Key highlights of the FAQs issued by the CBEC
The government has taken another step to implement GST from 1 April 2017. It recently came out with a compilation of Frequently Asked Questions (FAQs) prepared by the National Academy of Customs, Excise and Narcotics (NACEN).
NACEN is the apex training institution set up by the government for capacity building of its indirect tax officials. The FAQs which were issued by the Central Board of Excise and Customs covers 24 topics with over 500 questions based on inputs gathered while conducting training and interactive sessions to help officers, as well as the general public, get acquainted with the Model GST law and its nuances.
Some of the key FAQs are given below:
Levy of GST and the scope of supply
- Tobacco and tobacco products will be subject to GST in addition to the levy of central excise duty by the centre
- Import of goods and services will be treated as inter-state supplies and Integrated GST (IGST) will be levied on the import of goods and services into the country
- Inter-state self-supplies such as stock transfers will be taxable because a taxable person has to take state-wise registration. However, intra-state (within one registration) self-supplies would not be taxable
- To determine whether a supply is made in the course or furtherance of business, the following factors should be taken into consideration:
- Whether the activity is a serious undertaking being earnestly pursued;
- Whether the activity is pursued with reasonable or recognisable continuity;
- Whether the activity is conducted in a regular manner based on sound and recognised business principles; and
- Whether the activity is predominantly concerned with making taxable supply for a consideration/profit.
- Occasional supplies made even for consideration will not be subject to GST if the same is not in course or furtherance of business
Classification of goods and services
- The HSN (Harmonised System of Nomenclature) code shall be used for the classification of goods under GST regime.
- If the turnover of taxpayer > INR 50 million, they shall use the 4-digit HSN code
- If the turnover of taxpayer > INR 15 million but < INR 50 million, they shall use the 2-digit HSN code
- If the turnover of taxpayer < INR 15 million, the HSN code is not required to be mentioned on invoices
- Services will be classified as per Services Accounting Code (SAC)
Composition of tax
- The composition scheme would become applicable for all business verticals/registrations which are separately held by a person with the same PAN.
Input tax credit
- Input tax credit of tax paid on capital goods can be availed in one instalment instead of two instalments, as prescribed under the current regime.
- However, credit on capital goods would be permitted only on a proportionate basis where such goods are used for effecting both business and non-business use or taxable and non-taxable supplies.
- No option for a centralised registration for service providers. Existing service tax assessees having centralised registration will have to apply afresh in their respective states wherever they have their business.
- Assessees will get their registration certificate within three common working days if the information and uploaded documents are in order.
GST returns and payment of tax
- Scanned copies of invoices should not be uploaded along with GSTR-1 and only the prescribed fields of information from such invoices should be uploaded.
- The need to revise a return under GST would only arise due to a change in invoice or debit/credit note details. The system will allow changing details of the transaction instead of revising the return. The details can be amended in any of the future GSTR-1/2 forms in the tables specifically provided for the purpose of amending details declared previously.
- The payment of GST is to be made by a normal taxpayer (other than composite dealers) on a monthly basis, by the 20th of the succeeding month. The timing of the payment will be from 00:00 to 20:00.
- Pre-registration of a credit card is necessary to make GST payments without any monetary limit.
Input service Distributor (ISD)
- All existing ISDs under the current service tax regime would not be migrated and would be required to obtain a fresh registration under the new regime in case they want to operate as an ISD.
- The GST portal is designed dynamically (it can be viewed on any smartphone). Thus, ledgers like cash ledger, liability ledger, ITC ledger, etc. can be seen on a mobile phone.