Frequently Asked Questions (FAQ) on GST

Frequently Asked Questions (FAQ) on GST

==> Central board of excise & customs New Delhi

 

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Levy of and Exemption from Tax

 

Q 1. Where is the power to levy GST derived from?
Ans. Article 246A of the Constitution, which was introduced
by the Constitution (101st Amendment) Act, 2016
confers concurrent powers to both parliament and state
legislatures to make laws with respect to GST. However,
-clause 2 of Article 246A read with Article 269A provides
exclusive power to the Parliament to legislate with respect
to inter-state trade or commerce.

 

Q 2. What is the taxable event under GST?
Ans. Supply of goods and/or services. CGST & SGST will be
levied on intra-state supplies while IGST will be levied on
inter-state supplies. The charging section is section 7 (1)
of CGST/SGST Act and Section 4(1) of the IGST Act.

 

Q 3. Is the reverse charge mechanism applicable
only to services?
Ans. No, reverse charge applies to supplies of both goods
and services.

 

Q 4. What will be the implications in case of
purchase of goods from unregistered dealers?
Ans. The receiver of goods will not be able to get
ITC. Further, the recipients who are registered under
composition schemes would be liable to pay tax under
reverse charge.

Q 5. In respect of exchange of goods, namely gold
watch for restaurant services will the transaction be
taxable as two different supplies or will it be taxable
only in the hands of the main supplier?
Ans. No. In the above case the transaction of supply of
watch from consumer to the restaurant will not be an
independent supply as the same is not in the course of
business. It is a consideration for a supply made by the
restaurant to him. The same will be a taxable supply by
the restaurant.

 

Q 6. Whether supplies made without consideration
will also come within the purview of Supply under
GST?
Ans. Yes only those cases which are specified under
Schedule I to the Model GST Law.

 

Q 7. Who can notify a transaction to be supply of
goods and/or services?
Ans. Central Government or State Government on the
recommendation of the GST Council can notify a transaction
to be the supply of goods and/or services.

 

Q 8. Will a taxable person be eligible to opt for
composition scheme only for one out of 3 business
verticals?
Ans. No, composition scheme would become applicable
for all the business verticals/registrations which are
separately held by the person with same PAN

Q 9. Can composition scheme be availed if the
taxable person effects inter-State supplies?
Ans. No, composition scheme is applicable subject to the
condition that the taxable person does not affect interstate
supplies.

 

Q 10. Can the taxable person under composition
scheme claim input tax credit?
Ans. No, taxable person under composition scheme is not
eligible to claim input tax credit.

 

Q 11. Can the customer who buys from a taxable
person who is under the composition scheme claim
composition tax as input tax credit?
Ans. No, customer who buys goods from taxable person
who is under composition scheme is not eligible for
composition input tax credit because a composition scheme
supplier cannot issue a tax invoice

 

Q 12. Can composition tax be collected from
customers?
Ans. No, the taxable person under composition scheme is
restricted from collecting tax. It means that a composition
scheme supplier cannot issue a tax invoice.

 

Q 13. What is the threshold for opting to pay tax
under the composition scheme?
Ans. The threshold for composition scheme is Rs. 50 Lakhs
of aggregate turnover in financial year.

 

Q 14. How to compute ‘aggregate turnover’ to
determine eligibility for composition scheme?
Ans. The methodology to compute aggregate turnover is
given in Section 2(6). Accordingly, ‘aggregate turnover’
means ‘Value of all supplies (taxable and non-taxable
supplies + Exempt supplies + Exports) and it excludesTaxes
levied under CGST Act, SGST Act and IGST Act, Value of
inward supplies + Value of supplies taxable under reverse
charge of a person having the same PAN.

 

Q 15. What are the penal consequences if a taxable
person violates the condition and is not eligible for
payment of tax under the Composition scheme?
Ans. Taxable person who was not eligible for the
composition scheme would be liable to pay tax, interest and
in addition he shall also be liable to a penalty equivalent to
the amount of tax payable. (Section 8 (3) of the MGL).

 

Q 16. What is the minimum rate of tax prescribed
for composition scheme?
Ans. 1%

 

Q 17. When exemption from whole of tax collected
on goods and/or services has been granted
unconditionally, can taxable person pay tax?
Ans. No, the taxable person providing such goods or
services shall not collect the tax on such goods or services.

 

Q 18. What is remission of tax/duty?
Ans. It means relieving the tax payer from the obligation
to pay taxon goods when they are lost or destroyed due
to any natural causes. Remission is subject to conditions
stipulated under the law and rules made thereunder.

 

Q 19. Whether remission is allowed under GST law?
Ans. Yes, proposed section 11 of Model GST law permits
remission of tax on supply of goods.

 

Q 20. Whether remission is allowed for goods lost or
destroyed before supply?
Ans. Remission of tax will apply only when tax is payable
as per law i.e. taxable event should have happened and tax
is required to be paid as per law. Under GST Law, levy is
applicable upon supply of goods. Where goods are lost or
destroyed before supply, taxable event does not occur in
order to pay tax. Accordingly, question of remission of tax
does not rise.

 

Q 21. Whether remission is allowed on goods lost or
destroyed for all reasons?
Ans. No, on plain reading of the language of proposed
Section 11, remission is allowed only for those cases where
supply of goods is found to be deficient in quantity due to
natural causes.

 

Q 22. Does the model GST Law empower the
competent government to exempt supplies from the
levy of GST?
Ans. Yes. Under Section 10 of the Model GST Law, the
Central or the State Government, on the recommendation
of the GST council can exempt the supplies from the levy of
GST either generally or subject to conditions.

 

Source : http://www.cbec.gov.in/htdocs-cbec/gst

GST Rates & HSN Codes

Related image

 

HSN / SAC Lookup

What is HSN Code?
The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System of Nomenclature” or simply “HSN” is a multipurpose international product nomenclature developed by the World Customs Organization

 

Why is it required?
Every business is required to declare list of goods they are dealing into. This declaration is required along with the HSN code of such commodity. System will automatically pick tax rate under GST regime based on these HSN codes. Thus it is of utmost importance to mention correct HSN codes at the time of enrollment or registration under GST

 

GST Rates & HSN Codes

GST council has made the much-awaited announcements around tax rates on various categories of goods on day one of a two-day meeting of the said council at Srinagar. There has been a hype around these rates for a while and now these rates are finally in the public domain.

 

As soon as the GST rates were announced a huge wave of curiosity hit across industry and trade bodies. Everyone is evaluating their position as a result of this change. So in this article, we bring you our analysis of these GST rates.

 

We already know that the GST slabs are pegged at 5%, 12%, 18% & 28%. According to the latest news from the GST council, the tax structure for common-use goods are as under:

GST Rates Structure

Tax Rates Products
0% Milk Kajal
Eggs Educations Services
Curd Health Services
Lassi Children’s Drawing & Colouring Books
Unpacked Foodgrains Unbranded Atta
Unpacked Paneer Unbranded Maida
Gur Besan
Unbranded Natural Honey Prasad
Fresh Vegetables Palmyra Jaggery
Salt Phool Bhari Jhadoo
5% Sugar Packed Paneer
Tea Coal
Edible Oils Raisin
Domestic LPG Roasted Coffee Beans
PDS Kerosene Skimmed Milk Powder
Cashew Nuts Footwear (< Rs.500)
Milk Food for Babies Apparels (< Rs.1000)
Fabric Coir Mats, Matting & Floor Covering
Spices Agarbatti
Coal Mishti/Mithai (Indian Sweets)
Life-saving drugs Coffee (except instant)
12% Butter Computers
Ghee Processed food
Almonds Mobiles
Fruit Juice Preparations of Vegetables, Fruits, Nuts or other parts of Plants including Pickle Murabba, Chutney, Jam, Jelly
Packed Coconut Water Umbrella
18% Hair Oil Capital goods
Toothpaste Industrial Intermediaries
Soap Ice-cream
Pasta Toiletries
Corn Flakes Computers
Soups Printers
28% Small cars (+1% or 3% cess) High-end motorcycles (+15% cess)
Consumer durables such as AC and fridge Beedis are NOT included here
Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)

In addition to the above, a few

 

  • Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices. However, instant food has been kept outside this bracket so, no relief for Maggie lovers!
  • The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.
  • Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation. Expect a good run for Coal India tomorrow.
  • Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely might seem fairer in its pricing from now on!
  • The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.

Plus, it was announced that:

  • for restaurants serving alcohol, the tax bracket will be 18 per cent
  • education, healthcare are going to be exempted from GST
  • services on Non-AC restaurants will be 12 per cent

Simplify Your GST Filing & Invoicing

 

If you want to know more about the GST rates, please check the below table.

Chapter 1 Live Animals, Bovine & Poultry
Chapter 2 Meat & Edible Offal of Animals
Chapter 3 Fish Meat & Fillets
Chapter 4 Eggs, Honey & Milk Products
Chapter 5 Non Edible Animal Products
Chapter 6 Live Trees & Plants
Chapter 7 Vegetables
Chapter 8 Fruits & Dry Fruits
Chapter 9 Tea, Coffee & Spices
Chapter 10 Edible Grains
Chapter 11 Milling Industry Products
Chapter 12 Oil Seeds, Fruit & Part of Plants
Chapter 13 Gums, Resins, Vegetable SAP & Extracts
Chapter 14 Vegetable Material & Products
Chapter 15 Fats, Oils & Waxes their Fractions
Chapter 16 Preserved/Prepared Food Items
Chapter 17 Sugar, Jaggery, Honey & bubble Gums
Chapter 18 Chocolate & Cocoa Products
Chapter 19 Pizza, Cake, Bread, Pasta & Waffles
Chapter 20 Edible Plants – Fruits, Nuts & Juices
Chapter 21 Tea & Coffee Extract & Essence
Chapter 22 Water – Mineral & Aerated
Chapter 23 Flours, Meals & Pellets
Chapter 24 Tobacco, Stemmed & Stripped
Chapter 25 Salts & Sands
Chapter 26 Mineral Ores & Slags
Chapter 27 Fossil Fuels – Coal & Petroleum
Chapter 28 Gases & Non Metals
Chapter 29 Hydrocarbons – Cyclic & Acyclic
Chapter 30 Drugs & Pharmaceuticals
Chapter 31 Fertilisers
Chapter 32 Tanning & Colouring Products
Chapter 33 Essential Oils, Beauty Products
Chapter 34 Soaps, Waxes, Polish products
Chapter 35 Casein, Albumin, Gelatin, Enzymes
Chapter 36 Propellants, Explosives, Fuses, Fireworks
Chapter 37 Photographic & Cinematographic Films
Chapter 38 Insecticides, Artificial Carbon & Graphite
Chapter 39 Polymers, Polyethylene, Cellulose
Chapter 40 Rubber, Plates, Belt, Condesnsed Milk
Chapter 41 Raw hides & Skins, Leather
Chapter 42 Trunks, Suit-cases, Vanity cases
Chapter 43 Raw Fur Skins, Articles of apparel
Chapter 44 Fuel wood, Wood Charcoal
Chapter 45 Natural Cork, Shuttlecock Cork
Chapter 46 Plaiting Materials, Basketwork
Chapter 47 Mechanical & Chemical woodpulp
Chapter 48 Newsprint, Uncoated paper & paperboard
Chapter 49 Printed Books, Brochures, Newspapers
Chapter 50 Silk Worm Coccon, Yarn, Waste & Woven Fabrics
Chapter 51 Wool materials & Waste, Animal Hairs
Chapter 52 Cotton materials, Synthetics & Woven fabrics
Chapter 53 Flex raw, Vegetable materials & Paper yarn
Chapter 54 Synthetic felaments, Woven fabrics & Rayons
Chapter 55 Synthetic felament tows & Polyster staple fiber
Chapter 56 Towels, Napkins, ropes & Netting materials
Chapter 57 Carpets & Floor coverings textile Handlooms
Chapter 58 Labels, Bades, Woven pile & Chennile, Terry towelings
Chapter 59 Rubberised textile fabrics, Convayer belts
Chapter 60 Pile,Wrap Knit,Tarry & Croched fabrics
Chapter 61 Men & Women Clothing
Chapter 62 Men & Women Jackets, Coats & Garments
Chapter 63 Blankets & Bedsheets
Chapter 64 Shoes & Footwear Products
Chapter 65 Hats & Accessories
Chapter 66 Umbrellas & Accessories
Chapter 67 Artificial flowers, Wigs & False Beards
Chapter 68 Monumental & Building Stones
Chapter 69 Bricks, Blocks & Ceramics
Chapter 70 Glasses, Mirrors, Flasks
Chapter 71 Pearls, Diamonds, Gold, Platinum
Chapter 72 Iron, Alloys, Scrap & Granules
Chapter 73 Iron tube, piles & Sheets
Chapter 74 Copper Mattes, Rods, Bars, Wires, Plates
Chapter 75 Nickel Mattes & Unwrought Nickel
Chapter 76 Unwrought Aluminium- Rods, Sheets & Profiles
Chapter 78 Unwrought Lead – Rods, Sheets & Profiles
Chapter 79 Unwrought Zinc – Rods, Sheets & Profiles
Chapter 80 Unwrought Tin – Rods, Sheets & Profiles
Chapter 81 Magnesium, Cobalt, Tungsten Articles
Chapter 82 Hand Tools & Cutlery
Chapter 83 Locks, Metal Mountings & Fittings
Chapter 84 Industrial Machinery
Chapter 85 Electrical Parts & Electronics
Chapter 86 Railway Locomotives & Parts
Chapter 87 Tractors & Motor Vehicles
Chapter 88 Balloons, Parachutes & Airlift Gear
Chapter 89 Cruise Ships & Boats
Chapter 90 Medical, Chemical & Astronomy
Chapter 91 Watches & Clocks
Chapter 92 Musical Instruments
Chapter 93 Military Weapons & firearms
Chapter 94 Furniture, Bedding & lighting
Chapter 95 Children Toys, Table & Board Games & Sports Goods
Chapter 96 Pencil Lighter Toiletries
Chapter 97 Paintings Decoratives Sculptures
Chapter 98 Machinery Lab Chemicals Drugs Medicines

Source :https://cleartax.in/s/gst-rates/