GST

GST

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All Questions

19 Questions

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How will tax evasion be checked?

Apologies. This does not seem to be a relevant question.

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Goods- in-Transit on interstate purchase as on 30/06/2017 what would be the effect of GST regime on the same.

Where goods are in transit as on 30/06/2017, no GST shall be applicable on the same as the invoice must have been raised before 30/06/2017. In such a case Section 140(5) of the CGST Act shall apply which states that where goods are received after the appointed date i.e. 01/07/2017, but the tax has been paid by the supplier under the existing law, no GST shall be applicable on the same subject to a condition that the invoice or any other duty or tax paying document of the same was recorded in the books of accounts of such person within a period of thirty days from the appointed day i.e. by 30/07/2017.

Answer given by CA Ankit Kanodia

DISCLAIMER: THE ABOVE IS THE PERSONAL VIEW OF THE AUTHOR AND IS NOT A LEGAL OPINION AND IS NOT BINDING ON ANY GOVERNMENT AUTHORITIES ALSO.

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We are Tata distributor, Can we raise our supply Invoice no.001 manually and our supply Invoice no.002 computerized as per GST Regime ?

Answer: yes, the same can be done.

Reason for the same:  the rules issued by the government (CGST Rules issued on ), Rule 46: Tax Invoice, states that a “consecutive serial number not exceeding sixteen characters, in one or multiple series, containing  alphabets or numerals or special characters- hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year”. It does not mention whether it should be computerised or manually entered. However, for any particular financial year only one method of issuing invoice is advisable. 1st invoice being manual and there after all other being computerised may be accepted.

DISCLAIMER: THE ABOVE IS THE PERSONAL VIEW OF THE AUTHOR AND IS NOT A LEGAL OPINION AND IS NOT BINDING ON ANY GOVERNMENT AUTHORITIES ALSO.

Answer given by CA Ankit Kanodia

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Questions #1. What if customers purchases pre GST lifts post GST. a)What would be the tax post GST? b) Whether he will be able to take cenvat? c) Can he sell that material received in July in GST? What forms to be maintained for the transition period?

Q1- What if customers purchases pre GST lifts post GST?

 Ans: if the question is regarding purchase of lift (elevators), then if post gst the same is purchased and the customer has some outward gst liabilities, then the same may be eligible as ITC.

 Q2 What would be the tax post GST?

 Ans: for lifts, it would be treated as composite supply of service of works contract and accordingly 18% GST to be levied on works contract.  

 Q3- Whether he will be able to take cenvat?

 Ans: as per section 17(5), works contract credit is BLOCKED unless used for plant and machinery or further provision of works contract service.

 Q4- Can he sell that material received in July in GST? What forms to be maintained for the transition period?

 Ans- Who can sell?? Question is not clear. For GST credit in transition, TRAN 1 to be filled. Format available on cbec website.

 

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How will GST credit be taken for Existing Stocks, which have been purchased as excise paid, CST paid or VAT paid?

As on the appointed date whatever stock you have, if all those credits are reflected in your return, then of course that credit will be eligible to you under the transitional provision.

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What about Abetment Scheme in Service Tax running at present?

They have not stated anything but powers have been given to the GST council, who on recommendation from the states and centre may propose certain abetments. 

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If advance payment is received from a customer and after 2-3 months if services or sales did not happen, and returns were filed, can the GST CENVAT can be reversed in such cases?

Sales return concept and deficient provision of service concept will be continued in GST. All those things have to be issued through debit notes and credit notes. Currently under rule 6 of the Service Tax rules there are certain provisions for service tax assessee and rule 16 of the Central Excise rules for the excise assessee. But under the GST regime, if a debit note is issued then the opposite party also has to issue a credit note and disclosure of these have to go in the respective returns. Then only refunds and credits of earlier sale will be allowed.

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What will happen with the assessment/audit of all existing department after application of GST?

The revenue secretary has stated that there cannot be dual control with the single SSE as there will be a lot of compliances coming up. We believe there will be a single control regime and the formalities are being worked out in that regard.

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What would be impact on Service provider, which are coming under RCM and liability is on Service Receiver?

There is a provision wherein the Government may list all the services on which reverse charge the GST liability has to be discharged. So not much change in reverse charge, they are continuing with the same. 

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What will be the treatment for Hill states like Himachal, Uttarakhand etc. where there is excise exemption?

This has to be taken up in the respective states. In the North-East, during the last budget, the Finance Minister has already confirmed that all the benefits which are continuing in the North-East would also continue under the GST regime but a cap will be there. Similarly, for Himachal and Uttarakhand, we believe, certain mechanisms are being put in place by the GST committee to see how the existing benefits can be continued.

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What would be the impact on companies having plants & stockyards in multiple locations in the country?

In the proposed GST regime, they are proposing a concept wherein every person has to register in each state. So the number of offices or the number of states you provide service or you have your plant in, you have to take separate registration for each state.

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What will happen to MODVAT on Stock lying at the time of GST implementation?

In the transitional provision they have stated that all the CENVAT which are lying in your stock will be allowed to be carried forward provided those credits are being reflected by you in the returns being filed under the earlier regime. 

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Can we claim set off of entire GST paid on purchases in case we sell product at loss?

In such a scenario there is a system where you can adjust or input tax credits subject to maximum of your output. Similar situations are bound to be appearing in GST also because your output GST would of course be less in case you are selling the product at loss. Thereby it has to restrict upon the limit of your output GST liability.

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What will be the system of refund under GST?

In the transitional provision chapter that is there in the model law, they have stated that all the pending refund claims have to be adjudged as per the earlier law. As on the appointed date of GST, all the transitional refund claims which have been already filed have to be adjudicated as per the old law.  

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We are a distributors (traders)and get job-work done on stock transfer as the job-work is excisable as present and get commercial and tax invoice. How will it work after GST?

The concept of supply will be there in GST. So in case of branch transfer / job work transfer, how the mechanism will operate – no clear guidelines have been formulated as of now.

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What about the goods sent for Job Work to another state?

The taxation on GST would be based on the concept of supply. There will be concept of sales as in VAT and no concept of manufacture as in excise. The whole concept is that of supply. So if goods are sent to another state it becomes a supply and tax has to be paid on this supply. Supply has been dealt with in Chapter IV, Sec-12, of the model GST Act which defines supply.

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What will be the return filling structure?

There will be at least 3 returns in a month which a dealer has to file. One will be for the purpose of your outward supplies meaning all your debtors’ details should be given and those will be given bill wise i.e. details of each and every bill during the month along with the name and addresses have to be entered in the GSTR-1 return. The GSTR-2 return will have the details of all the inward supplies i.e. all your CENVAT credits that you have paid to your vendors during a particular month. The third return, GSTR-3, is the combined return for the net with the total tax payable, total input taken in set-off and the net tax payable, which has to be filed within the 20th of the end of the month. There are other returns for TDS and there will be an annual return filed after the completion of financial year within 31st December.

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How will the Government curb dealers who don’t pay any taxes?

The states have a threshold limit of 5 lakh or 10 lakh and in excise we have 12.5 crores and in service tax it is 10 lakh. But GST being uniform, a uniform threshold limit of 10 lakh has been proposed. All the small players have to pay taxes at each level when they procure materials. Now if they do not sell their materials with proper tax invoices it is bound to be caught by the audit trail of documents and the GST system that is being developed is a very high-end system wherein inputs from all the other departments such as income tax will be matched. Thereby everyone, be they big or small dealers, will have to pay taxes.

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How will tax evasion be checked?

As of now, with GST coming into the picture, there will be a lot of documents trails which have to be maintained. At each level the value addition will be reflected in the paper trail, thus making it difficult to evade taxes.