How is Input Tax Credit (ITC) available to ‘rent a cab’ service providers?
The service provider has two options.
Option1: Pay 5% and not claim ITC. If they choose not to take credit of tax paid on various inputs, then they can pay only 5% GST on output service.
Option 2: Pay 12% and claim ITC. If they choose to take credit of the tax paid on various inputs, then they will have to pay 12% GST on output service.
When can registration be obtained by TDS and TCS deductors?
Entities which are required to deduct and collect tax at source can apply for GST registration from 18th September 2017, whereas the date for deduction and collection of tax is yet to be notified.
Can amendment be made in GST Registration if there is a change in constitution?
If there is a change in constitution, eg conversion from partnership to company, PAN of the entity will get changed, hence no amendment can be made in the registration. Instead, a fresh registration should be obtained.
When can ITC of tax paid on Reverse Charge Mechanism (RCM) be taken?
The credit of tax paid on RCM is available and it can be taken even in the same month, provided the payment has been made.
If a person has aggregate turnover above Rs 20 lakh, but turnover of taxable supply is less than Rs 20 lakh, is he required to get registered under GST?
Yes, he is required to get himself registered. For the threshold of Rs 20 lakh, aggregate turnover is to be considered.
Is GST leviable in respect of ticket booked in India but place of boarding is outside India?
The place of supply is outside India, but the supplier is located in India. Hence, it is a case of inter-state supply and subject to IGST. The supply will be considered as zero-rated if the amount is received in convertible foreign exchange.
Will the goods of principal directly supplied from job-worker’s premises be included in the aggregate turnover of the job worker?
No, the supply will be included in the aggregate turnover of the principal.
Is a job-worker required to take registration?
Yes, as a job-worker would be a supplier of services, he would be required to obtain registration if his aggregate turnover exceeds the prescribed threshold.
Will an Indian providing service to a US-based company on contractual basis be required to pay tax on reverse charge, on charges deducted by US-based company?
It will depend on the nature of charges deducted. The place of supply is outside India, but the supplier is located in India. Hence, it is a case of inter-state supply and subject to IGST. The supply will be considered as zero-rated if amount is received in convertible foreign exchange.
Will reimbursement of expenses to staff attract RCM?
Reimbursement is considered as an expense in the course or furtherance of business, and if it is taken against a taxable supply from an unregistered supplier, will attract GST under RCM.
Should tax payable on reverse charge basis be reduced from the value of supply?
If tax is not included in the price payable towards the supply, then tax payable on reverse charge basis cannot be reduced from the value of supply that is paid to supplier.
Can a taxable person opt to pay tax under composition scheme by seeking separate registration for branches, all under a common PAN?
No, a registered person shall not be eligible to opt for composition scheme unless all such registered persons (branches having separate registration under a single PAN) opt to pay tax under composition scheme.
Does exemption from IGST automatically operate as exemption from IGST on imports?
GST on import of goods provides that IGST will be levied ‘at the point’ when customs duties are leviable. To apply IGST on imports, reference must be taken from IGST rate prevailing on such date. So, if there is any exemption under IGST Act, the same will apply to IGST on imports.
When does a registered person need to generate E-way bill?
Every registered person who is causing movement of goods, of value exceeding Rs 50,000, shall before commencement of such movement, furnish information in Part A of FORM GST EWB-01, electronically, on the common portal.
What needs to be done if goods cannot be transported within the validity of E-way bill?
If under circumstances of exceptional nature the goods cannot be transported within the validity period of the E-way bill, the transporter may generate another E-way bill after updating the details in Part B of FORM GST EWB-01.
CA Ankita Mathur, author of this article, heads Business Services at H&R Block India Private Limited. She can be reached at firstname.lastname@example.org.