Frequently Ask Questions GST

How long can I wait to register in GST?

An unregistered person has 30 days to complete its registration formalities from its date of liability to Obtain registration.

Is GST registration mandatory for small retailers to buy from dealers/wholesalers?

There is no such requirement under GST law.

What if the dealer migrated with wrong PAN as the status of firm was changed from proprietorship to Partnership?

New registration would be required as partnership firm would have new PAN.

If I am not an existing taxpayer and wish to newly register under GST, when can I do so?

You would be able to apply for new registration at the GST Portal gst.gov.in

A firm dealing exclusively in exempted products has GST registration; does it need to file return?

If registered, then you need to file returns. You may choose to cancel your registration since you are dealing only in exempted products.

I have not received ARN or have received ARN but not GSTIN, how do I supply goods or services or both?

You can supply goods or services or both on bill of supply without mentioning GSTIN and/or ARN. On receipt of GSTIN, you will need to issue revised invoice mentioning GSTIN. You are required to reflect this supply in your return and also pay tax thereon.

Suppose I am in composition scheme in GST. If I purchase goods from unregistered person, then GST will be paid to Government by me or not?

Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered person.

What is Goods and Services Tax (GST)?

It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off.

Why is Dual GST required?

India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional  requirement of fiscal federalism.

Who will decide rates for levy of GST?

The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council.

How will the goods and services be classified under GST regime?

HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods and SAC ( Service Accounting Code ) shall be used for classifying the goods under the GST regime.

Whether transaction in securities be taxable in GST?

Securities have been specifically excluded from the 21 definition of goods as well as services. Thus, the transaction in securities shall not be liable to GST.

What is meant by Reverse Charge?

It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.

What is the composition levy under GST?

The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to prescribed limit. The objective of composition scheme is to bring simplicity, ease compliance burden and reduce cost of compliance for the small taxpayers. The scheme is optional. It essentially provides for a turnover tax regime for such tax payers, with facility for filing of return on quarterly basis (instead of monthly return by the normal tax payers). An eligible person opting to pay tax under the composition scheme shall, instead of paying tax on every invoice at the specified rate, pay tax at a prescribed percentage of his turnover every quarter.

Can a person who has opted to pay tax under the composition scheme avail Input Tax Credit on his inward supplies?

No. A taxable person opting to pay tax under the composition scheme is out of the credit chain. He cannot take credit on his input.

What is advantage of taking registration in GST?

Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

  • Legally recognized as supplier of goods or services.
  • Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
  • Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
  • Getting eligible to avail various other benefits and privileges rendered under the GST laws
Can a person without GST registration claim ITC and collect tax?

No, a person without GST registration can neither collect GST from his customers nor can claim any input tax credit of GST paid by him.

What is the time limit for taking a Registration under GST?

A person should take a Registration, within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as is prescribed under the Registration Rules

Whether the Registration granted to any person is permanent?

Yes, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended.or revoked.

At the time of registration will the assessee have to declare all his places of business?

Yes. The principal place of business and place of business have been separately defined under section 2(89) & 2(85) of the CGST/SGST Act respectively. The taxpayer will have to declare the principal place of business as well as the details of additional places of business in the registration form.

Whether Amendments to the Registration Certificate is permissible?

Yes. In terms of Section 28, the proper officer may, on the basis of such information furnished either by the registrant or as ascertained by him, approve or reject amendments in the registration particulars within a period of 15 common working days from the date of receipt of application for amendment.

Whether Cancellation of Registration Certificate is permissible?

Yes. Section 29 of the CGST Act, read with rule 20 of the CGST Rules provides that a taxpayer can apply for cancellation of registration in FORM GST REG-16 in the following circumstances:

  • Discontinuance of business or closure of business;
  • Transfer of business on account of amalgamation, merger, de-merger, sale, lease or otherwise;
  • Change in constitution of business leading to change in PAN;
  • Taxable person (including those who have taken voluntary registration) is no longer liable to be registered under GST;
  • Death of sole proprietor;
  • Any other reason (to be specified in the application) 72 Application in FORM GST REG-16 has to be submitted within a period of 30 days of the “occurrence of the event warranting the cancellation”.
What is the taxable event under GST?

The taxable event under GST shall be the supply of goods or services or both made for consideration in the course or furtherance of business. The taxable events under the existing indirect tax laws such as manufacture, sale, or provision of services shall stand subsumed in the taxable event known as ‘supply’.    

What are the different types of supplies under 80 the GST law?

(i) Taxable and exempt supplies.
(ii) Inter-State and Intra-State supplies,
(iii) Composite and mixed  supplies and
(iv) Zero rated supplies.    

What is time of supply?

The time of supply fixes the point when the liability to charge GST arises. It also indicates when a supply is deemed to have been made. The CGST/SGST Act provides separate time of supply for goods and services.

What is Input tax credit?

Input tax credit means the credit of “input tax” in terms of section 2(63). Further, "Input tax" in terms of section 2(62) in relation to a registered person, means the Central tax, State tax, Integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes:

  • integrated goods and service tax charged on import of goods
  • tax payable on reverse charge basis under IGST Act/SGST Act/CGST Act/UTGST Act.
  • but excludes tax paid under composition levy.
Can one use input tax credit for payment of tax under reverse charge basis?

No, the amount available in the electronic credit ledger may be used for making any payment towards ‘output tax’. Further, the definition of output tax u/s 2(82) specifically excludes tax payable under reverse charge basis. Therefore, input tax credit cannot be used for payment of tax under reverse charge basis.      

Can the registration certificate be downloaded from the GSTN portal?

Yes, registration certificate shall be granted in Form GST REG 06 and the same shall be available on the common portal.

What is exempt supply?

As per Section 2(47) of the CGST Act, 2017, “Exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under Section 11 of CGST Act, 2017, or under Section 6 of the IGST Act, and includes non-taxable supply.