Saturday, April 29, 2017

Frequently Asked Questions on GST (Goods and Services Tax) - Part V


FAQ on GST (Goods and Services Tax) - Part I
FAQ on GST (Goods and Services Tax) - Part II
FAQ on GST (Goods and Services Tax) - Part III
FAQ on GST (Goods and Services Tax) - Part IV
FAQ on GST (Goods and Services Tax) - Part V
FAQ on GST (Goods and Services Tax) - Part VI

FAQ on GST (Goods and Services Tax) - Part VII


This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

Below mentioned Q& A are derived from above document with modifications.


61. Whether supply of software would be treated as the supply of goods or supply of services under GST law? 

Development, design, programming, customization, adaptation, up-gradation, enhancement, implementation of IT software shall be treated as the supply of services.  [Sl. No. 5 (2)(d) of Schedule –II of the model GST law]

62. What is meant by zero-rated supply under GST? 

Zero rated supply means export of goods and/or services or supply of goods and/or services to a SEZ developer or a SEZ Unit. 

63. What is the time period within which invoice has to be issued for supply of Goods? 

[Section 31 of CGST/SGST Act] A registered taxable person shall issue a tax invoice showing description, quantity and value of goods, tax charged thereon and other prescribed particulars, before or at the time of removal of goods for supply to the recipient, where supply involves movement of goods or delivery of goods or making available thereof to the recipient in other cases. 

64. What is the time period within which invoice has to be issued for supply of Services? 

[Section 31 of CGST/SGST Act] A registered taxable person shall, before or after the provision of service, but within a period prescribed in this behalf, issue a tax invoice showing description, value of goods, tax payable thereon and other prescribed particulars. 

65. What is the time period within which invoice has to be issued in a case involving the continuous supply of goods? 

In the case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received. 

66. What is the time period within which invoice has to be issued in a case involving the continuous supply of services? 

In case of continuous supply of services,  

Where the due date of payment is ascertainable from the contract, the invoice shall be issued before or after the payment is liable to be made by the recipient but within a period prescribed in this behalf whether or not any payment has been received by the supplier of the service; 

where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or after each such time when the supplier of service receives the payment but within a period prescribed in this behalf; 

where the payment is linked to the completion of an event, the invoice shall be issued before or after the time of completion of that event but within a period prescribed in this behalf. 

67. Is it mandatory for e-commerce operator to obtain registration? 

The benefit of threshold exemption is not available to e-commerce operators and they would be liable to be registered irrespective of the value of supply made by them. 

68. Whether a supplier of goods or services supplying through e-commerce operator would be entitled to threshold exemption? 

No. The threshold exemption is not available to such suppliers and they would be liable to be registered irrespective of the value of supply made by them. This requirement, however, is applicable only if the supply is made through such electronic commerce operator who is required to collect tax at source.   

69. Will an e-commerce operator be liable to pay tax in respect of the supply of goods or services made through it, instead of an actual supplier? 

Yes, but only in case of certain notified services. In such cases tax shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the person liable to pay tax in relation to supply of such services. 

70. Will threshold exemption be available to electronic commerce operators liable to pay tax on notified services? 

No. Threshold exemption is not available to e-commerce operator who is required to pay tax on notified services provided through them.  

71. What is Tax Collection at Source(TCS)? 

The e-commerce operator is required to collect an amount calculated at the rate not exceeding 1% of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). 

72. It is very common that customers of e-commerce companies return goods. How these returns are going to be adjusted?   

An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, the value of the supplies which are returned is adjusted in the aggregate value of taxable supplies. 

73. Is every e-commerce operator required to collect tax on behalf of an actual supplier? 

Yes, every e-commerce operator is required to collect tax where consideration with respect to the supply is being collected by the e-commerce operator. 

74. At what time should the e-commerce operator make such collection? 

The e-commerce operator should make the collection during the month in which supply was made. 

Sajeev

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