GST: What you Know & What it Means

Question-1:  If I buy raw material from supplier unregistered in GST, do I have to pay GST in RCM and can I avail ITC of the same ?

Answer: Yes, you have to pay GST via RCM. You can avail ITC of the GST so paid if you are otherwise eligible.

Question-2: Can an unregistered dealer supply goods to other States if his turnover is below Rs. 20 lakhs ?

Answer: No. The supplier would be liable to obtain registration in case of inter-State Supplies irrespective of his turnover.

Question-3:Existing taxpayer registering a branch office in another state comes under fresh registration or under existing tax payer registration ?

Answer: The registration in other State would come under fresh registration.

Question-4: Is registration necessary if only interstate supply of Nil rated goods is being made ?

Answer: If exclusively making supplies of Nil rated supplies, registration is not compulsory. Kindly refer section 23 of CGST Act.

Question-5: Whether franchisor company will have to take registration in each state where outlets are located ?

Answer: No, a franchisor company need not take registration in a state where only its franchisee is located.

Question-6: If I’m starting new business today, still need to get TIN and then apply for GST ? Or can I directly register with GST ?

Answer: You may directly take GST registration on www.gst.gov.in

Question-7: A firm dealing exclusively in exempted products has GST registration; does it need to file return ?

Answer: If registered, then you need to file returns. You may choose to cancel your registration since you are dealing only in exempted products.

Question-8: My all outward supplies are export services. In this case is it compulsory to register under GST ?

Answer: Yes. Since, exports are zero rated, one needs to register for GST to claim refunds.

Question-9: Can a person operating two different companies with different names but with same PAN get two GST registrations ?

Answer: One PAN holder gets one registration in every state, but he has the option of getting different registrations for different business verticals.

Question-10: Whether job worker is required to register? Whether composition scheme is available to a job worker ?

Answer: Job workers making taxable supplies above the threshold aggregate turnover need to register. Composition scheme is not available to job-workers. They, however, can avail benefit of section 143 of the CGST Act.

Question-11: I am a service provider with turnover of Rs. 50 lakhs in one state only. Am I eligible for the composition scheme ?

Answer: Service providers, except restaurants/caterers, are not eligible for composition scheme.

Question-12: I am an ice cream manufacturer with sales in one state only. Can I avail the option of composition?

Answer: No. The following three classes of persons, namely

♦ Ice cream and other edible ice, whether or not containing cocoa.

♦ Pan masala

♦ All goods, he. Tobacco and manufactured tobacco substitutes

are not eligible for benefit of composition scheme.

Question-13: If I register under the composition scheme, can I opt out of it Later ? What happen to my stock if I do so ?

Answer: Those Availing composition can exit and opt for normal tax scheme anytime. They  would be eligible for ITC on stocks available on the date of switchover in terms of section 18 (1)(C) of CGST Act, 2017.

Question-14: Can I registrer as a normal taxable person now and avail of the composition sacheme later ?

Answer: You can opt for composition scheme from the beginning of the next financial year on submiting the option to avial composition scheme before beginning of the financial year. It may please be noted that composition scheme cannot be availed from the middle of a financial year.

Question-15: I have registered as a composition dealer. If my turnover crosses Rs. 75 lakhs, can I continue in the scheme for the remaining financial year ?

Answer: No, taxpayer becomes ineligible for composition scheme on the day the turnover crosses Rs. 75 lakhs.

Question-16: If I was registered earlier but am not required to register under GST, what to do about provisional ID and accumulated ITC

Answer: Please apply for cancellation of registration under Section 29(1) of the CGST Act, 2017 read with Rule 24(4) of CGST Rules, 2017. You will be required to calculate and pay ITC availed on goods held in stock on the date of cancellation of registration.

Question-17: I was registered under Central Excise or Service Tax, but could not migrate and therefore have taken a new registration. Will I be eligible for transitional credit ?

Answer: In your new registration application, if you have referred to your past registration no. of Central Excise or Service Tax, you will be eligible for transitional credit under Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017.

Question-18: I have migrated and received provisional ID but not GSTIN, how do I supply goods or services or both ?

Answer: Provisional ID (PID) will be your GSTIN. You can supply goods or services or both specifying PID as your GSTIN on Invoice.

Question-19: I have not received ARN or have received ARN but not GSTIN, how do I supply goods or services or both

Answer: You can supply goods or services or both on bill of supply without mentioning GSTIN and/or ARN. On receipt of GSTIN, you will need to issue revised invoice mentioning GSTIN. You are required to reflect this supply in your return and also pay tax thereon.

Question-20: I am a supplier of exempted goods based out of Delhi and procure raw material from Kerala. My supplier from Kerala insists that I have to be registered in Delhi for procurement of Inter-State goods. Is he right

Answer: No, if you are dealing in 100% exempted supplies you are not liable to be registered in GST. There is no requirement of registered for inter-state Purchases.

Question-21: After implementation of GST, will EOU scheme continue or not

Answer: GST has no special dispensation for EOUs. As to whether they exist for any other purpose may be seen from the FTP.

Question-22: I was unregistered in excise before and now in 18% slab? can I take credit of stock if I don’t have invoice ?

Answer: Deemed credit will be available to you for stock as duty paying documents are not available, subject to provision of section 140 (3) of the CGST Act, 2017 read with Rules 140 (4) of CGST Rules, 2017

Question-23: I enjoyed SSI Exemption in Excise and did not register; how do I now take credit of stock lying with me?

Answer: Credit may be availed on the basis of document evidencing payment of duty on inputs as per section 140(3) of the CGST Act, 2017 read with Rules 140 (4) CGST Rules, 2017.

Question-24: For textile trader or of manufacturers, with input stock without payment of excise duty but GST being charged on final sale, shall we get credit of such stock?

Answer: Credit of stock which was unconditionally exempt from excise duty or was NIL rated shall not be available. Please see Rule 117(4) of the CGST Rules, 2017.

Question-25: Can a spice manufacturer take ITC of central excise paid on packing material lying in stock as on 30/06/17?

Answer: If he has duty paying documents then he will get full credit of central excise duty paid on stock held by him.

Question-26: I made booking for hotel for a trip in October. Invoice raised already. Would I need to pay GST if payment will be done on 15 July?

Answer: If the invoice has been raised and payment made before the 1st of July 2017 then GST will not be applicable.

Question-27: If rent received in advance before appointed day and person not liable to service tax then does RCM liability arise?

Answer: The liability of RCM under GST will arise only after 1st of July 2017.

Question-28: Is there any format for invoice under GST? If yes, please provide the link of the same?

Answer: No there is no particular format. Rule 46 of the CGST Rules, 2017 prescribes the particulars to be contained in Invoice.

Question-29: Whether from 1st July sequence of invoice no will change? Or can we follow the same sequence?

Answer: Same sequence can be followed provided conditions laid down in Section 31 of the CGST Act, 2017 read with Rule 46 of CGST Rules, 2017 are met.

Question-30: Whether existing UT-1, Bond will suffice? Whether existing ARE 1 form will exist?

Answer: Circular No. 4/4/2017-GST dated 07.07.2017 has clarified that the existing Bonds/LUTs shall be valid till 31.07.2017 after which the Bonds/LUTs shall have to be executed in the newly prescribed formats. New formats of bond and LUT have been prescribed under Rule 96A of CGST Rules, 2017.

ARE-1 procedure is being dispensed with except in respect to commodities which continue to attract Central Excise duty.

Question-31: Can we get ITC for capital expenditures like vehicles, solar panels etc. for company use?

Answer: ITC on capital goods is generally available if they are used in the course or furtherance of business. However, credit is not available on cars, unless you are in business imparting driving supplying such cars. A list of item on which ITC is not available is provided in Section 17 of the CGST Act, 2017.

Question-32: If my turnover is less than 1.5 crores, do I need to mention HSN code on my invoice?

Answer: Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5 crores.

Question-33: We are Excise registered dealers and have stock older than 1 year for which Excise is paid. Will we get Input tax credit?

Answer: You will be entitled to carry forward closing balance of CENVAT credit shown in your last return filed under Central Excise Act.

Question-34: I register under composition scheme. Can I take to was unregistered earlier. Now I want to ITC of my duty paid stock?

Answer: No, a person registering under the composition scheme cannot take ITC on inputs.

What is Composition Scheme Under GST?