods?. . . . . . . . . . 218 Q.125 What will be the value of import articles for levy of cess?. . . . . . . . . . . . . . 218 Import of Services [Section 2(11)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Q.126 What is meant by import of services and conditions to be an import of services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Q.127 What are the criteria for import of services in relation to business and consideration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Intermediary [Section 2(13)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Q.128 What is meant by an ‘intermediary’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Q.129 Whether ‘intermediary’ includes an ‘agent’? . . . . . . . . . . . . . . . . . . . . . . . . 220 Non-taxable Online Recipient [Section 2(16)]. . . . . . . . . . . . . . . . . . . . . . . . . . 220 Q.130 What is meaning of ‘non-taxable online recipient’?. . . . . . . . . . . . . . . . . . . 220 Q.131 In what siutations, a person in taxable territory can be deemed to be non-taxable online recipieint?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Online Information Database Access or Retrieval (OIDAR) Services [Section 2(17)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Q.132 What is meant by ‘online information database access or retrieval’ services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Q.133 What type of services could be considered as non-OIDAR services? . . . . . 222 Zero Rated Supply [Section 2(23)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Q.134 What is meant by zero rated supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Q.135 Whether zero rated supplies can be of both, goods and services? . . . . . . . . 223 Q.136 The supplies to a SEZ unit or SEZ developer are treated as zero rated supplies in the GST Law. Then why there is no specific mention in the GST Law about not charging of tax in respect of supplies from DTA unit to a SEZ unit or SEZ developer?. . . . . . . . . . . . . . 223 Q.137 When a SEZ unit or SEZ developer procures any goods or services from an unregistered supplier, whether the SEZ unit or SEZ developer needs to pay IGST under reverse charge or these will be zero rated supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 23

GST Ready Reckoner in Q & A Format

Terminology under UTGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Government [Section 2(6)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Q.138 What is meaning and scope of ‘Government’ in case of Union Territory?. . 223 Union Territory [Section 2(8)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Q.139 What is an Union Territory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Q.140 Whether Delhi and Pondichery are States or Union Territory for the purpose of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Chapter 5 GST: Constitutional frame work . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Q.1 Why did introduction of GST require a Constitutional amendment?. . . . . . 225 Q.2 What is constitutional amendment in relation to GST? . . . . . . . . . . . . . . . . 226 Q.3 Why is Dual GST required in India?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Q.4 What does the Constitution (101st Amendment) Act, 2016 seek to achieve?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Q.5 From when does the Constitutional amendments take effect? . . . . . . . . . . . 227 Q.6 What is the GST Council and what is its composition? . . . . . . . . . . . . . . . . 227 Q.7 What about the Constitution of GST Council?. . . . . . . . . . . . . . . . . . . . . . . 227 Q.8 What steps have been taken so far for functioning of the GST Council?. . . 228 Q.9 How does the GST Council function and perform? . . . . . . . . . . . . . . . . . . . 228 Q.10 What is the guiding principle for the GST Council to function? . . . . . . . . . 229 Q.11 What functions have been mandated to the GST Council under the Constitution?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Q.12 What is the role of GST Council in GST rate determination? . . . . . . . . . . . 230 Q.13 What is the scope of ‘goods’ and ‘Services’ as per the Constitution?. . . . . . 230 Q.14 What is the meaning of Goods and Service Tax (GST)?. . . . . . . . . . . . . . . . 230 Q.15 What are the constitutional powers to levy GST in India?. . . . . . . . . . . . . . 231 Q.16 Presently, GST has not been levied on petroleum products. When will such goods be brought under the net of GST?. . . . . . . . . . . . . . . . . . . . 231 Q.17 What constitutional powers have been legislated for levy of GST on inter-State trade or commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Q.18 How will be the import of goods or services treated and taxed in GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Q.19 What are the goods on which excise duties shall continue to be levied?. . . 232 Q.20 Whether states will continue to levy value added tax on goods which will not be under the GST net?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 Q.21 In GST regime, there may be disputes between the centre and states or amongst the states. How are these going to be resolved?. . . . . . . . . . . . . 232 Q.22 How will the States be compensated for loss of revenue on account of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 24

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Q.23 Q.24

What is the fate of Empowered Committee of State Finance Ministers on Constitution of GST Council?. . . . . . . . . . . . . . . . . . . . . . . . . 233 What are the legislative amendments done for implementation of GST in J& K State?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

Chapter 6 Administration of GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Q.1 What is the scope of tax administration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Q.2 What type of GST has been implemented?. . . . . . . . . . . . . . . . . . . . . . . . . . 236 Q.3 Which authority shall levy and administer GST in India? . . . . . . . . . . . . . . 236 Q.4 How shall GST be administered in India?. . . . . . . . . . . . . . . . . . . . . . . . . . . 236 Q.5 Who shall be the authority to levy and administer GST in India? . . . . . . . . 237 Q.6 What shall be the role of GST Council in administration of GST in India? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237 Q.7 What shall be the major changes in overall administration of GST?. . . . . . 238 Q.8 What is the likely administrative organization structure for GST?. . . . . . . . 239 What shal be the structure of a Board under GST regime?. . . . . . . . . . . . . . 240 Q.9 Q.10 How will the revenue intelligence work under GST?. . . . . . . . . . . . . . . . . . 240 Q.11 What will be the role of Member (Central Excise & Legacy) in new Board?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 Q.12 How will audit function be administered under GST regime?. . . . . . . . . . . 241 Q.13 What are the powers of Board in relation to tax administration?. . . . . . . . . 242 Q.14 Can a Commissioner delegate his power?. . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Q.15 What is the concept of authority of regional Principal Chief Commissioners? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Q.16 How will GST Zones and Commissionerates work or operate?. . . . . . . . . . 242 Q.17 How will GST Divisions work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Q.18 Under GST, who will adjudicate the cases and pass orders? . . . . . . . . . . . . 243 Q.19 Who will be the Commissioners under GST?. . . . . . . . . . . . . . . . . . . . . . . . 244 Q.20 Who shall be the ‘Proper Officer’ under the GST law? . . . . . . . . . . . . . . . . 244 Q.21 What type of class of officers shall be appointed under the CGST/ SGST Act and IGST Act for tax administration? . . . . . . . . . . . . . . . . . . . . . 244 Q.22 Whether tax officers of Central Tax statutes be appointed as proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Q.23 Whether simultaneous proceedings under different Acts be initiated on same subject?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Q.24 Whether any proceedings under CGST Act can also lie under SGST/UTGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Q.25 How will assessments be administered on the basis of threshold, by Centre or by State? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Q.26 Whether both the authorities will control the assessee?. . . . . . . . . . . . . . . . 247 25

GST Ready Reckoner in Q & A Format

Chapter 7 Compensation Cess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Q.1 What is the legislative authority to GST Compensation Cess statute?. . . . . 250 Q.2 What are the objectives of Compensation Act?. . . . . . . . . . . . . . . . . . . . . . . 250 Q.3 What is meant by Compensation Cess? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Q.4 What are the obligations of a tax payer in respect of Compensation Cess?. 251 Q.5 How shall the proceeds of Cess be dealt with?. . . . . . . . . . . . . . . . . . . . . . . 251 Q.6 What are the items on which Compensation Cess shall be levied?. . . . . . . . 252 Q.7 What are the Compensation Cess rates leviable on various motor vehicles?.259 Q.8 What shall be the base year for ascertaining Compensation Cess payable to States? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 Q.9 How will the base year revenue be determined?. . . . . . . . . . . . . . . . . . . . . . 261 Q.10 How will be the Compensation Cess payable to States be determined?. . . . 261 Q.11 Is Compensation Cess payable under composition scheme also?. . . . . . . . . 263 Q.12 Whether input tax credit is available on Compensation Cess?. . . . . . . . . . . 263 Q.13 What are the provisions for administration of Compensation Cess? . . . . . . 263 Q.14 Whether Compensation Cess be levied on services also?. . . . . . . . . . . . . . . 263 Chapter 8

GST Compliance Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

Statutory Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Q.1 Who shall be given or assigned rating score for compliances?. . . . . . . . . . . 265 Q.2 Whether all tax payers will be assigned compliance rating?. . . . . . . . . . . . . 266 Q.3 On what basis compliance rating scores will be given?. . . . . . . . . . . . . . . . 266 Q.4 How will GST compliance rating scores be updated/intimated to all concerned?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Q.5 What would be the likely parameters for compliance rating?. . . . . . . . . . . . 266 Q.6 Who will do the rating and monitor scores?. . . . . . . . . . . . . . . . . . . . . . . . . 267 Q.7 What could be compliance ratings used for?. . . . . . . . . . . . . . . . . . . . . . . . . 267 Q.8 How can compliance ratings help in an efficient input tax credit mechanism?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 Q.9 What are the expected consequences of compliance rating? . . . . . . . . . . . . 268 Chapter 9

Anti-Profiteering Measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Statutory Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Anti-Profiteering Measure (Section 171). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Q.1 What is the objective of anti-profiteering measure in GST?. . . . . . . . . . . . . 271 Q.2 What is the concept and scope of anti-profiteering measure?. . . . . . . . . . . . 272 Q.3 What are the salient features of anti-profiteering clause in GST?. . . . . . . . . 272 Q.4 Who is empowered to constitute an anti-profiteering Authority?. . . . . . . . . 273 Q.5 What shall be the functions of Anti-profiteering Authority?. . . . . . . . . . . . . 273 26

Table of contents

Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14

How will Anti-profiteering authority be administered? . . . . . . . . . . . . . . . . 273 What are the duties of various authorities under Anti-profiteering?. . . . . . . 274 How will application be dealt with by the Authority?. . . . . . . . . . . . . . . . . . 275 What duties shall be performed by Anti-Profiteering Authority (APA)? . . . 275 What type of orders can be issued by Authority?. . . . . . . . . . . . . . . . . . . . . 276 What are the powers of Authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 Is there any time limit for anti-profiteering clause to be in force? . . . . . . . . 277 In there any specific penalty prescribed as anti-profiteering measure?. . . . . 277 In there any time limit for complying with Authority’s order?. . . . . . . . . . . 277

Chapter 10

GSTN Common Portal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279

Statutory Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Q.1 What is ‘Common Portal’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Q.2 What functions are mandated to be performed by Common Portal? . . . . . . 279 Q.3 In GST regime, Information Technology network will be crucial as most of the procedures would be automated. How it will be done?. . . . . . . 280 Q.4 What is GST Network (GSTN)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 What are the responsibilities entrusted to GSTN? . . . . . . . . . . . . . . . . . . . . 280 Q.5 Q.6 What are the objectives of GSTN?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 Q.7 How will GSTN system’s interface interact with various stakeholders? . . . 281 Q 8 What is the concept of GST eco-system?. . . . . . . . . . . . . . . . . . . . . . . . . . . 282 Q.9 What services are rendered by GSTN to various stakeholders?. . . . . . . . . . 282 Q.10 What type of functions can be performed by taxpayers using GST Portal?.283 Q.11 What services could be undertaken on common GST portal? . . . . . . . . . . . 283 Q.12 What functions can be carried out by tax officers using GST common portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 Q.13 How invoices will be uploaded on GSTN systems?. . . . . . . . . . . . . . . . . . . 284 Q.14 What is the Interface System between GSTN and the States/CBEC? . . . . . 284 Q.15 Who is GST Suvidha Provider (GSP) under the GSTN system?. . . . . . . . . 284 Q.16 What is the role of GST Suvidha Providers (GSP)?. . . . . . . . . . . . . . . . . . . 285 Q.17 What are the benefits to taxpayers by using the services of GSP?. . . . . . . . 285 Q.18 Will tax payer be able to change the GST practitioner once chosen in above mentioned facility?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 Q.19 Whether GSTN provides tool for uploading invoice data on GST Portal?. . 286 Q.20 What are the security measures being taken by GSTN to ensure security of the GST System?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 Q.21 Will GSTN be providing mobile based apps to view ledgers and other accounts? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

27

GST Ready Reckoner in Q & A Format

Q.22

Q.23

Will GSTN provide separate user ID and password for GST practitioner to enable them to work on behalf of their customers (taxpayers) without requiring user id and password of taxpayers, as happens today? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 What are the security measures being taken by GSTN to ensure security of the GST system?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 PART B – CGST/SGST

Chapter 11

Charge of GST (Charging Provision of Levy and Collection). . . 289

Levy and Collection of Central/State Goods and Services tax. . . . . . . . . . . . . . . 289 Q.1 What is the meaning of Central tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Q.2 What is the meaning of State tax and the State?. . . . . . . . . . . . . . . . . . . . . . 289 Q.3 What is the meaning of Union Territory tax and the Union territory? . . . . . 290 Q.4 What is the meaning of reverse charge in GST Act?. . . . . . . . . . . . . . . . . . . 290 Q.5 What is the meaning of electronic commerce operator in GST? . . . . . . . . . 290 Q.6 What are the provisions related to charge (levy) of GST? . . . . . . . . . . . . . . 291 Q.7 What are the different rates of tax in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . 291 Q.8 Alcoholic liquor for human consumption is an exception in GST. What will be the applicable taxation on Alcoholic liquor for human consumption? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 What is the taxation structure for petroleum products? . . . . . . . . . . . . . . . . 292 Q.9 Q.10 From where is the authority derived for charge and levy of GST?. . . . . . . . 292 Q.11 What is reverse charge as provided under sec 9(3) of the GST Act and sec 5(3) of IGST Act? Whether GST will also be liable to be paid under reverse charge? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 Q.12 What is reverse charge liability as provided under sec 9(4) of the GST Act or sec 5(4) of IGST Act? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 Q.13 What is reverse charge liability of an electronic commerce operator as provided under sec 9(5) of the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . 294 Q.14 Which services have been notified under sec 9(5) of the GST Act? . . . . . . 294 Q.15 Would sec 9(5) be applicable in case of registered taxable persons?. . . . . . 294 Q.16 How is sec 9(5) applicable on electronic commerce operator located outside India? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 Q.17 How is sec 9(5) applicable on electronic commerce operator located outside India and also having no representative located in India? . . . . . . . . 294 Chapter 12 Supply of Goods and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Q.1 What is the taxable event under GST? How is it different than the taxable event in the erstwhile system of indirect tax?. . . . . . . . . . . . . . . . . . 295 28

Table of contents

Q.2 Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28

Q.29

What is meant by ‘Supply’ in the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . 295 What is meant by goods under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 What is meant by services under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Why is distinction between supply of goods and supply of services in GST important?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 What is meant by exempt supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 What is meant by composite supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 What is meant by mixed supply? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 How will GST be charged in case of composite and mixed supply? . . . . . . 300 What are self supplies and whether such supplies are taxable under GST?. 300 What is meant by ‘principal’ and ‘agent’? Are supplies between principal and agent, taxable supplies for the purpose of GST ?. . . . . . . . . . 301 What is understood by ‘sale’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 How is ‘sale’ different from ‘supply’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302 What is ‘barter’ and how is it different from sale?. . . . . . . . . . . . . . . . . . . . 302 What is ‘exchange’ and how is it different than sale?. . . . . . . . . . . . . . . . . . 302 When there is use of words ‘Valuable Consideration’ in Sale, than what was the need to include the words ‘exchange’ or ‘barter’? . . . . . . . . . 303 What is the meaning of ‘license’ with reference to Supply?. . . . . . . . . . . . . 303 What is the meaning of ‘rental’ with reference to Supply?. . . . . . . . . . . . . . 303 What is the meaning of ‘lease’ with reference to Supply? . . . . . . . . . . . . . . 304 What is the meaning of ‘disposal’ with reference to Supply?. . . . . . . . . . . . 304 What will constitute a transaction in the course or furtherance of business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 Whether consideration for supply of goods/services a necessary ingredient for such supply to become taxable in GST?. . . . . . . . . . . . . . . . . 304 What is the meaning of distinct person in the GST Act? . . . . . . . . . . . . . . . 305 Transfer or disposal of business assets would be considered as supply. Whether the same will also apply to transfer of business?. . . . . . . . 305 How shall the transactions of supply without consideration be taxed under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 What would be the tax treatment of captive consumption of goods?. . . . . . 306 How are the transactions of Schedule I (Supply without consideration) treated in erstwhile indirect tax system?. . . . . . . . . . . . . . . . 306 Importation of services has been mentioned in the definition of supply but importation of goods has been excluded? Does that mean that there will be no GST leviable on importation of goods?. . . . . . . 306 Whether transfer of property in goods is a pre-requisite for supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 29

GST Ready Reckoner in Q & A Format

Q.30 Q.31 Q.32

Q.33 Q.34

Q.35 Q.36 Q.37 Q.38

Q.39

Q.40

Q.41

Q.42 Q.43 Q.44 Q.45

Q.46

30

What would be the treatment of transactions of supply of goods for use but without transfer of title in such goods?. . . . . . . . . . . . . . . . . . . . . . . 307 How is copyrights dealt with for the purpose of supply under GST law? . . 307 Whether an agreement to supply goods at future date be considered as contract of supply for the purpose of GST? How will hire purchase transactions be treated? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 Whether the transactions in immovable property would fall under the scope of Supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 The transaction of sale of property before its completion has been a matter of dispute under VAT Acts. How has such transactions been dealt in the GST Act? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 What is meant by ‘construction’ in relation to immovable properties? . . . . 309 Who is considered as a ‘competent authority’ for the purpose of issuing completion certificate of constructed property?. . . . . . . . . . . . . . . . 309 What would be the tax treatment of transaction of job work activity done on the goods supplied by other party?. . . . . . . . . . . . . . . . . . . . . . . . . 309 A bank takes charge of the property of the borrower as per loan agreement. It then goes on to sell the movable goods so taken over.

How will this transaction be dealt in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . 309 A decides to transfer his entire business to B on going concern basis. Will this transaction of transfer of business by A to B be considered as taxable supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 Development and maintenance of software has always been an issue of litigation in VAT and Service tax law. How has this issue been addressed in GST regime? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 The activity of doing an activity or not doing an activity for a consideration at the instance of some other person is considered as a taxable service under Service tax law treating it as a declared service. What would be its treatment in GST regime?. . . . . . . . . . . . . . . . . 310 What would be the tax treatment of following items? . . . . . . . . . . . . . . . . . 310 How are works contract transactions dealt in GST?. . . . . . . . . . . . . . . . . . . 311 How are transactions involving transfer of the right to use goods, dealt in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 Supply by way of or as part of any service, of goods being food or any other article of human consumption was taxable under VAT and Service tax. What is the tax treatment of such transactions under GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 Supply of goods by unincorporated associations to its members was considered as deemed sale under VAT laws. What is the treatment of such transactions in the GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 312

Table of contents

Q.47 Q.48

Q.49 Q.50 Q.51 Q.52 Q.53

How to decide the nature of an item which does not figure in Schedule II and for which there are conflicting views of courts?. . . . . . . . . 313 In the modern day trade, there is a category of suppliers of services called Aggregator of services. These suppliers book orders, receive payment but are not actual service providers. They pass on the orders so booked to the actual service providers who provide service under the brand names of suppliers booking orders. What would be the tax treatment of such transactions under GST?. . . . . . . . . . . . 313 What are the items of services on which GST is not leviable?. . . . . . . . . . . 313 What are the negative list items in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . 314 What is termed as Salary for the purpose of exemption in GST?. . . . . . . . . 314 What does salary mean for the purpose of Schedule III of the GST Act? . . 314 Whether stipend paid to intern will be covered as supply?. . . . . . . . . . . . . . 315

Chapter 13 Exempted Supply under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Q.1 What is meant by “Exempt Supply” under the GST Act?. . . . . . . . . . . . . . . 317 Q.2 What is meant by “Non taxable Supply” under the GST Act?. . . . . . . . . . . 317 Q.3 What is meant by “Nil rated Supply” under the GST Act?. . . . . . . . . . . . . . 318 What is meant by “Zero rated Supply” under the GST Act? Is zero Q.4 rated supply an exempt supply? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Q.5 Would a person dealing in non taxable turnover liable for registration under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Q.6 What is the taxable status of Alcohol for human consumption under GST?.318 Q.7 What is the taxable status of petroleum products in GST?. . . . . . . . . . . . . . 319 Q.8 Who has been vested with authority to grant exemption in GST?. . . . . . . . 319 Who grants exemption of SGST in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Q.9 Q.10 Is it necessary for government to issue a notification for grant of exemption? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Q.11 What is the effective date of exemption of any item?. . . . . . . . . . . . . . . . . . 319 Q.12 Are exemption available for entire HSN code or SAC code?. . . . . . . . . . . . 320 Q.13 What is the procedure for clarifying any doubt/confusion in exemption? . . 320 Q.14 From which date the notification clarifying the scope of exemption be effective? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Q.15 Will exemption notification be effective in respect of clarification issued by Government after one year of date of notification?. . . . . . . . . . . . 320 Q.16 Is it compulsory for any taxable person to avail the exemption, if granted?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Q.17 What is the implication of collection of tax on the supply of an item exempt absolutely?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 31

GST Ready Reckoner in Q & A Format

Q.18 Q.19 Q.20

Is it compulsory to avail a conditional exemption?. . . . . . . . . . . . . . . . . . . . 321 Interest is non taxable in GST? Is it true for penal interest also?. . . . . . . . . 321 The monthly maintenance charges of our flat charged by builder are less than INR 5,000/-. Is it exempt from GST?. . . . . . . . . . . . . . . . . . . . . . . 322

Chapter 14 Classification and Rates under GST. . . . . . . . . . . . . . . . . . . . . . . . 323 Q.1 What is the need for classification under GST Act?. . . . . . . . . . . . . . . . . . . 323 Q.2 What is the need for classifying goods and services separately under GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 Q.3 Classification of goods and services has been a challenge in indirect taxation. How has it been done in GST Act? . . . . . . . . . . . . . . . . . . . . . . . . 323 Q.4 Whether a composite supply contract be classified as contract of supply of goods or services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324 Q.5 Whether mixed supply be classified as supply of goods or services?. . . . . . 324 Q.6 What is the basis for having different rate of taxation in GST?. . . . . . . . . . 324 Q.7 What is the applicable rate of tax on GTA service? . . . . . . . . . . . . . . . . . . . 325 What is the requirements of mentioning HSN codes on invoices?. . . . . . . . 325 Q.8 Chapter 15

Time of Supply of Goods and Services. . . . . . . . . . . . . . . . . . . . . . 327

Time of Supply of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327 Q.1 What is relevance of time of supply for levy of GST?. . . . . . . . . . . . . . . . . 327 Q.2 At what point of time does the GST becomes payable?. . . . . . . . . . . . . . . . 327 What would be the time of supply of goods under GST?. . . . . . . . . . . . . . . 327 Q.3 Q.4 What is the last date prescribed for issuance of invoice in case of supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 What is the scope of removal of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Q.5 Q.6 When the goods are removed for purpose other than supply, whether GST will be payable on such removal?. . . . . . . . . . . . . . . . . . . . . . 329 Q.7 What would be the time of supply of goods which are not required to be removed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Q.8 In what situations, it would be considered that goods are not required to be removed for determination of time of supply?. . . . . . . . . . . . 330 Q.9 Which date will be considered as date of receipt of payment by a supplier?.331 Q.10 What is meant by recurring or continuous supply of goods? . . . . . . . . . . . . 331 Q.11 How will the time of supply be determined in case of recurring or continuous supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 Q.12 What is the meaning of reverse charge?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 Q.13 When does liability to pay tax under reverse charge on supply of goods become due?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332

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Q.14 Q.15

Q.16

Q.17 Q.18 Q.19

Would there be reverse charge tax liability in case of accounting of goods in transit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 In any business, there are situations when goods are sent on approval or sale or return basis. How will the time of supply of goods in such case be arrived at? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 In case one fails to arrive at the time of supply of goods under above circumstances, what other option would be there to determine time of liability?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334 How will the time of supply be determined in case of import of goods?. . . 335 How will the time of supply be determined in case of export of goods? . . . 335 How will the time of supply be determined in case of composite supply?. . 335

Time of Supply of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335 Q.20 What will be the time of supply in case of services? . . . . . . . . . . . . . . . . . . 335 Q.21 Will it make a difference in case invoice is not issued within the prescribed period of 30 days?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336 Q.22 In case of supply of services, How will the time of supply be determined where the payment has not been received, invoice has not been issued and date of completion of service is also not known?. . . . . 336 Q.23 Which date will be considered as date of receipt of payment?. . . . . . . . . . . 336 Q.24 What type of services would be considered as supply on continuous or recurrent basis?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337 Q.25 How will the time of supply of service be arrived at, in case of continuous supply or supply on recurrent basis?. . . . . . . . . . . . . . . . . . . . . . 337 Q.26 What is the time of supply of services, where tax is liable to be paid on reverse charge basis? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338 Q.27 Whether the services provided in a ceased contract liable to GST taxation? If yes, when would this be taxed?. . . . . . . . . . . . . . . . . . . . . . . . . 339 Q.28 What are the options available in cases where one fails to arrive at the time of supply of services by above methods?. . . . . . . . . . . . . . . . . . . . 339 Q.29 Interest, late fee and penalty are considered a part of assessable value under the GST Act. What would be the time of supply of such items? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 Q.30 What is the time of supply in case of a works contract?. . . . . . . . . . . . . . . . 340 Q.31 What is the time of supply in case of a composite supply?. . . . . . . . . . . . . . 340 Q.32 What is the time of supply in case of a Mixed Supply? . . . . . . . . . . . . . . . . 340 Q.33 What is the time of supply in case of an import of service?. . . . . . . . . . . . . 341 Q.34 What is the time of supply in case of service of online information and data base access or retrieval service?. . . . . . . . . . . . . . . . . . . . . . . . . . . 341

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GST Ready Reckoner in Q & A Format

Change in Rate of Tax in respect of Supply of Services . . . . . . . . . . . . . . . . . . . . 341 Q.35 In case where the tax rate changes before the provision of services, what rate of tax would be chargeable on such services?. . . . . . . . . . . . . . . . 341 Q.36 In case where tax rate changes after the provision of services, what rate of tax would be chargeable on such services?. . . . . . . . . . . . . . . . . . . . 342 Q.37 What would be the date of receipt of payment in case of change in effective rate of tax? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342 Q.38 What would be the effective rate of tax in case payment is to be made on reverse charge basis? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 Q.39 Will GST be applicable on the outstanding debtors as on 30.06.2017?. . . . 343 Chapter 16 Threshold Exemption under GST . . . . . . . . . . . . . . . . . . . . . . . . . 345 Q.1 What is meant by “aggregate turnover” under GST Act?. . . . . . . . . . . . . . . 345 Q.2 What is meant by “Exempt Supply” under GST Act?. . . . . . . . . . . . . . . . . . 345 Q.3 Who will be a “taxable person” under GST Act?. . . . . . . . . . . . . . . . . . . . . 346 Q.4 What is the relevance of threshold limit under GST?. . . . . . . . . . . . . . . . . . 346 Q.5 What is the meaning of threshold limit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 Q.6 What is the purpose of prescribing threshold limit in tax laws?. . . . . . . . . . 347 Q.7 What threshold limit has been prescribed in GST Act? . . . . . . . . . . . . . . . . 347 How would threshold limit be calculated for a person having Q.8 business spread over different states of India?. . . . . . . . . . . . . . . . . . . . . . . 347 Q.9 In which States, lower threshold limit is is applicable? . . . . . . . . . . . . . . . . 348 Q.10 A person has one of his offices located in Delhi and another office located at Sikkim. In Delhi office, his turnover is INR 16 lakhs and in Sikkim his turnover is INR 3 lakhs. What would be the threshold limit in this case?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 Q.11 What is the threshold limit for a taxable person opting for composition levy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348 Q.12 Whether threshold exemption limit will be applicable to a taxable person required to pay GST under reverse charge basis?. . . . . . . . . . . . . . . 349 Q.13 Would a petroleum dealer having aggregate turnover of INR 80 lakhs out of which INR 5 lakhs relate to Management consultancy income be liable for registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 Chapter 17 Composition Levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 Q.1 What is the scope of tax for the purpose of GST?. . . . . . . . . . . . . . . . . . . . . 351 Q.2 What is the objective of composition levy under GST law?. . . . . . . . . . . . . 351 Q.3 Whether the composition scheme is available for both goods and services?.352 Q.4 Other than the services, are there any other categories not eligible under the Scheme of Composition levy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 34

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Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28

Who are the persons eligible under the Scheme of Composition levy?. . . . 352 What are the advantages and disadvantages of opting for composition scheme by a taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . 353 What is the meaning of ‘Aggregate turnover’ for Composition Scheme? . . 353 Besides turnover, is there any other restriction on eligibility for availing composition scheme?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 Are there any further conditions prescribed as restriction on eligibility for availing composition scheme? . . . . . . . . . . . . . . . . . . . . . . . . 354 Whether a supplier receiving goods in inter-state supply eligible for Composition scheme?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 Whether a taxable person under Composition Scheme is eligible to import goods and services from outside India?. . . . . . . . . . . . . . . . . . . . . . . 355 Taxpayer opting for Composition Scheme is not allowed to have inter-state supplies. Will this apply for export out of country as well?. . . . . 355 Can a composition supplier purchase goods and services from unregistered tax payers? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 Whether Composition Scheme is a mandatory scheme or an optional one on the part of taxpayer? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 What is the rate of tax under composition scheme?. . . . . . . . . . . . . . . . . . . 355 How will a supplier under composition scheme collect tax from his customers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 Can a recipient of goods/service from a supplier under a Composition scheme take input credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 Can a supplier opt for composition scheme in one state and not in other states?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 What is the procedure for opting for or applying for Composition levy?. . . 357 What is the validity period of an intimation of composition levy?. . . . . . . . 357 Can Composition permission once granted by proper officer be cancelled?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 Can a taxpayer switch over from Composition scheme to normal scheme or vice-versa?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 Whether the supplier under Composition scheme be liable to pay tax under reverse charge mechanism?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 What are the penal provisions for availing composition scheme by suppliers not eligible for it?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 What are the grounds for levy of penalty? . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Can a registered person under composition levy issue tax invoice ? . . . . . . 358 Will it be compulsory to issue bill of supply of all supplies including petty supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 Is there any other requirement in respect of Bill of Supply?. . . . . . . . . . . . . 359 35

GST Ready Reckoner in Q & A Format

Q.29

What are the other requirements to be fulfilled by composition taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359

Chapter 18 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Q.1 What is the relevance of registration in GST and why a taxable person is required to be registered?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 Q.2 Who is liable to obtain registration under GST law? . . . . . . . . . . . . . . . . . . 362 Q.3 Besides the persons as specified in sec 22, are there any other persons who require registration under GST law? . . . . . . . . . . . . . . . . . . . . 362 Q.4 Who shall be the person required to deduct tax at source?. . . . . . . . . . . . . . 363 Q.5 Who will not be liable for registration under GST law?. . . . . . . . . . . . . . . . 363 Q.6 Who is an Agriculturist for registration under GST law?. . . . . . . . . . . . . . . 363 Q.7 Whether having PAN, e-mail id and mobile number the three basic requirements for obtaining registration under GST? Will PAN be insisted even when an assessee doesn’t have taxable income under the Income Tax Act, 1961?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 Q.8 What is the structure of GST registration number?. . . . . . . . . . . . . . . . . . . . 364 Q.9 What are the various types of registration granted under GST?. . . . . . . . . . 365 Q.10 What is the time allowed for seeking registration.. . . . . . . . . . . . . . . . . . . . 366 Q.11 What is the effective date of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . 367 Q.12 What are the consequences of late application of registration? . . . . . . . . . . 367 Q.13 Can a person register himself on voluntary basis, even when he is not liable to be registered under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . 367 Q.14 What are the requisite documents for obtaining registration?. . . . . . . . . . . . 368 Q.15 Whether an assessee having multi-unit operations can obtain centralized registration under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 Q.16 An assessee has various offices spread over many States in the Country and the head office is located at New Delhi. The income of all offices is assessed under same PAN at New Delhi. Whether the assessee can have only one registration under GST? . . . . . . . . . . . . . . . . . . 369 Q.17 Whether an assessee needs to take as many registrations as the number of states he operates, to comply with the requirements of State GST law? Can he take only one registration for the purpose of CGST and IGST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 Q.18 In case an assessee has different business verticals in few states like TV manufacturing and air conditioner manufacturing. Would he be granted only one registration in each state? . . . . . . . . . . . . . . . . . . . . . . . . . 370 Q.19 There is a time limit of thirty days for obtaining registration under the Act. What would be the status of the transactions made before

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Q.20

Q.21 Q.22 Q.23

Q.24 Q.25 Q.26

Q.27

Q.28 Q.29 Q.30 Q.31 Q.32

Q.33 Q.34

Q.35

application for registration? What would be the status in the following example-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 In case a person liable for registration on 1st July makes an application for registration on 10th August, What substantive benefits will not be available to the assessee for making late application of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Are there any time lines provided under the GST Act for grant of registration or refusal of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 Can an applicant download the registration certificate from the GSTN portal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 An Assessee is already registered in Central Excise/Service tax/State VAT Act. Would such assessee need to seek another registration under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372 What is the procedure of registration for a person required to deduct tax at source u/s 51 and E-Commerce operators?. . . . . . . . . . . . . . . . . . . . . 372 What is the procedure for registration of non-resident taxable person?. . . . 373 What is the difference between a non-resident taxable person and a casual taxable person? How is registration process of non-resident taxable person different than casual taxable person? . . . . . . . . . . . . . . . . . . 373 There is an assessee located in New Delhi and registered under GST at Delhi. He wishes to participate in a 15 days trade exhibition in the State of Tamil Nadu where he does not have a permanent place of business. Would such assessee be liable for registration in the state of Tamil Nadu? In case yes, what would be the procedure for his registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 What is the validity period of registration granted to casual taxable person and non- resident taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . 374 Whether there is a concept of input service distributor (ISD) under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 Can there be multiple ISD of a single registered person?. . . . . . . . . . . . . . . 374 Can an ISD avail services which are liable for reverse charge payment?. . . 375 Whether the Department of Central Government or State Governments or Local Authority be required to take registration under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 Whether the UN bodies, Consulate and Foreign Embassies will be liable for registration under the GST law? . . . . . . . . . . . . . . . . . . . . . . . . . . 375 UN bodies, Consulates or Embassies of foreign countries are not required to have PAN under Income Tax. On what basis, they will be registered under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 What is Unique Identification Number (UIN) and its relevance in GST? . . 376 37

GST Ready Reckoner in Q & A Format

Q.36

Q.37 Q.38 Q.39 Q.40

Q.41 Q.42 Q.43

Q.44 Q.45 Q.46 Q.47 Q.48 Q.49 Q.50 Q.51 Q.52 Q.53 38

A business carried on by a taxable person registered under GST Act is transferred on account of succession or otherwise to the transferee or the successor. In such case, whether the transferee or successor will be required to obtain registration?. . . . . . . . . . . . . . . . . . . . . 376 Is there any provision for suo-moto registration by proper officer of the Department? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 Under what circumstances the suo-moto registration by Department would be done?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 What course of action is available to person registered suo-moto by the Department? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 GST law requires deduction of tax at source also collection of tax at source in certain specified cases and onward payment to the credit of Government. How will the persons making such deduction or collection deposit such tax? Is there any specific provision for their registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 Can the registration data and information be edited/amended by the registered person after obtaining registration? . . . . . . . . . . . . . . . . . . . . . . . 377 Which fields of registration data are considered as core fields?. . . . . . . . . . 378 In case of change in information submitted by taxable person in registration application, what actions are required to be taken by a registered person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 In case where the change in data results change in PAN of the taxable person, whether such change be permitted by Department? . . . . . . 378 Is there any time limit for making application for amendment of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 Can the application for amendment in registration be rejected by Department? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 What is the procedure followed by Department for accepting or rejecting the application of amendment to registration?. . . . . . . . . . . . . . . . 379 Can a registered taxable person seek cancellation of registration? If yes, under what circumstances? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 What are the formalities to be completed for application of cancellation of registration? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 Can a person who had sought voluntary registration seek cancellation of his registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 Can a proper officer cancel the registration on his own motion? If yes, under what circumstances? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 What procedure will be followed by proper officer for cancellation of registration on his own motion?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 What will be the effective date of cancellation of registration?. . . . . . . . . . 381

Table of contents

Q.54 Q.55 Q.56 Q.57 Q.58 Q.59 Q.60 Q.61 Q.62

Q.63

On cancellation of registration under CGST, what would be the fate of registration under SGST and vice versa?. . . . . . . . . . . . . . . . . . . . . . . . . 381 Can a registered person seek revocation of cancellation of registration? if yes, under what circumstances?. . . . . . . . . . . . . . . . . . . . . . 381 Can proper officer reject application for revocation of cancellation of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 What are the implications of cancellation of registration under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 How a registered person should make payment whose registration is cancelled? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 Whether proper officer can conduct physical verification of business premises in certain cases?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 Who can be primary authorized signatory in GST? . . . . . . . . . . . . . . . . . . . 383 Is a person whose entire turnover beyond threshold limit comes from exempt activities, liable for registration?. . . . . . . . . . . . . . . . . . . . . . . 383 A person is engaged in manufacturing activity and also engaged in trading activity. Would he be required to seek separate registration for such activities?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 Whether a person having turnover less than the threshold limit but supplying goods through an e commerce website, liable for registration?. . 383

Chapter 19 Valuation under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 What is the relevance of valuation of supply of goods and services Q.1 in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 Q.2 What is the value to be considered for the purpose of levy of tax under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 What is meant by ‘consideration’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 Q.3 Q.4 What is meant by ‘Money’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 Q.5 Whether deposits can be considered as consideration for supply under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 What shall be the valuation of taxable supplies in ordinary course? . . . . . . 388 Q.6 Q.7 What is meant by transaction value?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 Q.8 What amounts shall be included in the ‘transaction value’?. . . . . . . . . . . . . 388 Q.9 What amounts shall be excluded from the transaction value? . . . . . . . . . . . 388 Q.10 What would be the treatment of post supply discount?. . . . . . . . . . . . . . . . . 389 Q.11 In valuation, for transaction value to be applicable, the supplier and the recipient of the supply are required to be not related and the price is sole consideration for supply. What is meant by ‘related’?. . . . . . . 389 Q.12 Whether person include legal or juristic persons?. . . . . . . . . . . . . . . . . . . . . 390

39

GST Ready Reckoner in Q & A Format

Q.13 Q.14

Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28 Q.29 Q.30 Q.31 Q.32 Q.33

Under what circumstances, the transaction value will not be considered for the purpose of levy of GST?. . . . . . . . . . . . . . . . . . . . . . . . . 391 Will subsidies received by the supplier constitute part of transaction value? Would such subsidy amount be added in transaction value of entire value chain?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 What is the method of valuation of transactions involving non monetary consideration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 What is the meaning of ‘open market value’?. . . . . . . . . . . . . . . . . . . . . . . . 392 What is the meaning of ‘like kind and quality’?. . . . . . . . . . . . . . . . . . . . . . 392 How will supply transactions between distinct or related persons valued?. . . 393 What is meant by ‘distinct person’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 What is the method of valuation of supply of goods made to or received from an Agent?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 What is the method of valuation in case it can not be determined by rules 27 - 29?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394 How is transaction value arrived at in case of foreign currency or money changing business? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394 How is transaction value arrived at in case of booking of air tickets business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 What is the method of valuation of services of life insurance business? . . . 395 How are dealings in second hand goods valued? . . . . . . . . . . . . . . . . . . . . . 395 What is the method of valuation of token, voucher or coupon?. . . . . . . . . . 396 Who is considered to be a ‘pure agent’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 396 Whether reimbursement of the amount incurred by supplier as pure agent will be excluded from the taxable value of services? . . . . . . . . . . . . . 396 How will goods or services invoiced in foreign currency be valued for taxation purpose?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397 How will value of goods and services be arrived at in case of supply value includes the tax amount?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397 Whether there will be separate valuation rules for SGST and IGST?. . . . . . 397 IGST is applicable on import of goods. Whether imported goods would be subject to valuation as provided in sec 15 of the GST Act? . . . . . 397 IGST is applicable on import of services. Whether import of services would be subject to valuation as provided in sec 15 of the GST Act and rules?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398

Chapter 20 Payment of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 How many types of tax payments are required to be made under GST? . . . 399 Q.1 Q.2 Who are liable to make payments under GST?. . . . . . . . . . . . . . . . . . . . . . . 399 40

Table of contents

Q.3 Q.4 Q.5 Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23

Q.24 Q.25 Q.26 Q.27

What is the due date for making the payment of tax?. . . . . . . . . . . . . . . . . . 400 Can the period of payment of tax be extended? . . . . . . . . . . . . . . . . . . . . . . 400 What are the different payment options under GST?. . . . . . . . . . . . . . . . . . 400 Where will tax payments be credited to? When will it be considered that payment has been made?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 What is meant by ‘authorized bank’ and what it is required to do? . . . . . . . 401 How many types of ledgers of a taxable person shall be maintained in GSTN?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 What is meant by ‘electronic cash ledger’? . . . . . . . . . . . . . . . . . . . . . . . . . 402 What is meant by ‘electronic credit ledger’? . . . . . . . . . . . . . . . . . . . . . . . . 402 What transactions would be reflected in electronic cash ledger?. . . . . . . . . 402 What type of transactions would be reflected in electronic liability register?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403 What type of transactions would be reflected in electronic credit ledger?. . 403 What action needs to be taken by taxable person, in case any error is found out in electronic credit ledger? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 The credit balance in electronic cash ledger can be used for what purposes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 The balance in electronic credit ledger can be used for what purposes? . . . 404 What are the restriction if any, on adjustment of balance lying in electronic credit ledger? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 Can the balance in electronic credit ledger be used for making payment of interest or penalty under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . 405 Can the balance in electronic credit ledger be used for making payment of tax payable on reverse charge basis under GST?. . . . . . . . . . . . 405 What is the process or procedure of making payment for electronic credit in cash ledger?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406 The amount claimed as input tax credit in GSTR 2 is allowed on provisional basis. Where is this provisional credit reflected?. . . . . . . . . . . . 406 Who can generate a valid challan on GSTN?. . . . . . . . . . . . . . . . . . . . . . . . 406 What action is required to be taken by taxable person, in case amount gets debited in his account but CIN (Challan identification no.) is not generated or not communicated through common portal?. . . . . . 407 Can a valid challan be generated/made by the tax authority?. . . . . . . . . . . . 407 How does a casual taxable person and non resident taxable person deposit advance tax before their registration?. . . . . . . . . . . . . . . . . . . . . . . . 407 Is it necessary that the GST payment are required to be made from bank account of taxable person only?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 Can payment challan be modified after its generation? . . . . . . . . . . . . . . . . 407 41

GST Ready Reckoner in Q & A Format

Q.28 Q.29 Q.30 Q.31 Q.32 Q.33 Q.34 Q.35

Can payment of current period be made without making the payment of any previous period in full?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 Can payment of GST be postponed and yet a valid return be filed?. . . . . . . 408 How will refund be adjusted in electronic ledgers? What will be the consequence if the refund is rejected by Department?. . . . . . . . . . . . . . . . . 408 What would be the consequences of delay in payment of tax?. . . . . . . . . . . 408 What would be the consequences of undue or excess claim of input tax credit by the taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 What is Tax Collection at Source (TCS) in GST?. . . . . . . . . . . . . . . . . . . . . 409 What is meant by reverse charge?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 Will the benefit of threshold exemption available to persons liable for reverse charge payment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409

Chapter 21 Reverse Charge Mechanism in GST . . . . . . . . . . . . . . . . . . . . . . . 411 Q.1 What is the meaning of recipient under the GST Act?. . . . . . . . . . . . . . . . . 411 Q.2 What is the meaning of reverse charge under the GST Act?. . . . . . . . . . . . . 412 What are the salient features of Reverse charge scheme under the Q.3 GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 Q.4 What is reverse charge as provided under sec 9(3) of the GST Act? Whether GST will also be liable to be paid under reverse charge?. . . . . . . . 412 Q.5 Can tax paid as reverse charge be reduced from the invoice value?. . . . . . . 413 Q.6 Is there any restriction on receiving goods or services from an unregistered person under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 Q.7 Would it mean that the receipt of goods from a composition taxable person would also be liable for tax payment under reverse charge obligation?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 Is there an exemption provided u/s 9(4) under the GST Act?. . . . . . . . . . . . 413 Q.8 Q.9 What is the implication of reverse charge on advance payments under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 Q.10 What is the tax treatment of return of goods which were liable for tax on reverse charge basis? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 Q.11 In case supplier charges tax on invoice in case of item prescribed for reverse charge payment, Will recipient be absolved of his liability under sec 9(3) of the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 Q.12 Will a taxable person paying tax on reverse charge basis be eligible to claim input tax credit under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . 415 Q.13 In respect of GTA service, who is liable for payment of reverse charge out of consignor or consignee of goods?. . . . . . . . . . . . . . . . . . . . . . 415 Q.14 Is the transportation of goods other than through GTA liable for reverse charge? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 42

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Q.15

Q.16

Q.17

Q.18

Q.19

For carrying out the duties, the employees have to spend on various expenses. Whether such expenses will be liable to reverse charge liability under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 In case recipient fails to pay tax on reverse charge, what is the implication of this default of recipient on his supplier under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 Supplier making an inter state supply is required to be registered under GST without any threshold limit, How can reverse charge liability arise under sec 5(4) of the IGST Act?. . . . . . . . . . . . . . . . . . . . . . . 416 In case of inter state transaction, in case the place of supply of transaction is not in the state of recipient like rent of immovable property, would there be reverse charge liability in such case? . . . . . . . . . . 416 Is any person who is not required to be registered under GST Act liable for payment of tax on reverse charge basis?. . . . . . . . . . . . . . . . . . . . 417

Chapter 22 Tax Deduction at Source in GST . . . . . . . . . . . . . . . . . . . . . . . . . . 419 Q.1 What is tax deducted at source in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 419 Q.2 In what situations, tax would be deducted at source in GST?. . . . . . . . . . . . 419 Q.3 Who would be required to deduct tax at source? . . . . . . . . . . . . . . . . . . . . . 419 Q.4 What is the rate of TDS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Q.5 When would the TDS required to be deposited?. . . . . . . . . . . . . . . . . . . . . . 420 How will deductee take credit of TDS? In which ledger this credit Q.6 be claimed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Q.7 Is there any time period for issue of TDS certificate? What details this certificate would have?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Q.8 Is there any penal provision on deductor for not issuing certificate in time?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 Q.9 What are consequences of delay in deposit of TDS by deductor? . . . . . . . . 421 Q.10 Can refund be sought for excess or erroneous deduction of TDS?. . . . . . . . 421 Chapter 23 Tax Collection at Source (TCS) . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 What is the nature of TCS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 Q.1 Q.2 What is Tax Collection at Source (TCS)?. . . . . . . . . . . . . . . . . . . . . . . . . . . 423 Q.3 What is meant by net value of taxable supplies in relation to TCS?. . . . . . . 423 Q.4 Is there any amount on which tax will not be collected? . . . . . . . . . . . . . . . 424 Q.5 Whether TCS will be collected when Electronic Commerce Operator (ECO) does not collect the consideration?. . . . . . . . . . . . . . . . . . . 424 Q.6 Whether TCS be applicable on notified services?. . . . . . . . . . . . . . . . . . . . . 424 Whether e-commerce operators are required to collect tax at source Q.7 (TCS)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 43

GST Ready Reckoner in Q & A Format

Q.8 Q.9 Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17

Q.18 Q.19 Q.20 Q.21 Q.22 Q.23

Q.24

Q.25

Whether collection of tax at source (TCS) by e-commerce operator is mandatory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 Whether there is any basic threshold limit of turnover for ECO or supplier to collect TCS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 What is the difference between TDS and TCS? . . . . . . . . . . . . . . . . . . . . . . 425 How will TCS and its payment to the Government be treated?. . . . . . . . . . 425 When is an electronic commerce operator required to collect tax? . . . . . . . 425 When is TCS required to be deposited? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 Whether an operator is required to furnish a monthly statement in relation to TCS collection and payment? . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 Is there any provision for filing of return in relation to TCS collection and payment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 What are the responsibilities of e-commerce operator in relation to TCS? . 427 Where goods are purchased from different vendors and are sold through a website, whether TCS will be required to be collected on such supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 Can the supplier from whose amount TCS has been collected and deposited, take credit thereof?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 Whether an e-commerce operator can be asked to furnish any other information in relation to the supplies effected through firm?. . . . . . . . . . . 427 How can a supplier of goods and services, on whose behalf tax has been collected, take credit of TCS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428 How will the unmatched entries be treated or dealt with? . . . . . . . . . . . . . . 429 What is meant by concerned supplier?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 There are cases in which the ECO does not provide invoicing solution to the seller. In such cases, invoice is generated by the seller and received by the buyer without ECO getting to know about it. The payment flows through the ECO. In such cases, on what value is TCS to be collected? Can TCS be collected on the entire value of the transaction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 There are sellers who are selling exempted or zero-tax goods like books through ECOs. Will marketplaces be required to collect TCS on such supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 There are transactions in which two or more ECOs are involved. In such cases who would deduct the TCS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 430

Chapter 24 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Q.1 What is meant by ‘Refund’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Q.2 What could be other situations in which refund can be claimed by the taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 44

Table of contents

Q.3

Q.4 Q.5 Q.6 Q.7 Q.8 Q.9

Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22

Whether a taxable person is required to make an application for refund of any tax and interest or such amount shall automatically be refunded to the taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 What is the time limit of making an application for refund in GST?. . . . . . 434 Which date shall be considered as ‘Relevant date’ under different situations for the purpose of refund?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434 When a taxable person can claim refund of any unutilized input tax credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 What are the cases under which refund of unutilized input tax credit shall not be allowed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 Whether refund of unutilized input tax credit can be allowed in case where export of goods is subject to export duty?. . . . . . . . . . . . . . . . . . . . . 437 Whether refund of unutilized input tax credit can be allowed in case where exporter of goods or services claims drawback or refund of taxes paid on such supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 How will the refund be claimed in relation to balance in the electronic cash ledger? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 What are the mandatory documents that are required to be attached with application of refund?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 How should one file refund application under sec 54?. . . . . . . . . . . . . . . . . 438 How should a refund application be made in case of supplies made to SEZ unit or SEZ developer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 Who should file refund application under sec 54 for deemed export?. . . . . 438 What are the documents required to be filed along with refund applications to establish that refund is due to the applicant? . . . . . . . . . . . . 438 What kind of declaration is required to be filed with refund application in cases where refund claim does not exceed INR 2 lakhs?. . . . 440 For a refund claim of more than 2 lakhs, is it necessary to file a declaration by a Chartered Accountant or Cost Accountant?. . . . . . . . . . . . 440 Under what circumstances, it will be considered that incidence of tax has been passed on to recipient?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 How will refunds be processed in case of claim of refunds filed by exporters? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 In case of refund claims of export of services, whether Bank Realization Certificate (BRC) is necessary for granting refund? . . . . . . . . . 441 Whether the principle of unjust enrichment be applicable to exports?. . . . . 441 Under Central Excise law, exporters were allowed to obtain duty paid inputs, avail Input Tax Credit on it and export goods upon payment of duty (after utilizing the ITC) and thereafter, claim 45

GST Ready Reckoner in Q & A Format

Q.23

Q.24 Q.25 Q.26 Q.27 Q.28 Q.29

Q.30 Q.31

refund of the duty paid on exports. Whether such refund system is available in GST regime? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 What is the maximum period within which the application of refund is required to be processed? What are the consequences of refund application not being processed within the stipulated time?. . . . . . . 441 What types of refunds shall be paid to the applicant instead of being credited to the Consumer Welfare Fund? . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Can refund be allowed on the direction of Appellate Tribunal or Court or any other provision of the Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Can the refund amount be withheld or adjusted by the proper officer of the Department?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 What is the meaning of ‘Specified date’ to be considered in sec 54(10)?. . . 443 Can refund be withheld by the Commissioner or Board? If yes, under what grounds?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443 Whether taxable person is entitled to receive interest on delayed refunds in case where refund amount is withheld by the proper officers under sec 54(11)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 What is the minimum amount below which refund will not be paid? . . . . . 444 How will pending refund claims be disposed off under earlier laws? . . . . . 444

Interest on delayed payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 Q.32 When is interest on delayed refund is payable? . . . . . . . . . . . . . . . . . . . . . . 444 Q.33 What is the prescribed rate of interest payable on delayed refunds? . . . . . . 444 Consumer Welfare Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Q.34 What is meant by ‘Consumer Welfare Fund’? . . . . . . . . . . . . . . . . . . . . . . . 445 Q.35 Under what circumstances, the sanctioned amount may be credited to Consumer Welfare Fund?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Q.36 Which amounts will be credited to Consumer Welfare Fund?. . . . . . . . . . . 445 Utilization of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Q.37 For what purposes Consumer Welfare Fund is used?. . . . . . . . . . . . . . . . . . 445 Q.38 What is the procedure for rejection of application of refund filed by an applicant?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 Q.39 In case of rejection of refund application, what would happen to the amount debited from input tax ledger?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446 Chapter 25 Liability to pay tax in certain cases . . . . . . . . . . . . . . . . . . . . . . . . 447 Q.1 What shall be the tax liability in case where business is transferred to another person without discharging tax liability?. . . . . . . . . . . . . . . . . . . 447 Q.2 Is it necessary that such transfer should be for a consideration?. . . . . . . . . . 448 Q.3 What shall be the liability to pay comprise of?. . . . . . . . . . . . . . . . . . . . . . . 448 46

Table of contents

Q.4 Q.5 Q.6 Q.7 Q.8 Q.9

Q.10

Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22

Q.23

What is the obligation of transferee or lessee on such transfer?. . . . . . . . . . 448 What types of business transfers are covered for liability to pay in case of business transfers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448 Would transferor be liable for any liability in respect of period post such transfer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 What shall be liability to pay in case of supply between agent and principal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 In what situations, agent’s activities would be covered?. . . . . . . . . . . . . . . . 449 In case of merger or amalgamation by order of court, the effective date of transfer of companies is generally different than the date of pronouncement of order like the court order dated 31 July may pronounce effective date of merger as 1 July? What will be the effective date of transfer for GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449 During the period of effective transfer, ie, 1 July to the date of order ie 31 July, there could be transactions of supply between two merged companies ‘A’ and ‘B’. How will such transactions be treated? . . . 450 Who will be responsible - A, B or AB in the above example for tax obligations for the period before 1 July and before 31 July? . . . . . . . . . . . . 450 Who would be liable to pay tax dues of a company going into liquidation?.450 What is meant by ‘company’ for this provision? . . . . . . . . . . . . . . . . . . . . . 450 What is the duty of receiver and commissioner in case of liquidation of a company?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451 Would the liability of directors of a company in liquidation abate in case of failure or delay on part of liquidator or commissioner?. . . . . . . . . . 451 What will be the liability of independent directors?. . . . . . . . . . . . . . . . . . . 451 What is the liability of directors of a private company being wound up?. . . 451 Who is liable in relation to tax, interest and penalty due from a private company? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 What would happen to the discharge of unpaid tax liability when a public company is converted into a private company?. . . . . . . . . . . . . . . . . 452 Whether recovery in similar manner also apply to personal penalty? . . . . . 452 Would partners of the firm be individually liable to pay tax of firm?

What would be the status of a retiring partner?. . . . . . . . . . . . . . . . . . . . . . . 452 What would be the consequences if intimation of retirement is not given or given late to commissioner? What would be the effect on liability of firm incurred post retirement of such partner? . . . . . . . . . . . . . . 453 Who should give the intimation of retirement of a partner? Would it make a difference in case the agreement between partners provide that the intimation of such event will be given by firm?. . . . . . . . . . . . . . . . 453 47

GST Ready Reckoner in Q & A Format

Q.24 Q.25 Q.26 Q.27 Q.28 Q.29

Q.30 Q.31 Q.32 Q.33 Q.34 Q.35 Q.36 Q.37 Q.38 Q.39 Q.40 Q.41 Q.42

What provisions would apply for liability to pay in case of limited liability partnership?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453 What happens to the tax liability of a taxable person, whose business is carried on by any guardian/trustee or agent of a minor?. . . . . . . 453 Who shall be liable to pay tax in the event of unrecovered tax dues from minor or incapacitated persons?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 Would minor or incapacitated person be liable for any dues under the Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 What is meant by ‘incapacitated person’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 454 Who shall be liable to pay unpaid taxes in cases where estate of a taxable person is under control of court of wards or administrator or receiver etc?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 What is meant by ‘court of wards’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455 How will the liability on the ‘court of wards’ be fastened? . . . . . . . . . . . . . 455 Whose liability will be to pay in case of death of taxable person?. . . . . . . . 455 In what situations, tax cannot be recovered from the legal representative of a deceased person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455 What is the tax liability in case of partition of Hindu Undivided Family (HUF) or Association of Person (AOP)? . . . . . . . . . . . . . . . . . . . . . 456 What is meant by a Hindu Undivided Family (HUF)?. . . . . . . . . . . . . . . . . 456 What is the meaning and scope of Association of Persons?. . . . . . . . . . . . . 456 What will be the tax liability in case of dissolution of a firm?. . . . . . . . . . . 456 What will be the liability where business is managed by guardian on behalf of minor or by a trustee on behalf of a trust? . . . . . . . . . . . . . . . . 457 What will be the tax liability in case of discontinued business of HUF or AOP? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Who will be liable to pay tax dues in case of a change in constitution (reconstitution) of firm or AOP?. . . . . . . . . . . . . . . . . . . . . . . . 457 Who will be liable to pay in case of dissolution of Association of Persons or partition of business by Hindu Undivided Family?. . . . . . . . . . . 457 What is meant by ‘court’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458

Chapter 26

Invoices, credit notes and debit notes. . . . . . . . . . . . . . . . . . . . . . . 459

Types of invoices: A snapshot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 Q.1 What is meant by a ‘tax invoice’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 Q.2 What is the relevance of a tax invoice under GST? . . . . . . . . . . . . . . . . . . . 461 Q.3 Whether a registered person is required to issue a tax invoice in case of supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 Q.4 How supply shall be reckoned for supply of goods?. . . . . . . . . . . . . . . . . . . 462 Q.5 What does ‘removal’ in reference goods mean?. . . . . . . . . . . . . . . . . . . . . . 462 48

Table of contents

Q.6 Q.7 Q.8 Q.9 Q.10 Q.11 Q.12

Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28 Q.29 Q.30 Q.31 Q.32 Q.33

Whether a registered person is required to issue a tax invoice in case of supply of services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462 What are the requisite particulars required to be shown in a tax invoice?. . 463 What are the requisite details required to show in a tax invoice in relation to supply meant for exports?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 Whether board or chief commissioner can notify any other details which may be required to be mentioned in the invoice or a bill of supply?. 465 Whether there is any relaxation for mention of HSN codes?. . . . . . . . . . . . 465 What are the time limits for issuance of a tax invoice by supplier of goods/services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 If an Assessee has two or more units with single registration, how the invoices are to be maintained viz., separate invoices unit wise or single invoice for all units?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 When should the invoice be issued in case of continuous supply?. . . . . . . . 467 When is a ‘bill of supply’ required to be issued and who is required to issue a bill of supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467 What are the requisite particulars required to be shown in a ‘bill of supply’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467 In what situation, a registered person may not be required to issue a bill of supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 When can a consolidated bill of supply be issued by a registered taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 When can other invoices or documents be considered as bill of supply?. . . 468 Who shall be responsible to indicate amount of tax in a tax invoice and other documents?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 What is the manner in which a tax invoice has to be issued?. . . . . . . . . . . . 469 What is invoice reference number (IRN)? . . . . . . . . . . . . . . . . . . . . . . . . . . 470 Whether any trader having turnover of less than INR 20 lakh needs to sell his goods on proper invoice/billing? . . . . . . . . . . . . . . . . . . . . . . . . . 471 What is meant by ‘common portal’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 What is the purpose of common portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 When is a receipt voucher issued? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 What are the prescribed particulars for a receipt voucher?. . . . . . . . . . . . . . 471 At what rate tax would be paid at the time of advance receipt?. . . . . . . . . . 472 At the time of advance, how to determine nature of supply?. . . . . . . . . . . . 472 When is a refund voucher issued?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472 What should the refund voucher contain?. . . . . . . . . . . . . . . . . . . . . . . . . . . 472 What is a payment voucher and when it is issued?. . . . . . . . . . . . . . . . . . . . 473 What are the contents of a payment voucher?. . . . . . . . . . . . . . . . . . . . . . . . 473 In there any prohibition or collection of tax by an unregistered person?. . . 474 49

GST Ready Reckoner in Q & A Format

Q.34 Q.35 Q.36 Q.37 Q.38 Q.39 Q.40 Q.41 Q.42 Q.43 Q.44 Q.45

Q.46 Q.47 Q.48

Q.49

Q.50 Q.51 Q.52 Q.53 Q.54 Q.55 Q.56

50

What is meant by ‘credit note’ and when it shall be issued?. . . . . . . . . . . . . 474 What is the time limit to issue a credit note by a taxable person? . . . . . . . . 475 When can a taxable person not issue credit note?. . . . . . . . . . . . . . . . . . . . . 475 What is meant by ‘debit note’ and when should it be issued?. . . . . . . . . . . . 476 What is the time limit to issue a debit note by a registered taxable person?. 476 What is meant by a supplementary tax invoice?. . . . . . . . . . . . . . . . . . . . . . 477 What are the requisite details required to be shown in a supplementary tax invoice and/or a credit note or a debit note?. . . . . . . . . . 478 Whether a recipient can take input tax credit on the basis of a tax invoice, a supplementary invoice or a debit note under GST regime?. . . . . 478 What is meant by ‘revised invoice’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479 When and who can issue a revised invoice?. . . . . . . . . . . . . . . . . . . . . . . . . 479 What is the difference between a revised invoice and a supplementary invoice?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479 Whether filing of return containing details of credit note or debit note issued or received is mandatory. If yes, then what is the requirement for filing of return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480 Whether an Input Service Distributor (ISD) is required to issue a tax invoice or any other document? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480 What are the requisite details required to be shown in the tax invoice issued by an Input Service Distributor (ISD)?. . . . . . . . . . . . . . . . . 480 Whether a tax invoice shall include any other documents issued in lieu of a tax invoice where an input service distributor (ISD) is an office of banking company/financial institution including NBFC?. . . . . . . . 481 What is the manner of issuing tax invoice where supplier is a banking company or a financial institution including a non-banking financial company (NBFC)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481 What is the manner of issuing a tax invoice in case where supplier is a goods transport agency (GTA)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482 Can transportation of goods be made without issuance of an invoice?. . . . . 482 What are the contents of delivery challan?. . . . . . . . . . . . . . . . . . . . . . . . . . 483 In what manner should delivery challan be issued? . . . . . . . . . . . . . . . . . . . 483 What is the procedure in case where the goods are transported in a semi knocked down or completely knocked down conditions? . . . . . . . . . . 483 What is the manner of issuing a tax invoice in case where supplier of taxable service is supplying passenger transportation service? . . . . . . . . 484 Under GST, how to send demonstration equipment and instruments to customers or branch offices with in India on returnable basis? – No sale is involved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484

Table of contents

Chapter 27 Filing of Returns under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Q.1 What is meant by ‘return’ under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Q.2 What is the purpose of filing tax return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 Q.3 What are the different returns prescribed under GST? What is their periodicity and due dates of filing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486 Q.4 What is the manner of filing returns? Can any return be filed in physical mode?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488 Q.5 When all the returns are required to be filed electronically, how can filing be ensured in case of absence of strong internet connection?. . . . . . . 488 Q.6 There is a prescribed threshold limit of INR 20 lakhs/10 lakhs for registration of a person. Are such registered persons required to file returns in cases where the turnover is below the threshold limit?. . . . . . . . . 488 Q.7 In some period of the year, there may not be any business activity like in case of seasonal businesses. Whether a taxable person will be required to file return in such cases also?. . . . . . . . . . . . . . . . . . . . . . . . . 488 Q.8 Foreign Consulates, UN bodies are also required to be registered under the Act. Whether such bodies are also required to file returns under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488 Q.9 Government Departments, entities or any PSU not making any taxable supplies will be issued a unique code by State GST Authorities. Whether they are required to file returns under GST? . . . . . . . 489 Q.10 There are three components of GST, i.e., CGST, SGST and IGST. Are all the above returns be filed for all the above taxes? . . . . . . . . . . . . . . 489 Q.11 CGST and IGST are the taxes of Central Government and SGST is a tax of the respective State Tax Authorities. How can common returns filed as above will be assessed by these authorities? . . . . . . . . . . . . 489 Q.12 When is self assessed tax as per return required to be deposited?

Can the return be filed without deposit of tax as declared in the return? . . . 489 Q.13 Whether different returns are required to be filed for each business vertical of the same taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 Q.14 Whether non-resident taxable persons are required to file only one return, viz. GSTR – 5? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 Q.15 A compounding taxpayer (taxpayer who has opted for composition scheme under sec 10) is required to file quarterly returns? Whether he is required to file Annual Return also?. . . . . . . . . . . . . . . . . . . . . . . . . . . 490 Q.16 What details of supply are required to be filed in case of outward supply?. 490 Q.17 Is taxpayer need to upload all the invoices along with the return?. . . . . . . . 491 Q.18 How are cash invoices or invoices where address of the recipient is not mentioned are shown in detail of outward supply?. . . . . . . . . . . . . . . . . 491 51

GST Ready Reckoner in Q & A Format

Q.19 Q.20 Q.21 Q.22 Q.23 Q.24

Q.25 Q.26

Q.27 Q.28 Q.29 Q.30 Q.31 Q.32 Q.33 Q.34 Q.35 Q.36 Q.37

Q.38

52

How is description of the goods and services supplied reflected in detail of outward supply? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491 In some cases, place of supply may be different than the location of recipient of supply. How are disclosures in the return made in such cases?. 492 Besides details of supply of goods and services, what other details are required to be submitted in detail of outward supplies?. . . . . . . . . . . . . 492 The details of outward return have to be filed by 10th of succeeding month. Earliest when can this detail be submitted? . . . . . . . . . . . . . . . . . . . 493 Will a taxpayer filing return of outward supply be allowed to make any changes post his filing of the return?. . . . . . . . . . . . . . . . . . . . . . . . . . . 493 Will the details of inward supply have to be filed or will it be automatically captured by the GSTN on the basis of supplier’s return of outward supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493 In case of any error in the return of inward supply filed by recipient in Form GSTR 2, what is the method of correction of such errors?. . . . . . . 494 Besides the auto populated data in the details of inward supply, what are the other information/particulars required to be filled by the tax payer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494 The input tax credit to be availed by a tax payer is linked to details of inward supply. What is required to be done by taxpayer in this regard? . 494 Whether monthly return be required to be made by taxpayer or it will be made automatically by GSTN system?. . . . . . . . . . . . . . . . . . . . . . . 494 Is there any other detail required to be filled by tax payer in the monthly return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Is there any option for filing a simplified return for registered persons not making taxable supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 What are the different means available to taxpayer for filing of returns?. . . 495 What is Facilitation Center (FC) and its purpose? . . . . . . . . . . . . . . . . . . . . 495 Is the taxpayer required to file any documents with the returns?. . . . . . . . . 496 What is meant by matching, reversal and reclaim of input tax credit?. . . . . 496 Will input tax credit claimed on the basis of return of inward supplies be allowed to be used for tax payment of relevant return?. . . . . . . 496 Which fields in the inward return need to match with the outward return of supplier for eligibility of input tax credit?. . . . . . . . . . . . . . . . . . . 497 What will be the consequences where the tax amount claimed in respect of inward supply is less than the amount of tax shown in the outward supply return of supplier?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497 Will supplier and recipient be informed by the system in case figures in inward return and corresponding figures in outward return don’t match?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497

Table of contents

Q.39 Q.40 Q.41 Q.42 Q.43 Q.44 Q.45 Q.46

Q.47 Q.48 Q.49 Q.50

What will be the financial impact of non-matching of figures? . . . . . . . . . . 498 When will auto reversed Input Tax Credit (ITC) be allowed to the recipient?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 Credit of Input Tax (ITC) which was earlier auto reversed be reclaimed by the recipient on suo-moto basis?. . . . . . . . . . . . . . . . . . . . . . . 498 What process would be followed for Input Tax Credit (ITC) claimed on debit notes of supplier?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 How will supplier’s output tax liability be matched in case the supplier has issued credit notes as well?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 How can a return once filed be revised/rectified?. . . . . . . . . . . . . . . . . . . . . 499 What are the consequences of non-filing of prescribed returns?. . . . . . . . . . 500 The application of registration can be made within 30 days of becoming liable. But no return can be filed without being registered. How will first return in this case be filed?. . . . . . . . . . . . . . . . . . 500 How will return be filed in case of cancellation of registration?. . . . . . . . . . 500 What is Annual Return? By whom it is required to be filed? When it is required to be filed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 What are the information/particulars required to be disclosed in Annual Return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 What documents are required to be filed with Annual Return? . . . . . . . . . . 501

Chapter 28 Job Work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 Q.1 What is meant by ‘job work’? Who is a job worker?. . . . . . . . . . . . . . . . . . 503 Q.2 What are the essential ingredients for job work? . . . . . . . . . . . . . . . . . . . . . 503 Q.3 Are the transactions of repair included in job work? . . . . . . . . . . . . . . . . . . 504 Whether job worker is required to be registered under GST?. . . . . . . . . . . . 504 Q.4 Q.5 Is it necessary that the activity carried out by a job work should amount to manufacture? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504 Q.6 What is meant by ‘manufacturer’ in relation to manufacture?

Whether job worker can be considered as a manufacturer?. . . . . . . . . . . . . 505 Q.7 Whether goods supplied by principal to a job worker amounts to supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505 Q.8 What is the meaning of ‘Non taxable Supply’ in relation to GST?. . . . . . . . 505 Q.9 Whether principal can send the goods to job worker without payment of tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506 Q.10 Whether job worker can return job worked goods to the principal without paying tax on goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506 Q.11 What is the taxable status of waste and scrap generated during the job work process?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506 53

GST Ready Reckoner in Q & A Format

Q.12 Q.13

Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20

Q.21

Q.22

Q.23 Q.24 Q.25 Q.26 Q.27 Q.28

Whether job worker has to be a different person or can some other unit of principal can also become job worker?. . . . . . . . . . . . . . . . . . . . . . . 506 Can Principal ask its vendors to send the inputs directly to the premises of job worker without first receiving in his premises and then sending the same to job worker’s premises?. . . . . . . . . . . . . . . . . . . . . 507 What happens in case job worker sends these goods to some other job worker for sub-job work/ processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . 507 After job work, is it necessary for principal to get the goods back to the place, from where goods were sent for job work?. . . . . . . . . . . . . . . . . . 507 Can job worked goods be directly exported from job worker premises?. . . 507 Will principal be eligible to claim Input Tax Credit (ITC) on goods sent to job worker for job work?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508 What would happen in case job worked goods are not received back by the principal within a period of one year?. . . . . . . . . . . . . . . . . . . . 509 Whether the principal shall be eligible to claim Input Tax Credit (ITC) on capital goods sent to job worker?. . . . . . . . . . . . . . . . . . . . . . . . . . 509 What happens to Input Tax Credit (ITC) on capital goods in case the capital goods are not received back by the principal within a period of 3 years? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509 Whether principal may reclaim the Input Tax Credit (ITC) and interest paid when the inputs or capital goods are not received back by the principal within a period of 1 year/3 years?. . . . . . . . . . . . . . . . . . . . 509 How will this period of 1 year/3 years be calculated in case inputs/ capital goods are sent directly to job workers premises by the vendors of principal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 What would be the status of tools, dyes, moulds jigs and fixtures being sent to job worker? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 Will job worker be eligible to claim Input Tax Credit (ITC) on material/input services used for carrying out job work activity? . . . . . . . . . 510 Whether the same procedure as applicable to job work shall apply for sending the non-taxable or exempt goods?. . . . . . . . . . . . . . . . . . . . . . . 511 Whose responsibility is for goods under job work and payment of tax? . . . 511 What kind of return is required to be filed for job work activity?. . . . . . . . . 511 Whether a job worker is eligible for the threshold exemption for registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511

Chapter 29 GST on E-commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Q.1 What are the indirect taxes to which e-commerce business was exposed in pre-GST era. Whether GST will benefit e-commerce sector?. . . 513

54

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Q.2

What are the different business models on which e-commerce companies generally do business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Q.3 What is the impact of GST on e-commerce operators?. . . . . . . . . . . . . . . . . 514 Q.4 What is the meaning and scope of electronic commerce (e-commerce)?. . . 514 Q.5 How a typical transaction is carried out by an e-commerce operator?. . . . . 514 Q.6 What are the essential ingredients to be covered under the scope of e-commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Q.7 Who is an electronic commerce operator? . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Q.8 Whether an electronic commerce operator can sell goods and/or services on his its own behalf? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 Q.9 Whether a supplier of goods or services supplying through e-commerce operator would be entitled to threshold exemption? . . . . . . . . 516 Q.10 Will threshold exemption be available to electronic commerce operators (ECO) liable to pay tax on notified services?. . . . . . . . . . . . . . . . 516 Q.11 What are the registration requirements for e-commerce operator?

Whether they are entitled to threshold exemption?. . . . . . . . . . . . . . . . . . . . 516 Q.12 It what cases, registration under GST shall be required for suppliers in relation to e-commerce/aggregator’s services?. . . . . . . . . . . . . . . . . . . . . 516 Q.13 Will an e-commerce operator be liable to pay tax in respect of supply of goods or services made through it, instead of actual supplier?. . . 517 Q.14 How should an ECO obtain GST registration?. . . . . . . . . . . . . . . . . . . . . . . 517 Q.15 Can the registration of ECO be cancelled?. . . . . . . . . . . . . . . . . . . . . . . . . . 517 Q.16 What are the situations where e-commerce operator shall have to pay GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 Q.17 What are the specific categories of supply of services where e-commerce operator is required to pay GST on intra-state supplies?. . . . . 518 Q.18 Where e-commerce operator does not have a physical presence, who will be liable to pay tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 Q.19 What would happen to tax liability where ECO or his agent is not present in taxable territory?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518 Q.20 Can e-commerce operators also engage in supply to self their own goods and services and still be liable under this section?. . . . . . . . . . . . . . . 519 Q.21 What does tax collected at source (TCS) imply in GST?. . . . . . . . . . . . . . . 519 Q.22 What is the nature of TCS and what does it mean in GST?. . . . . . . . . . . . . 519 Q.23 When is an electronic commerce operator required to collect tax? . . . . . . . 519 Q.24 What is the provision for filing of any return in relation to TCS collection and payment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 Q.25 What information shall the monthly statement filed by operator contain?. . 520 Q 26. Are there any additional powers given to tax officers for ECO’s?. . . . . . . . 520 55

GST Ready Reckoner in Q & A Format

Chapter 30 Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 Q.1 What is meant by ‘document’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 Q.2 What is meant by ‘year’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521 Q.3 What is the scope of ‘accounts’ and ‘books of accounts’?. . . . . . . . . . . . . . 522 Q.4 What creates an obligation to maintain accounts and records?. . . . . . . . . . . 522 Q.5 What accounts are required to be maintained by a registered taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 Q.6 What all accounts and records should generally be maintained by registered person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 Q.7 At which place, shall the books and other records need to be maintained?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524 Q.8 In what manner, accounts & records should be maintained? . . . . . . . . . . . . 524 Q.9 Where shall the books and other records be maintained in case of taxable person having multiple places of business as specified in the certificate of registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525 Q.10 Whether the records are required to be maintained physically or in electronic form?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525 Q.11 What are the requirements for generation and maintaining accounts in electronic form?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Q.12 Whether electronic cash ledger and electronic credit ledger on common portal as required for input tax credit be covered under accounts and records?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Q.13 Whether Commissioner can notify and require taxable persons to maintain additional accounts or documents?. . . . . . . . . . . . . . . . . . . . . . . . . 527 Q.14 Whether the manner of maintaining the accounts as per the provisions has to be strictly adhered to or such manner can be changed in case of any difficulty?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528 Q.15 Whether an assessee is required to get his accounts audited and need to submit the audited statement of accounts to the proper officer? . . . 528 Q.16 Whether an assessee is required to submit an audited statement of accounts and a reconciliation statement in physical form or in electronic form?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529 Q.17 What is meant by a ‘chartered accountant’?. . . . . . . . . . . . . . . . . . . . . . . . . 529 Q.18 What is meant by a ‘cost accountant’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529 Q.19 Whether any types of records are required to be maintained by owner or operator of godown or warehouse and transporters?. . . . . . . . . . . 529 Q.20 Whether any type of records are required to be maintained by an Agent?. . 530 Q.21 Whether a registered person is required to maintain separate accounts in relation to works contracts?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 56

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Q.22

Whether a Clearing and Forwarding agent is required to maintain any type of accounts and records?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531

Period for Retention of Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531 Q.23 What is the time limit for the retention of the books of account or other records? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531 Q.24 What is the requirement of retention of accounts and records where the taxable person has more than one place of business?. . . . . . . . . . . . . . . 532 Q.25 What shall be the time limit for retention of books of accounts and records by a taxable person in case of an appeal or revision or any other proceeding pending before appellate authority or tribunal or court?. . 532 Chapter 31 E Way Bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Q.1 What is meant by ‘E Way Bill’? What is its relevance in GST?. . . . . . . . . . 533 Q.2 Why is E way bill required?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Q.3 Is E way bill required to be generated for all consignments irrespective of its value?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533 Q.4 Is E way bill is required to be generated for supply of goods?. . . . . . . . . . . 534 Q.5 Who is liable to generate e way bill? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534 Q.6 Is e way bill required to be generated even for very small distance also? . . 534 Q.7 What happens to e way bill in case of need for transportation due to breakdown of conveyance mentioned on e way bill?. . . . . . . . . . . . . . . . . . 534 Q.8 What are the rules for transporting different consignments in a single conveyance?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535 Q.9 The details of invoice are required to be entered on common portal for generation of e way bill. It is also required to furnish GST returns also. Would such registered person need to enter it twice?. . . . . . . . 535 Q.10 E way bill on GST portal is required to be generated in advance.

Are there any provision for its cancellation in case of change of plans? . . . 535 Q.11 Is there any system provided for seeking the acceptance of consignment from consignee at the time of generation of e way bill?. . . . . 536 Q.12 What is the validity period of e way bill generated on common portal?. . . . 536 Q.13 Is there any provision for extension of validity period of e way bill?. . . . . . 536 Q.14 Would e way bill be required to be generated for transportation of goods in any case?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536 Q.15 What are the documents which a transporter of goods need to carry with him during transportation of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . 537 Q.16 Is every transporter of goods need to carry with him RFID (Radio frequency identification device)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537 Q.17 What are the verification powers of the tax officials?. . . . . . . . . . . . . . . . . . 537 57

GST Ready Reckoner in Q & A Format

Q.18 Q.19 Q.20 Q.21

What is RFID? How is it used by tax officials for verification?. . . . . . . . . . 537 Is there any time limit for tax officials to finalise their verification report?. 537 Is there any time limit of holding the transport vehicle for verification?. . . 538 Can a transport vehicle can be again stopped for verification?. . . . . . . . . . . 538

Chapter 32 Scrutiny and Audit under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 Q.1 What is understood by the term ‘audit’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 539 Q.2 What is the relevance of audit in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540 Q.3 What is difference between reconciliation, scrutiny and audit?. . . . . . . . . . 541 Q.4 Audit can be conducted by a chartered accountant. Who is a chartered accountant for the purpose of this audit?. . . . . . . . . . . . . . . . . . . . 541 Q.5 Audit can be conducted by a cost accountant. Who is a cost accountant for the purpose this audit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 Audit Based on Turnover. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 Q.6 What is the provision for requirement of audit of taxable person based on aggregate turnover? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 Q.7 What is the prescribed limit for requirement of audit of taxable person based on aggregate turnover? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 Q.8 What are the conditions and provisions for audit based on turnover? . . . . . 543 Q.9 Whether audited statements are required to be furnished along with annual return? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 Q.10 Whether audit report is also required to be filed under GST system?. . . . . . 544 Scrutiny. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544 Q.11 Whether scrutiny of return can be undertaken in GST?. . . . . . . . . . . . . . . . 544 Q.12 How will the notice in relation to scrutiny of returns be issued by the proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544 Q.13 What are the consequences of not providing an explanation against scrutiny conducted by proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545 Q.14 What are the essential ingredients of scrutiny?. . . . . . . . . . . . . . . . . . . . . . . 545 Q.15 What is the manner of dealing with discrepancies? . . . . . . . . . . . . . . . . . . . 545 Q.16 In what situation, no further action shall be taken against the assessee? . . . 546 Q.17 Where an assessee does not comply with the law, what action can be taken by the proper officer against such assessee?. . . . . . . . . . . . . . . . . . 546 Audit by Tax Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 Q.18 What are the salient features of provisions for audit by tax authorities? . . . 546 Q.19 How should an Order of audit be issued and what should it be convey?. . . 547 Q.20 Whether audit under sec 65 can be undertaken by way of a surprise?. . . . . 548 Q.21 How will a proper officer inform the registered taxable person regarding audit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548 58

Table of contents

Q.22 Q.23 Q.24

Q.25 Q.26 Q.27 Q.28

Is audit under sec 65 mandatory and all taxable persons are required to be audited as such?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548 Can audit under sec 65 be dispensed with, if any other audit is being conducted under GST law or any other law? . . . . . . . . . . . . . . . . . . . 548 Audit has to be completed within a stipulated period of three months (subject to extension) from the date of commencement.

What is implied by date of commencement of audit?. . . . . . . . . . . . . . . . . . 548 What is the outcome of audit under sec 65?. . . . . . . . . . . . . . . . . . . . . . . . . 549 Whether there is any time limit for disclosing the audit findings to auditee?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549 Can the proper officer issue show cause notice and adjudicate the demand sought to be recovered?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549 What is the difference between the two audit under sec 65 and sec 66? . . . 550

Special Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551 Q.29 What is special audit under GST and what are the circumstances which trigger the order for special audit?. . . . . . . . . . . . . . . . . . . . . . . . . . . 551 Q.30 While ordering the special audit to be conducted, what principles should guide the officer to order a special audit?. . . . . . . . . . . . . . . . . . . . . 552 Q.31 How can special audit be ordered or directed?. . . . . . . . . . . . . . . . . . . . . . . 552 Q.32 Whether special audit is required to be directed vide any specified form?. . 552 Q.33 Who shall appoint the auditor for conducting special audit? . . . . . . . . . . . . 552 Q.34 Can any direction be given to the auditor also? . . . . . . . . . . . . . . . . . . . . . . 553 Q.35 What are the reporting requirements for auditor?. . . . . . . . . . . . . . . . . . . . . 553 Q.36 Can the stipulated period of 90 days to submit audit report be extended?. . 553 Q.37 Can special audit be ordered even where taxable person is or has been audited?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553 Q.38 Can the Department use the audit findings or material gathered during audit in any proceedings against the assessee? . . . . . . . . . . . . . . . . . 553 Q.39 What are the consequences of special audit? . . . . . . . . . . . . . . . . . . . . . . . . 554 Q.40 Under what circumstances, proceedings under sec 73 can be initiated by the department? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554 Q.41 Who shall bear the expenses of special audit? . . . . . . . . . . . . . . . . . . . . . . . 554 Q.42 How will findings of special audit be communicated to auditee?. . . . . . . . . 554 Chapter 33

Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555

Power of inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555 Q.1 What is meant by inspection? How is it different from search?. . . . . . . . . . 555 Q.2 What are the various powers available to tax authorities for inspection or related to inspection?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 556 59

GST Ready Reckoner in Q & A Format

Q.3 Q.4 Q.5 Q.6 Q.7

Who has the power to inspect any person or premises under sec 67?. . . . . . 556 Who or what can be inspected under sec 67(1)?. . . . . . . . . . . . . . . . . . . . . . 557 What is the scope of ‘inspection’ under GST? . . . . . . . . . . . . . . . . . . . . . . . 557 What are the situations under which or as a consequence of which inspection under sec 67(1) can be initiated?. . . . . . . . . . . . . . . . . . . . . . . . . 557 What is meant by the expression, ‘reason to believe’?. . . . . . . . . . . . . . . . . 558

Inspection of goods in movement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 Q.8 In case of goods in movement, what are the provisions for inspection?. . . . 559 Q.9 What are the essential conditions for inspection of goods in movement? . . 560 Q.10 Can the conveyance be detained or seized? . . . . . . . . . . . . . . . . . . . . . . . . . 560 Q.11 What is the time limit for detention of conveyance carrying goods?. . . . . . 560 Q.12 What is the distinction in law between ‘Seizure’ and ‘Detention’? . . . . . . . 560 Q.13 What documents shall be carried by the person in-charge of conveyance? . 561 Q.14 Who is required to issue the prescribed documents? . . . . . . . . . . . . . . . . . . 561 Q.15 What is e-way bill number?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 Q.16 What is the requirement of INR 50,000 monetary limit? Is it for all the consignments in the conveyance or per consignment? How will it be complied with where a single conveyance of more than one consignments of goods, is of value below INR 50,000?. . . . . . . . . . . . . . . . 561 Q.17 Whether documents will require online upload on common portal? . . . . . . 562 Q.18 What is common portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562 Q.19 Whether the documents relating to movement of goods shall be validated?.562 Q.20 Can the proper officer intercept the conveyance carrying goods? . . . . . . . . 562 Access to business premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 Q.21 Can revenue officials access the business premises of a taxable person?. . . 563 Q.22 What is meant by ‘access’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563 Q.23 Who can access the business premises of the taxable person?. . . . . . . . . . . 563 Q.24 How can authorization for inspection be made?. . . . . . . . . . . . . . . . . . . . . . 563 Q.25 What shall be the objective of such access to business premises?. . . . . . . . 563 Q.26 What can be the purpose of inspection on access to business premises?. . . 564 Q.27 On such access to place of business, what is the person incharge of place/premises required to do? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 Q.28 Will access to place of business premises under sec 71 also include unregistered premises? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565 Q.29 Whether the list of documents/information is exhaustive and no other document can be inspected?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565 Officers required to assist proper officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565 Q.30 Whether officers of other Departments are required to assist GST officials in execution of provisions of law?. . . . . . . . . . . . . . . . . . . . . . . . . . 565 60

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Q.31

Can any other officer be also called upon to assist?. . . . . . . . . . . . . . . . . . . 566

Chapter 34 Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567 Q.1 What is the concept of input tax credit(ITC)?. . . . . . . . . . . . . . . . . . . . . . . . 567 Q.2 What is meant by ‘Input’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 Q.3 What is meant by ‘capital goods’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . 568 Q.4 What is the meaning of ‘Input Service’ in GST? . . . . . . . . . . . . . . . . . . . . . 568 Q.5 What is meant by ‘input tax’ and ‘input tax credit’ in GST?. . . . . . . . . . . . . 569 Q.6 The definition of input tax includes the tax paid under reverse charge mechanism under sec 9(3) and 9(4) of the GST Act. Whether the input tax credit of tax paid on reverse charge be also available to registered taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570 Q.7 The definition of input tax includes the CGST, SGST/ UTGST and IGST. Would input tax credit be available for all such taxes? . . . . . . . . . . . 571 Q.8 What is the order of utilization of input tax credit? . . . . . . . . . . . . . . . . . . . 571 Q.9 Whether cross utilization of credits between goods and services is allowed under GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 Q.10 What is meant by ‘Inward Supply’ for the purpose of input tax credit in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 Q.11 What is meant by ‘output tax’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572 Q.12 What is the meaning of ‘outward supply’ in GST?. . . . . . . . . . . . . . . . . . . . 572 Q.13 What is the meaning of ‘turnover in a state’ in GST?. . . . . . . . . . . . . . . . . . 573 Q.14 Who is entitled to take input tax credit? How will this amount be accounted for in tax records maintained on GST portal?. . . . . . . . . . . . . . . 573 Q.15 What are other conditions for availing the input tax credit?. . . . . . . . . . . . . 573 Q.16 What is the concept of matching of invoices vis-a-vis electronic credit ledger for availing input tax credit? . . . . . . . . . . . . . . . . . . . . . . . . . . 574 Q.17 Whether the registered taxable person is eligible to take input tax credit in respect of inputs held in stock and contained in semifinished and finished goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575 Q.18 Does it make a difference on entitlement of Input Tax Credit (ITC) in case the person liable for registration makes a late application for registration under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575 Q.19 Where a person applies for registration for the first time under GST, whether he is eligible for credit on the stocks carried by him?. . . . . . . . . . . 576 Q.20 Is there any time limit prescribed for taking input tax credit? . . . . . . . . . . . 576 Q.21 Whether the registered taxable person can take credit in respect of invoice issued for supply of goods and/or services after the filing of annual return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577

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Q.22

Where some of the business assets and/or services are used for non business purposes, Does it impact the input tax credit claim of such person? How will this impact be calculated? . . . . . . . . . . . . . . . . . . . . . . . . 577 Q.23 A registered taxable person makes supply of taxable goods including zero rated goods, makes supply of exempt goods also.

Would his input tax credit be affected? How would the amount of input tax credit computed in such scenario?. . . . . . . . . . . . . . . . . . . . . . . . . 578 Q.24 What would happen to input tax credit balance in case of change in constitution of a company on account of sale, merger, demerger, amalgamation, lease or transfer to another company? . . . . . . . . . . . . . . . . . 578 Q.25 What are the inputs which are not eligible for input tax credit?. . . . . . . . . . 579 Q.26 What is the meaning of ‘whether as goods or in any form’ in respect of works contract service?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580 Q.27 Would works contract service for making foundation or structural support for plant and machinery be eligible for input tax credit?. . . . . . . . . 580 Q.28 Tax includes any amount payable under sec 10 (composition levy scheme), whether input tax credit is available on payment of such amount?.581 Q.29 Whether every motor vehicle purchased by taxable person is eligible for input tax credit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 Q.30 A taxable registered person has a manufacturing facility. It produces the electricity for captive consumption in his factory for manufacture of taxable goods. Considering the fact that electricity has been kept outside the scope of GST, would input tax credit be eligible on items used in manufacture of electricity?. . . . . . . . . . . . . . . . . . 581 Q.31 Manufacturing process for manufacture of taxable goods of taxable person require a dust free environment, which requires the painting of production floor. Will the activity of painting of production floor be considered as eligible input service? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 582 Q.32. Where certain inputs and input services are used for manufacture of an exempted product but this exempted product is further used for manufacture of a taxable product, whether input tax credit will be eligible on such inputs and input services?. . . . . . . . . . . . . . . . . . . . . . . . . . 582 Q.33 When will a taxable person claim input tax credit, where the goods are directly delivered to job worker on the instructions of taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 582 Q.34 A taxable person directs his supplier to deliver goods to some other person to whom the first person has further sold the goods. Whether such taxable person will be eligible to claim ITC in the absence of receipt of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583

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Q.35 Q.36 Q.37 Q.38 Q.39

Q.40 Q.41 Q.42

Q.43

Q.44

Q.45

Can a taxable person claim entire input tax credit on capital goods in one go or it has to be in installments as was under the Cenvat rules? . . . 583 Depreciation is allowed on every capital asset. What is the effect of charging depreciation on the eligibility of input tax credit?. . . . . . . . . . . . . 583 What would be the impact of sale or transfer of capital assets on Input Tax Credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584 Would input tax credit of tax paid on inputs be available, which are used in fabricating a capital asset? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584 One of the requirements of availing input tax credit is the furnishing of valid return by supplier of goods and/or services.

What are the consequences of supplier failing to furnish such return or failing to show such supply in the return? . . . . . . . . . . . . . . . . . . . . . . . . 585 Would it affect the input tax credit claim in case part of the inputs in an invoice have not been received?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585 Is it necessary that the product should be sold for a price more than its purchase cost for the purpose of claiming input tax credits.? . . . . . . . . . 585 The purchaser of the goods sells goods to some other person by transfer of documents during the course of movement of such goods. Would such purchaser be entitled to ITC in the absence of goods received by him? Would the final purchaser who receives goods be entitled to ITC on receipt of goods to him?. . . . . . . . . . . . . . . . . . 585 What would be the tax implications on a regular taxable person, who switches over to composition levy scheme under sec 10, i.e., switching from regular scheme to composition levy?. . . . . . . . . . . . . . . . . . 586 What would be the tax implications on a regular taxable person, in case where the goods and/or services supplied by him become exempt absolutely under sec 11?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 586 What would be the implications for a taxable person who switches over from composition levy scheme under sec 10 to regular scheme?. . . . . 586

Chapter 35 Input Service Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589 Q.1 Who is an input service distributor (ISD) in GST?. . . . . . . . . . . . . . . . . . . . 589 Q.2 Can there be more than one ISD of same taxable person in a State? . . . . . . 589 Q.3 Can an ISD take input tax credit of goods, which are otherwise eligible for input tax credit as per provisions of the GST Act?. . . . . . . . . . . 590 Q.4 Can an ISD take input tax credit of services on which tax is required to be paid on reverse charge basis as per sec 9(3) of CGST Act or 5(3) of IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590 Q.5 How will input service distributor claim ITC and to whom they can distribute such credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590 63

GST Ready Reckoner in Q & A Format

Q.6 Q.7 Q.8 Q.9

What manner of distribution can be adopted by ISD for distribution of credits to its various recipients?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 What are the conditions to be satisfied by an ISD in respect of distribution of ITC ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 What is the meaning of term ‘relevant period’ in reference to distribution of input tax credit of ISD?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592 What are the consequences of excess credit distributed by ISD?. . . . . . . . . 593

Chapter 36 Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595 Q.1 What is meant by ‘Assessment’ under GST law?. . . . . . . . . . . . . . . . . . . . . 595 Various assessments at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596 Q.2 What are the various types of assessments carried out under GST Act? . . . 596 Q.3 What is meant by ‘Commissioner’ in GST Act?. . . . . . . . . . . . . . . . . . . . . . 599 Q.4 What is meant by ‘Proper Officer’ under GST law?. . . . . . . . . . . . . . . . . . . 599 Self-assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599 Q.5 Who will be responsible to make self-assessment in relation to determination of tax liability under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . 599 Provisional Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 Q.6 In case the taxable person is unable to determine correctly the value of goods or rate of tax applicable on supplies, what is the option available to taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 Whether a proper officer can assess the amount of tax payable by Q.7 the taxable person without being requested by the taxable person?. . . . . . . 601 Q.8 Whether execution of bond with surety by registered taxable person is compulsory for provisional assessment?. . . . . . . . . . . . . . . . . . . . . . . . . . 601 Q.9 How much security can be asked for by the proper officer while allowing the application of provisional assessment? . . . . . . . . . . . . . . . . . . 601 Q.10 What details need to be provided by taxable person in his request application seeking provisional assessment? . . . . . . . . . . . . . . . . . . . . . . . . 601 Q.11 What details and conditions may be prescribed by the tax department while allowing provisional assessment?. . . . . . . . . . . . . . . . . . . 602 Q.12 Can a person who has furnished a return on self assessment basis make a request for provisional assessment?. . . . . . . . . . . . . . . . . . . . . . . . . 602 Q.13 What is the maximum period permitted for finalizing the provisional assessment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 Q.14 Can be the period of 6 months for provisional assessment be extended?. . . 602 Q.15 What would be the consequences of short/excess payment in case of provisional assessment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603

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Scrutiny of Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 Q.16 What does scrutiny of return means? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603 Q.17 What is the time limit for replying to notice?. . . . . . . . . . . . . . . . . . . . . . . . 603 Q.18 What would be the result of such reply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 604 Best Judgment Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604 Q.19 Under what situations best judgment assessment can be done by the proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604 Assessment of Non-filers of Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605 Q.20 How is best judgment assessment in case of non-filers of return done?. . . . 605 Q.21 Is it necessary to issue notice before doing best judgment assessment?. . . . 605 Q.22 What is the time limit for finalizing a best judgment assessment under sec 62?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605 Q.23 Under what circumstances the order of best judgment assessment would stand withdrawn?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605 Q.24 Under what circumstances the order of best judgment assessment may be considered valid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606 Q.25 Would the provisions of interest on delayed payment and late fee applicable in case of best judgment assessment? . . . . . . . . . . . . . . . . . . . . . 606 Assessment of Unregistered Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607 Q.26 Whether proper officer can proceed for assessment where a person fails to obtain registration even though he is required to do so?. . . . . . . . . . 607 Q.27 Would a person whose registration has been cancelled be treated as unregistered person for sec 63?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607 Q.28 Whether assessment of unregistered persons can be done unilaterally?. . . . 607 Q.29 What is the time limit of passing of assessment order under sec 63?. . . . . . 607 Summary Assessment in certain Special Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . 607 Q.30 What is summary assessment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607 Q.31 Under what circumstances a summary assessment order can be passed by a tax officer? What procedure will be followed by proper officer for passing such an order?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608 Q.32 How will an order of summary assessment be passed in case of supply of goods where the person liable for tax is not ascertainable? . . . . . 608 Q.33 Whether a proper officer can issue order under summary assessment without getting permission from the Additional/Joint Commissioner?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608 Q.34 Can a Summary Assessment order be withdrawn? Who can withdraw such order and under what circumstances?. . . . . . . . . . . . . . . . . . 609

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Q.35

What are the tax implications of withdrawal of summary assessment order?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609

Chapter 37 Demand and Recovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 Q.1 In what cases, demand proceedings could be initiated by the proper officer under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613 Q.2 What are the demand and recovery provisions available to proper officer under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614 Q.3 Whether proper officer is required to issue a detailed recurring show cause notice even for subsequent period or default on the same issue?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614 Q.4 In case a defaulting assessee admits/accepts his default before issuance of show cause notice, can issuance of show cause notice to him be avoided? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 Q.5 Whether it is necessary to provide reasonable opportunity of being heard before issuing show cause notice/order to the taxable person?. . . . . . 615 Q.6 In case proper officer does not concur with the amount of deposit made by defaulting assessee, what course of action would is available to him?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 Q.7 In case defaulting assessee pays the defaulted amount after issuance of show cause notice to him, what reliefs will be available to such defaulter?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 Q.8 What is the meaning of ‘all proceedings in respect of the said tax shall be deemed to be concluded’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 Q.9 What is the maximum penalty for default which can be levied by proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 Q.10 What is the limitation period for concluding the demand proceedings by proper officer? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 Q.11 Whether the taxable person has any option to pay reduced penalty in case where the demand is raised under sec 74? . . . . . . . . . . . . . . . . . . . . 617 Q.12 What is the limitation period for issuance of show cause notice by proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617 Q.13 How will be the limitation period counted, in case of stay by Court on issuance of show cause notice? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617 Q.14 What shall be the consequences where notice is issued but order has not been passed within 3 years (in sec 73)/5 years (in sec 74 cases)? . . 618 Q.15 What would be the consequences of Court setting aside the charges of fraud, willful mis-statement or suppression of facts?. . . . . . . . . . . . . . . . 618 Q.16 What is meant by ‘Suppression’ under sec 74 of the GST Act?. . . . . . . . . . 618 Q.17 Whether an opportunity of personal hearing required to be granted to the person chargeable with tax? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618 66

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Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28 Q.29 Q.30 Q.31 Q.32 Q.33

Q.34 Q.35

Can the person chargeable with tax seek adjournment of hearing? . . . . . . . 619 What discipline should be observed by proper officer while making an order of demand? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619 Whether officer issuing Order can be the same person who issued SCN?. . 619 Can Appellate Authority or Tribunal or Court modify the amount of tax determined by proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619 Will the amount of interest and penalty change in case the amount of tax demanded is modified by any Appellate Authority?. . . . . . . . . . . . . . 619 Is it necessary to demand interest on defaulted tax in the order issued by proper officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 When would adjudication proceedings be deemed to be concluded?. . . . . . 620 What would be the limitation period in a case where the appeal on similar grounds is pending before any superior court for final disposal?. . . 620 What is the liability of a person who collects the tax under the GST law but is not very sure of its taxability?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 In case the assessee who collects tax wrongfully but fails to deposit, what course of action is available to proper officer against such assessee?. 621 In case of defaulting assessee under sec 52, how shall be proper officer determine the tax liability?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621 What is the time limit for issuance of an order under sec 76? . . . . . . . . . . . 621 What would be the treatment of amount already deposited under sec 76(1) of the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622 How will surplus deposit be treated in case proceedings under sec 76(10) conclude with a surplus deposit made?. . . . . . . . . . . . . . . . . . . . 622 What are the rights of persons who have borne the incidence of tax amount by wrongfully paid tax which was not leviable under the Act?. . . . 622 What would be the consequences of wrong deposit of tax on the taxable person on wrong consideration of inter-State transaction as intra-State transaction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622 Would taxable person would be liable for payment of interest besides paying the tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623 Can the refund claim on account of sec 77 be subjected to provision of undue enrichment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623

Initiation of Recovery proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623 Q.36 What is the time prescribed for payment of tax demand after passing the order?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623 Q.37 Can the prescribed period of 3 months be shortened?. . . . . . . . . . . . . . . . . . 623 Q.38 What happens in case of default in payment by taxable person within the time permitted by order? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623 67

GST Ready Reckoner in Q & A Format

Recovery of Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624 Q.39 What are the different modes available to proper officer for recovery of defaulted amount of dues under the GST Act? . . . . . . . . . . . . . 624 Q.40 What shall be the liability of a person who has been issued notice to pay the amount on account of defaulter under GST Act?. . . . . . . . . . . . . . . 624 Q.41 Whether a notice can be issued to a third party like bank or post office?. . . 625 Q.42 Whether amount of tax payable can be recovered from the bond or other instrument executed under the Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . 625 Q.43 Whether proper officer of SGST/CGST during the course of recovery of tax dues, can recover amount of tax, interest or penalty which is payable to the Central Government/State Government? . . . . . . . . 625 Payment of Tax and Other Amount in Installments . . . . . . . . . . . . . . . . . . . . . . . 626 Q.44 Whether any facility of installments for payment of defaulted amount be allowed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626 Q.45 Under what circumstances the facility of payment in installments can not be allowed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626 Q.46 What are the consequences of default in payment of installment?. . . . . . . . 626 Transfer of Property to be Void in Certain Cases. . . . . . . . . . . . . . . . . . . . . . . . . 627 Q.47 Can a defaulting person alienate any of his properties during the period of default?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 Q.48 What are the rights of an innocent buyer of property from a defaulted seller?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 Tax to be First Charge on Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 Q.49 Can the properties of an assessee in default be attached? If yes, under what circumstances and by whom?. . . . . . . . . . . . . . . . . . . . . . . . . . . 627 Provisional Attachment to Protect Revenue in Certain Cases. . . . . . . . . . . . . . . 627 Q.50 Whether properties of taxable persons can be provisionally attached?. . . . . 627 Q.51 When will any provisional attachment order made under sec 83 remain valid?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628 Continuation of Certain Recovery Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . 628 Q.52 What is meant by Government dues?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628 Q.53 What are the consequences of increase in Government dues by Appellate Recovery Court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628 Q.54 What are the consequences of reduction in Government dues by Appellate Recovery Court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628 Chapter 38

Offences and Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629

Offences and Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 Q.1 What is meant by ‘Offences’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 68

Table of contents

Q.2 Q.3 Q.4 Q.5 Q.6 Q.7

What is meant by ‘Penalty’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 What are the specified offences which are liable to penalty detailed in GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 What penalties have been prescribed for various above offences under sec 122(1) of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632 What is the prescribed penalty for offences specified under sec 73 and 74?.632 What are the other offences for which penalty has been prescribed?. . . . . . 632 What is the difference between the penalty under sub-section (1) and (3) of sec 122, as discussed above? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633

Penalty for failure to furnish information return . . . . . . . . . . . . . . . . . . . . . . . . . 633 Q.8 What is the penalty which can be levied for failure to furnish information return?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633 Fine for failure to furnish Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634 What is the penalty which can be levied for failure to furnish Statistics? . . 634 Q.9 General Penalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634 Q.10 What is the general penalty which can be levied for any violation for which no specific penalty has been prescribed? . . . . . . . . . . . . . . . . . . . 634 General Disciplines related to Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634 Q.11 What discipline has to be observed by tax authorities in levying penalty?. . 634 Q.12 What discipline should be observed by the tax authorities where a person voluntarily discloses the breach of law before the discovery by the tax authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 Q.13 What are the restrictions on imposing substantial penalties?. . . . . . . . . . . . 635 Q.14 When breach of law will be considered as a minor breach and easily rectifiable mistake?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 Power to impose penalty in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 Q.15 What is the penalty which can be levied in case of specific proceedings under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 Power to waive penalty or fee or both. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 Q.16 Is there any provision of waiver of penalty or fee or both? . . . . . . . . . . . . . 635 Detention of Goods and Conveyance, and Levy of Penalty . . . . . . . . . . . . . . . . . 636 Q.17 Under what circumstances, goods and the conveyance can be detained?. . . 636 Q.18 Who can detain the goods and conveyances?. . . . . . . . . . . . . . . . . . . . . . . . 636 Q.19 How can the detained goods/conveyances be released?. . . . . . . . . . . . . . . . 636 Q.20 Whether proper officer can determine tax liability along with interest and penalty without giving a person reasonable opportunity of being heard? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 636 Q.21 What are the consequences of owner of goods failing to pay tax and penalty?. . . 637 69

GST Ready Reckoner in Q & A Format

Confiscation of Goods and conveyance and Levy of Penalty. . . . . . . . . . . . . . . . 637 Q.22 What is meant by ‘Confiscation’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637 Q.23 Under what circumstances, can goods be confiscated and penalty be levied?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637 Q.24 What fine and penalty will be levied on owner of goods or owner of conveyance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638 Q.25 How are confiscated goods dealt with? What are the rights of owner of confiscated goods? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638 Confiscation or Penalty not to interfere with Other Punishments. . . . . . . . . . . . 638 Q.26 Whether any penalty can be levied even when fine has already been paid on confiscation?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638 Cognizance of offences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639 Q.27 Whether any court can try offences under GST Act?. . . . . . . . . . . . . . . . . . 639 Presumption of Culpable mental state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639 Q.28 What is culpable mental state? Is it presumed to be in existence in offences requiring such state?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639 Relevancy of statements under certain circumstances . . . . . . . . . . . . . . . . . . . . . 639 Q.29 To what an extent the statement of any person would be considered in any inquiry or proceeding under the Act?. . . . . . . . . . . . . . . . . . . . . . . . . 639 Offences by Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640 Q.30 Who will be guilty in case of offence committed by a company under this Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640 Q.31 Who will be guilty in case of offence committed by a partnership firm, HUF, Trust under this Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640 Chapter 39

Search, Seizure and Summons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641

Search & Seizure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641 Q.1 What is meant by “search”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641 Q.2 What is meant by “seizure”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642 Q.3 What are the “powers of search and seizure” related to and what does it convey? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642 Q.4 What are the powers in relation to search and seizure in GST law?. . . . . . . 643 Q.5 What is meant by “reason to believe”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643 Q.6 Should “reasons to believe” be recorded to initiate/order search?. . . . . . . . 644 Q.7 What is meant by “secreted”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645 Q.8 What particulars should a search authorization (warrant) contain? . . . . . . . 645 Q.9 What are the safeguards available to the assessees for a proper and transparent conduct of search and seizure operation?. . . . . . . . . . . . . . . . . . 645 70

Table of contents

Q.10 Q.11 Q.12 Q.13 Q.14 Q.15 Q.16 Q.17 Q.18 Q.19 Q.20 Q.21 Q.22 Q.23 Q.24 Q.25 Q.26 Q.27 Q.28 Q.29 Q.30 Q.31

What places can be searched?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 646 What are the essential conditions for search and seizure? . . . . . . . . . . . . . . 646 What powers does the authorized officer has in relation to search and seizure?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 647 Under what situations, goods can be confiscated? . . . . . . . . . . . . . . . . . . . . 647 For how long seized items can be retained?. . . . . . . . . . . . . . . . . . . . . . . . . 647 Whether the person searched is entitled to copies of documents seized?. . . 647 When will the seized material be returned to the person searched?. . . . . . . 648 Within how such time documents etc not being relied upon should be returned?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 Does the officer has power to seal or break open door etc where access is denied?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 Whether the central/state government have any power to dispose off the seized material?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 Whether inventory in required to be drawn for items seized? . . . . . . . . . . . 649 In what situations, goods, articles etc be seized? . . . . . . . . . . . . . . . . . . . . . 649 Can an officer also purchase goods or services to check authenticity of invoices?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 649 How should authorisation for search or inspection be issued?. . . . . . . . . . . 649 In what manner goods, documents etc can be seized? . . . . . . . . . . . . . . . . . 650 What should be done when it is not practical to seize the goods? . . . . . . . . 650 What is the procedure for releasing the seized goods?. . . . . . . . . . . . . . . . . 650 What consequences would follow if goods provisionally released are not produced on demand ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651 How will the seizure of perishable and hazardous nature goods be dealt with?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651 Whether provisions of Code of Criminal Procedure, 1973 will apply to search cases also? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651 What are the guiding principles for conduct of search?. . . . . . . . . . . . . . . . 652 What would happen when search conducted is held to be illegal, ie without proper authority? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653

Summons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653 Q.32 What is meant by “summon”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 653 Q.33 What purpose does “summons” serve?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 654 Q.34 What are the powers under GST law to issue summons?. . . . . . . . . . . . . . . 654 Q.35 Summons are issued for production of documents etc. What does it imply?.654 Q.36 Summons are generally seen as a harsh measure causing stress and fear in the mind of person summoned. Should “summons” be resorted to in ordinary course of enquiry?. . . . . . . . . . . . . . . . . . . . . . . . . . . 654 71

GST Ready Reckoner in Q & A Format

Q.37 Q.38 Q.39 Q.40 Q.41 Q.42 Q.43 Q.44

Should summons be issued in writing only?. . . . . . . . . . . . . . . . . . . . . . . . . 656 Can the summons issued on the spot are valid? . . . . . . . . . . . . . . . . . . . . . . 656 What are the obligations of a person who has been issued and served with a summon?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656 What is nature of summon proceedings? . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 What are the consequences of non-appearance or not responding to summons?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 Whether there is any monetary penalty for non-responding to summons?. . 657 What are the other provisions of Indian Penal Code that may be relevant for the purpose of summoning enquiry?. . . . . . . . . . . . . . . . . . . . . 657 What course of action would the department adopt while taking action against the person summoned under sec 70 of the GST law? . . . . . . 658

Chapter 40 Arrest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659 Q.1 What is the objective of arrest provisions in tax law?. . . . . . . . . . . . . . . . . . 659 Provisions for arrests are used in exceptional circumstance and only with prior authorisation from the Commissioner.. . . . . . . . . . . . . . . . . . . . . . . . . 659 Q.2 What is meant by ‘arrest’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659 Q.3 What are the powers to arrest any person under the GST law? . . . . . . . . . . 660 Q.4 What is meant by ‘reasons to believe’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660 Q.5 Who can arrest any person under GST law?. . . . . . . . . . . . . . . . . . . . . . . . . 660 What are the offences punishable with ‘arrest ‘? . . . . . . . . . . . . . . . . . . . . . 660 Q.6 Q.7 What is the requirement for information of grounds of arrest?

Should the officer inform such grounds to the person being arrested?. . . . . 660 Q.8 What are two types of offences for ‘arrest’?. . . . . . . . . . . . . . . . . . . . . . . . . 661 Q.9 What is a cognizable offence?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 661 Q.10 What is meant by non-cognizable offence? . . . . . . . . . . . . . . . . . . . . . . . . . 662 Q.11 What is a ‘bailable offence’ and a ‘bail’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 662 Q.12 Can a person be released in case of non-cognizable offence and bailable offence?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662 Q.13 What are the safeguards provided under GST Act for a person who is placed under arrest?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663 Q.14 What are the rights of an arrested person? . . . . . . . . . . . . . . . . . . . . . . . . . . 663 Q.15 What are the guidelines or provisions to be observed for arrest?. . . . . . . . . 663 Q.16 What are the precautions and safe guards to be observed while arresting a person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664 Q.17 What are the principles/directions given by the Supreme Court in relation to arrest?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665

72

Table of contents

Chapter 41

Prosecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667

Prosecution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667 Q.1 What is meant by ‘prosecution’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 667 Q.2 What is meant by ‘offence’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 668 Q.3 What is meant by ‘conviction’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 668 Q.4 Who can be prosecuted under GST law? . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 What are the offences for which the offender can be punished and Q.5 prosecuted against?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669 Q.6 What are the punishments which can be awarded against the offences as mentioned in specified offences (see Q.No. 5 above)?. . . . . . . . 670 Is there any relief from prosecution against non-supply of Q.7 information or supply of false information?. . . . . . . . . . . . . . . . . . . . . . . . . 671 Q.8 What are the prosecution provisions in case of repeated offence(s)?. . . . . . 671 Q.9 What are cognizable and non-cognizable offences under GST?. . . . . . . . . . 671 Q.10 What are non-cognizable and non bailable offences under GST? . . . . . . . . 671 Q.11 Whether a person can be prosecuted without approval from a designated authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672 Q.12 What is the minimum punishment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672 Q.13 What is included in ‘tax’ for the limits of ‘tax’ evaded for prosecution under sec 132 of the GST Act, 2017? . . . . . . . . . . . . . . . . . . . . 672 Liability of officers and certain other persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . 672 Q.14 Whether any person who willfully discloses any information other than in execution of duties can be punished? If yes, what will be the punishment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672 Q.15 In what cases, prosecution of officers shall not be done?. . . . . . . . . . . . . . . 673 Cognizance of Offences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673 Q.16 What are cognizable offences and non-cognizable offences based on monetary limits?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673 Q.17 Who shall take cognizance of offences?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 673 Presumption of Culpable Mental State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 674 Q.18 Is ‘mens rea’ an essential condition for prosecution?. . . . . . . . . . . . . . . . . . 674 Q.19 What is meant by ‘culpable mental state’?. . . . . . . . . . . . . . . . . . . . . . . . . . 674 Q.20 In what situation, should the court presume ‘culpable mental state’?. . . . . . 675 Q.21 Whether opportunity is allowed to the accused to defend himself?. . . . . . . 675 Q.22 How and when will a fact be proved by court?. . . . . . . . . . . . . . . . . . . . . . . 675 Relevancy of Statement under certain Circumstances. . . . . . . . . . . . . . . . . . . . . 675 Q.23 What are the circumstances under which statements made/ recorded/signed by any person can be considered as relevant? . . . . . . . . . . 675 73

GST Ready Reckoner in Q & A Format

Q.24 Q.25

Can such statement be used against the person who made such statement?. 676 Can statement be used in proceedings, other than court, also?. . . . . . . . . . . 676

Offences by Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676 Q.26 What is meant by ‘company’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676 Q.27 Who is a ‘director’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676 Q.28 Can a company be proceeded against or prosecuted for any offence under the CGST/SGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677 Q.29 Who shall be held guilty and prosecuted in case of offences which are committed by a company?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677 Q.30 Who will be held guilty where someone else has consented or connived with the company for an offence committed by the company?. . . 677 Q.31 Who shall be held guilty and punishable where offence has been committed by a taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678 Q.32 In what situations, a person cannot be held to be liable to any punishment under sec 137?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 678 Chapter 42 Compounding of offences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679 Q.1 What is meant by ‘compounding’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679 Q.2 What types of offences can be compounded?. . . . . . . . . . . . . . . . . . . . . . . . 680 Q.3 What are the restrictions on compounding of offences or offences for which compounding is not available?. . . . . . . . . . . . . . . . . . . . . . . . . . . 680 Q.4 What amounts should be paid for compounding?. . . . . . . . . . . . . . . . . . . . . 682 What are the other conditions subject to which compounding of Q.5 offences is allowed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682 Q.6 Is there any monetary limit on amount for compounding of offences? . . . . 682 What does amount of ‘tax’ include?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683 Q.7 Q.8 Who will determine the compounding amount?. . . . . . . . . . . . . . . . . . . . . . 683 Q.9 What shall be the consequences of payment of compounding amount?. . . . 683 Q.10 Whether immunity granted under section 138(3) be withdrawn at any time in future?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684 Q.11 What is the procedure to be followed for getting compounding of offence done? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684 Chapter 43

Appeals and revision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687

Gist of appeal provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688 Appeal to appellate authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688 Revision by commissioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689 Appeal to appellate tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689 Appeals to high court and Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689 Q.1 What is meant by appellate authority? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690 74

Table of contents

Q.2 Q.3 Q.4

What is understood by concept of appeal?. . . . . . . . . . . . . . . . . . . . . . . . . . 690 How are appeals administered under GST regime? . . . . . . . . . . . . . . . . . . . 691 What is meant by ‘appellate tribunal’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691

Appeal to appellate authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691 Q.5 Who can file an appeal before appellate authority and against what?. . . . . . 691 Q.6 Whether all orders are appealable and assessee has a right to appeal?. . . . . 692 Q.7 Who is an adjudicating authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692 Q.8 What authorities shall not be considered as adjudicating authorities?. . . . . 692 Q.9 What is the time limit of filing appeal to appellate authority? . . . . . . . . . . . 692 Q.10 Can the delay in filing an appeal be condoned and period extended?. . . . . . 693 Q.11 Where Commissioner of CGST feels that the order passed is not legal and proper, whether he can revise the order on his own?. . . . . . . . . . . 693 Q.12 What are the powers of Commissioner for appeal to appellate authority?. . 693 Q.13 On what basis Commissioner can take such actions an aforesaid?. . . . . . . . 694 Q.14 What is the time limit for filing application or appeal before the appellate authority by the Commissioner? . . . . . . . . . . . . . . . . . . . . . . . . . . 694 Q.15 Can the application to appellate authority made under sec 107(2) be treated as an appeal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 Q.16 What is the manner of filing appeal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 Q.17 What is the manner of filing appeal before appellate authority?. . . . . . . . . . 694 Q.18 When does an appeal get filed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 695 Q.19 What is the manner of filing application (appeal) by Commissioner? . . . . . 695 Q.20 Whether appeal is required to be filed alongwith deposit?. . . . . . . . . . . . . . 695 Q.21 What is meant by ‘amount in dispute’ for the purpose of depositing the amount for filing appeal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696 Q.22 What is the consequence of pre-deposit of 10% of amount of tax disputed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696 Q.23 Whether opportunity of being heard (personal hearing) be allowed to the appellant?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696 Q.24 Whether adjournments for personal hearing be allowed?. . . . . . . . . . . . . . . 696 Q.25 Can any additional ground of appeal be pressed during the course of hearing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697 Q.26 In what manner, an order in appeal should be passed by the appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697 Q.27 What type of order should be issued by appellate authority?. . . . . . . . . . . . 698 Revisional Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698 Q.28 What is meant by Revisional Authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 698 Q.29 Can adjudication orders be revised?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699 75

GST Ready Reckoner in Q & A Format

Q.30 Q.31 Q.32

What are the powers of revision by the Commissioner?. . . . . . . . . . . . . . . . 699 In what situations, Commissioner cannot exercise revision powers?. . . . . . 699 Can revision be exercised on any point not covered in or raised in appeal filed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 Q.33 Whether revision order is an appealable order? . . . . . . . . . . . . . . . . . . . . . . 700 Q.34 Whether the period of stay/pendency of appeal shall be considered while counting three years?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 Constitution of appellate tribunal and benches thereof . . . . . . . . . . . . . . . . . . 700 Q.35 Who will constitute the goods and service tax appellate tribunal?. . . . . . . . 700 Q.36 What are the unique features of appellate tribunal? . . . . . . . . . . . . . . . . . . . 701 Q.37 Where will national bench be located and how will it be constituted?. . . . . 701 Q.38 How will regional benches of appellate tribunal be constituted?. . . . . . . . . 701 Q.39 What will be the jurisdiction of national and regional benches, state benches and area benches of appellate tribunal?. . . . . . . . . . . . . . . . . . . . . . 701 Q.40 How is the business at Tribunal distributed?. . . . . . . . . . . . . . . . . . . . . . . . . 702 Q.41 What will be the membership at State bench and Area bench of Tribunal?. 702 Q.42 How appeals will be heard in absence of a member in any bench? . . . . . . . 702 Q.43 What is the provision for hearing by a single member bench?. . . . . . . . . . . 702 Q.44 How will the appeals be decided in case of difference of opinion between members of bench?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703 Q.45 Can be proceedings of Tribunal be rendered invalid due to vacancy or defect in constitution of Tribunal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703 President & members of Appellate Tribunal, their qualifications, appointment, conditions of service etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703 Q.46 What shall be eligibility criteria for appointment of president, judicial member asked technical members of Appellate Tribunal?. . . . . . . . 703 Q.47 How will president and judicial members of national bench and regional benches be appointed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704 Q.48 How will technical members of Tribunal be appointed?. . . . . . . . . . . . . . . . 704 Q.49 What shall be the tenure of office for various positions of appellate Tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705 Q.50 What are the disqualifications for removal of president/members of Appellate Tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705 Q.51 What are the restrictions imposed upon the president or members of Tribunal on ceasing from holding such office?. . . . . . . . . . . . . . . . . . . . . . . 706 Procedure before appellate tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 706 Q.52 How does the appellate tribunal function? . . . . . . . . . . . . . . . . . . . . . . . . . . 706 Q.53 What would happen if the bench is equally divided, i.e., there is no majority?. . . 706 Q.54 How will appellate tribunal regulate its functioning?. . . . . . . . . . . . . . . . . . 706

76

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Q.55 Q.56 Q.57 Q.58

What are the powers of appellate tribunal for discharging its functions?. . . 707 What are the principles to be followed by Tribunal in any proceeding before it?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 707 How will the orders of Appellate Tribunal be enforced? . . . . . . . . . . . . . . . 707 Whether appellate tribunal proceedings are judicial proceedings?. . . . . . . . 708

Appeals to appellate tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 Q.59 What type of appeals could be filed to appellate tribunal under sec 112? . . 708 Q.60 In there any monetary limit for admitting appeals by the appellate tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 708 Q.61 What is the time period for filing appeal?. . . . . . . . . . . . . . . . . . . . . . . . . . . 708 Q.62 How can a Commissioner file application or appeal before appellate Commissioner?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 709

Q.63 Q.64 Q.65 Q.66 Q.67 Q.68 Q.69 Q.70 Q.71 Q.72 Q.73 Q.74 Q.75 Q.76

Whether application by authorised officer in terms of sec 112(3) be treated as appeal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 709 When and by whom cross objections are required to be filed?. . . . . . . . . . . 709 Whether delay in filing appeal or cross objections be condoned by the tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 709 How appeal has to be filed and whether any fee is required to be filed with appeal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 How should cross objection be filed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 What documents should be submitted?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 What is the manner of making application to the appellate Tribunal

by Department?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710 Whether pre-deposit is required to be made alongwith appeal?. . . . . . . . . . 711 What does ‘amount in dispute’ mean? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711 What are the consequences of pre-deposit? . . . . . . . . . . . . . . . . . . . . . . . . . 711 Whether the pre-deposit shall apply to cross objections also?. . . . . . . . . . . 711 Whether fee shall be payable for miscellaneous application filed before the tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711 Whether fee shall be payable where application is filed by Department?. . . 712 What shall be fee payable for different applications before Appellate Tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712

Orders of appellate tribunal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712 Q.77 In what manner, appellate tribunal shall pass orders?. . . . . . . . . . . . . . . . . . 712 Q.78 Whether appellate tribunal can grant time/adjournments while hearing appeals? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713 Q.79 Can the appellate tribunal amend or rectify its orders?. . . . . . . . . . . . . . . . . 713 Q.80 Can rectified order be rectified again?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 713 Q.81 What is the time frame for deciding the appeal?. . . . . . . . . . . . . . . . . . . . . . 713 77

GST Ready Reckoner in Q & A Format

Q.82 How shall the tribunal distribute the copies of order passed by it?. . . . . . . . 714 Q.83 What shall the jurisdictional Commissioner do on receipt of order? . . . . . . 714 Q.84 Whether the order passed by the appellate tribunal is final?. . . . . . . . . . . . . 714 Financial and Administrative powers of President. . . . . . . . . . . . . . . . . . . . . . 714 Q.85 What financial and administrative powers can be exercised by the President of Tribunal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714 Q.86 Can the President delegate his powers? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714 Interest on refund of amount paid for admission of appeal. . . . . . . . . . . . . . . 715 Q.87 Whether interest will be payable on delayed refund of pre-deposit made by the appellant under sec 107 or 112 of the GST Act, 2017? . . . . . . 715 Q.88 What shall be the rate of interest payable on delayed refund of predeposit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 Appearance by authorized representative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 Appeal to high court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 Q.89 What type of orders can be appealed to the high court?. . . . . . . . . . . . . . . . 715 Q.90 What are the procedural requirements for filing an appeal to high court? . . 716 Q.91 What shall high court do in respect of question of law and determination of any issue?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716 Q.92 What is the manner of filing appeal to high court?. . . . . . . . . . . . . . . . . . . . 717 Q.93 What is jurisdictional officer expected to do on confirmation of demand by courts?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Q.94 Whether provisions of Code of Civil Procedure, 1908 will apply to high court appeals?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Appeal to Supreme Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Q.95 Against what orders or judgments, an appeal would lie before the Supreme court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Q.96 Whether the provisions of Code of Civil Procedure, 1908 apply to appeals before Supreme court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Q.97 Who shall bear the costs of appeal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718 Q.98 How shall the order of Supreme Court be given effect where it results in variation or reversal of order in appeal? . . . . . . . . . . . . . . . . . . . . 718 Sums due to be paid notwithstanding appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . 718 Q.99 Whether sums due to the department as per order of appellate tribunal are payable despite appeal being preferred to high court or Supreme Court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718 Q.100 Is there a provision for pre-deposit in such cases?. . . . . . . . . . . . . . . . . . . . 718 Appeal not be filed in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719 Q.101 Whether there can be any monetary ceiling for filing appeals? . . . . . . . . . . 719 Q.102 Does non-filing of appeal by officer preclude him from filing appeals in other similar cases? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719 78

Table of contents

Q.103 Where appeal has not been filed, can the other party contend that he has been acquiesced on disputed issue? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719 Q.104 Whether non-filing be considered as precedent?. . . . . . . . . . . . . . . . . . . . . . 719 Non-appealable decisions and orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720 Q.105 What are non-appealable decisions/orders under GST law?. . . . . . . . . . . . . 720 Q.106 Since sec 121 stipulates that certain orders/decisions are nonappealable, what is the remedy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720 Chapter 44

Advance ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 Q.1 What is meant by ‘advance ruling’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 Q.2 What is meant by ‘applicant’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 723 Q.3 What is meant by ‘application’ for the purpose of advance ruling?. . . . . . . 724 Q.4 What is meant by ‘authority’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 724 Q.5 What is meant by ‘appellate authority’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 724 Q.6 What are the objectives of having a mechanism of advance ruling? . . . . . . 724 Q.7 What are the advantages of advance ruling to a taxable person under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 724 Authority for advance ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725 Q.8 How will be Authority for Advance Ruling (AAR) constituted?. . . . . . . . . 725 Q.9 What is Authority for Advance Ruling expected to do?. . . . . . . . . . . . . . . . 725 Q.10 Who can appoint members of the authority?. . . . . . . . . . . . . . . . . . . . . . . . . 725 Q.11 What are the qualifications and eligibility conditions etc of the members?. . . 725 Q.12 What will be the jurisdiction of the authority?. . . . . . . . . . . . . . . . . . . . . . . 726 Appellate authority for advance ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726 Q.13 What is meant by appellate authority for advance ruling (AAAR)?. . . . . . . 726 Q.14 How will be the appellate authority for advance rulings (AAAR) constituted?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726 Application for advance ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726 Q.15 Who can make an application for advance ruling and what is the manner of making application?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726 Q.16 What are the question(s) on which advance ruling can be sought?. . . . . . . . 727 Q.17 Whether application is required to be made to seek advance ruling?. . . . . . 727 Q.18 Whether application for advance ruling is to be accepted in all cases ?. . . . 727 Q.19 What is the form and manner of making an application for seeking advance ruling?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 Q.20 What contents are required to be filled in Form ARA 01? . . . . . . . . . . . . . . 728 Q.21 Is it necessary for a person seeking advance ruling to be registered?. . . . . 729 Q.22 How many AAR and AAAR will be constituted under GST? . . . . . . . . . . . 729 79

GST Ready Reckoner in Q & A Format

Procedure on receipt of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 Q.23 What is the procedure for obtaining advance ruling with regard to supply of goods and/or services, made by an applicant to authority for advance ruling?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 Q.24 Under what circumstances, application for advance ruling shall not be considered by the authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 730 Q.25 Whether authority can reject the application made by an applicant without giving an opportunity of being heard?. . . . . . . . . . . . . . . . . . . . . . . 730 Q.26 Whether authority is required to intimate the reasons for rejection of application to the applicant?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Q.27 Can an advance ruling be given orally? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Q.28 When can a reference be made to the appellate authority for advance ruling?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Q.29 What is the time limit of pronouncing advance ruling by the authority or appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Q.30 How shall advance ruling pronounced by the authority or appellate authority be sent to the applicant and the concerned officers?. . . . . . . . . . . 731 Q.31 How can a certified copy of order be issued?. . . . . . . . . . . . . . . . . . . . . . . . 731 Q.32 Whether the advance rulings have precedent value of a judgment of the High Court or the Supreme Court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732 Appeal to the appellate authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Q.33 Who can file an appeal before the appellate authority for advance ruling?. . . 733 Q.34 What is the time limit for filing an appeal before the appellate authority for advance ruling? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Q.35 Can appellate authority condone the delay in filing appeal?. . . . . . . . . . . . . 733 Q.36 What is meant by ‘concerned officer’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Q.37 Can a person other than departmental officer or applicant challenge the ruling before the appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Q.38 Whether appeal can be made to appellate authority in respect of question(s) which were not stated in the original application made by the applicant to the authority? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 Q.39 How should an appeal be made to AAAR?. . . . . . . . . . . . . . . . . . . . . . . . . . 734 Q.40 How shall the appeals be verified and authenticated?. . . . . . . . . . . . . . . . . . 734 Orders of the appellate authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734 Q.41 Whether appellate authority should provide an opportunity of hearing before passing an order against the advance ruling of the authority appealed against under sec 100? . . . . . . . . . . . . . . . . . . . . . . . . . . 734 Q.42 What is the time limit for passing of an order by the appellate authority for advance ruling? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 734 80

Table of contents

Q.43 Q.44 Q.45

Under what circumstances, advance ruling by appellate authority cannot be issued in respect of the question covered under the appeal? . . . . 735 How shall advance ruling pronounced be sent to the applicant and the officers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735 How shall the order to certified and to whom it shall be sent?. . . . . . . . . . . 735

Rectification of advance ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735 Q.46 Whether any advance ruling order may be rectified by the authority or appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735 Q.47 What is the time limit for amendment/rectification of advance ruling?. . . . 736 Q.48 Under what circumstances, a notice is required to be issued to the applicant or appellant, as the case may be, before rectification of an advance ruling order? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736 Q.49 Whether authority or appellate authority can amend or rectify substantial part of order?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736 Applicability of advance ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736 Q.50 On whom, advance ruling pronounced by the authority or appellate authority shall be binding? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736 Q.51 Whether advance ruling is applicable to similarly placed person who is residing in the same state in which applicant is residing?. . . . . . . . . 737 Q.52 Whether advance ruling pronounced by the authority or appellate authority shall be binding in case where law, facts or circumstances have changed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737 Q.53 What is the time period for applicability of advance ruling? . . . . . . . . . . . . 737 Advance ruling to be void in certain circumstances . . . . . . . . . . . . . . . . . . . . . . . 737 Q.54 Can an advance ruling given be nullified? . . . . . . . . . . . . . . . . . . . . . . . . . . 737 Q.55 Under what circumstances advance ruling may be declared as void? . . . . . 737 Q.56 What are the consequences in case where advance ruling is declared as void ab initio?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 738 Q.57 When can an order declaring advance ruling to be void, be passed by the authority or appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 738 Q.58 Whether a copy of order under sec 104(1) is required to be sent to applicant or prescribed officer?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 738 Powers of the authority and appellate authority. . . . . . . . . . . . . . . . . . . . . . . . . . 738 Q.59 What are the powers vested with the authority and the appellate authority?.738 Q.60 Whether the authority or the appellate authority shall be deemed to be a civil court?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 738 Q.61 Whether all the proceedings before the authority shall be deemed to be a judicial proceedings?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739 Q.62 What are powers of AAR and AAAR?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739 81

GST Ready Reckoner in Q & A Format

Procedure of the authority and the appellate authority. . . . . . . . . . . . . . . . . . . . 739 Q.63 Who shall determine the procedure to be followed by the authority or the appellate authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 739 Chapter 45

Information returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741

Penalty for failure to furnish information return . . . . . . . . . . . . . . . . . . . . . . . . . 741 Q.1 What is the penalty for failure to furnish information return? . . . . . . . . . . . 741 Q.2 Who will levy the penalty?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741 What is the maximum penalty that can be imposed under sec 123 of Q.3 the Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 Fine for failure to furnish statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 Q.4 Whether any fine can be levied for failure to furnish statistics?. . . . . . . . . . 742 Obligation to furnish information return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 Q.5 What is the meaning of ‘information return’ in GST? In what way it can be useful to the tax authorities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 Q.6 Who is required to file information return?. . . . . . . . . . . . . . . . . . . . . . . . . . 743 Q.7 What information is kept by these persons due to which they have been made liable for filing of information return? . . . . . . . . . . . . . . . . . . . . 744 Q.8 What would be the consequences where information supplied in the return is found to be defective?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 744 Q.9 What is the time limit allowed for rectification of information furnished?. . . 744 Q.10 What would be the consequences of non-rectifying the defects when asked for by specified authority?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745 Q.11 What would be the consequences of non-submission of information return?. . . . 745 Power to collect statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745 Q.12 What kind of statistics may be collected by the board/commissioner under GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745 Q.13 What is the manner of collecting statistics in relation to administration of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745 Q.14 What particulars should be contained in the notice calling for the information? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746 Bar on disclosure of information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746 Q.15 Can personal or confidential tax information be sought for public disclosure?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746 Q.16 Who can have access to information collected under the provisions of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 746 Q.17 In what circumstances, bar on disclosure of information shall not apply?. . 746 Q.18 What are the consequences of disclosure of information without proper sanction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747 82

Table of contents

Q.19 Q.20

Can prosecution be instituted without sanction of government? . . . . . . . . . 747 What kind of information can be published under this Act?. . . . . . . . . . . . . 747

Persons deemed to be public servants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747 Q.21 Who is a public servant under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747

Q.22

Who are deemed to be public servants under IPC?. . . . . . . . . . . . . . . . . 747

Disclosure of information by a public servant. . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 Q.23 What shall be treated as confidential information in GST?. . . . . . . . . . . . . . 748 Q.24 Can courts require GST officers to produce confidential information before it?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 Q.25 What are the consequences of disclosure of information by GST officers without sanction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 Q.26 To whom the confidential information can be disclosed?. . . . . . . . . . . . . . . 749 Publication of information respecting persons in certain cases. . . . . . . . . . . . . . 750 Q.27 Under what circumstances, the information of personal nature can be published?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 Q.28 When can information relating to penalty imposed under the Act be published?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750 Q.29 Can the names of individuals charged with punishment also be published? . . . 750 Chapter 46 GST Practitioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751 Q.1 Who is GST Practitioner (GSTP)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751 Q.2 Who can authorise a person to act as a GST Practitioner on his behalf? . . . 752 Q.3 How can a registered person shall authorise a person to act as a GST Practitioner? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752 Q.4 For approval of GST practitioner (GSTP), what criteria does sec 48 provide for?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752 Q.5 What is the criteria to be fulfilled to become a GST Practitioner?. . . . . . . . 752 Q.6 Are there any preconditions before one can enroll on the GST Portal as a GST Practitioner? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753 Q.7 In addition to above, what are conditions that needs to be satisfied by a person to become a GST Practitioner? . . . . . . . . . . . . . . . . . . . . . . . . . 753 Q.8 What is the procedure to apply for enrolment as a GST Practitioner?. . . . . 754 Q.9 What is the validity of enrolment made in Form GST PCT-1 by a person for becoming a GST Practitioner?. . . . . . . . . . . . . . . . . . . . . . . . . . . 754 Q.10 Is enrolment under IGST rules mandatory? . . . . . . . . . . . . . . . . . . . . . . . . . 755 Q.11 Whether production of authorisation a must before any GST authority?. . . 755 Q.12 Whether a show cause notice can be issued against a GST Practitioner?. . . 755 Q.13 What are the functions which can be performed by a GST Practitioner?. . . 755 Q.14 How shall the GST Practitioner prepare and authenticate the statements?. . 756 83

GST Ready Reckoner in Q & A Format

Q.15 Q.16 Q.17 Q.18 Q.19 Q.20

Who shall be responsible for the correctness of the particulars filed

by GST practitioner?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756 What is meant by a deemed confirmation in relation to statements furnished by GST practitioner?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756 Whether a person (GST Practitioner) needs to register separately in each State and Union Territory under GST?. . . . . . . . . . . . . . . . . . . . . . . . . 756 Can a GST Practitioner also act as an Authorised representative?. . . . . . . . 756 Will tax payer be able to change the GST Practitioner once chosen in above mentioned facility?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 757 Will GSTN provide separate user ID and password for GST Practitioner to enable them to work on behalf of their customers (Taxpayers) without requiring user ID and password of taxpayers, as happens today?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 757

Chapter 47 Authorised Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 Q.1 Who is an ‘authorised representative’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 Q.2 Who can appear by an authorised representative? . . . . . . . . . . . . . . . . . . . . 759 Q.3 When can a person not appoint an authorised representative?. . . . . . . . . . . 760 Q.4 Before what authorities can an authorised representative appear or represent?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760 Who can be appointed to act as an authorised representative?. . . . . . . . . . . 760 Q.5 Q.6 Whether former government officers (gazetted) working in indirect tax departments, can be appointed as an authorised representative? . . . . . . 761 Q.7 Who are not qualified to represent as an authorised representative? . . . . . . 761 Q.8 Whether a person disqualified under any SGST Act/UTGST Act/be disqualified for GST also?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 Q.9 What are the consequences an authorised representative shall face if he is found guilty of any misconduct?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 762 Q.10 What is the difference between GST practitioner and an authorised representative?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762 Q.11 Can a GST practitioner also act as an authorised representative?. . . . . . . . . 762 Chapter 48

Transitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763

Transitional Provisions at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763 Q.1 What is the meaning of ‘Appointed day’?. . . . . . . . . . . . . . . . . . . . . . . . . . . 770 Q.2 What is the meaning of ‘existing law’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 Q.3 Where the assessee is already registered in Central Excise/Service Tax/State VAT Act, whether such assessee require another/ fresh registration under GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771

84

Table of contents

Q.4

Q.5 Q.6 Q.7

Q.8

Q.9 Q.10 Q.11 Q.12 Q.13 Q.14

Q.15 Q.16 Q.17 Q.18 Q.19

What is the maximum time limit allowed to assessee who is already registered for making application in Form GST REG – 26? Can this time limit be extended?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 What are the consequences of such assessee failing to file Form GST REG – 26 within 3 months?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 772 What is the mandatory requirement for automatic migration of existing assessee Excise/Service Tax/ VAT number to the GST system?. . . 772 The present turnover of an existing assessee is INR 10 lakhs. He is registered with VAT Department but owing to his small profits, he doesn’t file Income tax returns. In such a case, whether his VAT registration will be automatically transferred to GST network? If not, than what would be his status in GST? . . . . . . . . . . . . . . . . . . . . . . . . . 772 The assessee is registered taxable person under the VAT laws having a turnover of 15 lakhs. Having known that he will not be liable for registration under GST law due to threshold limit and may not like to continue his registration, what is the course of action for him? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 772 What is the procedure for migration of persons who were already registered under existing laws to the GST law? . . . . . . . . . . . . . . . . . . . . . . 773 Whether the person registered as input service distributor (ISD) will also follow the same procedure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 773 When will provisional certificate be issued to existing registered taxable persons? When will they get final registration certificate?. . . . . . . . 773 Whether there is any concept of ‘deemed enrolment’ in GST? Can the application form for enrolment be rejected?. . . . . . . . . . . . . . . . . . . . . . 774 What information should be readily available with the person before he enrolls with GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774 What user name and password will be required to log in common portal in GST? Can the person himself create his own user id and password? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775 Who can be the primary authorised signatory?. . . . . . . . . . . . . . . . . . . . . . . 775 What is the importance of ‘electronic credit ledger’ in relation to input tax credit/ CENVAT etc.?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Whether balance of CENVAT credit in Central Excise/Service Tax be allowed to be carried forward in GST? . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Whether balance of Input tax credit in State VAT to be allowed to be carried forward in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Whether registered taxable person is allowed to take CENVAT credit on items on which credit was not allowed in existing tax laws but credit is allowed in CGST/SGST law?. . . . . . . . . . . . . . . . . . . . . . . . . . 777 85

GST Ready Reckoner in Q & A Format

Q.20

Q.21

Q.22 Q.23

Q.24

Q.25

Q.26 Q.27

Q.28 Q.29 Q.30

Q.31

Q.32

Q.33

Q.34 86

Whether amount of CENVAT credit taken can be recovered as an arrear of tax from registered taxable person in case where it is found to be recoverable under CGST/SGST law? . . . . . . . . . . . . . . . . . . . . 778 Will Education Cess and Secondary and Higher Education Cess which is being carried forward as per the return, be allowed to be carried forward as CGST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 778 Will there be any differential treatment of Swachh Bharat Cess and Krishi Kalyan cess w.r.t. carry forward as CGST?. . . . . . . . . . . . . . . . . . . . 778 If the amount of duty, tax or cess carried forward as per the accounts is different from the return, which amount will be allowed to be carried forward?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 Where the Capital goods used by registered tax person were eligible for CENVAT credit/input tax credit in installments in Central Excise/Service Tax/VAT law, what would happen to such unavailed credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 What is the status of CENVAT credit in respect of items invoiced before the appointed day but received by the taxable person after the appointed day?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779 What amount of CENVAT credit/input tax credit will be allowed to be carried forward? Are there any conditions attached to it? . . . . . . . . . . . . 780 Where a taxable person was not liable to be registered under existing law but may be liable to be registered under GST, whether such person will be eligible for any opening credit in GST regime? . . . . . . 780 Can unavailed input tax credit on capital goods be taken in GST law if the same was not taken in the existing law?. . . . . . . . . . . . . . . . . . . . 780 What is meant by ‘unavailed CENVAT credit’?. . . . . . . . . . . . . . . . . . . . . . 780 A registered person was dealing in exempted goods under central excise but in GST regime, his product is a taxable product. Would such person be eligible for credit of items lying in his stocks?. . . . . . . . . . . 781 Would a taxable person not registered/ registered person in existing law dealing in exempted goods would get credit? If yes, what are the conditions for the same? Would some conditions be checked for his eligibility of credit in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 781 Where a registered taxable person paying tax in composition scheme under the existing Acts, whether such person will be eligible for opening input credit on his stocks in GST?. . . . . . . . . . . . . . . . 781 Would a taxable person paying tax as composition levy in existing law will get unconditional credit? If no, what are the conditions for eligibility of credit in GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 What could be eligible taxes under the provisions of the GST Act?. . . . . . . 782

Table of contents

Q.35

Q.36 Q.37 Q.38

Q.39 Q.40

Q.41

Q.42

Q.43

Q.44

Q.45

Q.46

Q.47

Q.48

There may be continuing disputes on eligibility of CENVAT Credit/ input tax credit under the existing law? Whether such disputed amount will also be allowed to be carried forward?. . . . . . . . . . . . . . . . . . . 782 What, if, some dispute is decided against the registered person and he is required to reverse the credit amount?. . . . . . . . . . . . . . . . . . . . . . . . . 783 What will happen if the inputs, which are intended for use for making taxable supplies are ultimately used for exempt supplies?. . . . . . . . 783 Post GST implementation, what would be the tax implication where duty paid goods are returned by the purchaser of such goods to the seller of such goods? Would it make a difference in case the person returning the goods is a registered taxable person?. . . . . . . . . . . . . . . . . . . . 783 Whether a taxable person shall be entitled to take input tax credit of GST paid on goods received back by him?. . . . . . . . . . . . . . . . . . . . . . . . . . 784 Where any inputs received in factory were removed for job work after complying with provisions under existing law, what would be tax implication when these are returned by job worker in GST regime?. . . 784 Where semi-finished goods were removed for further processing after complying with provisions under existing law, what would be tax implication when these are returned by job worker in GST regime?. . . 784 Where finished goods were removed for tests or such other process after complying with provisions under existing law, what would be tax implication when these finished goods are returned by job worker in GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785 There could be cases of price revisions in respect of goods/services supplied before the appointed day. How would these revisions be dealt with under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786 Any refund claims in respect of tax/duty and interest were pending for disposal on appointed day. How will these claims be processed in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786 Where some proceedings in respect of CENVAT credit were pending for disposal on appointed day, how will result of these proceedings be effected in GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 Where some proceedings in respect of output tax liability were pending for disposal on appointed day, how will result of these proceedings be effected dealt in GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 Assessment or Adjudication proceedings of period before the appointed day may result in refund or demand of tax. After the appointed day, how will these demands and refunds of tax be dealt with?. . 787 In case revision is carried out of returns filed under the existing law, how will amount recoverable or refundable on account of such revision be dealt with under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788 87

GST Ready Reckoner in Q & A Format

Q.49

Q.50 Q.51

Q.52

Where supply of goods and/or services have been made under GST in respect of which payment was received before appointed day, what taxes will be chargeable on such supplies? . . . . . . . . . . . . . . . . . . . . . 788 How will ISD distribute credit of services received prior to appointed day? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789 Where goods were sent for approval basis before the appointed day but was rejected after the appointed day, what will be tax liability under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789 Where on transactions of sale of goods, TDS was required to be deducted under existing law but payment of said sale is made after the appointed day, what would be its treatment under the GST law?. . . . . . 789

Chapter 49

Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791

Presumption as to Documents in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 Q.1 What is meant by ‘document’?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 Q.2 What is the meaning of ‘presumption’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 Q.3 Can the documents produced or seized from a person be denied of its truth, in case they are brought in a Court of law as evidence?. . . . . . . . . 792 Admissibility of Micro Films, Facsimile Copies of Documents and Computer Printouts as Documents and as Evidence. . . . . . . . . . . . . . . . . . . . . . . 793 What is meant by Micro Films, Facsimile Copies of Documents Q.4 and Computer Printouts?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793 Q.5 Under what circumstances, the micro films, facsimile copies of documents and computer printouts can be admitted as evidence?. . . . . . . . 793 Q.6 When a certificate can be considered as evidence for the purpose of proceedings under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793 Deemed Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 Q.7 What is meant by deemed export? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 Special procedure for certain processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 Q.8 Is there any special category of persons enjoying special simplified procedures?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 Power to take samples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 Can an officer under GST draw samples from the possession of a Q.9 taxable person? If yes, under whose authority? . . . . . . . . . . . . . . . . . . . . . . 794 Burden of Proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795 Q.10 The burden of prove of any claim or input credit is on whom? . . . . . . . . . . 795 Assessments Proceedings, etc. not to be invalid on certain Grounds. . . . . . . . . . 795 Q.11 Whether any proceedings done under the Act can be declared invalid because of some mistakes or omission?. . . . . . . . . . . . . . . . . . . . . . 795 88

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Q.12

Can any notice, order or communication be questioned for any mistake, omission or defect in it after acting upon on such notice?. . . . . . . 795

Rectification of Mistakes or Errors apparent from Record. . . . . . . . . . . . . . . . . 795 Q.13 What is the meaning of ‘mistake apparent from record’?. . . . . . . . . . . . . . . 795 Q.14 How can an apparent mistakes from record be rectified under the GST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796 Q.15 What is the time limit for rectification of any mistake/error apparent from record? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796 Q.16 Is there any maximum period allowed for rectification of mistake?. . . . . . . 796 Q.17 Can any rectification change be done under sec 161 which has effect of increasing the liability of taxpayer?. . . . . . . . . . . . . . . . . . . . . . . . 797 Q.18 Can rectification be made in substantive portion of document while rectifying error under sec 161?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797 Bar of Jurisdiction of Civil Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797 Q.19 Can any matter relating to GST be dealt with or decided by Civil Courts?. 797 Levy of Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797 Q.20 Can some fee be levied for issuance of a copy of the order or document?. . 797 Power of Central (or State ) Government to make Rules. . . . . . . . . . . . . . . . . . . 798 Q.21 How will rules be made for the operation of GST? . . . . . . . . . . . . . . . . . . . 798 Q.22 Whether Central or State Government can make any rules which are made effective from a retrospective date which is earlier than the date on which provisions of the GST Act come into force?. . . . . . . . . . 798 Q.23 Can Government provide for penalty for breach of rules?. . . . . . . . . . . . . . 798 Laying of Rules, regulations and notification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798 Q.24 What is the role of Parliament or State assembly in respect of modification of rule, notification?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798 General power to make Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Q.25 What are the general powers to make regulations under GST? . . . . . . . . . . 799 Delegation of Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Q.26 Can a Competent Authority under the Act delegate his powers? . . . . . . . . . 799 Instructions to GST officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Q.27 Can competent authority under the Act give instructions to other GST officers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Service of Notice in certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Q.28 What are the various methods of service of documents under the Act or rules? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 Q.29 When will the order etc. be deemed to have been served?. . . . . . . . . . . . . . 800

89

GST Ready Reckoner in Q & A Format

Q.30

When any decision, order, summons, notice or any other communication is deemed to be served where such communication is sent by registered post or speed post?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800

Rounding off of Tax etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 Q.31 To what extent rounding off of any amount in GST will be allowed? . . . . . 800 Removal of Difficulties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 Q.32 Who can remove difficulty in implementation of provisions under the Act?.801 Q.33 What is the time limit of giving order for removing of difficulties under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 Q.34 Whether it is necessary that every order made in respect of removal of difficulties shall be furnished before the Parliament or State Legislature?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 Repeal and Saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 Q.35 On commencement of the GST Act, whether Central Excise Act or State VAT Acts remain on Statute books?. . . . . . . . . . . . . . . . . . . . . . . . . . . 801 Q.36 What are the existing laws which will be repealed on appointed day? What effect will it have on existing continuing issues?. . . . . . . . . . . . 802 PART C – INTEGRATED GST Chapter 50 Levy and collection of IGST (Charging provisions). . . . . . . . . . . 803 What is meant by ‘Integrated Tax’ (IGST)? . . . . . . . . . . . . . . . . . . . . . . . . . 803 Q.1 Q.2 What is the need for bringing IGST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804 Q.3 What is meant by territory of ‘India’ for the purpose of IGST?. . . . . . . . . . 804 Q.4 What is meant by ‘import of goods’ into India?. . . . . . . . . . . . . . . . . . . . . . 804 Q.5 How will import of goods be charged to tax under IGST?. . . . . . . . . . . . . . 804 How would IGST be apportioned or passed on to the relevant state Q.6 in case of goods being imported by the final consumers?. . . . . . . . . . . . . . . 805 Q.7 What is meant by ‘import of services’ in GST? . . . . . . . . . . . . . . . . . . . . . . 805 Q.8 What is meant by ‘export of goods’ in GST?. . . . . . . . . . . . . . . . . . . . . . . . 805 Q.9 What is meant by ‘export of services’ in GST?. . . . . . . . . . . . . . . . . . . . . . . 805 Q.10 What does ‘supply’ mean for IGST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806 Q.11 On what supplies IGST will be levied and it shall be collected by whom?. . . 806 Q.12 What is the charging provision for levy of IGST? . . . . . . . . . . . . . . . . . . . . 806 Q.13 Who will be responsible to levy and pay IGST to the government?. . . . . . . 807 Q.14 Whether there is any threshold exemption limit in IGST?. . . . . . . . . . . . . . 807 Q.15 Is IGST levied on petroleum products? If not, from when it may be applicable?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807 Q.16 How IGST on goods imported into India is taxed?. . . . . . . . . . . . . . . . . . . . 807 90

Table of contents

Q.17 Q.18 Q.19 Q.20 Q.21 Q.22

There are reverse charge provisions in GST law. Will these provisions be applicable to IGST also?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807 How transactions or supplies by an unregistered person be taxed? . . . . . . . 808 How will IGST be levied and charged on electronic commerce supplies?. . 808 How exemptions shall be provided in IGST?. . . . . . . . . . . . . . . . . . . . . . . . 808 How are exemptions governed in IGST? . . . . . . . . . . . . . . . . . . . . . . . . . . . 809 When an exemption is granted, what should a registered person do?. . . . . . 809

Chapter 51 Nature of supplies (Inter-state supply of goods and services). . . 811 Q.1 What is the meaning of ‘government’ for the purpose of IGST?. . . . . . . . . 811 Q.2 What is the meaning and scope of ‘central government’? . . . . . . . . . . . . . . 811 Q.3 What shall ‘government’ exclude? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812 Q.4 When will supply of goods be considered to be made in inter-State trade and commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813 When will supply of services be considered to be made in the Q.5 course of inter-State trade and commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . 813 Q.6 Where a person say, from Gujarat is providing service to customer in Maharashtra but outsources the work to a service provider in Maharashtra, what tax will be charged?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 814 Q.7 How GST will be levied in case where a journey ticket is booked in India but the place of boarding is outside India?. . . . . . . . . . . . . . . . . . . . . . 814 Q.8 How will the goods supplied into territory of India be treated till they cross custom frontiers of India? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814 Q.9 What shall be the tax treatment in case of high sea sales? . . . . . . . . . . . . . . 814 Q.10 What will be the nature of supply of import of services?. . . . . . . . . . . . . . . 815 Q.11 In what specific situation, supplies shall be treated as inter-state supplies? . . 815 Q.12 What is meant by custom frontiers of India? . . . . . . . . . . . . . . . . . . . . . . . . 815 Q.13 When will supply of goods be considered to be made in the course of intra-State trade and commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 Q.14 When will supply of services be considered to be made in the course of intra-State trade and commerce?. . . . . . . . . . . . . . . . . . . . . . . . . . 816 Q.15 What will be the status of supply of goods/services where the supply is effected from one city to another city but in the same state (say, from Noida to Lucknow)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816 Q.16 The supply of goods within same state needs to pass through another state, like in a situation where the supply of goods from Gurgaon in Haryana is to be made to Faridabad in Haryana need to pass through Delhi. What will be the status of such supply? . . . . . . . . . . . . 817 Q.17 What will be the nature of supply of services to or from a Special Economic Zone?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817 91

GST Ready Reckoner in Q & A Format

Q.18 Q.19

What are the exclusions in case of supply of goods to be treated as intra-state supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817 How will supplies in territorial waters be treated?. . . . . . . . . . . . . . . . . . . . 817

Chapter 52

Exports, Imports & Zero Rated Supplies . . . . . . . . . . . . . . . . . . . 819

GST Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819 IGST Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819 Q.1 What is meant by ‘deemed exports’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819 Q.2 What is meant by export of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820 What is meant by export of services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820 Q.3 Q.4 Which establishments shall be treated as establishments of distinct persons?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821 Q.5 How are imports/exports be taxed under GST? . . . . . . . . . . . . . . . . . . . . . . 821 What is meant by import of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821 Q.6 Q.7 What meant by import of services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822 Q.8 How imports be treated under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822 Q.9 How will IGST be levied on goods imported into India?. . . . . . . . . . . . . . . 822 Q.10 For import of services, is consideration a mandatory condition?. . . . . . . . . 822 Q.11 Whether import of services before appointed day will also be taxed?. . . . . 822 Q.12 How will import of goods be charged to tax under GST regime?. . . . . . . . . 823 Q.13 What is meant by zero rated supplies? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823 Q.14 Whether supplies made by SEZ units/Developer are treated as Zero rated supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 823 Q.15 How are the exports treated under the GST Law? . . . . . . . . . . . . . . . . . . . . 823 Q.16 What are the salient features of export scheme under GST regime? . . . . . . 824 Q.17 Whether the supplies made to Nepal and Bhutan will be treated as zero rated supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 824 Q.18 What is the criterion for registration in relation to export?. . . . . . . . . . . . . . 824 Q.19 What is the difference between ‘Merchant’ exporter and ‘Manufacturer’ exporter?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825 Q.20 For merchant exporters, is there any change in the Export Procedure under the GST regime? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825 Q.21 Whether input credit of zero-rated supplies can be claimed?. . . . . . . . . . . . 825 Q.22 Outline is the procedure to take refund of IGST paid in relation to zero rated supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825 Q.23 What are the conditions for furnishing a bond to claim refund?. . . . . . . . . . 826 Q.24 Is there any time limit for making refund application?. . . . . . . . . . . . . . . . . 826 Q.25 How soon will refund in respect of export of goods or services be granted during the GST regime?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 826 92

Table of contents

Q.26 Q.27 Q.28

Q.29

Q.30

Q.31

Q.32

Whether there are any conditions to issuing a LUT? . . . . . . . . . . . . . . . . . . 827 Whether input tax credit can be availed even if export is made under LUT/Bond?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827 What will be exemptions available for various authorizations/scrips which have been issued prior to 1.7.2017 and remain unutilized on 1.7.2017?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827 Is Drawback at a higher All Industry Rate (AIR) admissible if an exporter has not availed Input Tax Credit of GST or refund of IGST paid on exported goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828 On re-export of imported goods, drawback of all duties paid at the time of importation was admissible earlier, as per the rates prescribed in this regard. What will be the position in respect of re-export made after 1st July 2017, of the goods imported prior to 1st July 2017? After 1st July 2017, IGST and Compensation Cess will also be payable on the imported goods. If such imported goods on which IGST and Compensation Cess were paid, are re-exported, whether Drawback of IGST and Compensation Cess will also be granted? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828 Will brand rate of Drawback be admissible for Central Excise duty and Service Tax in respect of exports made prior to GST implementation, for which application is filed after 1st July 2017?. . . . . . . 828 How GST shall be levied in case where a ticket booked in India but the place of boarding is outside India?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828

Chapter 53

Special Economic Zones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829

GST Act/Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 Q.1 What is meant by Special Economic Zones (SEZs)? . . . . . . . . . . . . . . . . . . 829 Q.2 What is meant by special economic zone developer?. . . . . . . . . . . . . . . . . . 829 What is meant by a SEZ unit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830 Q.3 Q.4 What shall be the nature of SEZ supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . 830 Q.5 How shall the supplies to SEZ be treated under GST?. . . . . . . . . . . . . . . . . 831 Q.6 When goods are being imported from SEZ, who is liable to pay IGST?. . . 831 Q.7 What are the exemptions available to SEZ?. . . . . . . . . . . . . . . . . . . . . . . . . 831 Q.8 What is exempt SEZ under SEZ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831 Q.9 What is meant by authorized operations?. . . . . . . . . . . . . . . . . . . . . . . . . . . 831 Q.10 What is the change under the GST regime in respect of filing of application for fixation of brand rate of Drawback for supplies to SEZ units and SEZ Developers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 832 Q.11 Whether SEZ developers and units are eligible for refund under GST?. . . . 832 Q.12 What is the manner of refund for SEZs under GST? . . . . . . . . . . . . . . . . . . 832 93

GST Ready Reckoner in Q & A Format

Q.13 Q.14 Q.15 Q.16

Q.17

Q.18

In what situation, a Letter of undertaking (LUT) can be issued in place of Bond?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 What are the documents required to be submitted with Bond/LUT application?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 Whether compensation cess can also be refunded to persons making supply to SEZ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 The supplies to a SEZ unit or SEZ developer are treated as zero rated supplies in the GST Law. Then why there is no specific mention in the GST Law about not charging of tax in respect of supplies from DTA unit to a SEZ unit or SEZ developer?. . . . . . . . . . . . . . 834 Section 16 of the IGST Act, 2017 has provision for zero rated supply under GST for supply of goods and services to SEZ units.

Whether this also covers for supply of goods and services by one SEZ unit to another SEZ unit eg Exchange levying fees and penalty to its trading members who are also IFSC units?. . . . . . . . . . . . . . . . . . . . . 834 When a SEZ unit or SEZ developer procures any goods or services from an unregistered supplier, whether the SEZ unit or SEZ developer needs to pay IGST under reverse charge or these will be zero rated supplies?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834

Chapter 54

Place of Supply of Goods and/or Services. . . . . . . . . . . . . . . . . . . 835

Place of Supply of Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838 Q.1 What is meant by ‘place of supply’ and how it is relevant for GST?. . . . . . 838 Q.2 How can place of supply of goods be determined?. . . . . . . . . . . . . . . . . . . . 839 Q.3 How place of supply will be determined in respect of supply of goods which require to be moved for their supply? . . . . . . . . . . . . . . . . . . . 839 What will be the place of supply of such goods where the supplier Q.4 makes a supply on FOR terms and needs to move the goods to recipient’s place?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839 Q.5 Supplier supplies the goods on ex-works terms and is requested by Recipient to arrange for its supply to recipients place, what will be place of such goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840 Q.6 Where the supplier supplies the goods on ex-works terms and arrange for its delivery to recipient at his factory gate, who himself arranges for transportation of goods to his place, what would be place of supply of such goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840 Q.7 Where the supplier supplies the goods on ex-works terms and arrange for its delivery to recipients agent at his factory gate/ business place, who arranges for its transportation to the place of recipient, what would be place of supply of such goods?. . . . . . . . . . . . . . . 840 94

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Q.8

Q.9

Q.10

Q.11 Q.12

Q.13

Q.14 Q.15 Q.16 Q.17

Q.18

Q.19

How will the supplier keep record of movement of goods for goods supplied on ex-works basis? What shall be the consequences of non-keeping of such records?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841 How will the place of supply be determined in case where goods are supplied to a third person instead of the person to whom such supply is billed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841 The delivery of goods is made to a person different than the person to whom these goods are billed. What would be the place of such supply of goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 842 What is the difference between ‘delivery’ and ‘supply’?. . . . . . . . . . . . . . . 842 The goods are billed and transported to a person by his supplier.

Before the goods reach to such person, he arranges to sell these goods to another person and instructs the transporter to deliver the goods carried for him to such other person. What would be the place of supply of such goods?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 842 A sells to B and during the movement of such goods to B, B sells the same to C by transfer of documents in favour of C, still during the transportation of such goods C further sells to D. How will be the place of supply for such goods for A, B and C be determined for IGST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843 Whether the supplier would need to have a copy of transporter’s GR in every case of supply?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843 What are the relevant documents for supply made with transfer of documents of title? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844 How will place of supply of goods be determined for goods which are not required to be moved from their location? . . . . . . . . . . . . . . . . . . . . 844 Ram, a registered taxable person executed a contract in the state of Delhi. Since Ram did not have further job, he decided to dispose off the construction equipments. Shyam who got a construction contract in Delhi agreed to buy equipments from Ram. What would be the place of supply of such equipments for this transaction of supply of goods by Ram to Shyam?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844 Ram who is a registered taxable person in the state of Delhi had leased some machines to Shyam in the state of Tamil Nadu. If Shyam decides to buy these machines from Ram, what would be the place of supply of such machines? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 845 What are the rules of supply in respect of goods which are required to be installed or assembled to complete their supply?. . . . . . . . . . . . . . . . . 845

95

GST Ready Reckoner in Q & A Format

Q.20

Q.21

Q.22 Q.23

Q.24 Q.25

A Ltd. a lift manufacturer, in the state of Delhi have been asked by Shyam to fix lift at his new offices in Gurgaon, Delhi and Mumbai.

How will A Ltd. determine place of supply of such supply contract?. . . . . . 845 Shyam engaged the services of a lift installer B and orders for all parts of lift from A Ltd. A Ltd. supplies the parts to Shyam. Lift was installed by B as per the order from Shyam. What will be the place of supply of this transaction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846 How will the place of supply of goods be determined which are supplied on board a conveyance?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846 On a flight from Delhi to Ahmedabad, some goods are sold on board a flight. How will supply of such goods on an air-borne flight will be determined for charging GST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 846 How will the place of supply be decided in case of import and export of goods? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 In case of a transaction of supply of goods, the place of which cannot be determined by application of any of the provisions, how will the place of supply be determined in such cases? . . . . . . . . . . . . . . . . . 847

Place of Supply of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 Q.26 What are three important terms which will determine place of supply of service?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 Q.27 What are the pre-requisites for ascertaining place of supply of services for specified services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 Q.28 What are the general principles to determine place of supply?. . . . . . . . . . . 848 Q.29 What are the challenges in ascertaining place of supply of services?. . . . . . 848 Q.30 What are the provisions of sections 12 and 13 on place of supply of services, generally?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849 Q.31 How does basis of determination of place of supply of services under IGST Act is different than provisions under Service tax?. . . . . . . . . . 850 Q.32 What is the general rule for place of supply of services in sections 12 and 13?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 850 Q.33 What is meant by ‘address on record’ for ascertaining location of person, other than a registered person in sec 12? . . . . . . . . . . . . . . . . . . . . . 851 Q.34 What will be the place of supply in relation to immovable property related services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851 Q.35 What will be place of supply in case of property or boat or vessel located in more than one State?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853 Q.36 What will be place of supply in case of property or boat or vessel located at multiple places including a place in India in case of sec 13(4) of the IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853 96

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Q.37

Q.38 Q.39 Q.40 Q.41

Q.42 Q.43 Q.44 Q.45 Q.46 Q.47

Q.48 Q.49

Q.50 Q.51 Q.52 Q.53

Q.54

What will be place of supply in case of supply of restaurant, catering, personal grooming services which are to be personally consumed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853 How will place of services be determined in respect of training/ performance appraisal services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853 How will place of supply be determined of services in relation to admission to events?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 854 How will place of supply be determined for services of organizing events and auxiliary services in relation to organizing/sponsoring events?. . . 854 In respect of recipient located outside India, How will place of supply be determined in case of admission to or organization of an event or a seminar?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855 What would be the place of services where event is held in more than one state and a consolidated amount is charged for such services? . . . 855 What will be the place of supply for services of goods transportation and courier services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855 What will be the place of supply for services of passenger transportation? . . 856 How will return journey be treated for ascertaining place of supply? . . . . . 856 What will be the place of supply in case of services in relation to on board a conveyance?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857 Meals are supplied on board on Shatabdi and Rajdhani trains.

A train from Delhi to Chandigarh passes through four tax jurisdictions, i.e., Delhi, Haryana, Punjab and Chandigarh. Food is supplied by a dealer located in the state of Delhi and is taken on board at Delhi. What will be the place of supply of in such transaction?. . . 857 If in the above example, meals are supplied by a person located in Noida (Uttar Pradesh), what will be the place of supply?. . . . . . . . . . . . . . . 857 How the place of supply shall be determined in case of telecommunication services, data transfer, broadcasting, cable and direct to home television?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857 How will the place of supply be determined for financial services?. . . . . . . 858 How will be the place of supply determined for insurance related services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 859 How will be place of supply determined for advertisement services to Government, local authority or statutory body?. . . . . . . . . . . . . . . . . . . . 859 On what basis, place of supply could be determined where there is confusion or some overlap in choosing from two or more options deserving equal merit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860 On what basis, nature of supply will be established where both, goods and services are involved? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860 97

GST Ready Reckoner in Q & A Format

Q.55

What is the difference between place of supply in respect of B2B and B2C transactions?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860

Online information, database access or retrieval services . . . . . . . . . . . . . . . . . . 860 Q.56 What is the meaning of online information and database access or retrieval service?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 860 Q.57 Who is liable for payment of tax on the service of online information or database access in case of such service consumed by a non taxable person in India?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 861 Q.58 When will such intermediary not liable for tax in India?. . . . . . . . . . . . . . . 861 Q.59 Who is called ‘intermediary’ in IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . 862 Q.60 Would a Supplier of Online information and database access service required to take registration in all states in India in GST Act?. . . . . 862 Q.61 What if such Supplier of non taxable territory is not present in India?. . . . . 862 Chapter 55 Payment of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 Q.1 What type of amounts are paid or payable by a taxable person? . . . . . . . . . 863 Q.2 What are the modes by which a tax payer can make the payment of amounts payable under the IGST law?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 Q.3 What date shall be considered to be the date of payment of tax/amount? . . 864 Q.4 What are the matters which have been prescribed by way of rules/ notifications?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 864 Q.5 How is the IGST paid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 865 Q.6 What will be the major credit heads in overall GST set up?. . . . . . . . . . . . . 865 What is the manner in which Input Tax Credit on account of IGST, Q.7 CGST and SGST would be utilized?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 865 Q.8 Whether credit on account of CGST may be utilized to pay SGST? . . . . . . 866 Q.9 For what purpose can balance available in electronic cash ledger be used? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 866 Q.10 For what purpose can balance available in electronic credit ledger be used?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867 Q.11 How will the refund of balance credit be made to the taxable person?. . . . . 867 Q.12 What does sec 54 of the GST Act, 2017 provide for refunds?. . . . . . . . . . . 867 Q.13 How and in what order will the tax and other liabilities be discharged by a taxable person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867 Q.14 How is the settlement between Centre, exporting state and importing state done? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868 Q.15 When shall it be considered that tax incidence has been passed to the recipient of goods and/or services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868

98

Table of contents

Q.16 Q.17 Q.18 Q.19 Q.20

What are the penalties prescribed for failure to pay tax as stipulated in Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868 Are business processes and compliance requirement same in the IGST and GST Acts?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869 Who shall be liable to pay IGST in case of OIDAR services?. . . . . . . . . . . 869 What shall be the obligation of an intermediary in case of OIDAR services? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869 Whether supplier of OIDAR services liable to pay IGST should also take registration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 870

Chapter 56 Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871 Q.1 What are provisions of Input tax credit in IGST Act?. . . . . . . . . . . . . . . . . . 871 Q.2 What is the meaning of ‘output tax’ in IGST? . . . . . . . . . . . . . . . . . . . . . . . 871 Q.3 The term ‘amount payable on reverse charge’ has been specifically excluded from the output tax. What is the reason behind this?. . . . . . . . . . . 871 Q.4 Will IGST paid available as input tax credit? Who shall be eligible to take such credit?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872 Q.5 Whether the input tax credit of IGST be available for payment of CGST?. . . . 872 Whether the input tax credit of IGST be available for payment of SGST?. . . 872 Q.6 Q.7 How is balance in IGST impacted on utilization of IGST balance for adjusting the liability of CGST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873 Q.8 How is balance in IGST impacted on utilization of IGST balance for adjusting the liability of SGST/UTGST? . . . . . . . . . . . . . . . . . . . . . . . . 873 Chapter 57 Apportionment of Tax and Settlement of Funds. . . . . . . . . . . . . . 875 Q.1 Why apportionment of tax is required for Integrated Goods and Service Tax (IGST)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875 Q.2 Under what circumstances apportionment be done in business to business transactions (B 2 B)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875 Under what circumstances apportionment be done in case of Q.3 business to consumer transactions (B 2 C)?. . . . . . . . . . . . . . . . . . . . . . . . . 876 Q.4 What are the circumstances in which need for apportionment between the centre and states will arise?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 876 Q.5 In what manner, apportionment of tax shall be done?. . . . . . . . . . . . . . . . . . 877 Q.6 How will be IGST paid to Central Government be apportioned to Central Government in case of inter-state supply of goods/ services to unregistered person or taxable person paying tax under composition scheme? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 877 Q.7 How and to whom will be the balance of tax remaining in the IGST account after apportionment to Central Government will be apportioned? . 877 99

GST Ready Reckoner in Q & A Format

Q.8 Q.9 Q.10 Q.11

How will apportionment be done, in case it is not possible to determine the state where supply takes place?. . . . . . . . . . . . . . . . . . . . . . . 878 How will apportionment be done in case it is not possible to identify the taxable person making the supply? . . . . . . . . . . . . . . . . . . . . . . 878 How will the other amounts, i.e. interest and penalty be apportioned? . . . . 878 There could be cases of reversal of transactions on account of return of goods non provision of services etc. How such transactions impact the amount already apportioned? . . . . . . . . . . . . . . . . . 878

Chapter 58 Refund of IGST to International Tourists. . . . . . . . . . . . . . . . . . . 881 Q.1 Who is a tourist for the purpose of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . 881 Q.2 Does it mean that a foreign national in India on a work permit will not be eligible for refund as tourist?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881 Q.3 What are refund provisions for tourist in GST? . . . . . . . . . . . . . . . . . . . . . . 881 Q.4 Is such tourist eligible for refund on the supply of services to him during his stay in India? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 882 Q.5 Would a tourist be eligible for refund on supply of goods to him which he has consumed while in India or on items of goods purchased in India and disposed off in India?. . . . . . . . . . . . . . . . . . . . . . . . 882 Q.6 What is the rationale of allowing refund to tourist on goods and not on services in IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 882 How will a supplier in India would charge IGST to a tourist, Q.7 especially when such goods are supplied to tourist at his counter? . . . . . . . 882 Q.8 Many of the Indians are working in foreign countries on the work permit? On their visits to India for short period, would they be considered tourists?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883 What procedure has been prescribed for tourist to seek refund under Q.9 IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 883 Chapter 59 Miscellanous and Transitional Provisions. . . . . . . . . . . . . . . . . . . 885 Q.1 What are consequences of deposit of IGST on a transaction which is subsequently determined as intra-state transaction?. . . . . . . . . . . . . . . . . 885 Q.2 Would the principle of unjust enrichment applicable on application of refund of IGST in case of wrong payment under sec 19 of the IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886 Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886 Q.3 What provisions of GST Act would apply to IGST also?. . . . . . . . . . . . . . . 886 Q.4 Who has the authority to make rules in respect of carrying out purposes and administration of IGST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 Q.5 Can rules be made with retrospective effect?. . . . . . . . . . . . . . . . . . . . . . . . 887 100

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Q.6

Can the penal provisions be also made in respect of violation of such rules?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887

Transitional Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 Q.7 What would be the tax treatment of import of services after the appointed day, which were initiated before the appointed day?. . . . . . . . . . 887 Q.8 What is meant by ‘transactions initiated before appointed day’?. . . . . . . . . 888 Q.9 Whether tax would be charged again under IGST law in case full payment of tax on transactions of supply was made under earlier law. . . . . 888 Q.10 Where the part payment of tax on transaction of import of service was made under service tax, whether full tax be chargeable under IGST Act on such transactions? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 888 Power to make Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889 Q.11 Who under IGST has been authorized to make regulations? . . . . . . . . . . . . 889 Q.12 What is the difference between rules and regulations?. . . . . . . . . . . . . . . . . 889 Laying of rules, regulations and notifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889 Q.13 Does the rules, notifications or regulations framed by Government or Board nee approval of Parliament/Assembly?. . . . . . . . . . . . . . . . . . . . . 889 Q.14 Is it necessary for parliament to accept or reject any rule/ regulation/notification placed before it for its approval? . . . . . . . . . . . . . . . 889 Q.15 In case of rejection or modification of rules, regulations or notifications by Parliament, what happens to actions already taken on such rules, regulations or notifications?. . . . . . . . . . . . . . . . . . . . . . . . . . 890 Removal of difficulties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890 Q.16 Who has been authorized to resolve the difficulties in implementing any provision of the IGST Act?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 890 Q.17 Is this a permanent power given to Government under the Act or there is any sunset clause on this power? . . . . . . . . . . . . . . . . . . . . . . . . . . . 890 PART D – UNION TERRITORY GST Chapter 60 Union Territory GST – Overview and Specific Provisions. . . . . . 891 Q.1 Dual tax structure (CGST and SGST) has been implemented in India. What tax will be applicable in Union territories of India?. . . . . . . . . 891 Which are the Union territories of India on which UTGST is applicable?. . . 891 Q.2 Q.3 Is there any difference in provisions of levy and collection of tax between UTGST Act and CGST Act, 2017?. . . . . . . . . . . . . . . . . . . . . . . . . 892 Q.4 What are the exemptions provided under the UTGST Act? Are they same as are is provided under CGST Act? . . . . . . . . . . . . . . . . . . . . . . . . . . 892 Q.5 What are the conditions of adjustment of UTGST input tax credit with other taxes under GST law in India?. . . . . . . . . . . . . . . . . . . . . . . . . . . 893 101

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Q.6 Q.7 Q.8 Q.9 Q.10 Q.11

What are the consequences of wrong payment of UTGST?. . . . . . . . . . . . . 893 What are the provisions of recovery of tax under the UTGST Act?. . . . . . . 894 What are the provisions for migration of existing taxable persons to UTGST? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894 What are the transition provisions of Input tax credit in UTGST?. . . . . . . . 894 Is there any difference between transitional provisions of the UTGST Act and CGST Act in respect of Job work provisions?. . . . . . . . . . 895 What are the other transitional provisions of the UTGST Act and CGST Act which are same?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895

List of abbreviations used. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 897

CD CONTENTS 1.

Constitution (101 Amendment) Act, 2016 Taxation Laws (Amendment) Act, 2017 2.

3.

Central GST Act and Rules 4.

Integrated GST Act and Rules 5.

GST (Compensation to States) Act and Rules 6.

Central Tax Notifications (Non-Tariff and Tariff) Integrated Tax Notifications (Non-Tariff and Tariff) 7.

8.

Compensation Cess Notifications (Non-Tariff and Tariff) 9.

Central Excise Notifications (Non-Tariff) 10. Customs - IGST Exemption Notifications 11. GST Forms 12. Press Releases, Circulars and Orders 13. FAQs st

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Indirect Tax Structure in India This chapter provides a basic overview of indirect taxation in India, various indirect taxes levied and the constitutional powers levy such taxes.

Q.1

What are the powers of Government to levy taxes?

Ans.

According to the Constitution of India, Government has the power to levy taxes on individuals and organizations. However, the Constitution states that no one has the right to levy or charge taxes except with the authority of law. Whatever tax is being charged shall be backed by the law passed by the State legislatures or the Parliament. Article 246 (Seventh Schedule) of the Indian Constitution distributes legislative powers including taxation, between the Parliament and the State Legislature.

Schedule VII to the Constitution of India enumerates these subject matters of taxation as follows– List - I enumerates the areas or subjects on which only the Parliament is competent to make laws, called as Union List List - II enumerates the areas or subjects on which only the State Legislatures can make laws, called as State List and List - III enumerates the areas or subjects on which both the Parliament and the State Legislatures can make laws concurrently, called as Concurrent List.

Separate heads of taxation are provided under List I and List II of Seventh Schedule of the Constitution. However, there is no head of taxation in the Concurrent List. Any tax levied by the Government which is not backed by law or is beyond the powers of the legislating authority may be struck down as unconstitutional or invalid.

Q.2

What are the stages for imposing any tax?

Ans.

All taxes and duties are imposed in three stages, namely – levy, assessment and collection: •

Levy is the stage where the declaration of liability is made.

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•

Assessment is the procedure of quantifying the amount of liability.

•

The final stage is collection of tax or duty where the tax or duty is actually collected.

Q.3

Taxes can be direct or indirect. What is meant by direct and indirect taxes?

Ans.

‘Direct tax’ is a tax which is deposited directly by an individual/organization to the imposing entity. The individual or organization upon which the tax is levied is responsible for the fulfillment of the tax payment. A taxpayer pays a tax directly to tax collectors i.e., to Government for different purposes, including income tax or taxes on assets, real property tax, personal property tax etc. A direct tax cannot be shifted to another individual or entity. Examples of direct taxes are income tax, wealth tax, dividend distribution tax etc.

‘Indirect tax’ generally refers to taxes levied on the basis of production, sale or purchase of goods such as import and export duties, excise and sales tax. Indirect taxes include taxes levied on production of goods, rendering of services, entertainment taxes, electricity duties, tax on passenger fares and freights etc. They are called indirect taxes and can be passed on to someone else (e.g. customers/consumers) whereas direct taxes are supposed to be borne by those on whom they are levied. For the Central Government, Central Excise, Customs and Service Tax are the three main components of indirect taxes. For State Governments, Value Added Tax (VAT) is the major indirect tax.

In the Indian context, major indirect taxes can be divided broadly under the following categories – State Excise Duty Central Excise Duty

Value Added Tax

Indirect Taxes

Service Tax

Central Sales Tax Customs Duty

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Q.4

What was the pre-GST indirect taxation structure in India?

Ans.

Broadly, the following types of Indirect Taxes were levied in India prior to GST implementation: •

Central Excise Duty

•

Service Tax

•

Customs Duty

•

Central Sales Tax (CST)

•

Value Added Tax (VAT)

•

Entry Tax/Octroi

•

Other taxes (entertainment tax, luxury tax, purchase tax, professional tax etc.)

The pre-GST indirect tax structure for indirect taxation can best be understood by the following chart: Indirect Tax Structure (Prior to 1.7.2017) [Four Important Constituents]

Excise Duty

Service Tax

Entry No. 84, List I, Schedule VII

Residuary Entry No. 97, List I, Schedule VII

Taxable Event: Manufacture

Taxable Event : Provision of Service

Median Rate-12% (12.5% w.e.f.

01.06.2015)

*Single Rate12.36% (14% w.e.f. 01.06.2015)

Customs Duty

Entry No. 83, List I, Schedule VII

Taxable Event : Import & Export

Median Rate 24.72%

Sales Tax / VAT/ CST

Entry No. 54 of List II (State VAT) and 92A of List I (Central Sales Tax) Taxable Event: Sale

Rates - 5%, 12.5% & 20%

*Excluding Cesses

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Other Important Indirect Taxes/Duties •

Octroi

•

Entry tax

•

Entertainment tax

•

Luxury tax

•

Research and development cess

•

Telecom license fees

•

Turnover tax

•

Tax on consumption or sale of electricity

•

Taxes on transportation of goods and services

•

Lottery tax

•

Professional tax

•

Betting and gambling tax

•

Stamp duty

•

Property tax

•

Toll tax, passenger tax

•

Purchase tax/Mandi tax

•

Royalties

•

Taxes on advertisements

•

Road tax/vehicle tax

•

Cesses/surcharges

Q.5

What were the indirect taxes levied and collected by the Union of India (Central Government) prior to levy of GST?

Ans.

Following Central Indirect Taxes were levied by the Union Government on various goods and services prior to 1.7.2017 –

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Tax Central Sales Tax Central Excise Duty Customs Duty* Additional Customs Duties (CVD, SAD) Excise Duty under Medicinal & Toiletries Preparation(Excise Duty Act) Service Tax

Levied on Inter-state trade or commerce Manufacture of excisable goods Import of Goods Import of Goods Medicinal & Toiletry preparations

Providing or agreeing to provide taxable service

*(not subsumed in GST) Major Central Indirect Taxes (Pre-GST) Customs Duty

Central Sales Tax

Central Levies

Excise Duty

Service Tax

Q.6

What were the present indirect taxes levied and collected by the States Governments in pre-GST regime?

Ans.

Following taxes and levies were imposed and collected by State Governments prior to 1.7.2017: Tax

Levied on

Value Added Tax (Sales Tax)

On sale of goods or deemed sales

Luxury Tax

On hotels, restaurants, motels etc

Entertainment Tax

On entertainment/movies/amusement

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Levied on activities

Entry Tax or Octroi

On entry of goods and services in state jurisdiction

Tax on Lottery/Betting/Gambling

On engaging in such activities

Electricity Duties

On distribution of electricity

State Excise Duty*

On manufacture of alcoholic beverages

Purchase Tax

On purchase of specified goods

*(not subsumed in GST)

Major State Indirect Taxes (Pre-GST)

Q.7

What are the advantages of levy of indirect taxes? Are there any disadvantages of indirect taxes?

Ans.

Advantages of levy of Indirect Taxes

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•

Indirect taxes are usually inbuilt in the prices of goods and services being transacted and, therefore, their presence is not felt or realized so much.

•

If the indirect taxes are properly administered, the chances of tax evasion are less.

•

Indirect taxes are a powerful tool in directing the production and investment activities of the economy i.e., they can guide the economy in its resource allocation.

•

Indirect taxes are added to the sale prices of the taxed goods without touching the purchasing power in the first place.

•

Indirect taxes are usually captured as part of cost and included in the prices of goods and services being transacted.

•

Being indirect, they are charged and recovered from customers.

•

Indirect taxes have a wide coverage. Majority of the products or services are subject to indirect taxes and as such, taxes are shared by a wider base. There is mass participation. Each and every person getting goods or services has to pay tax.

•

Indirect tax is convenient as the taxpayer does not have to pay a lump sum amount for tax and is based on consumption – more you consume, more you pay; when you consume, you pay.

•

Indirect taxes are paid by all classes of people and so they are broad based. Poor people may be out of the net of the income tax, but they pay indirect taxes while buying goods and taxable services.

•

Indirect taxes promote social welfare. The amount collected by way of taxes is utilized by the Government for social welfare activities, including education, health and family welfare.

•

Indirect taxes are a powerful tool in moulding the production and investment activities of the economy i.e. they can guide the economy in its resource allocation.

•

The Government can check on the consumption of harmful goods by imposing higher taxes.

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•

Tax rate on essential items can be reduced or even be made exempt in case of essential items.

•

Indirect taxes are subject to input tax credit and as such, cascading effect of taxes is reduced.

Disadvantages of levy of Indirect Taxes

110

•

If indirect taxes are heavily imposed on the luxury items, then this may only help partially, because taxing the luxuries alone may not yield adequate revenue for the State.

•

The result is that in their case, inflationary forces are fed through higher prices, higher costs and higher wages resulting in again higher prices.

•

Indirect tax is uncertain. As demand fluctuates, tax will also fluctuate.

•

In case of excise, since it is levied on manufacture itself, tax burden to the rich and poor is likely to be same.

•

Indirect tax fails to satisfy the principle of cost-benefit as the Government has to set up elaborate machinery to administer indirect taxes. Therefore, cost of tax collection per unit of revenue raised is generally higher in the case of most of the indirect taxes.

•

The indirect taxes are regressive in nature. This may further increase income disparities among the rich and the poor.

•

Indirect taxes do not create any social consciousness, as the taxpayers do not feel the burden of the taxes they pay. Moreover, it does not impact manufacturers as it does not incentivize the cost reduction.

•

Most of the taxes are included in the price of goods or services. As result, taxpayers do not know how much tax they are paying to the Government.

•

Indirect taxes also suffer from high degree of revenue leakage and tax disputes.

Chapter 1

Indirect Tax Structure in India

Q.8

What were the deficiencies in the pre-GST indirect tax system?

Ans.

The erstwhile indirect tax regime in India suffered from multiplicity of taxes and their consequential adverse impact. These can be enumerated as under: •

Discriminatory taxes, undue preferences, trade and non-trade barriers, entry tax , octroi and check posts

•

A complex tax structure with multiple rates of taxes and multiple taxes across the supply chain

•

As a developing country, India needs a transparent & progressive tax policy/tax structure

•

Confusion/lack of clarity/interpretational issues

•

Lack of trust between assessee and revenue – Valuation/ Classification/Exemptions

•

Lack of consistency in provisions with frequent amendments

•

Cascading effect – levy of tax on tax

•

Narrow assessee base

•

High transaction costs

•

High compliance costs

•

Too much of litigation and disputes

•

Hidden tax on exports

•

Lack of harmony and varying inter-state practices

•

No protection from cheaper imports

Q.9

How does the Goods & Services Tax (GST) and pre-GST system of Value Added Tax (VAT) compare?

Ans.

In principle, there is no difference between tax structure under VAT and GST as far as the tax on goods is concerned because GST is also a form of VAT on both, goods and services. Earlier, the sales tax (or valued added tax), with an exception of Central Sales Tax (CST), was a VAT system. Further, Cenvat credit mechanism was also available in Service Tax. Hence both, sales tax and service tax followed the value added principles. The goods and services were taxed separately but in GST, this difference will not be there. The overall system of GST is very much similar to the VAT, which can be considered as first step towards GST. One of the major differences between earlier indirect taxes and GST is that in contrast to CST, GST is destination/consumption tax to be levied on a transaction (rather than an activity).

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All the states had their own VAT laws comprising VAT Acts and VAT Rules and these Acts and Rules were formulated on the basis of “White Paper on VAT” issued by the Empowered Committee of States’ Finance Ministers on VAT. The same Empowered Committee had been working on GST since inception up till the Constitution of GST Council. Due to the fact that the taxpayers were already using the VATable sales tax and service tax system, GST is going to be a matter of settlement between the Centre and the states and like VAT, the possibility of any resistance from the tax payers may not be there.

Q.10

What is the relevance of GST in present day context?

Ans.

India had both types of taxes – direct and indirect. There were multiple indirect taxes levied on taxable subjects, both by Centre and States. This poses challenges to all stakeholders in terms of cost, complexity, compliance, audit and tax cascading. The indirect tax structure in GST regime is depicted as illustrated in the following figure – Indirect Tax Structure in GST regime Indirect Taxes

GST

GST

Other Taxes

SGST/UTGST

CENTRAL TAXES

Excise Duties (on Petro products) Basic Customs Duty Stamp Duty

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IGST

TAXES BY LOCAL BODIES

STATE TAXES

VAT (on Petro products) State Excise Duty (on liquor) Stamp Duty Electricity Duty

Chapter 1

Indirect Tax Structure in India

In order to move towards international best practices and consolidate indirect taxes in the country, dual GST has been adopted as an alternative tax model as a unified indirect tax whereby over a dozen of indirect taxes shall be subsumed and in turn, only one tax, i.e., GST shall be levied which will comprise of CGST, SGST/UTGST and IGST.

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