As the much-awaited launch of GST or goods and services tax nears, the government has addressed various questions on the new indirect tax regime spanning multiple sectors. Touted as the biggest tax reform since Independence, GST is set for a midnight launch on June 30. The CBEC, under the purview of the Department of Revenue, shed light on many topics including returns, advance receipts, supply, transition credit and unregistered dealers. For example, the CBEC has clarified that the salary by a partnership firm to its partners will not be liable under GST.
Here are some of those queries addressed by the CBEC:
If advance has to be refunded in any circumstance, what would be done on the tax paid on advance receipt?
The advance refunded can be adjusted in the return.
Are registered dealers required to upload the sale details of unregistered dealers also in GST?
Generally not, but it will required in case of inter-state supplies having invoice value of more than Rs 2.5 lakh.
Under supply from an unregistered dealer, the purchaser has to pay GST on Reverse Charge Mechanism (RCM) basis. Will stipend paid to an intern also come under RCM?
Stipend paid to interns will be an employer-employee transaction. Hence, it will not be liable for GST.
How to incorporate two supplies in return for pharma with the same four-digit HSN (Harmonized System of Nomenclature) code buy having different tax rates?
The returns provide for furnishing rate-wise details.
How will promotional items given free to end-consumers by FMCG companies be treated? If taxable, will input tax credit (ITC) be allowed?
Tax will be charged only on the total consideration charged for such supply. ITC will be available accordingly.
How to comply with Section 9(4) of the 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.
According to Section 9(4) of the CGST Act: "The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both."
If I purchase stationary worth Rs 100 from an unregistered supplier, am I required to pay tax under RCM as per Section 9(4) of the CGST Act?
It has been decided that an exemption of Rs 5,000 per day will be given in respect of supplies received from an unregistered person.
Is salary by a partnership firm to partners as per the Income Tax Act liable to GST?
No, the salary will not be liable for GST.
How will disposal of scrap be treated in GST?
If the disposal is in the course for furtherance of business purposes, it will be considered as a supply.
How to avail transition credit?
Transition credit can be availed by filing the respective forms under transition rules.