Our top 10 GST FAQs are here for you, answered by our GST expert, CA Harsh Vardhan Dawar. This is a curated list of questions you asked during our first GST chat on Facebook, Ask the GST Expert, held in April 2017.
Top 10 GST FAQs
Q1. I have registered myself for service tax, my turnover for this year was 20 lakh. Am I required to register under GST?
A. Yes. If you are registered under Service Tax, you will have to seek registration under GST as well. You can login into the ACES website and use the Provisional Login details and register for GST. Subsequently, if your turnover is under the GST limit of INR 20 lakhs, you can seek an exemption under the GST laws.
Q2. If limit for GST registration is INR 20 lakh but my one client has turnover around INR 8-9 lakh in last year. He has TIN. For him is it compulsory to go for GST and can he surrender his GST number after migration?
Yes. If your client already has a TIN or a Service Tax Number, he will have to seek GST registration first and then surrender it under the GST laws if his turnover is expected to stay below INR 20 lakhs.
Q3. Do we need to seek exemption or just file a nil return with details of our turnover? If we need to seek exemption what documents do we need to produce?
You need not seek any specific exemption as long as your services qualify as Export of Services. You just file the returns with the amount or turnover under the section Export of Services.
Q4. Do we have 2 components in GST and IGST? Where can we claim both the components?
For every invoice raised to within the same state, you will charge both CGST and SCGT. For sales of Goods and Services outside the state, you will charge IGST. That is three taxes in total. IGST Credit can be utilized to pay the IGST liability first, then CGST and then SGST. CGST credit can be utilized to pay the CGST liability first and then IGST. CGST credit cannot be utilized to pay SGST liability. SGST Credit can be utilized to pay the SGST liability first and then IGST. SGST Credit cannot be utilized to pay CGST liability.
Q5. If I source raw material from Delhi and sell it in Chennai, and our office is registered in Bangalore, could you very briefly explain how CGST, SGST, and IGST will apply in such a situation?
For this, you need to refer to the rules relating to the “Place of Supply” of goods and services. Ideally, your supplier in Delhi will charge you IGST on the goods he is selling to you. You will charge IGST on your sales to your client in Chennai.
Q6. What is the rule for the set-off of IGST and SGST?
For every invoice raised to within the same state, you will charge both CGST and SCGT. For sales of Goods and Services outside the state, you will charge IGST. That is three taxes in total. IGST Credit can be utilized to pay the IGST liability first, then CGST and then SGST.
Q7. Can you highlight the rule for the composite scheme?
Businesses dealing only in goods can only opt for the composition scheme. Services Provider has been kept outside the scope of the Composition scheme. Any dealer whose aggregate turnover in a financial year does not exceed Rs.50 Lakh can opt for composition scheme.
A Composition Dealer is not allowed to avail of an input tax credit of GST paid to their suppliers. Such a dealer is not required to maintain detail books of accounts. Such a Composition Dealer will be required to pay tax at a rate not more than 1% if he is a manufacturer, 2.5% for the restaurant sector and 0.5% for other suppliers of the total turnover.
Q8. How the builder lobby gets taxed under GST?
The tax rates for different industries will get notified by the GST Council in the coming week. We will have clarity only after that.
Q9. How reconciliation is done under GST?
As a Seller, you will file GSTR -1 pertaining to Outward Supplies 10th of next month. All input credits due to you will appear in your login latest by the 15th of the month. (GSTR-2). Based on both GSTR-1 and GSTR-2, the GSTR-3 is finalized and you arrive at your net tax liability. If there are mismatches in the Input Credits due to you, you need to mark the same for your Supplier to reply and resolve with the correct amount.
Q10. What will be UTGST rates?
There are 5 rates notified: 0%, 5%, 12, 18% and 28%. Have more questions on GST? Ask us on Facebook, or in comments here, and our expert will answer in the next session of GST Chat. Also, you can read more articles related to GST on our QuickBooks GST Center