Monday, May 1, 2017

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

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.

89. What is IGST?

“Integrated Goods and Services Tax” (IGST) means tax levied under the IGST Act on the supply of any goods and/ or services in the course of inter-State trade or commerce.

90. What are inter-state supplies?

A supply of goods and/or services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States, two different union territory or in a state and union territory Further import of goods and services, supplies to SEZ units or developer, or any supply that is not an intrastate supply. (Section 7 of the IGST Act).

91. How will the Inter-State supplies of Goods and Services be taxed under GST?

IGST shall be levied and collected by Centre on inter-state supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies of goods and services. The inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The Importing dealer will claim the credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information is also submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds.

92. How will the settlement between Centre, exporting state and importing state be done?

There would be settlement of account between the Centre and the states on two counts,

• Centre and the exporting state: The exporting state shall pay the amount equal to the ITC of SGST used by the supplier in the exporting state to the Centre.
• Centre and the importing state: The Centre shall pay the amount equal to the ITC of IGST used by a dealer for payment of SGST on Intra- state supplies.

The settlement would be on a cumulative basis for a state taking into account the details furnished by all the dealer in the settlement period. Similar settlement of amount would also be undertaken between CGST and IGST account.

93. What treatment is given to supplies made to SEZ units or developer?

Supplies to SEZ units or developer shall be zero-rated in the same manner as done for the physical exports. Supplier shall have the option to make supplies to SEZ without payment of taxes and claim refunds of input taxes on such supplies (section 16 of the IGST Act).

94. The place of supply in relation to immovable property is the location of immovable property. Suppose a road is constructed from Delhi to Mumbai covering multiple states. What will be the place of supply?

Where the immovable property is located in more than one State, the supply of service shall be treated as made in each of the States in proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf.
(The Explanation clause to section 12(3) of the IGST Act, for domestic supplies)

95. What would be the place of supply of services provided for organising an event, say, IPL cricket series which is held in multiple states?

In the case of an event, if the recipient of service is registered, the place of supply of services for organising the event shall be the location of such person.

However, if the recipient is not registered, the place of supply shall be the place where the event is held. Since the event is being held in multiple states and a consolidated amount is charged for such services, the place of supply shall be taken as being in each state in proportion to the value of services so provided in each state.
(The Explanation clause to section 12(7) of the IGST Act)

96. What will be the place of supply of goods services by way of transportation of goods, including mail or courier?

In the case of domestic supply: If the recipient is registered, the location of such person shall be the place of supply.
However, if the recipient is not registered, the place of supply shall be the place where the goods are handed over for transportation
(section 12 of the IGST Act)

For international supplies: The place of supply of transport services, other than the courier services, shall be the destination of goods. For courier, the place of supply of services is where goods are handed over to the courier. However, if the courier services are performed even partially in India, the place of supply shall be deemed as India
(section 13(3),13(6) and 13(9) of the IGST Act).

97. What will be the place of supply of passenger transportation service, if a person travels from Mumbai to Delhi and back to Mumbai?

If the person is registered, the place of supply shall be the location of the recipient. If the person is not registered, the place of supply for the forward journey from Mumbai to Delhi shall be Mumbai, the place where he embarks.

However, for the return journey, the place of supply shall be Delhi as the return journey has to be treated as a separate journey.
(The Explanation clause to section 12(9) of the IGST Act)

98. What is GSTN?

Goods and Services Tax Network (GSTN) is a not-for-profit, a non-government company promoted jointly by the Central and State Governments, which will provide shared IT infrastructure and services to both central and state governments including taxpayers and other stakeholders. The Frontend services of Registration, Returns, Payments, etc. to all taxpayers will be provided by GSTN. It will be the interface between the government and the taxpayers.

99. What services will be rendered by GSTN?

GSTN will render the following services through the Common GST Portal:

(a) Registration (including existing taxpayer migration, a process which began on 8th Nov 2016);
(b) Payment management including payment Gateways and integration with banking systems;
(c) Return filing and processing;
(d) Taxpayer management, including account management, notifications, information, and status tracking;
(e) Tax authority account and ledger Management;
(f) Computation of settlement (including  IGST Settlement) between the Centre and States; Clearinghouse for IGST;
(g) Processing and reconciliation of GST on import and integration with EDI systems of Customs;
(h) MIS including need-based information and business intelligence;
(i) Maintenance of interfaces between the Common GST Portal and tax administration systems;
(j) Provide training to stakeholders;
(k) Provide Analytics and Business Intelligence to tax authorities; and
(l) Carry out research and study best practices.


For full set please visit

No comments:

Post a Comment