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 excludes Taxes
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 tax on 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.