Frequently Asked Questions

 

Chapter-1-Levy-and-Collection-of-Tax

Ans. As per Sub-section (1) of Section 7, Supply includes: 1. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; 2. import of services for a consideration whether or not in the course or furtherance of business; 3. the activities specified in Schedule I, made or agreed to be made without a consideration; and 4. the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
Ans. Yes. The CGST Act, 2017 specifies certain provisions separately for supply of goods and supply of services viz., Section 12 and Section 13 provides for ascertaining time of supply of goods and time of supply of services respectively; similarly separate provisions have been specified for ascertaining place of supply of goods and place of supply of services. Further, the rate of tax applicable to supply of goods and supply of services may be different. Accordingly, it is important to distinguish whether a particular transaction involves supply of goods or supply of services.
Ans. The Schedule II appended to CGST Act, 2017 enlists the activities which are to be treated as supply of goods or supply of services. One may refer Schedule II with reference to Section 7 to classify whether the transaction involves supply of goods or supply of services.
Ans. The activities enumerated in Schedule I will qualify as supply even if made without consideration. Accordingly, such supplies in the absence of consideration are liable to tax. To illustrate, following are the activities which will qualify as supply in the absence of consideration and eventually would be liable to tax: 1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets. 2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business: Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both. 3. Supply of goods— (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. 4. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.
Ans. In terms of Section 25(4) of the CGST Act, 2017, every person is required to obtain separate registration for every branch located in different state or union territory and shall be treated as distinct persons. Accordingly, the supply of goods (stock transfers) to a branch located outside the State would qualify as supply liable to tax in terms of clause 2 to Schedule I of the CGST Act, 2017. Further, it is important to note that, supply of goods to a branch / unit located within the same State having separate registration would also be liable to tax since both such units (supplying unit and recipient unit) would qualify as distinct person in terms of Section 25(4).
Ans. In terms of Explanation appended to Section 15 it is clarified that employer and employee will be deemed to be related persons. Accordingly, in terms of proviso to clause 2 of Schedule I, gift by an employer to employee will be a supply and will be liable to tax. However, any gifts for a value not exceeding fifty thousand rupees in a financial year will not qualify as supply and as such will not be liable to tax.
Ans. In terms of Section 7 read with Schedule I, following would qualify as supply: 1. Supply of goods by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or 2. Supply of goods by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.
Ans. The following import of service will qualify as supply under CGST Act, 2017: 1. import of service for a consideration whether or not in the course or furtherance of business is a supply; 2. import of service by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.
Ans. In terms of Section 2(30) of CGST Act, 2017 composite supply means supply consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjuction with each other in the ordinary course of business, one of which is a principal supply. The illustration of composite supply appended to Section 2(30) is as follows: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a composite supply.
Ans. In terms of Section 8 of the CGST Act, 2017 tax liability in case of composite supply should be determined with reference to the principal supply forming part of such composite supply.
Ans. In terms of Section 2(74), mixed supply means two or more individual supplies of goods or services or any combination thereof, made in conjuction with each other by a taxable person for a single price where such supply does not constitute a composite supply. The illustration of mixed supply appended to Section 2(74) is as follows: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.
Ans. In terms of Section 8, the tax liability in case of a mixed supply shall be ascertained with reference to that particular supply which attracts highest rate of tax
Ans. In terms of Section 9 of the CGST Act, 2017, intra-State supplies are liable to CGST & SGST. In terms of Section 7 of UTGST Act, 2017, intra-State supplies effected by a taxable person located in Union Territory (within the Union Territory) will be liable to CGST & UTGST.
Ans. Section 15 of the CGST Act, 2017 specifies that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. Further Section 15 provides for certain inclusions which will form part of the value viz., incidental expenses, commission, interest, penalty etc. In cases where the supplier and recipient are related persons or where the price is not the sole consideration, the provisions and method for ascertaining the value of taxable supply as prescribed in valuation rules shall apply..
Ans. The applicable rate of tax is yet to be notified. However, the provisions specifies that the Central/State Government may specify rate of tax not exceeding 20%.
Ans. Generally, the person effecting taxable supplies is liable to pay taxes. However, following are certain exceptions: (a) Reverse charge: Supply of goods or services or both, as may be notified by the Government on the recommendations of the Council, the tax on which shall be paid by the recipient under reverse charge; and (b) E-Commerce: Categories of services as may be notified by the Government on the recommendation of Council the tax on which shall be paid by the electronic commerce operator if such services are supplied through it
Ans. In terms of Section 2(98), the terms reverse charge is defined to mean liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both.
Ans. As per Section 9 of the CGST Act, 2017 there are two types of supplies which are liable to tax under reverse charge mechanism which are:-. 1. Specified categories of supply of goods or services or both as notified by government on recommendation of the council 2. Supply of taxable goods or services or both by an unregistered supplier to a registered person
Ans. No. Section 9(1) which is the charging provision for levy and collection of tax on intra- State supplies excludes supply of alcoholic liquor for human consumption. Further, in terms of Section 9(2), tax on supply of petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. Accordingly, supply of alcoholic liquor for human consumption is not liable to tax under CGST Act, 2017.
Ans. In terms of Section 7 of the IGST Act, 2017, import of goods or services or both is shall be treated to be a supply in the course of inter-State trade or commerce. Accordingly, tax under the provisions of IGST Act, 2017 (IGST) shall apply on import of goods or services or both.
Ans. The rate of tax applicable to a taxable person opting to pay tax under composition scheme is not yet notified . However, Section 10(1) of the CGST Act, 2017 prescribes, subject to such conditions and restrictions as may be prescribed, that the rate of tax shall not exceed: 1. one per cent of the turnover in State or turnover in Union territory in case of a manufacturer; 2. two and a half per cent, of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II; and 3. half per cent, of the turnover in State or turnover in Union territory in case of other suppliers
Ans. No. The registered taxable person whose aggregate turnover in the preceding financial year does not exceed fifty lakhs rupees may opt to pay tax subject to satisfaction of the following conditions: 1. he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II; 2. he is not engaged in making any supply of goods which are not leviable to tax under this Act; 3. he is not engaged in making any inter-State outward supplies of goods; 4. he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and 5. he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:
Ans. No. A supplier of services is not eligible to opt for composition scheme. However, a supplier supplying composite supply involving supply of service or goods being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption) is eligible to opt for payment of taxes under composition scheme.
Ans. No. A registered person shall not be eligible to opt for the composition scheme unless all such registered persons (branches having separate registration under a single PAN) opt to pay tax under composition scheme.
Ans. No, a taxable person under composition scheme is not eligible to claim input tax credit.
Ans. No. The recipient is not eligible to take input tax credit of composition tax paid. Moreover, a taxable person paying taxes under composition scheme is not entitled to collect taxes from the recipient in terms of Section 10(4) of the CGST Act, 2017. Accordingly, there does not arise a question for the recipient to claim input tax credit.
Ans. In terms of Section 2(6) of the CGST Act, 2017, "aggregate turnover" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
Ans. In terms of Section 10(3), the option availed for paying tax under composition scheme shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds fifty lakh rupees
Ans. Following are the consequence for non-compliance with the conditions specified therein: 1. shall be liable to pay additional taxes at the rates applicable to regular taxable person; 2. shall be liable to penalty; and 3. the amount of tax and penalty shall be recovered in terms of Section 73 & 74 of CGST Act, 2017.
Ans. No. The power to grant exemption is vested with the Government. In other words, the Government by notification on the recommendations of the council may grant exemption from tax subject to such conditions as may be notified..

Chapter-2-Time-and-Value-of-Supply

SampleAns. The provisions relating to time of supply of goods / services are relevant in ascertaining the time to remit the taxes on a particular transaction involving supply of goods / services under the GST Law. The CGST Act, 2017 provides separate provisions for time of supply of goods and services viz., Section 12 for time of supply of goods and Section 13 for time of supply of services. Description
Sample Ans. Generally, in terms of Section 12 of CGST Act, 2017, the time of supply of goods shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice; or (c) Date on which supplier receives the payment; or (d) Date on which payment is entered in books of accounts of the supplier; or (e) Date on which payment is credited to the bank account.Description
Ans. In terms of the Explanation 2 appended to Section 12, the date of payment shall be the earliest of the following dates: (a) The date on which supplier receives the payment; or (b) Date on which payment is entered in books of accounts of the supplier; or (c) Date on which payment is credited to the bank account.
Ans. The time of supply of goods shall be the date of issuance of invoice; or due date for issuance of invoice or receipt of payment by the supplier, whichever is earlier. In the event, the supplier has not received the payment in case of multiple invoices issued for a single consignment of supply, the time of supply shall be earlier of date of issuance of invoice; or due date for issuance of invoice.
Ans. In case of tax liable to be paid under reverse charge mechanism, the time of supply shall be the earliest of the following: (a) Date of receipt of goods by the recipient; or (b) Date on which the payment is entered in the books of accounts of the recipient; or (c) Date on which payment is debited in the bank account of the recipient; or (d) Date immediately following thirty days from the date of issue of invoice by the supplier. Where the time of supply cannot be ascertained as above, the date of entry in the books of accounts of the recipient shall be the time of supply of goods. To illustrate, Mr. A being registered taxable person procures goods from Mr. B who is unregistered. The chronology of events are as follows: Date of receipt of goods by Mr. A July 15, 2017 Time of supply shall be July 15, 2017 Date on which the payment is entered in the books of accounts of Mr. A July 20, 2017 Date on which payment is debited in the bank account of Mr. A July 22, 2017 In the event, the above details are not available and the date of entry relating to purchase of goods in the books of Mr. A is July 30, 2017, the time of supply of goods will be July 30, 2017
Ans. In terms of Section 12(4) of the CGST Act, 2017, time of supply of vouchers shall be the earliest of the following: (a) date of issue of voucher, if the supply is identifiable at that point; or (b) date of redemption of voucher, in all other cases. Eg: Mr. A buys vouchers from Lifestyle of worth Rs. 1,000/- for a shirt dated December 01, 2017. Mr. A gifts such vouchers to Mr. B who redeems such vouchers with Amazon India on January 31, 2018. – Time of supply is the date of issue of vouchers viz., December 01, 2017.
Ans. In terms of the proviso to Section 12(2)(b) of the CGST Act, 2017, the time of supply with respect to the amount received in excess up to Rs. 1,000/- of the amount indicated in tax invoice, the time of supply shall be the date of issue of invoice. Where the amount is received exceeds Rs. 1,000/-, the time of supply of goods shall be the earliest of the following (in case where the invoice is already issued): (a) Date on which payment is entered in books of accounts of the supplier; or (b) Date on which payment is credited to the bank account. Accordingly, the time of supply in each of the scenarios given in the example would be as follows: Scenario 1: The time of supply of goods with respect to the amount of Rs. 500/- received in excess shall be the date of invoice. Scenario 2: The time of supply would be as follows: Date on which payment is entered in books of accounts of the supplier July 30, 2017 Time of supply shall be July 28, Date on which payment is credited to the bank 2017 account July 28, 2017
Ans. The date of payment as referred in provisions relating to time of supply of goods shall be the earliest of the following: (a) date when the payment entry in relation to supply of goods is recorded in books of accounts; or (b) date on which the payment is credited to suppliers bank account.
Ans. Section 31(1) of the CGST Act, 2017 prescribes the time at which the tax invoice should be issued by a registered taxable person supplying goods. Accordingly, the due date for issuance of invoice would be as follows: (a) Supply involves movement of goods – It is provided that the tax invoice should be issued before or at the time of removal of goods for supply to the recipient. As such, it is inferred that the date of removal of goods shall be the ‘due date of issuance of invoice’; (b) Any other case – delivery of goods or making goods available to the recipient. As such, it is inferred that the date on which goods are delivered to the recipient or the date on which goods are made available to the recipient is the ‘due date of issuance of invoice’.Proviso to Section 31(1) of the CGST Act, 2017 also empowers the Central / State Government prescribe the time limit for issuance of invoice by way of notification in certain categories of supplies. In such a scenario, the invoice should be issued within the time limit as notified.
Ans. In terms of Section 2(30) of CGST Act, 2017 ‘composite supply’ is defined to mean a supply made by a taxable person to a recipient comprising two or more supplies of goods or services, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The illustration appended to the definition of ‘composite supply’ reads as follows: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply. Section 8(a) provides that the composite supply whether involves supply of goods or services shall be decided based on the principal supply forming part of ‘composite supply’. In other words, if the composite supply involves supply of services as principal supply, such composite supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable. Alternatively, if composite supply involves supply of goods as principal supply, such composite supply would qualify as supply of goods and accordingly, the provisions relating to time of supply of services would be applicable.
Ans. The general provisions relating to time of supply of goods will be applicable where composite supply involves goods as principal supply. Accordingly, the time of supply of such composite supply shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice; or (c) Date on which supplier receives the payment; or (d) Date on which payment is entered in books of accounts of the supplier; or (e) Date on which payment is credited to the bank account.
Ans. In terms of Section 2(32) of the CGST Act, 2017, ‘continuous supply of goods’ is defined to mean a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire,cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis. Due date for issuance of invoice in terms of Section 31(4) involving successive statement of accounts (SOA) or successive payments is Before/ at the time of issue of each SOA or Before/ at the time of receipt such successive payment Accordingly, the time of continuous supply of goods, in terms of Section 12 shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice; or (c) Date on which supplier receives the payment; or (d) Date on which payment is entered in books of accounts of the supplier; or (e) Date on which payment is credited to the bank account.
Ans. The CGST Act, 2017 do not provides separate provisions for ascertaining time of supply of goods by e-commerce entities. Here the supplier of goods is a person who make the supply through an e commerce entity. Accordingly, in terms of Section 12 time of supply shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice; or (c) Date on which supplier receives the payment; or (d) Date on which payment is entered in books of accounts of the supplier; or (e) Date on which payment is credited to the bank account.
Ans. In terms of Section 12(6) of the CGST Act, 2017 the date on which the supplier receives interest, penalty or late fee which forms part of value will be the time of supply. However, reference can also be drawn to proviso to Section 12(2) where such additional value is received in the form of interest, penalty and late fee. Accordingly, the time of supply with respect to the amount received in excess up to Rs. 1,000/- of the amount indicated in tax invoice, the time of supply shall be the date of issue of invoice. Where the amount received exceeds Rs. 1,000/-, the time of supply of goods shall be the earliest of the following (in case where the invoice is already issued): (a) Date on which payment is entered in books of accounts of the supplier; or (b) Date on which payment is credited to the bank account.
Ans. In terms of Section 13, the time of supply of services shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice under Section 31; or (c) Date when the payment entry in relation to supply of services is recorded in books of accounts; or (d) Date on which the payment is credited to suppliers bank account. Illustration: Date of invoice December 31, 2017 Time of supply of services shall be December 10, 2017 Due date of issue of invoice under Section 31 December 15, 2017 Advance payment received by way of cheque and the entry for receipt of payment is recorded in books of accounts December 10, 2017 Amount credited to bank account of supplier December 12, 2017
Ans. In terms of the proviso to Section 13(2)(b) of the CGST Act, 2017 the time of supply with respect to the amount received in excess up to Rs. 1,000/- of the amount indicated in tax invoice, the time of supply shall be the date of issue of invoice. Where the amount received exceeds Rs. 1,000/-, the time of supply of services shall be the earliest of the following (in case where the invoice is already issued): (a) Date on which debit note is issued; or (b) Date on which payment is entered in books of accounts of the supplier; or (c) Date on which payment is credited to the bank account. Accordingly, the time of supply in each of the scenarios given in the example would be as follows: Scenario 1: The time of supply of services with respect to the amount of Rs. 500/- received in excess shall be the date of invoice. Scenario 2: The time of supply would be as follows: Date on which payment is entered in books of accounts of the supplier July 30, 2017 of supply shall be July 28, Date on which payment is credited to the bank 2017 account July 28, 2017
Ans. In terms of Section 13 of the CGST Act, 2017 the time of supply of services refers to the date on which payment is received by the supplier. Accordingly, the service provider should remit the applicable taxes on such advances in the month in which the money is received in advance even otherwise the services are not supplied / provided. Subsequently, when the invoice is issued with respect to the advance payments received earlier, the same shall be declared in the returns pertaining to the month in which the invoice is issued, by giving reference of the ‘Transaction ID’ generated at the time of remitting taxes on the advance payments (in the earlier tax periods).
Ans. In terms of Section 13(3) of the CGST Act, 2017, the time of supply of services for remittance of tax under reverse charge mechanism shall be the earliest of the following: (a) Date of payment recorded in the books of accounts; (b) Date of debit in bank account; (c) Sixty days from the date of issue of invoice or any other document by the supplier; or (d) Date of entry in the books of accounts of the recipient.
Ans. Section 13 of the CGST Act, 2017 does not refer to the date of completion of provision of service. However, it refers to the due date of issuance of invoice. In terms of Section 31(2), a registered taxable person supplying taxable services shall, before or after the provision of service but within a period prescribed in this behalf, issue a tax invoice, showing the description, value, the tax payable thereon and such other particulars as may be prescribed.
Ans. The ‘date of payment’ referred in provisions relating to time of supply of services shall be the earliest of the following: (a) date when the payment entry in relation to supply of services is recorded in books of accounts; or (b) date on which the payment is credited to suppliers bank account.
Ans. In case of associated enterprises located within India, the time of supply in terms of Section 13(3) shall be the earliest of the following: (a) Date of payment as per books of accounts; or (b) Date on which payment is debited in the bank account of the supplier; or (c) Sixty days from the date of issuing invoice by the supplier; or (d) Date of entry in the books of accounts of the recipient. Where associated enterprises is located outside India, the time of supply shall be the earliest of the following dates: (a) Date of entry in the books of accounts of the recipient; or (b) Date of payment. Particulars Non-associated enterprises Associated Enterprises Date on which payment is entered in books of accounts December 15, 2017 December 15, 2017 Date on which payment is debited to bank account December 17, 2017 December 17, 2017 Date of issuance of invoice December 10, 2017 December 10, 2017 Sixty days from the date of issuing invoice February 09, 2018 February 09, 2018 Date of entry in the books of accounts of the recipient December 10, 2017 December 10, 2017 Time of supply December 10, 2017 December 15, 2017
Ans. In terms of Section 2(12), the ‘associated enterprises’ shall have the meaning assigned to it in Section 92A of the Income Tax Act, 1961.
Ans. A registered taxable person supplying services, in terms of Section 31(2) shall issue the tax invoice before or after the provision of service but within a period prescribed in this behalf. Accordingly, the last date within which the invoice should be issued will be the ‘due date of issuance of invoice’.As per the draft Invoice Rules, 2017 the time limit for issuing a tax invoice is thirty days from the date of provision of service.
Ans. In terms of entry (a) to clause 6 of schedule II, the works contract in relation to immovable property under the GST regime should be treated as supply of service. Accordingly, in terms of Section 13, the time of supply of services shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice under Section 31; or (c) Date when the payment entry in relation to supply of services is recorded in books of accounts; or (d) Date on which the payment is credited to suppliers bank account.
Ans. The general provisions relating to time of supply of services are applicable where composite supply involves services as principal supply. In terms of Section 13, the time of supply of services shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice under Section 31; or (c) Date when the payment entry in relation to supply of services is recorded in books of accounts; or (d) Date on which the payment is credited to suppliers bank account.
Ans. In terms of Section 2(74) of the CGST Act, 2017 ‘mixed supply’ is defined to mean two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. The illustration appended to the definition of ‘mixed supply’ reads as follows: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately. Section 8(b) provides that the mixed supply whether involves supply of goods or services shall be ascertained on the basis of a particular supply forming part of the mixed supply which attracts highest rate of tax. In other words, the mixed supply, if involves supply of services liable to tax at the higher rates than any other goods orservices, such mixed supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable. Alternatively, the mixed supply, if involves supply of goods liable to tax at the higher rates than any other goods or services, such mixed supply would qualify as supply of goods and accordingly the provisions relating to time of supply of services would be applicable. Eg: During an exhibition, the package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices are supplied by the organizer of exhibition. This would qualify as mixed supply since exhibition of services and other goods are supplied in conjunction. The rate of tax applicable (presumed) to each of the goods and services: Exhibition services 18% Dry fruits and fruit juices 5% Canned foods, sweets, chocolates, cakes and aerated drink 12% Nature of supply (highest rate) Supply of services
Ans. ‘Continuous supply of services’ in terms of Section 2(32) of CGST Act, 2017 means supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such service as the Central or a State Government may, whether or not subject to any condition, by notification, specify. Accordingly, in terms of Section 13, the time of supply of services shall be the earliest of the following: (a) date of issue of invoice; or (b) due date of issue of invoice under Section 31; or (c) date when the payment entry in relation to supply of services is recorded in books of accounts; or (d) date on which the payment is credited to suppliers bank account.
Ans. The CGST Act, 2017 does not provide separate provisions for ascertaining the time of supply of service where such services are supplied online. Accordingly, in terms of Section 13, the time of supply of services shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice under Section 31; or (c) Date when the payment entry in relation to supply of services is recorded in books of accounts; or (d) Date on which the payment is credited to suppliers bank account.
Ans. In terms of Section 7(1) of the CGST Act, 2017 supply includes import of services for a consideration whether or not in the course or furtherance of business. Accordingly, the recipient of services would be liable to pay tax on import of service. The CGST Act, 2017 does not provide separate provisions for ascertaining the time of supply in case of import of services. Accordingly, in terms of Section 13 shall be the earliest of the following: (a) Date of issue of invoice; or (b) Due date of issue of invoice; or (c) Date on which supplier receives the payment; or (d) Date on which payment is entered in books of accounts of the supplier; or (e) Date on which payment is credited to the bank account.
Ans. In terms of Section 13(6) of the CGST Act, 2017 the date on which the supplier receives interest, penalty or late fee which forms part of value will be the time of supply. However, reference can also be drawn to proviso to Section 13(2) where such additional value is received in the form of interest, penalty and late fee. Accordingly, the time of supply with respect to the amount received in excess up to Rs. 1,000/- of the amount indicated in tax invoice, the time of supply shall be the date of issue of invoice. Where the amount received exceeds Rs. 1,000/-, the time of supply of goods shall be the earliest of the following (in case where the invoice is already issued): (a) Date on which payment is entered in books of accounts of the supplier; or (b) Date on which payment is credited to the bank account.
Ans. Three important events need to be considered – Date of raising invoice, receipt of payment and completion of supply. If any of the two events occur before the change in rate of tax then the old rate will apply else the new rate will apply. Illustration – Rate of GST on Supply made on or after September 1, 2017 increased from say 18% to 20% then the tax to be applied on supplies will be as under Before – Event occurred before September 1, 2017 After – Event occurred on or after September 1, 2017 Supply Provided Invoice issued Payment received GST Rate Before After After 20% Before Before After 18% Before After Before 18% After Before After 20% After Before Before 18% After After Before 20%
Ans. The date of receipt of payment is date of entry in the books or date of credit in the bank account whichever is earlier.
Ans. If the invoices is also raised before the change in rate of tax then the old rate will be applicable even though the supply is complete after the change in rate of tax. Else, the new rate will be applicable.
Ans. For payments received before the change in rate of tax, if invoices are also raisedbefore the change in rate of tax, old rate will be applicable. Else the new rate will be applicable. For slab completion before the change in rate of tax, if invoices are also raised before the change in rate of tax, old rate will be applicable. Else the new rate will be applicable.
Ans. Separate provisions have been provided under the present service tax laws to determine the service tax payable on reverse charge mechanism which is linked to date of payment to the service provider unless the payment is made within 3 months of the date of invoice. However, such provisions are not forthcoming from the CGST Act, 2017. Accordingly, general provisions relating to change in rate of tax shall be applied in determining the appropriate rate of tax.
Ans. If the supply was complete for such outstanding balances and the invoice is also issued before change in rate of tax then old rate will be applicable. Else the new rate will be applicable.
Ans. If the customer is entitled to claim the credit of tax mentioned in the original invoice, the input tax credit of additional taxes can be availed which is subject to conditions specified in this regard.
Ans. No. Section 15 and the rules prescribed under this Section are common for supply of goods and supply of services. The provisions of valuation and the rules would apply to composite supplies and mixed supplies equally.
Ans. No. Customs Law will be applicable for valuation of imported goods.
Ans. No. Customs Law is applicable only for valuation of imported goods. Section 15 read with valuation rules will apply for valuation of import of services
Ans. Contract price is more specifically referred to as ‘transaction value’ and that is the basis for computing tax. However, the transaction will not be accepted as the value of supply where the supply is between related persons (including different registrations of the same PAN and principal-agent supplies), or where the consideration payable is not wholly in money..
Ans. No. Reference to Valuation Rules is required only when the supply is between related persons (including different registrations of the same PAN and principal-agent supplies), or where the consideration payable is not wholly in money. However, in specific cases where the categories of goods and services are notified in this regard (such as moneychanging), the valuation rules must be referred to, irrespective of the fact that the supplier and recipient are unrelated and price is the sole consideration.
Ans. Where transaction value is partly, or not wholly in money, the same cannot be accepted. The value of supply should be determined under the Valuation Rules.
Ans. Section 15(5) empowers the Government to prescribe the value of certain supplies which may or may not be linked to the transaction value. Thus, in cses such as inter- State stock transfer to a branch would be valued based on a “deemed value” as determined under the valuation rules.
Ans. The relationship will be examined based on the explanation appended to Section 15 which defines the term “related persons”. Accordingly, the following persons would be treated as “related persons” for the purpose of GST: such persons are officers or directors of one another’s businesses; such persons are legally recognised partners in business; such persons are employer and employee; any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; one of them directly or indirectly controls the other; both of them are directly or indirectly controlled by a third person; together they directly or indirectly control a third person; or they are members of the same family; persons who are associated in the business of one another where one is the sole agent/ sole distributor/ sole concessionaire of the other.
Ans. The law mandates a reference to valuation rules where the supply is between related persons. However, since the supply is at “arm’s length price”, the fact that the price assigned to the transaction is an ‘open market value’ should be established.
Ans. Under the GST law, consideration can be in “money or otherwise”, and also includes the monetary value of an act or forbearance, in relation to a supply. Consideration may also flow from any person other than the recipient. In cases where the money received in respect of the supply is not the sole consideration, the “price is not the sole consideration”. E.g. Buyer of capital goods discharges the loan of seller, goods purchased on exchange offer, etc.
Ans. Yes. Section 15 provides for inclusions to the transaction value (on which GST will be payable). The below are broadly, the inclusions prescribed: (a) any taxes, duties, cesses, fees and charges levied under a law other than the GST law, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient, but not included in the price; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient, and any amount charged for anything done by the supplier in respect of the supply until delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Government.
Ans. Transaction Value does not include the taxes payable under GST. Therefore, there is no order required to be followed for arriving at the amount of tax. Both CGST and SGST/UTGST should be calculated on the ‘transaction value’.Note: Taxes, cesses etc. applicable under any other law will have to be included in the transaction value for computation of taxes under GST.
Ans. The law provides that expenses incurred by the recipient in relation to supplies made by supplier of goods / services is to be included in the transaction value, only where such expenses were to be borne by the supplier. However, in the instant case, it cannot be said that the suppliers are liable to incur the cost of booking of flight tickets or that the cost was incurred by the recipient on behalf of the supplier. Hence, the value of flight tickets booked are not required to be included by the Chartered Accountants on their invoice, for computation of transaction value of audit service.
Ans. All the expenses incurred by the supplier, in relation to the supply, -are required to be included in the transaction value to the extent they are charged for. Even if the contract is for delivery of goods ex-factory, and the supplier incurs the cost of transportation on behalf of the recipient for delivery of goods to the recipient, the cost should be included in the transaction value if the supplier charges the recipient for the same. However, if the contract price is for delivery of goods is at the location of the recipient, then the transportation charges incurred by the supplier would not be required to be added to the transaction value, as the cost is contained in the said value.
Ans. Yes, the following two types of discounts would be excluded from transaction value: Discount at the time of Sale – Allowed as a deduction provided if the discount is recorded on the face of invoice. Post-supply Discount – If such discount is based on the arrangement entered into before or at the time of supply, AND where the same can be linked to relevant invoices, then the same is allowed as a discount on the condition that the recipient reverses the tax credit related to such discount availed earlier.
Ans. Quantity Discounts are allowed based on the volume / value of purchases made by the customer for a particular period. The discount is allowed at the end of a particular period based on the pre-agreed rates entered into between the supplier and the recipient. Such discounts will be eligible for exclusions by way of credit notes, only where the supplier is in a position to link the discount to each and every invoice, and the recipient reverses the credit to the extent of such discount.
Ans. The laws assume that the relationship between the contracting parties prima facie has influenced the price at which the transaction is being carried out. Since the relationship did not exist on the date the prices were finalized (i.e., entering into the contract), the transaction value should be accepted in case of supplies effected prior to the forming of such relationship. However, for supplies effected after the two persons become ‘related persons’ for the purpose of the GST law, the transaction value cannot be accepted and reference must be made to the valuation rules.
Ans. Interest, Penalty or Late fee charged from the customer would also be liable to GST. However, the law provides that the GST liability on such values can be paid only on receiving such additional amounts.
Ans. Subsidies received by the supplier, from Central / State Governments are not required to be included in the transaction value of supplies effected by him, even if the subsidies are directly linked to the supplies made by him.
Ans. Subsidies directly linked to the price of the supply are to be included in the transaction value, where such subsidies are not provided by the Central/ State Governments. Where it can be established that the price of the supply is not directly linked to the subsidy given on capital goods, the same is not required to be included.
Ans. Yes. Any expenses incurred by the supplier relating to supply until the services are delivered, and which are charged to the recipient, will have to be included in the transaction value.
Ans. Presently, under the Service tax law, the aforementioned expenses are treated as reimbursements as ‘pure agent’ and are hence, not liable to service tax. Similar treatment exists in case of pure agents under the GST law as well, where the expenditure/ costs are incurred by the supplier acting as a pure agent of the recipient, on fulfilment of prescribed conditions.

Chapter III Input Tax Credit

Sample DescriptionAns. No. ‘Inputs’ are defined under Section 2(59) of the CGST Act to mean any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. ‘Capital goods’ are defined under Section 2(19) of the CGST Act to mean goods, the value of which is capitalized in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.
Ans. Input tax credit means the credit of central tax, state/ union territory tax and integrated tax available to a registered person on the inward supply of goods or services or both, made to him excluding the tax paid on supplies liable to composite tax. It further includes the integrated tax applicable on import of goods and the tax payable under reverse charge mechanism.
Ans. A registered person will be entitled to claim input tax credit only upon fulfillment of the following conditions: He is in possession of tax invoice/ debit note issued by a registered supplier or any other tax paying documents; He has received the goods and /or services or both; The tax charged on such supply is paid to the Government (by way of cash or by utilizing input tax credit) He has furnished a valid return.
Ans. Yes. Input tax credit will be available in full with respect to inputs and capital goods, subject to fulfillment of the prescribed conditions under Section 16(2) of the CGST Act.Even in the case of supply of goods in lots/ instalments, the credit would be available in full on the receipt of the last lot/ installment. The existing concept of partial credit on purchase of capital goods under the CENVAT Credit Rules, 2004 (i.e. 50% in the year of receipt and 50% in subsequent years) has been done away with.
Ans. The tax paying documents have been prescribed under Rule 1 of the Input Tax Credit Rules, 2017 as under: An invoice issued by supplier of goods or services. Bill of Entry Invoice raised by the recipient in case of inward supplies from unregistered persons or reverse charge mechanism supplies ISD Invoice issued by an Input Service Distributor for distribution of credit A debit note issued by supplier of goods or services
Ans. The time limit prescribed is one hundred and eighty days (180 days) from the date of issue of invoice by the supplier of service/goods. If the recipient fails to do pay the value of supply (with tax) within 180 days, such input tax credit would be payable by the recipient along with applicable interest. The above time limit is not applicable to supplies that are liable to tax under reverse charge mechanism
Ans. No. there is no provision under the GST law to allocate part payment of the invoice towards the taxes first so that the input tax credit can be allowed. Second proviso to Section 16(2) of the CGST Act clearly provides that the entire value of supply (with tax) is to be paid within 180 days from the date of issue of invoice. Therefore, as long as the entire payment is made within 180 days, the recipient would be entitled to claim the credit in full. Assuming that only part payment is made within 180 days, availing of proportionate credit based on such part payment is not provided for under the CGST law and thus, would be subject to litigation.
Ans. Yes. Explanation to Section 16(2)(b) of the CGST Act provides for deemed receipt of goods where the goods are delivered by the supplier to the recipient or any other person on the direction of the recipient, whether acting as agent or otherwise, before or during movement of goods.
Ans. No. Section 16(3) provides that input tax credit will not be allowed on the tax component of cost of capital goods/ plant and machinery, if the depreciation on the said tax component is claimed under the provision of Income Tax Act, 1961 by the taxable person. Therefore, the registered person has an option to either claim depreciation (under the Income Tax Act, 1961) or claim credit under the GST law, on the said tax component. For example: Cost of Asset = Rs. 1000/- Tax = Rs. 100/- Total = Rs. 1100/- If depreciation is charged on Rs. 1000/-, then credit will be available under the GST law and if depreciation is charged on Rs. 1100/- then credit will not be available.
Ans. A registered person is not entitled to claim input tax credit in respect of any supply of goods or services after the earlier of following two events: (a) Filing of the monthly return under Section 39 of the Act for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains; (b) Furnishing of the annual return under Section 44 of the Act. However, in cases of credit in special circumstances like new registration, voluntary registration, etc. the credit will not be available after the expiry of one year from the date of issue of tax invoice.
Ans. The credit on goods/ services used partly for business and partly for non-business purposes will be allowed proportionately to the extent it is attributable for businesspurposes. The manner of calculation of such credit is provided in Rule 7 (1) of the Input Tax Credit Rules, 2017.
Ans. ‘Exempt Supplies’ for this purposes means all supplies other than taxable and zero rated supplies and specifically include the following: Supplies liable to tax under reverse charge mechanism; Transactions in securities; Sale of land; Sale of building.
Institute of Chartered Accountants of India purposes. The manner of calculation of such credit is provided in Rule 7 (1) of the Input Tax Credit Rules, 2017. Q 12. Credit attributable to exempt supplies is not available to a registered person. What are the supplies that are included in exempt supplies? Ans. ‘Exempt Supplies’ for this purposes means all supplies other than taxable and zero rated supplies and specifically include the following: Supplies liable to tax under reverse charge mechanism; Transactions in securities; Sale of land; Sale of building. Q 13. Will compliance of the provisions of Section 17(2) regarding restriction of credits relatable to exempt supplies be mandatory to a Banking Company/ Financial Institution engaged in accepting deposits or extending loans or? Ans. No. A Banking Company/ Financial Institution engaged in supplying services by way of accepting deposits, extending loans or advances has the following options: Comply with the provisions of Section 17(2) regarding restriction of credits relatable to exempt supplies in the manner prescribed; or Avail 50% of the eligible input tax credit every month on inputs, capital goods and input services and the remaining 50% shall not be available. The option exercised cannot be withdrawn in the same year. The restriction of 50% will not apply to the tax paid on supplies made by one registered person to another registered person having the same PAN
Ans. No. The option once exercised by the Banking Company/ Financial Institution cannot be withdrawn during the remaining part of the financial year.
Ans. No. Section 17(5) (h) specifically restricts input tax credit on goods disposed of by way of gift or free samples.
Ans. Section 17(5) (h) specifically restricts input tax credit on goods lost, stolen, destroyed, written off or disposed by way of gift or free samples. Therefore, If the goods have been destroyed in full, input tax credit will not be available. However, if in the process of manufacture some inputs become waste and are sold as scrap, credit shall not be denied. Further, output tax shall be payable on sale of such waste/scrap.
Ans. Yes. Section 17(5) (h) specifically restricts input tax credit on goods lost, stolen, destroyed, written off or disposed by way of gift or free samples. Therefore, input tax paid on goods which are destroyed/pilfered and shortage will not be eligible
Ans. Yes. The mobile phones/ laptops would be covered under the definition of ‘inputs’ as they are used in the course/ furtherance of business and hence, the input tax paid on such goods will be available as input tax credit
Ans. The restriction of input tax credit on motor vehicles and conveyances provided under Section 17 (5) (a) is on such motor vehicles/ conveyances except when they are used for further supply of vehicles/ conveyances, transportation of passengers, imparting training or for transportation of goods only. Therefore, input tax credit will be available when it is used by courier agency, outdoor catering, pandal and shamiana and tour operator as it covers use of vehicles for transportation of goods/ transportation of passengers
Ans. Yes. Section 17(5) (b)(iii)(A) provides that tax paid w.r.t rent a cab services, life/ health insurance services will be eligible as input tax credit where the Government notifies that such services are obligatory for an employer to provide to its employees under any law for the time being in force.
Ans. Tax paid w.r.t rent a cab services, life/ health insurance services will be eligible as input tax credit subject to the following conditions: If the Government notifies that such services are obligatory for an employer to provide to its employees under any law for the time being in force, or Such services are used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply.
Ans. Input tax credit is not available on goods or services received by a taxable person forconstruction of an immovable property on his own account other than plant and machinery even when used in course or furtherance of business. The word “construction” includes reconstruction, renovation, additions or alterations or repairs to the extent of capitalization to the said immovable property. If the cost of interiors is capitalized towards the cost of immovable property then it forms part of the cost of immovable property (Service apartment) and accordingly taxes paid on change of interiors of service apartment will not be eligible as input tax credit
Ans. The expression “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes— (i) land, building or any other civil structures; (ii) Telecommunication towers; and (iii) Pipelines laid outside the factory premises.
Ans. No. In case of new registrations and voluntary registrations, input tax credit can be availed only on the stock held (inputs, semi-finished goods or finished goods) preceding the day when he is liable to pay tax or preceding to the date of grant of voluntary registration. Input service and capital goods lying in stock are not eligible for ITC.
Ans. In case of compulsory registration, the input tax credit can be availed on the stocks held immediately preceding the date from which he becomes liable to pay tax (date of grant of registration may be later) and in case of voluntary registration, the input tax credit can be availed on the on stocks held immediately preceding the date of grant of registration.
Ans. Yes. In such a scenario, the registered person will be entitled to claim input tax credit on the stock held (inputs, semi-finished goods or finished goods) and on the capitalgoods preceding the day when he is liable to pay tax under the regular scheme. The credit of capital goods shall stand reduced by five percentage points for every quarter.
Ans. In terms of Section 18(1)(d) of the Act, where an exempt supply made by a person becomes taxable supply, such a person will be entitled to claim credit of tax paid on stock held (inputs, semi-finished goods or finished goods) relatable to exempt supply and on the capital goods exclusively used for exempt supply preceding the day when the supply becomes taxable. Tax paid on capital goods used for both, taxable and exempt supply will not be eligible as input tax credit.
Ans. No. In terms of Section 18(3) of the Act, transfer of unutilized input tax credit is permissible only when there is change in constitution of the business with the specific provision of transfer of liabilities.
Ans. There is no specific provision under the Act prohibiting transfer of such unutilized credit. Rather, Section 18(3) specifically provides that when there is a change in constitution of a registered person on account of sale, merger, or amalgamation of business with specific provision of transfer of liabilities, the registered taxable person shall be allowed to transfer the input tax credit which remains unutilized. Therefore, if the recipient is registered under the Act, he should be eligible to claim such unutilized credits. In a situation, where the recipient is not registered under the Act, he may have to make a fresh application for registration and claim such unutilized credits after making an intimation to the department.
Ans. Yes. In terms of Section 18(4) of the CGST Act, an amount equal to the credit of tax paid on stock held (inputs, semi-finished goods or finished goods) and capital goods (reduced by percentage points) on the day preceding the date of opting for composition/ effecting exempt supplies will have to be paid. The same can be paid by utilization of credit/ cash payments.
Ans. Yes. In terms of Section 18(6) of CGST Act, in case of supply of capital goods or plant and machinery on which input tax credit has been taken, the registered person will have to pay an amount equal to: Input tax credit taken on the said capital goods/ plant and machinery reduced by the percentage points specified ; or the tax on the transaction value of such goods whichever is higher
Ans. Yes. In terms of proviso to Section 18(6) of CGST Act, in case of supply of such goods as scrap, the registered person is required to pay the tax on the transaction value of such goods.
Ans. The time limit prescribed for return of goods sent to job work under the exemption route is 1 year of being sent out (for inputs) and 3 years of being sent out (for capital goods). Therefore, if the inputs/ capital goods are returned to the principal after 1 year/ 3 years (as applicable), then such return of goods to the principal after the said period would be treated as ‘supply’. This time limit is not applicable to moulds and dies, jigs, fixtures, and tools.
Ans. Yes. Section 19(2) and Section 19 (5) allows the principal to take input tax credit of goods not received by him, if the goods are sent directly to the job workers premises by the vendor.
Ans. No. The time limit of one year and three years is not applicable to return of moulds and dies, jigs, fixtures, and tools by the job worker to the principal.
Ans. It is mandatory that the Input Service Distributor and the recipient of credit are persons having the same PAN, whether or not they are located in the same State.
Ans. The Input Service Distributor is permitted to distribute the credit as follows: Central tax as central tax or integrated tax; and Integrated tax as integrated tax or central tax.
Ans. No. Section 20(1) does not permit distribution of CGST as SGST and vice versa. This flows from the fundamentals of the GST law wherein the credit of CGST cannot be utilized against SGST and vice versa.
Ans. In terms of Section 20(2) of CGST Act, an Input Service Distributor can distribute the credit subject to the following conditions: The credit should be distributed to recipient against a document containing such details as may be prescribed; The amount of credit distributed shall not exceed the amount of credit available for distribution; The credit of tax paid on input service attributable to a recipient of credit shall be distributed only to that recipient; If credit is applicable to more than one recipient, then it shall be distributed only among such recipient(s) to whom the input service is attributable on pro rata basis of the turnover in a State of such supplier during the relevant period, to the aggregate of the turnover of all such recipients If credit is applicable to all recipients, the above method of allocation on pro rata may be applied with reference to all recipients.
Ans. Yes. In terms of Section 21 of the Act, the recovery provisions can be initiated if the Input Service Distributor distributes credit in contravention of the law resulting in excess distribution of credit to one/ more recipients of credit. Such credit can be recovered from the recipients along with applicable interest.
Ans. A registered person (including an Input Service Distributor) can claim input tax credit on the strength of the following documents: (a) Tax invoice issued by the supplier of goods or services or both (b) Debit note issued by a supplier (c) A Bill of entry; (d) Invoice raised by the recipient in case of inward supplies from unregistered persons or reverse charge mechanism supplies; (e) Tax Invoice issued by an Input Service Distributor (f) ISD Invoice issued by an Input Service Distributor for distribution of credit.
Ans. Input tax credit can be availed by a registered person only if: All the applicable particulars prescribed in the Invoice Rules, 2017 are contained in the document; and The relevant information contained in the document is furnished in FORM GSTR- 2 (Details of inward supply) by the recipient. Input tax credit cannot be availed on the tax paid in pursuance of any order where the demand has been raised on account of any fraud, willful misstatement or suppression of facts.
Ans. Yes. Where the value of the supply along with the tax, has not been paid to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be added to the output tax liability of the recipient. The recipient will haveto furnish the details of the supply in Form GSTR-2 for the month immediately following the period of 180 days from the invoice date and will be liable to pay interest from the date of availment of credit till the date of addition to the output tax liability.
Ans. A Banking Company/ Financial Institution engaged in supplying services by way of accepting deposits, extending loans or advances has the following options: Option 1: Comply with the provisions of Section 17(2) regarding restriction of credits relatable to exempt supplies in the manner prescribed; or Option 2: Avail 50% of the eligible input tax credit every month on inputs, capital goods and input services. A Banking Company/ Financial Institution choosing Option 2 has to follow the following procedure: The credit of tax paid on inputs and input services used for non-business purposes and those that are not eligible in terms of Section 17(5) should not be availed The credit of tax paid on supplies by another person having the same PAN can be availed in full 50% of the remaining credit will be admissible and should be claimed in Form GSTR-2 The eligible credit (as mentioned above) will be credited to the Electronic Credit Ledger
Ans. No. The ITC available for distribution by an ISD should be distributed to the recipients in the same month itself and the details should be furnished in Form GSTR-6.
Ans. No. The ISD is required to distribute the eligible and in-eligible credit separately to a recipient. Further, the integrated tax, central tax and state tax should also be distributed separately.
Ans. The eligible amount to be distributed in relation to a recipient is to be calculated in the following way:Where C1 = Amount distributed to a recipient C = Amount of credit to be distributed t1 = Turnover of the recipient during the relevant period T = Aggregate of the turnover of all the recipients during the relevant period
Ans. The distribution is to be made by an ISD as follows: (a) Integrated tax as integrated tax (b) Central tax as central tax (if the recipient and ISD are located in the same State) and as integrated tax (if the recipient and ISD are not located in the same State) (c) State tax as state tax (if the recipient and ISD are located in the same State) and as integrated tax (if the recipient and ISD are not located in the same State) (d) In case of distribution of central/ state tax as integrated tax, it should be ensured that the amount distributed equals the amount of credit of central and state tax put together.
Ans. An ISD is required to issue an ISD invoice indicating that the invoice is issued only for distribution and an ISD credit note for reduction of credit (if already distributed).
Ans. The credit reduced by issuance of an ISD credit note will be apportioned to each recipient in the same ratio in which the credit of the original invoice was distributed.
Ans. Yes. The amount of credit reduced due to issuance of credit note shall be reduced from the amount to be distributed in the month in which the credit note is included in the return in FORM GSTR-6; and added to the output tax liability of the recipient and where the amount so apportioned is in the negative by virtue of the amount of credit to be distributed is less than the amount to be adjusted
Ans. The conditions prescribed under Rule 5 of the Input Tax Credit Rules, 2017 are: (a) The credit on capital goods can be claimed after reduction of 5 percentage points per quarter from the tax paid on such capital goods from the date of invoice(b) A declaration has to be made by the recipient to the effect that he is eligible to claim the credit, within 30 days of becoming eligible to claim the credit in Form GST ITC-01 with complete details of the inputs and capital goods lying in stock (c) The details furnished should be certified by a practicing Chartered/ Cost Accountant if the aggregate value of claim of credit exceeds Rs. 2 Lakh. (d) The credit details furnished will be matched and verified with the corresponding details furnished by the supplier.
Ans. The registered person is required to furnish the details of sale, merger, amalgamation, de-merger, lease, transfer of business in Form GSTR ITC-02 electronically with a request to transfer the unutilized credit to the transferee.
Ans. In case of demerger, the credit will be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.
Ans. The conditions prescribed under Rule 6 of the Input Tax Credit Rules, 2017 are: (a) The details of the sale, merger, amalgamation, de-merger, lease, transfer of business should be furnished in Form GSTR ITC-02 (b) A certificate issued by a practicing Chartered/ Cost Accountant should be furnished certifying that the sale, merger, amalgamation, de-merger, lease, transfer of business has been done along with a provision for transfer of liabilities. (c) Upon acceptance of the details by the transferee, the credit specified in Form GSTR ITC-02 will be credited to the electronic credit ledger. (d) The inputs and capital goods are to be accounted in the transferee’s books.
Ans. The credit attributable to exempt supplies in such cases are determined as under in terms of Rule 7 of the Input Tax Credit Rules, 2017: D1 = (E/F) x C2 Where D1 = Credit attributable to exempt supplies E = aggregate value of exempt supplies (all supplies other than taxable and zero rated supplies)F = total turnover of the person in the tax period C2 = Total input tax in period reduced by Tax attributable exclusively for non-business purpose Tax attributable exclusively for exempt supplies Ineligible credits as per Section 17(5) Tax attributable exclusively for taxable supplies (including zero rated supplies)
Ans. In terms of Rule 7(j) of the Input Tax Credit Rules, 2017, the credit attributable to nonbusiness purpose (D2) will be equal to 5% of ‘C’ (Refer Answer to Q16)
Ans. The eligible credit in such cases are determined as under in terms of Rule 7 (k) of the Input Tax Credit Rules, 2017: Net eligible credit = C – (D1 + D2) D1 = Credit attributable to exempt supplies D2 = Credit attributable to non-business purposes (5% of C)
Ans. No. The recipient is required to do the apportionment on an annual basis also before the due date of filing the return of the September month of the following year. The differentials will be liable to be paid with interest (if the annual disallowance is higher) and will be eligible as credit (if the annual disallowance is lesser).
Ans. The credits are determined in terms of Rule 8 of the Input Tax Credit Rules, 2017 are as under: (a) Input tax in respect of capital goods used or intended to be used exclusively for non-business purposes or used or intended to be used exclusively for effecting exempt supplies shall be indicated in FORM GSTR-2 and shall not be credited to his electronic credit ledger (b) Input tax in respect of capital goods used or intended to be used exclusively for effecting taxable supplies including zero-rated supplies shall be indicated in FORM GSTR-2 and shall be credited to the electronic credit ledger(c) Out of the total input tax credit on capital goods, the amount of input tax credit in (a) and (b) shall be deducted from total input tax credit and shall be credited to the electronic credit ledger and the useful life of such good shall be taken as five years. (d) The common input tax credit attributable to exempt supplies shall be calculated as a ratio of the aggregate value of exempt supplies to the total turnover of the person in the tax period. (e) In case if the turnover details are not available then the values for the preceding tax period shall be taken for calculation.
Ans. In terms of Rule 9 of the Input Tax Credit Rules, 2017, the reversal of input tax credit relating to inputs lying in stock will be calculated proportionately on the basis of corresponding invoices on which credit had been availed. For capital goods, the input tax credit relating to the remaining residual life in months shall be computed on pro-rata basis, taking the residual life as five years.(Part of the month shall be ignored while calculation)
Ans. If the invoices relating to inputs in stock are not available, the prevailing market price of goods on the effective date of occurrence of the events i.e. change of the scheme from Composition to Regular scheme, supplies becoming taxable which were earlier exempt and cancellation of registration, should be considered for estimation.
Ans. The conditions prescribed in respect of inputs/ capital gods sent for job work are set out in Rule 10 of the Input Tax Credit Rules, 2017 as under: (a) The inputs/ capital goods are to be sent to the job worker under the cover of a challan issued by the principal including cases where the inputs/ capital goods are sent directly to job worker; (b) The challan issued by the principal should contain the details as specified in Rule 8 of the Invoice Rules, 2017 (c) The details of challan in respect of goods dispatched to/ received from a job worker during a tax period shall be included in Form GSTR-1 furnished for that period. (d) If the inputs/ capital goods are not returned within the 1 year/ 3 years, respectively, the challan issued shall be deemed to be an invoice.
Ans. The value of land and building adopted for the purpose of paying stamp duty should be considered.

Chapter IV Registration

Sample DescriptionAns. No. Every person will have to get registered separately for each of the States from where he makes taxable supply if he is liable to for registration in terms of Sub-section (1) of Section 22 of CGST ACT.
SamAns. Yes. As per sub-section (2) of section 22 Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed dayple Description
Ans. Every Person who is liable to be registered under Section 22 or Section 24 shall apply within 30 days from the date on which he becomes liable to registration in such manner and subject to such conditions as may be prescribed.
Ans. Yes. As per proviso to Sub-Section (2) of Section 25, a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.
Ans. As per the second part of explanation to the Sub-section (4) of Section 22, taxable supply made by the registered job-worker on behalf of his principle shall not to be added to the aggregate turnover of the registered Job worker. If the Job worker is registered then only the supply made by him on behalf of the principle shall not to be considered for computing his aggregate turnover.
Ans. Yes. In terms of Sub-section (3) of Section 25, a person, though not liable to be registered under Section 22 or Section 24, may get himself registered voluntarily, andall provisions of this Act, as are applicable to a registered taxable person, shall apply to such person.
Ans. Yes. Every person should have a Permanent Account Number issued under the Income Tax Act, 1961 (43 of 1961) in order to be eligible for grant of registration under Section 25 of the CGST ACT. Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration. However, as per section 25 (7) CGST ACT, PAN is not mandatory for a non-resident taxable person for obtaining registration.
Ans. Yes. In terms of sub-section (8) of Section 25, where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under the CGST ACT, or under any other law for the time being in force, proceed to register such person in the manner as may be prescribed.
Ans. Yes. The Proper officer can reject the Application for registration if after filling the Application of registration in Form GST REG 01 the proper officer issued notice in Form GST REG 03 for further clarification and no response or no satisfactory response is given by the applicant the Proper officer may reject the Application.
Ans. Yes, the registration once granted to any person is permanent except for non-resident taxable person and casual taxable person, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended.
Ans. All UN bodies, Consulate or Embassy of foreign countries and any other class of persons, so notified, would be required to obtain a unique identification number (UIN) from the GST portal. This UIN will be needed for claiming refund of taxes paid by them on the notified supply of goods or services or both received by them.
Ans. The taxable supplier supplying to UN bodies is expected to mention the UIN on the invoices and treat such supplies as supplies to another registered person (B2B).
Ans. No. A person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him.
Ans. Where the application for registration has been submitted within thirty days from the date on which the person becomes liable to registration, the effective date of registration shall be date on which he become liable for registration. Where an application for registration has been submitted by the applicant after thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of grant of registration. In case of suo moto registration, i.e. registration pursuant to any survey, enquiry, inspection, search or any other proceedings, the effective date of registration shall be the date of order of registration.
Ans. Every supplier whose aggregate turnover exceeds Rs. 20 Lacs (10 Lacs for special category states) in a financial year is liable to get himself registered in a state from where he makes taxable suppliers. However, certain categories of persons mentioned in Section 24 of GST Law are liable to be registered irrespective of this threshold. Further, following persons shall not be liable to registration as per section 23:- (a) An agriculturist, to the extent of supply of produce out of cultivation of land. (b) Any person engaged exclusively in the business of supplying goods and/ services that are not liable to tax or wholly exempt from tax under the Act.
Ans. As per section 2 (6) of the GST Law, aggregate turnover means the aggregate value of all taxable supplies, exempt supplies, export of goods or services or both and inter- State supplies of a person having same PAN, to be computed on all India basis and excludes CGST/SGST, IGST, UGGST and cess. Aggregate turnover does not include value of inward supplies on which tax is payable on reverse charge basis.
Ans. As per Section 24 of GST Act, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit: (a) persons making any inter-State taxable supply; (b) casual taxable persons making taxable person; (c) persons who are required to pay tax under reverse charge; (d) non-resident taxable persons making taxable supply; (e) an electronic commerce operator for whom the provision of section 9(5) of GST Act apply. (f) persons who are required to deduct tax under section 51; (g) Every electronic commerce operator; (h) persons who supply goods or services or both on behalf of other taxable persons whether as an agent or otherwise; (i) input service distributor; (j) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; (k) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; (l) such other person or class of persons as may be notified by the Government on the recommendations of the Council
Ans. Yes, in case the government organisation are required to deduct tax at source u/s 51 of GST Law, shall mandatorily obtain registration under the Act,
Ans. Casual Taxable Person has been defined in Section 2 (20) of GST Law. It means a means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
Ans. Non-resident Taxable Person means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India in terms of Section 2 (77).
Ans. The certificate of registration issued to a “casual taxable person” or a “non-resident taxable person” shall be valid for a period specified in the application for registration or for a period of 90 days from the effective date of registration, whichever is earlier. However, the proper officer, at the request of the said taxable person, may extend the validity of the aforesaid period by a further period not exceeding ninety days.
Ans. Yes. A casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 27, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought. If registration is to be extended beyond the initial period of ninety days, an advance additional amount of tax equivalent to the estimated tax liability is to be deposited for the period for which the extension beyond ninety days is being sought.
Ans. Yes. Such deposited amount can utilised against the output tax liability and balance amount shall be refunded to the applicant subject to Section-54 the GST Law.
Ans. Yes. In terms of Section 28, the proper officer may, on the basis of such information furnished either by the registrant or as ascertained by him, approve or reject amendments in the registration The Application shall be made within 15 days of such change. It is to be noted that permission of the proper officer for making amendments will be required for only certain core fields of information, whereas for the other fields, the registrant can himself carry out the amendments.
Ans. Yes. Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned in Section 29 of CGST ACT. The proper officer may, either on his own motion or on an application filed by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration.
Ans. Yes. The cancellation of registration under one Act (say CGST Act) shall be deemed to be a cancellation of registration under the other Act (i.e. SGST Act). (Section 29 (4)).
Ans. Yes, in certain circumstances specified under section 29(2) of the CGST ACT, the proper officer can cancel the registration on his own. Such circumstances include: a person contravene the provisions of the Act; not filing return for a continuous period of six months (for a normal taxable person) or three returns (for Composition taxable person); registration has been obtained by means of fraud, and not commencing business within six months from the date of registration (in case of voluntary registration). However, before cancelling the registration, the proper officer shall give reasonable opportunity of being heard. (Section 29 (2)).
Ans. In such cases, the registration may be cancelled from such date including any retrospective date by the proper officer as per Section 29(2)(e).
Ans. No. There is no option to take Centralize registration for services or goods or both.
Ans. No. However the taxpayer has the option to register such separate business verticals independently in terms of proviso to Section 25(2) of CGST ACT
Ans. Yes. The ISD registration is for one office of the taxpayer which will be different from the normal registration irrespective of the threshold.
Ans. Yes. Different offices of a taxpayer can apply for ISD registration.
Ans. The transferee or the successor shall be liable to be registered with effect from the date of such transfer or succession and will have to obtain a fresh registration as per Section 22 (3) of CGST ACT.
Ans. No. Every person registered under an earlier law and having a Permanent Account Number issued under the Income Tax Act, 1961 shall be granted registration on a provisional basis and a certificate of registration incorporating the Goods and Services Tax Identification Number (GSTIN) therein, shall be made available on the Common Portal. Further, the proper officer will issue a final registration certificate after calling for information and documents.
Ans. No. Section 22 of CGST ACT does not prescribe any such condition. if Job Worker fulfil any condition of Section 22 or section 24 then only he is required to get himself registered.
Ans. Yes. The principal place of business and place of business have been separately defined under section 2(85) & 2(89) of GST Law respectively. The taxpayer will have todeclare the principal place of business as well as the details of additional places of business in the registration form.
Ans. Every application must be filed only electronically in Form GST REG 01 on the common portal.
Ans. The application for registration (FORM GST REG-01) shall be submitted online and shall be approved within 3 working days by the proper officer. If the proper officer finds that the application filed under the Act is deficient, then he may call for further clarification on the information or documents through a notice (in FORM GST-03) within 3 working days from the date of submission of application for registration. The applicant shall provide such additional data within 7 working days (In FORM GST -04), the proper officer shall approve the grant of registration within 7 working days of receiving such Form GST REG 04 giving certificate of registration (in FORM GST REG -06). If the proper officer doesn’t take any action within 3 days of receipt of application in GST REG or 7 days from receipt of form GST REG 04, then it shall deemed that the application of registration is approved.
Ans. Yes, registration certificate shall be granted in Form GST REG 06 and the same shall be available on the common portal.
Ans. The proper officer may cancel such registration if the person who has voluntarily registered doesn’t commence the business within 6 months for the date of registration. The registered person himself may apply for cancellation of registration only after the expiry of 1 year from the effective date of registration.
Ans. No. If any one business vertical of a taxable person becomes ineligible for paying tax u/s 10, then all other business verticals of the said taxable person shall become ineligible for paying tax u/s 10.
Ans. A non-resident taxable person shall become liable for registration when he makes any taxable supply as per Section 24(v).
Ans. When a registration of a taxable person is cancelled by a proper officer on his own motion, then such person shall apply for revocation of such cancellation to such proper officer within 30 days from the date of service of cancellation order. No revocation isand the tax thereon is paid along with applicable interest, penalty and late fee. If the proper officer is satisfied that sufficient ground for revocation of cancellation are there then such officer may revoke the cancellation of the registration by an order within 30 days from the receipt of such application of revocation. The proper officer may call for further details and clarification within such period as prescribed upon filing the application. The proper cannot reject the application for revocation without giving the person a reasonable opportunity of being heard.
Ans. Yes, but the time limit is not mentioned for applying for cancellation of provisional registration.
Ans. In terms of section 22(1) read with Section 25(1) such persons need to obtain a separate registration in every such States.
Ans. As per Section 22(1) A taxable person should obtain registration in every State from where he makes taxable supply of goods or services or both.
Ans. No, Cancellation of registration does not affect the tax liability of the person which is incurred prior to the date of cancellation. He shall still be liable to pay the amount of tax and other dues or any other obligation for a period prior to the date of cancellation irrespective of the fact that whether the same is determined before or after the cancellation of registration.
Ans. Every registered taxable person whose registration has been cancelled shall pay the amount of ITC on inputs which are held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such cancellation or the output tax payable on such goods whichever is higher to be calculated in a manner as prescribed.reduced by such percentage points as maybe prescribed in this behalf or tax on transaction value whichever is higher. The above said payment can be made by debiting the electronic credit ledger or through cash ledger.
Ans. A Primary authorized signatory is the person who is primarily responsible to perform action on the GST System Portal on behalf of taxpayer. All communication from the GST System Portal relating to taxpayer will be sent to him. He may be resident or nonresident.
Ans. States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
Ans. The registered taxable person shall intimate within 15 days of such amendment by submitting an application through electronically in Form GST REG 13.
Ans. Yes, Every registered taxable person shall display his registration certificate in a prominent location at his principal place of business and at every additional place or Places of business. Further, he has to display his GSTIN in the name board exhibited at the entry of his principal place of business and at every additional place or places of business
Ans. Yes, he can apply for cancellation of registration after the completion of one year from the effective date of registration.

Chapter V Tax Invoice, Credit and Debit Note

Sample DescriptionAns. The answer depends upon the type of goods. As per Sec.31(1), if the nature of the supply is such that: Movement of goods is involved, then the tax invoice has to be issued before or at the time of removal of the goods for supply to the recipient. Movement of goods is not involved, then the tax invoice has to be issued before or at the time of the goods are delivered to the recipient or when the goods are made available to the recipient.
SampleAns. In cases where the ownership, or the risks and rewards are transferred without requiring the movement of goods, the goods would be treated as supplied although no movement is involved in effecting such supply. E.g. when an Agent who is in possession of certain goods decides to buy the goods from the principal, on-side installation of machinery, sale and lease back transactions, etc Description
Ans. Removal is defined u/s 2(85 96) of the Act. Removal in relation to goods means, (a) dispatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier; or (b) collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient It can be seen that removal is complete as soon as the goods are dispatched. However, where the supply is such that the recipient collects the goods from the supplier, the point at which the good are collected would be the time of removal of the goods The dispatch (or collection, as the case may be) would trigger the liability to raise the invoice, and the supplier should not wait until the goods reach the destination.
Ans. Goods can be removed by way of: Dispatch by the supplier himself Dispatch by any person acting on behalf of the supplier Collection by the recipient himself Collection by any person acting on behalf of the recipient
Ans. As per Sec.31(4) where, under a contract, there is a continuous/ recurrent supply of goods involving periodic invoices or payments, the invoice shall be issued before or at the time of issue of the statements of account or receipt of payments. Since the given instance is a case of continuous supply of goods, tax invoice has to be issued latest by the time of submitting the statement every time.
Ans. Based on the explanation in Q6 above, it is clear that the liability becomes certain only on submission of the statements of account. Therefore, the invoice can be raised on a bi-monthly basis, by the 25th of every 2nd month when the account is submitted. However, the time of supply provisions get triggered on receipt of payment in advance, for which, a receipt voucher shall be issued. Tax should be discharged on receipt of advances, although invoice is yet to be raised.
Ans. In such cases, as per sec. 31(7) tax invoice need not be raised at the time of removal. This is because the removal cannot be said to be made for the purpose of supply to the recipient, as it is not certain (at the time of dispatch of goods) that the sending of goods will result in a ‘supply’. However, on or before the confirmation of the supply by the other party, the tax invoice has to be issued. The law provides a time limit of 6 months from the date of removal, during which the goods will not be treated as supplied. Where no confirmation is received within such period, a tax invoice should be issued on the day immediately succeeding the 6-month period.
In case of categories of goods or services that are notified, on which tax is payable on reverse charge basis, the recipient of the goods or services would be required to issue a payment voucher at the time of making payment to the supplier- Sec31(3)(g). Further, where the tax liability is cast on the recipient for the reason that the supplier of goods or services is an unregistered person, the recipient will be required to issue an invoice in respect of such goods or services -Sec31(3)(f).
Ans. Invoice has to be raised within 30 days of supply of service Rule 2 of The Tax Invoice, Credit and Debit note Rules.
Ans. Given that the contract is for a period exceeding 3 months, to provide services on a continuous/ recurrent basis, the supply will be treated as a continuous supply of services. As the due date of payment is ascertainable from the contract, the invoice has to be raised on or before the due date of payment-Sec 31(5)(a).
Ans. The above instance is a case of continuous supply of services. Here, since the payment is linked to completion of an event (i.e., milestones set in the contract), an invoice should be raised on or before the due date of completion of event. Therefore, an invoice be raised on or before completion of the 1st floor and the second time on or before the completion of 2nd floor.
Ans. Yes. Where a supply of service ceases before its completion, an invoice has to be issued at the time the supply ceases, i.e., on the 10th day. The invoice shall be to the extent of the service provided before its cessation-Sec. 31(6).
Ans. Yes. An Input Service Distributor (ISD) should issue a tax invoice being an ‘ISD invoice’ for distributing credits to the GST registrations that have the same PAN as that of the ISD. Such invoice will be different from invoices reflecting supply of goods or services (refer Invoice Rules). This is a document required under Section 20 of the Act..
Ans. In case of banking companies, financial institutions including NBFCs, the time limit for issuing an invoice is extended to 45 days (as against 30 days in respect of other supplier) from the date of supply of service-Rule 2 of The Tax Invoice, Credit and Debit note Rules.
Ans. Only a registered person can issue a tax invoice. Also, section 32 specifically prohibits collection of tax by persons who are not registered under the GST law.
Ans. Till the grant of registration on i.e., 29th April, tax cannot be collected on the supplies made. However, even though the registration is granted on 29th April, the effective date of will be 1st April, as registration is applied for within the permissible period. Section28 31(3) provides for issue of ‘revised invoices’ against the bills raised on a regular basis (without collection of tax) from 1st April to 28th April, within a period of 1 month from the date of grant, i.e., within 29th May. Applicable taxes can be collected in the revised invoices issued.
Ans. As Per Proviso to Rule 6 (2) of Tax Invoice, Credit and Debit note Rules,it is mandatory to issue separate tax invoices in the following cases: Supplies to registered persons; Inter-state supplies to unregistered persons where the taxable value of the supply exceeds Rs. 250,000. A consolidated invoice can be issued to an unregistered recipient (State-wise consolidation) not covered above.
Ans. Yes. A ‘receipt voucher’ containing prescribed particulars should be issued on receipt of any advance payment towards supply of goods or services.
Ans. U/s 2(32), Continuous supply of goods means a supply of goods which is provided or agreed to be provided continuously or on recurrent basis. There should be a contract for such a supply requiring the supplier to issue invoices to the recipient on a regular or periodic basis. Also, the supply may or may not be through a wire, cable, pipeline or other conduit. U/s 2(33), Continuous supply of services means a supply of services which is provided or agreed to be provided continuously or on recurrent basis under a contract. Such contract should be for a period exceeding 3 months, with periodic payment obligations. The Government is also empowered to treat the supply of a particular category of goods or services as ‘continuous supply’, irrespective of the criteria specified above.
Ans. A bill of supply should be issued instead of a tax invoice in case of the following supplies: supply of exempted goods or services; or supplies made by a composition supplier.
Ans. A separate ‘Bill of Supply’ is not necessary if the value of the goods or services supplied is less than Rs. 1200 unless the recipient demands for such a bill. In such a case, a consolidated ‘Bill of Supply’ should be prepared at the close of each day in respect of all such supplies to each recipient, separately.
Ans. As per Sec. 34(1) ,for issuing a Credit note, an invoice for a supply should have been issued earlier. A credit note may be issued in the following cases: The taxable value on which the tax is collected is more than the actual taxable value; The tax charged is more than what should have been charged; The recipient has returned the goods; The recipient has found that the goods or services supplied are deficient.
Ans. The credit note should be declared in return of outward supplies (GSTR-1) for the month of May.
Ans. A credit note can be issued for any supplies. However, in order to declare the details of the credit note and thereby claim a reduction in output tax liability, it must be issued and declared in a return upto September following the end of Financial Year, or before filing of the annual return for that Financial Year, whichever earlier. e.g. Assuming that annual return for the year 2017-18 is not yet filed, , a credit note can be issued in respect of any of supplies made during the year 2017-18, up to 30th September 2018. However, if the Annual Return is filed for financial year 2017-18 on 30th June 2018, then the details of the credit note for the year 2017-18 cannot be declared in the returns file after 30th June 2018.
Ans. The below requirements must be met for claiming a reduction in output tax liability: (a) It can be proven that the incidence of tax and interest have not been passed on to any person; (b) The details of the credit note are declared within the prescribed timelines as explained in Q25 above. (c) The recipient of the supply should accept credit note in his return of inwardsupply and reduce his claim of input tax credit to the extent reduction of tax liability.
Ans. A debit note may be raised for accounting purposes. However, for the purpose of GST, such a debit note will be of no relevance. Under the scheme of things, both debit note and credit note are issued by the supplier. Where the supplier fails to declare the details of such documents, the recipient can declare the details of the same (i.e., those issued by the supplier) and require the supplier to accept the same, in order to effect amendments in his return of outward supplies (GSTR-1)- Sec.34(3).
Ans. Yes. ‘Debit notes’ are akin to ‘supplementary invoices’. They are issued by the supplier for recording increase in taxable value or tax charged in the supply.
Ans. Debit note should be issued with immediate effect, and the details should be declared in the return of outward supplies for the month of May.
Ans. No. Every increase in tax liability or taxable value mandates an issue of debit note.
Ans. Normally, the tax invoice should have the following details : (a) Name, address, GSTIN of the supplier (b) Consecutive Serial Number unique for a financial year having alphabets, numerals and special characters being “-“ or “ / “ only (c) Date of Issue (d) Name and address of the recipient (e) GSTIN/UID of the recipient, if registered (f) HSN code of Goods or Accounting Code of Services (g) Description of Goods / Services (h) Quantity and Unit(or Unique Quantity Code) in case of Goods (i) Total Value of Goods and Services (j) Post discount/abatement taxable value of Goods and Services (k) Rate of Tax, Separately for each type of tax (Central tax, State tax, Integrated tax, Union territory tax) (l) Amount of Tax Charged(m) Place of Supply along with the name of the State if the supply is an inter-State supply (n) Place of delivery if different from place of supply (o) Whether tax is payable on reverse charge (p) Signature/Digital Signature of the Suppler or his authorised representative.
Ans. A GTA supplying services in relation to transportation of goods by road in a goods carriage, is required to have the following details in its invoices (in addition to other details required: (a) Gross weight of the consignment (b) Name of the Consignor and the Consignee (c) Registration number of the goods carriage (d) Details of goods transported (e) Details of place of origin and destination (f) GSTIN of the person liable to pay tax (whether as consignor, consignee or GTA).
Ans. A Bill of Supply should have the following details : (a) Name, address, GSTIN of the supplier (b) Consecutive Serial Number unique for a financial year having alphabets/ numerals and special characters being “-“ or “ / “ only (c) Date of Issue (d) Name, and address of the recipient (e) GSTIN/UID of the recipient, if registered (f) HSN code of Goods or Accounting Code of Services (g) Description of Goods / Services (h) Post discount/abatement value of Goods and Services (i)Signature/Digital Signature of the Suppler or his authorised representative
Ans. These documents shall contain the following details : (a) Name, address, GSTIN of the supplier(b) Nature of the Document – i.e., Debit Note / Credit Note / Supplementary invoice / Revised Invoice; (c) Consecutive Serial Number unique for a financial year having alphabets/ numerals and special characters being “-“ or “ / “ only (d) Date of Issue (e) Name, and address of the recipient (f) GSTIN/UID of the recipient, if registered (g) Name and address of the recipient and address of delivery, along with the name of State and its code, if such recipient is unregistered (h) Serial number and date of the corresponding tax invoice/ bill of supply (i) Taxable value of goods or services, rate of tax and the amount of tax credited/ debited to the recipient (j) Signature/Digital Signature of the Suppler or his authorised representative
Ans. The tax invoice issued by an ISD shall contain the following details : (a) Name, address, GSTIN of the ISD (b) Consecutive Serial Number unique for a financial year having alphabets/ numerals and special characters being “-“ or “ / “ only (c) Date of Issue (d) Name, address, GSTIN of the supplier of input service (e) Serial Number and date of invoice of such supplier of input service (f) Name, address, GSTIN of the recipient to whom credit is being distributed (g) Amount of Credit Distributed (h) Signature/Digital Signature of the Suppler or his authorised representative
Ans. Yes. In case of the supplier being a Banking Company or a Financial Institution including NBFC or an insurer, the tax invoice would be treated as complete, even in the following cases: The invoice is not serially numbered; The invoice does not contain the address of the recipient of taxable supply. Also, they may issue an invoice within 45 days from the date of supply of service ( as against 30 days in other cases).
Ans. In case of such suppliers, a tax invoice will include a ‘ticket’. The invoice would be treated as complete, even in the following cases: The invoice is not serially numbered; The invoice does not contain the address of the recipient of taxable supply.
Ans. The invoice should be prepared in triplicate. The original is for the recipient, the duplicate for the transporter and the triplicate for the supplier. The copies should be marked as ‘ORIGINAL FOR RECIPIENT’, ‘DUPLICATE FOR TRANSPORTER’ and ‘TRIPLICATE FOR SUPPLIER’, as the case may be.
Ans. Yes. The consigner can issue a delivery challan instead of an invoice at the time of removal of goods for transportation in the following cases: (a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known, (b) transportation of goods for job work, (c) transportation of goods for reasons other than by way of supply, or (d) such other supplies as may be notified by the Board.
Ans. Receipt voucher is a document issued as per Section 31(3)(d) when advance is collected/ received in relation to supply of Goods or Services.
Ans. As per Rule 8, where goods are being transported on a delivery challan in lieu of invoice, the details of the delivery challan should be declared in FORM WAYBILL. The transporter can show his copy marked as ‘DUPLICATE FOR TRANSPORTER’, which should show the details of the goods, place of supply and details of the consignee (amongst other details).
Ans. For supply of Services, only two copies of the invoice is sufficient. The original is for the recipient and the duplicate for the supplier.
Ans. The invoice rules require that the serial number should be consecutive and unique for a financial year. Hence, restarting the serial number of the invoice or ‘bill of supply’ on a daily basis would not be considered appropriate.
Ans. Yes, the requirements are the same but for one:- In case of supplies to unregistered persons, along with the name, address of the recipient and the address of delivery, the name of the State and its code will also have to be mentioned in the invoice, in case of every supply where the taxable value is Rs. 50,000 or more.
Ans. The Board/Commissioner by notification may specify the number of digits of HSN code for goods or Accounting Code for Services that a class of taxable persons shall be required to mention.
Ans. The words ‘Revised Invoice’ or ‘Supplementary Invoice’ should be mentioned prominently along with reference of the date and invoice number of the original invoice.
Ans. The document should carry any one of the following endorsements, as applicable: Supply meant for export on payment of IGST Supply meant for export under bond or letter of undertaking without payment of IGST Also, the document should contain the following details of the recipient: Name and Address Address of Delivery Name of the country of Destination Number and date of application for removal of goods for export
Ans. The invoice rules prescribe a separate field to mandatorily mention prominently, the amount of tax and the rate of tax applicable on the price at which the supply is made. Therefore, mentioning a consolidated amount without showing the tax separately will not be valid.

Chapter VI Accounts and Records

Ans. Yes. As per Section 35 of the Act, every registered person is required to keep and maintain books of account at his principal place of business that is mentioned in the certificate of registration.
Ans. As per Section 35 of the Act, read with Draft Accounts and Records Rules, the following accounts need to be maintained on a true and correct basis: (a) Production or manufacture of goods; (b) Inward or outward supply of goods or services of both; (c) Stock of goods; (d) Input tax credit availed; (e) Output tax payable and paid;
Ans. Every registered person, in addition to the records to be maintained under section 35 of the Act, is required to maintain following additional accounts on a true and correct basis: 1. Goods or services imported or exported; 2. Supplies attracting reverse charge along with documents (including invoices, bill of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills); 3. Accounts of stock for each commodity received and supplied – containing particulars of opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and balance of stock including raw materials, finished goods, scrap and wastage thereof (these details need not be maintained by a composition dealer) 4. Advances received, paid and adjustments thereto;5. Tax payable on reverse charge basis; 6. Tax payable, tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period; 7. names and complete addresses of suppliers from whom he has received the goods or services; 8. names and complete addresses of the persons to whom he has supplied the goods or services; and 9. the complete addresses of the premises where the goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.
Ans. Yes, as per Rule 1(12) of Accounts and Records Rules, 2017 every agent referred in section 2(5) shall maintain accounts containing: 1. particulars of authorization received by him from each principal to receive or supply goods or services on behalf of such principal separately; 2. particulars including description, value and quantity(wherever applicable) of goods or services received on behalf of every principal; 3. particulars including description, value and quantity(wherever applicable) of goods or services supplied on behalf of every principal; 4. details of accounts furnished to every principal; and 5. tax paid on receipts or on supply of goods or services effected on behalf of every principal.
Ans. Yes as per Rule 1(15) of Accounts and Records Rules, 2017 the registered person providing works contract service shall maintain the accounts showing- 1. the names and addresses of the persons on whose behalf the works contract is executed; 2. description, value and quantity (wherever applicable) of goods or services received for the execution of works contract; 3. description, value and quantity(wherever applicable) of goods or services utilized in the execution of each works contract; 4. the details of payment received in respect of each works contract; and 5. the names and addresses of suppliers from whom he has received goods or services.
Ans. Yes, as per Rule 1(18) of Accounts and Records Rules, 2017 , the clearing and forwarding agent or the carrier of goods shall maintain true and correct records in respect of such goods handled by him on behalf of the registered person.
Ans. The books of account are to be maintained at principal place of business as mentioned in the certificate of registration.
Ans. No, in case of additional places of business, the accounts relating to each place of business shall be kept at such places of business concerned (provided such place is specified in the certificate of registration).
Ans. Yes, the registered person may keep and maintain such accounts and other particulars in the electronic form, in the manner as may be prescribed.
Ans. The Commissioner/Chief Commissioner may notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified.
Ans. Yes, in case any class of taxable persons is not in a position to keep and maintain accounts in accordance with the provisions of this section, the Commissioner/ Chief Commissioner may permit such class of taxable persons to maintain accounts in such manner as may be prescribed after recording the reasons for the same
Ans. Yes, every registered person whose turnover during a financial year exceeds the prescribed limit of Rs. one crore, shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited statement of accounts, the reconciliation statement under Section 44(2) and such other documents in the form and manner as may be prescribed in this behalf.
Ans. Yes, where the registered person fails to account for the goods and/or services in accordance with Section 35(1), the proper officer shall determine the amount of taxpayable on the goods and/or services that are not accounted for, as if such goods and/or services had been supplied by such person and in this regard, and the provisions of Sections 73 or 74, as the case may be, shall apply, mutatis mutandis, for determination of such tax. Note: Section 73 & 74 are the demand-related provisions under the Act.
Ans. Yes, every owner/ operator of warehouse or godowns or any other place used for storage of goods and transporter (whether registered or not) needs to maintain records of consigner, consignee and other relevant details as under: 1. For Transporter: Goods transported Goods delivered Goods stored in transit by him and branches 2. For owner/ operator of a warehouse or godowns: Accounts related to that period for which goods remain with him Details of dispatch, movement, receipt and disposal Further, owner/ operator of warehouse or godowns should store the goods in such a way that identification item-wise and owner-wise is possible and facilitates physical verification/ inspection.
Ans. Yes, as per Accounts and Records Rules, 2017, owner/ operator of warehouse or godowns or any other place used for storage of goods and transporter if not registered is required to submit the details regarding his business electronically on the Common Portal in FORM GST ENR-01, either directly or through a Facilitation Centre notified by the Commissioner and, upon validation of the details furnished, a unique enrollment number shall be generated and communicated to the said person.
Ans. The proper officer is free to determine the amount of tax payable on such goods as if the goods have been supplied by the registered person
Ans. Yes. As per Rule 1(14) of Accounts and Records Rules, 2017, a supplier of service is required to maintain quantitative details of goods used in provision of each service, details of input service utilized and services supplied.
Ans. Yes, as per section 36 every registered person is required to keep and maintain books of account or other records as prescribed under Section 35(1) and retain them until the expiry of seventy two months from the due date for filing of Annual Return for the year pertaining to such accounts and records.
Ans. A registered person, who is a party to an appeal or revision or any other proceeding before any Appellate Authority or Tribunal or Court, is required to retain the books of account pertaining to the subject matter of such appeal or revision or proceeding for a period of one year after final disposal of such appeal or revision or proceeding, or until the expiry of sixty months from the last date of filing of Annual Return for the year pertaining to such accounts and records, whichever is later

Chapter VII Returns

Ans. The various returns prescribed under GST Act read with GST Returns Rules are as follows:- Return Particulars Due date GSTR-1 Furnishing details outward supplies 10th of succeeding tax period GSTR-1A (autodrafted) Communication to supplier of goods and services for any addition/deletion/modification made by the recipient in GSTR-2 Accept or reject before 17th of the succeeding tax period GSTR-2 Furnishing details of inward supplies Before 15th of succeeding tax period GSTR-2A (autodrafted) Part A: Communication to receiver of goods and services in respect of goods and services procured by it and uploaded by the supplier. Part B: Communication to the receiver of credit in case of distribution of credit by Input Service Distributor in Form GSTR-6 Part C: Communication of details of tax deducted at source from the payments to the receiver based on Form GSTR-7 of the deductor Part D: Communication of details of tax collected at source on payments received by the supplier from the ecommerce operator, based on Form GSTR-8 GSTR-3 Monthly return after finalization of outward supplies and inward supplies 20th of succeeding tax period Return Particulars Due date GSTR-3A Notice sent to registered taxable persons who fails to furnish return under section 39 and section 45 GSTR-3B Return to be filed in lieu of Form GSTR-3 when the due date for filing Form GSTR-1 and Form GSTR-2 has been extended by the Commissioner Due date shall be notified by the Commissioner GSTR-4 Return to be furnished by a registered taxable person under composition scheme 18th of the month succeeding the quarter GSTR-4A Communication to the person registered under composition scheme in respect of inward supplies procured by it and uploaded by the supplier GSTR-5 Return to be furnished by nonresident taxable person 20th of succeeding tax period GSTR-6 Return to be furnished by Input Service Distributor 13th of succeeding tax period GSTR-6A Communication to Input Service Distributor in respect of inward supplies procured by it and uploaded by the supplier GSTR-7 Return to be furnished by persons liable to deduct tax at source under Section 51 of the GST Act 10th of succeeding tax period GSTR-7A Certificate to be issued to the recipient by the person deducting tax at source Within 5 days of remitting the amount deducted GSTR-8 Return to be furnished by persons liable to collect tax at source under Section 52 of the GST Act 10th of succeeding tax period GSTR-9 Annual return 31st December of subsequent year GSTR-9A Annual return for composition dealers 31st December of subsequent yearReturn Particulars Due date GSTR-9B Reconciliation statement to be submitted along with Annual Return 31st December of subsequent year GSTR-10 Final Return 3 months from the date of cancellation/order of cancellation, whichever later GSTR-11 Return to be filed by persons having Unique Identity Number and claiming refund on inward supplies To be submitted along with Refund Application
Ans. All registered taxable persons are required to furnish the details of outward supplies of goods and services effected during the tax period, except: (a) Input Service Distributors (b) Composition suppliers (c) Non-resident taxable persons (d) Persons liable to deduct tax at source as per Section 51 (e) Persons liable to collect tax at source as per Section 52 The details should be furnished electronically in the format prescribed in Form GSTR-1. Such returns should be furnished on or before 10th of the succeeding tax period.
Ans. The supplier has to furnish the details of invoices, debit notes, credit notes and revised invoices issued in relation to outward supplies made during the tax period. Key points to be disclosed are as follows:- upplies made to registered persons and unregistered persons including consumers. Inter-State supplies to a consumer (non-registered person) where invoice value is more than Rs. 2,50,000/ should be separately captured. Consolidated amount of Intra-State supplies to a consumer (non-registered person) for each rate of tax. Exempted supplies, Nil-rated supplies, Exports (including deemed exports) and non-GST supplies should each be captured, separately. Tax liability arising in the current tax period where invoice is not issued in the current tax period (i.e., yet to be raised). Invoices issued in the current tax period for which tax was already paid earlier (advances). Supplies made through e-commerce portal of other companies to registered taxable persons and other consumers, separately. The supplier has to mention the Harmonized System of Nomenclature for goods and Service Accounting Code.
Ans. The details uploaded by the supplier in GSTR-1 would be communicated to the recipient in Part A of Form GSTR-2A, which is an auto-drafted form
Ans. The recipient can verify and validate/modify/delete such details and even add details, and thereafter submit the same in Form GSTR-2 on or before 15th of the succeeding tax period.
Ans. If the recipient modifies/deletes any details, such modification/deletion will be communicated to the supplier in Form GSTR-1A. The supplier can accept/reject such modification/deletion before 17th of the succeeding tax period. To the extent of such modifications/ deletions, Form GSTR-1 of the supplier would stand amended
Ans. If the recipient finds that certain inward supplies made to him in the tax period are not reflected in the Form GSTR-2A, the recipient can manually add the details of such supplies in Form GSTR-2. Such additions will be communicated to the supplier in Form GSTR-1A. The supplier can accept/reject such modifications before 17th of the succeeding period, upon which, Form GSTR-1 filed by him would stand amended.
Ans. Where the recipient has modified/deleted/added any details in his Form GSTR-2, the supplier will receive a communication in Form GSTR-1A. The supplier can accept or reject such modifications/deletions/addition before 17th of the succeeding period. If the supplier accepts the modifications/deletions/addition, the details furnished by him in Form GSTR-1 will be amended automatically.
Ans. It may also be noted that there is no concept of revision of a filed return under the GST regime. However, the details furnished in Forms GSTR-1 and GSTR-2 which have remained unmatched as per Section 42 or 43 can be rectified as and when the error or omission is discovered. However, no rectification is permissible after filing the annual return or the return for the month of September of the following year (whichever is earlier).
Ans. All registered taxable persons are required to furnish the details of inward supplies of goods and services effected during the tax period, except: (a) Input Service Distributors (b) Composition suppliers (c) Non-resident taxable persons (d) Persons liable to deduct tax at source as per Section 51 (e) Persons liable to collect tax at source as per Section 52 The details should be furnished electronically in the format prescribed in Form GSTR-2. Such returns should be furnished after 10th but before 15th of the succeeding tax period.
Ans. The details regarding inward supplies will be auto-populated from GSTR-2A. However, the recipient can modify/delete/add the details of inward supply. Key points to be disclosed are as follows :- Details of inward supplies from registered persons and unregistered persons Details of debit notes/ credit notes issued by the suppliers to the person. Details of inward supplies attracting reverse charge. Details of goods, capital goods and services procured from outside India. Further, the details of total eligible input tax credit and input tax credit available in the current tax period shall also be disclosed. Specify the inward supplies on which he is not eligible, either fully or partially, for input tax credit for each invoice. Specify the quantum of ineligible input tax credit on inward supplies, which are relatable to non-taxable supplies or for purpose other than business, which cannot be determined invoice level. Supplies received from composition taxable person, unregistered persons and other exempt/nil/non-GST supplies shall be reported separately. Input tax credit received from ISD, TDS credit and TCS credit. Input tax credit received on an invoice on which partial credit was claimed earlier. Where there is liability to pay tax under reverse charge mechanism even though the invoice has not been received. Where tax has already been paid under reverse charge mechanism in the earlier period but invoice has been received in the current tax period. Input tax credit reversed along with the reason for such reversal.
Ans. Form GSTR-2A is an auto-drafted form and contains the details of inward supplies made by the assesse, the details of which have been uploaded by the supplier. It also contains the input tax credit distributed by the Input Service Distributor, tax deducted at source under Section 51 and tax collected at source under Section 52.
Ans. As per Section 37, details of inward supply of the recipient should match with the outward supply declared by the supplier for the current tax period or for the earlier tax period. In this case, the inward supply of the recipient is filed for the period September 2017 and will match with the outward supply of the supplier filed for the period August 2017.
Ans. In Form GSTR-2, against each inward supply at invoice level, the assesse has to state whether he is fully eligible, partially eligible or not eligible for availing credit on such inward supply. Further, in case invoice level details cannot be mentioned, the assesse can specify the quantum of ineligible input tax credit on inward supplies, which are relatable to non-taxable supplies or for purpose other than business.
Ans. After finalizing the statements for outward and inward supplies, a registered taxable person has to file the monthly return in Form GSTR-3. However, the following persons are not required to file the GSTR-3 return:- (a) Registered taxable person paying taxes under Composition scheme (Form GSTR-4 to be furnished instead) (b) Input service distributor (From GSTR-6 to be furnished instead) (c) Non-resident taxable person (Form GSTR-5 to be furnished instead) (d) Person liable to deduct tax at source as per Section 51 (Form GSTR-7 to be furnished instead) (e) Person liable to deduct tax at source as per Section 52 (Form GSTR-8 shall be furnished instead) The return in GSTR-3 will be auto populated from Forms GSTR-1 and GSTR-2. Further, the details of tax, interest and penalty paid have to be reported in Part B of Form GSTR- 3. The return has to be filed by 20th of the succeeding tax period.
Ans. No. An assesse under the composition scheme is not required to furnish details of inward and outward supplies. Such assesses are required to file quarterly returns in Form GSTR-4 within 18 days from the end of quarter.
Ans. Form GSTR-4A contains the details of inward supplies received by composition suppliers from registered taxable persons, debit/credit notes received and tax deducted at source. This statement is auto populated from Forms GSTR-1, GSTR-5 and GSTR-7 filed by other assesses.
Ans. While furnishing the return in GSTR-4, the assesse has to furnish the following details:- (a) Invoice wise details of inter-State and intra-State inward supplies received from registered and unregistered persons (b) Import of goods and services (c) Consolidated details of outward supplies (d) Debit and credit notes issued and received, if any
Ans. A non-resident taxable assesse is liable to file Form GSTR-5 for furnishing the monthly details of inward and outward supplies, debit/credit notes, tax paid details, details of closing stock and refund claimed, if any. The return should be furnished by 20th of the month succeeding the tax period, or within 7 days from the last day of the validity of registration.
Ans. Input Service Distributor is not liable to furnish the details of inward and outward supplies. Input Service Distributor is liable to file return in GSTR-6 on or before 13th of the month succeeding the tax period. The details relating to input tax credit distributed is communicated to the recipient in Part B of GSTR-2A.
Ans. Form GSTR-6A contains the details of inward supplies received by Input Service Distributors from registered taxable persons and debit/credit notes received. This statement is auto populated from GSTR-1 and GSTR-5 filed by other assesses bearing the same PAN as the Input Service Distributor.
Ans. Any person liable to deduct tax at source under Section 51 of the GST Act is specifically liable to furnish returns in Form GSTR-7. The details in respect of tax deduced at source, as well as the details relating to tax payable and tax paid shall be disclosed. Further, the person shall be required to furnish other returns in Forms GSTR-1,GSTR-2 and GSTR-3, to the extent not covered in Form GSTR-7.
Ans. Any person liable to collect tax at source under section 52 of the GST Act is specifically liable to furnish returns in Form GSTR-8.The details in respect of tax collected at source, as well as the details relating to tax collected and tax paid shall be disclosed. Further, the person shall be required to furnish other returns in Forms GSTR-1, GSTR-2 and GSTR-3, to the extent not covered in Form GSTR-8 above.
Ans. Section 39(8) of the CGST Act specifies that the periodical return in Form GSTR-3 or GSTR-4 (as the case may be) shall be furnished whether or not any supplies have been effected during the tax period. Here, it is relevant to note that the term “supplies” includes both inward and outward supplies. However, a non-resident taxable person, an input service distributor, a person liable to deduct tax at source and person liable to collect tax at source would not be liable to furnish returns (in Forms GSTR-5, GSTR-6, GSTR-7 and GSTR-8, respectively) if they have not effected any supplies requiring them to furnish the respective forms (as mentioned above).
Ans. As per Section 39(9), where the omission / incorrect particulars are pointed out by the department during audit/inspection/scrutiny/enforcement, the assesse cannot rectify such omissions/incorrect particulars in the returns. However, due tax and interest shall be payable thereon.
Ans. As per section 39(7), the tax payable as per return has to be paid to the ‘Government’ on or before the due date for filing the return. Section 2(53) of the CGST Act defined ‘Government’ to mean the Central Government. Further, as per Section 2(9) of the IGST Act, the term ‘Government’ has been defined to mean the Central Government. Therefore, in respect of CGST and IGST taxes, the tax has to be paid to the credit of the Central Government. In respect of SGST, the tax has to be paid to the credit of the State Government.
Ans. As per Section 40, a registered taxable person is required to file First Return to disclose the details of supplies effected during the period between the date on which he became liable to registration till the date on which registration is granted. Therefore, the assesse has to file First Return to disclose the supplies effected during the period July 12, 2017 to August 16, 2017.
Ans. The input tax credit availed by the recipient in its return is allowed to the recipient on a provisional basis. Once the input tax credit availed by the recipient is matched with the corresponding details of outward supply furnished by the supplier or with the additional duty of customs paid by the recipient in respect of imported goods, the input tax credit will become final.
Ans. Under the GST regime, the responsibility to compute the correct output tax liability, eligible input tax credit and net tax liability lies with the assesse. The assesse must determine the rate of tax, value of supply and the output tax payable. The assesse must also decide the eligibility of input tax credit in respect of the various inward supplies. The determination of turnover, rate of tax, value of supply, eligibility to input tax credit, reversal of input tax credit, etc. done by the assesse himself is called as selfassessment.
Ans. As per Section 42(1), the details of inward supplies and input tax credit availed by the recipient and disclosed in Form GSTR-2 have to be matched with the following: - (a) Corresponding details of outward supply furnished by the supplier in his valid return for the same tax period or earlier tax period, (b) Additional duty of customs paid under section 3 of the Customs Act in respect of imported goods, andFurther, duplication of claims of input tax credit would also be noted. Also, the details of the GSTIN of the supplier, GSTIN of the recipient, invoice/debit note number, taxable value and the tax amount shall also be matched.
Ans. Once the details of inward supply and input tax credit are matched with the corresponding details of outward supply furnished by the supplier in his valid return for the same tax period (or earlier tax periods), or with the additional duty of customs paid by the person himself, the input tax credit shall be finally accepted. Once the input tax credit is finally accepted, the details of such acceptance will be communicated to the assesse in Form GST MIS-1.
Ans. Section 42(4) of the GST Act provides that duplicate claims of input tax credit will be communicated to the recipient in GST MIS-1. Such duplicate claim of input tax credit will be added to the output tax payable for the month in which such GST MIS-1 is communicated to the recipient, and interest shall be payable thereon.
Ans. If the input tax credit claimed by the recipient is in excess of the output tax declared by the supplier for the same supply or where the supplier does not declare such outward supply in the returns, the discrepancy will be communicated to the supplier in Form GST MIS-1 and to the recipient in Form GST MIS-2 on or before the last day of the month in which such matching is carried out. On receipt of such communication, either the supplier or the recipient can rectify the details so as to match the claim of input tax credit. Where the supplier rectifies the mistake, the amount claimed as credit shall be allowed, and the supplier shall be liable to pay due tax and interest thereon. However, where the supplier does not accept the excess input tax credit claimed by the recipient, such excess shall be added to the output tax liability of the recipient in the following month, and interest shall be payable on such amount by the recipient.
Ans. If there is a mismatch in the claim of input tax credit, a communication in Form GST MIS-1 will be sent to the supplier and communication in Form GST MSS-2 will be sent to the recipient of such supply. If the discrepancy is due to the incorrect particulars entered by the recipient, then the recipient can rectify such discrepancy in its return for the month in which GST MIS-2 is communicated to him. Once the discrepancy is rectified and the input tax credit is matched, a communication in GST MIS-1 will be sent to the recipient and the claim of input tax credit will be finally accepted. However, if therecipient does not rectify the discrepancy in the month in which such discrepancy is communicated, the amount of tax payable on account of such discrepancy will be added to the output tax liability of the recipient for the month succeeding the month in which GST MIS-2 is communicated to the recipient.
Ans. If the supplier declares incorrect details in its GSTR-1 or does not declare a particular supply in GSTR-1, the recipient has an option of modifying/deleting/adding such details in GSTR-2. Once the recipient modifies/deletes/adds such details in its GSTR-2, the supplier will be intimated of such modification/deletion/addition in GSTR-1A. The supplier has the option to accept or reject such modification/deletion/addition. If the supplier accepts such modification/deletion/addition, his GSTR-1 is also amended accordingly and the issue of mismatch of credit does not arise. However, if the supplier rejects such modification/deletion/addition, then there will be a mismatch in the claim of input tax credit availed by the recipient. Such mismatch in input tax credit will be communicated to the supplier in Form GST MIS-1 and in to the recipient in Form GST MIS-2 on or before the last day of the month in which such matching is carried out. On receipt of such communication, either the supplier or the recipient can rectify the details so as to match the claim of input tax credit. If the supplier/recipient does not correct the discrepancy, the tax payable on account of such mismatch will be added to the output tax liability of the recipient in the month succeeding the month in which GST MIS-2 is communicated to the recipient.
Ans. As per section 42(8) of the GST Act, the recipient is liable to pay interest on the differential tax liability arising on account of mismatch of input tax credit or due to duplicate claim of input tax credit at the rate specified in section 50(1). The interest is liable to be paid from the date on which credit is availed till the date on which such differential tax liability is added to the output tax liability of the recipient.
Ans. As per section 155 of the GST Act, if any person claims input tax credit, then the burden of proving such claim lies on him. Therefore, if the supplier does not declare the supplies or declares output tax lower than the amount claimed as credit, the recipient is burdened with the differential tax liability.
Ans. The input tax credit which remains unmatched is added to the output tax liability of the recipient in the month succeeding the month in which GST MIS-2 is communicated to the recipient. However, if the supplier rectifies the discrepancy within the date for filing the return for the period of September of the succeeding financial year or before the annual return is submitted by him, then the recipient is eligible to reduce the output tax liability to the extent of differential tax liability paid on account of such input tax mismatch.
Goods supplied by A to B in the month of August 2017 Value of goods = Rs. 1,000/- GST = Rs. 200/- A does not declare the details of such supplies in GSTR-1. B claims input tax deduction of Rs. 200 by adding the details of such supply in GSTR-2. A rejects the communication in GSTR-1A. The department issues Form GST MIS-1 to the supplier and Form GST MIS-2 to the recipient in the month of September 2017. The supplier does not rectify the discrepancy by September 2017 The department adds Rs.200 to the output tax liability of B for the month of October 2017. B is liable to pay Rs. 200 along with interest for the period August 2017 to October 2017. A rectifies the discrepancy in the month of December 2017. B can reduce output tax liability for January 2017 by Rs.200. B will also be eligible for refund of interest paid earlier.
Ans. As per Section 43, the details of credit notes issued by the supplier in respect of outward supply and claimed as reduction in output tax liability has to be matched with a corresponding reduction of input tax by the recipient of the supply. Further, the credit note issued shall also be matched for duplication of reduction of output tax liability.
Ans. As per Section 43(1) of the CGST Act, all claims of reduction in output tax liability on account of credit notes will be matched so as to ensure that the supplier does not claimsuch deduction more than once for a particular credit note. Where the supplier claims such deduction more than once, such discrepancy will be communicated to the supplier in GST MIS-3. Such duplicate claim of reduction of output tax liability will be added to the output tax payable of the supplier for the month in which such GST MIS-3 is communicated to the supplier.
Ans. If the reduction in output tax liability claimed by the supplier does not match with the corresponding reduction of input tax by the recipient, then such discrepancy will be communicated to the supplier in Form GST MIS-3 and to the recipient in Form GST MIS-4 on or before the last day of the month in which such matching is carried out. On receipt of such communication, either the supplier or the recipient can rectify the details so as to match the claim of reduction in output tax liability and corresponding reduction of input tax credit.
Ans. If there is a mismatch in the claim of reduction of output tax liability, a communication in Form GST MIS-3 will be sent to the supplier and a communication in Form GST MIS-4 will be sent to the recipient of such supply. If the discrepancy is due to the incorrect particulars entered by the recipient, then the recipient can rectify such discrepancy in its return for the month in which GST MIS-4 is communicated to him. Once the discrepancy is rectified and the reduction in output liability is matched, a communication in Form GST MIS-3 will be sent to the supplier and the claim of reduction in output tax liability will be finally accepted. However, if the recipient does not rectify the discrepancy in the month in which such discrepancy is communicated, the amount of tax payable on account of such discrepancy will be added to the output tax liability of the supplier for the month succeeding the month in which Form GST MIS-4 is communicated to the recipient.
Ans. As per Section 43(8) of the GST Act, the supplier is liable to pay interest on the differential tax liability arising on account of mismatch of reduction in output tax liability or due to duplicate claim of reduction in output tax liability at the rate specified in Section 50(1) of the GST Act. The interest is liable to be paid from the date on which reduction in output tax liability is claimed till the date on which such differential tax liability is added to the output tax liability of the supplier.
Ans. The reduction in output tax liability which remains unmatched is added to the output tax liability of the supplier in the month succeeding the month in which GST MIS-3 is communicated. However, if the discrepancy is rectified within the date for filing the return for the period of September of the succeeding financial year or before the annual return is submitted by him, then the supplier is eligible to reduce the output tax liability to the extent of differential tax liability paid on account of such mismatch.
Ans. As per Section 43(9), once the discrepancy in the reduction of output tax liability is rectified and such rectification is accepted, then the supplier is eligible to refund of interest paid earlier. The maximum interest refundable is equivalent to the interest paid by the recipient. The supplier has to make a claim for such refund in GSTR-3. The interest to be refundable will be credited to the electronic cash ledger in Form GST PMT-3 and will be available for any future payment of interest. Alternatively, the supplier can claim the refund of such amount by following the procedure set out in Section 54 of the GST Act.
Ans. The supplied made through E-commerce operator as declared by the E-commerce operator in Form GSTR-8 has to be matched with the corresponding details disclosed by the supplier in Form GSTR-1. Where the supplier is liable to disclose invoice wise details in Form GSTR-1, the matching with Forms GSTR-8 shall be done at invoice level. Where the supplier is not liable to disclose invoice wise details in Form GSTR-2, the matching will done on the basis of total taxable value of supplies made in the State through E-commerce operator.
Ans. Where the details disclosed by the E-commerce operator in Form GSTR-8 does not match with the corresponding details disclosed by the supplier in Form GSTR-1, then such discrepancy will be communicated to the supplier in Form GST MIS-5 and to the E-commerce operator in Form GST MIS-6 on or before the last day of the month in which such matching is carried out. On receipt of such communication, either the supplier can make suitable rectification in the statement of outward supplies to befurnished for the month in which the discrepancy is communicated or the E-commerce operator can make rectification in the statement to be furnished for the month in which such discrepancy is communicated.
Ans. Where the discrepancy is not rectified by the E-commerce operator, an amount to the extent of the discrepancy will be added to the output tax liability of the supplier in his return in Form GSTR-3 for the month succeeding the month in which the details of discrepancy is communicated.
Ans. All registered taxable persons are required to furnish an Annual Return for every financial year, electronically, in Form GSTR-9. A registered taxable person paying opting to pay tax under the composition scheme is required to file the annual return in Form GSTR-9A. However, the below mentioned registered taxable persons are not required to file an Annual Return :- (a) Input Service Distributor (b) Person liable to deduct tax at source as per Section 51 (for the purpose of TDS) (c) Person liable to collect tax at source as per Section 52 (for the purpose of TCS) (d) Casual taxable person (e) Non-resident taxable person Such returns should be furnished on or before 31st December of the following the end of financial year.
Ans. If the turnover of the registered taxable person exceeds Rs. one crore, then the Annual Return is required to be audited by a Chartered Accountant or Cost Accountant. Further, they also have to submit reconciliation statement in Form GSTR-9B. If the turnover does not exceed Rs. one crore, the registered taxable person can himself compile the details in Form GSTR-9 and submit the return.
Ans. Any registered taxable person whose registration has been cancelled is required to file Final return in Form GSTR-10. The return has to be filed within three months from the date of cancellation or date of order of cancellation, whichever is earlier.
Ans. If the registered taxable person fails to furnish the return in Form GSTR-3 or GSTR-4 orGSTR-5 or GSTR-6 or GSTR-7 or or Final return in Form GSTR-10, the department will issue a notice in Form GSTR-3A asking the registered taxable person to furnish the particular return within 15 days.
Ans. Where any return except Annual return, is filed belatedly, the registered taxable person shall be liable to pay a late fee of one hundred rupees for each day of delay subject to a maximum of five thousand rupees.
Ans. Goods and service tax practitioner is a person who has been approved to act as a goods and service tax practitioner as per Section 48 of the GST Act. He has to satisfy the conditions and eligibility as prescribed under the Rules to act as a goods and service tax practitioner. A registered taxable person can authorise an approved goods and service tax practitioner to file the returns in Form GSTR-1, GSTR-2, GSTR-3, GSTR-4, GSTR-5, GSTR-6, GSTR-7, Annual return in GSTR-9 and Final return in GSTR-10, and also to perform other tasks as may be prescribed. In respect of returns filed by the goods and service tax practitioner, the registered taxable person will be responsible for the correctness of the details furnished in the returns.