Chapter I 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 II 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 invoiceÂ’;
(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 invoiceÂ’.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
supplyÂ’. 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. Assuming the supply is completed after the change in rate of tax, new rate will apply.
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. Yes. You can raise a supplementary invoice / debit note to recover the additional tax
from the customer.
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. Yes. Section 15 is common for all all supplies.
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.
Q 16. What is to be done if there are certain factors affecting price but same cannot be quantified?
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 anotherÂ’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
personsÂ’ 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 transfereeÂ’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.
Ans. The value of security should be considered as 1% of such security
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
Q31. Will ISD be required to be separately registered other than the existing taxpayer registration?
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 doesnÂ’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 doesnÂ’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. Yes. As there is no provision under the GST Law exists to provide for exemption to
such cases.
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.
Q5. Is there any specific set of records to be maintained by the provider of works contract service?
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.