Goods & Services Tax (GST) – Frequently Asked Questions

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Srinagar:  Jammu and Kashmir assembly adopted a resolution on 5 July, 2017 to implement the Goods & Services Tax (GST), bringing the state’s indirect taxation into the new unified tax regime that the rest of the country adopted on 1 July at a landmark ceremony in Parliament.

Following are some Frequently Asked Questions regarding Goods & Services Tax (GST). These FAQs have been issued in public interest by the Government of Jammu & Kashmir.

1. What would be done on the tax paid on advance receipt if advance has to be refunded in any circumstance?

Advance refunded can be adjusted in the return.

2. Do registered dealers have to upload the sale details of unregistered dealers also in GST?

Generally not. But required in case of inter-State supplies having invoice value of more than Rs. 2.50 Lakhs.

3. How to incorporate two supplies in return for Pharma with same HSN code of four digits but having different tax rates?

Returns provide for furnish rate wise details.

4. Should we discharge GST liability for all reverse charge having small amounts of Transaction or any amount limit is there?

It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies
received from unregistered person. For supplies above this amount a monthly consolidated bill can be raised.

5. What will be the treatment of promotional items given free to end consumers by FMCG Companies?

Tax will be charged only on the total consideration charged for such supply.

6. How to comply with 9(4) of CGST Act if POS is in another State of the unregistered supplier?

Any person making inter-State supply has to compulsorily obtain registration and therefore in such cases, section 9(4) will not come into play.

7. Under supply from unregistered dealer the purchaser have to pay GST on RCM basis, so whether stipend paid to intern will also come under RCM?

Stipend paid to interns will be employer-employee transactions. Hence, not liable for GST.

8. Salary by partnership firm to Partners as per Income Tax Act liable to GST?

Salary will not be liable for Goods & Services Tax (GST).

9. Sec 9(4) of CGST Act 2017. Do I need to pay under RCM if I purchase stationary worth Rs. 100 from an unregistered stationery shop?

It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from registered person.

10. What is the treatment of promotional item given free to end consumers by FMCG companies? If taxable, whether ITC is allowed?

Tax is payable on consideration received for the supply and ITC will be available accordingly.

11. Whether GST will be leviable in case of returnable packing material like drums supplied with finished goods?

Goods & Services Tax (GST) will be levied on the value charged for the supply only.

12. How will disposal of scrap be treated in GST?

If the disposal is in the course or furtherance of business purpose, it will be considered as a supply.

13. I am from J&K and providing service to a customer in Maharashtra. I outsource the work to a service provider in Maharashtra, what tax I need to charge?

Generally these will be two supplies where the supplier from J&K will charge IGST from the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge IGST from the recipient in J&K.

14. If address of buyer is J&K and place of supply is same as state of supplier (Rajasthan), then IGST will apply or CGST / SGST?

If the place of supply and the location of the supplier are in the same State then it will be intra-state supply and CGST/SGST will be applicable.

15. Why is bifurcation of cash deposit as CGST-SGST-IGST required? Is cash held against a GSTIN, to be adjusted via return U/S 39?

Three levies are under three different statutes and are required to be separately accounted for.

16. What is the difference in between ‘Nil rated’ (taxable at 0%) and exempted goods and services? Especially in relation with ITC.

Exempt supply includes NIL rated (taxable at 0%) and non-Taxable supplies and no ITC is available for such supplies.

17. Employer provides bus service, meal coupon, telephone at residence, gives vehicle for official and personal use, uniform and shoes, any GST?

Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds Rs. 50000/- in a financial year.

18. The definition of composite supply and the description of same under Section 8 differ. Please explain consequences.

Section 2(30) defines what will be considered as a composite supply. Whereas, Section 8 provides that in case of a composite supply, the treatment for tax rate etc. will be that of principal supply.

19. Whether slump sale will attract GST. If yes then under which Section?

It will have the same treatment as normal supply.

20. Whether Salary by Partnership firm to Partners as per Income Tax Act liable to GST? Partners are not employees of the firm.

Salary will not be leviable of Goods & Services Tax (GST).

21. How do I avail transition credit?

Transition credit can be availed by filing the respective forms under Transition rules.

22. We manufactured excisable goods. But unit availed the exemption benefits 50/2003. What about my dealers stock?

The dealer will get deemed credit @ 40% / 60% of the CGST paid on supply of such goods in GST. If the goods are branded and value more than Rs. 25000, full credit using CTD can be availed.

23. A trader buys from manufacturer not registered in excise as his turnover is below 1.50 cr. Then in such case can trader take ITC on stock upto 40%?

Yes, deemed credit will be available subject to satisfaction of other conditions as prescribed.

24. I am a trader. I have excise paid purchase invoice. Whether I can claim credit of full excise duty on closing stock of 8th July 2017?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

25. If a trader purchase directly from manufacturer & has documents showing excise, will he get full excise credit or 40% of CGST?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140 (3) of the CGST Act.

26. If a FSD (First Stage dealer) purchases directly from manufacturer and has value cum excise duty and excise duty is not separately shown will he get full credit?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

27. Is the full excise credit also available to traders who purchase directly from manufacturers and excise is separately shown in invoice?

Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.

28. What will be the impact of closing stock which has been already paid VAT on 1st July?

The supplier would be eligible to carry forward ITC on such stock from last VAT return.

29. If in VAT return refund claimed in June 17 & no balance credit in GST, then what’s the position of submission of Form C?

Refund claimed under existing law will be handled as per the provisions of the existing law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules.

30. Some service was provided on 28.06.2017 but Invoice will be raised on 10.07.2017. Whether we have to charge Service Tax or GST?

If Point of Tax arises after appoined date, then Goods & Services Tax (GST) will be chargeable on such supply.

31. What about VAT balance pending on transition date?

Balance VAT credit in the return for June 2017 will be transferred as SGST Credit.

32. What about deemed export against Form H?

Form H will not be there in Goods & Services Tax (GST).

33. Who will bear tax difference on closing stock as on 30th June 2017? Whether the manufacturer/ dealer or government?

Closing ITC in VAT return will be allowed to be carry forward in Goods & Services Tax (GST).

34. How will we get input credit on stock in hand for spare parts billed from other state, excise, CST and entry tax paid?

For all inputs with duty paying documents available respective CGST / SGST credit will be available. But credit of CST will not be available.

35. A Trader buys from manufracturer not registered in excise as his turnover is below 1.50 crore, then in such case can traders take ITC on stock up to 40%?

Deemed Credit will be available on stock in hand provided the conditions of section 140(3) read with Rule 1(4) of transition Rules are satisfied.

36. Whether we will be eligible for credit of duty paid on Capital Goods in transit and received post GST?

No such provision in Goods & Services Tax (GST).

37. Can you clarify for 40% benefit on closing stock does 1 year limit apply or not?

Deemed credit will be available for all stock procured within a 1 year period.

38. Till what time is transition credit available? Where do I need to declare my input Stock?

The window to declare transition credit forms is three months from the apponted day. Please refer to transition rules for more details.

39. Whether IGST would be levied twice on high seas sales? First on high seas sales and second on custom clearance. IGST paid on one available as ITC?

IGST shall be levied only once on imports.

40. Is there a sunset clause for Anti-Profiteering law?

Yes, the sunset clause for Anti-profiteering Law is of two years.

Disclaimer: Replies given above are only for educational and guidance purposes and do not hold any legal validity.

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