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GST SECTORAL SERIES - FAQ: Mining

Goods and Services Tax - GST - Dated:- 1-8-2017 - Question 1: Can small mining leaseholders with a turnover less than ₹ 75 lacs operate under composition scheme? Answer: As per Sec. 10(1) of the CGST Act, 2017, a registered person whose aggregate turnover in the preceding FY did not exceed ₹ 75 lakhs, would be eligible for paying GST under the composition scheme. Question 2: What is the GST rate for minerals and ores in Composition Scheme? Answer: In a case where the process amounts .....

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upplier chooses to avail of composition scheme, he shall not undertake inter-State supply. Question 5: What is the IGST rate for minerals and ores in case of inter - State supply? Answer: At present, the IGST rate is the sum of CGST and SGST/ UTGST rate. These rates have been notified and are available in public domain. Question 6: Can the buyer get input credit on the supply of minerals from a mine owner in composition scheme? Answer: No,the buyer cannot avail of the credit of tax paid by the s .....

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chanism. Question 8: What is the threshold limit and conditions when a small mine owner/lease holder under Composition Scheme has to migrate into full GST System? Answer: As per section 10(3) of the CGST Act, 2017, the option availed of by the small mine owner/lease holder shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds ₹ 75 lakhs. For details regarding other conditions, section 10 of the CGST Act, 2017 and the rules framed there under m .....

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icable to the tiny and micro segment even in mining. However, a person engaged in making taxable supply and having aggregate annual turnover (more than ₹ 20 lakhs in any State other than the special category States) would be liable to obtain registration under GST. The return has to be filed on monthly basis by regular taxable persons and on quarterly basis by the taxable persons registered under the composition scheme. . Question 11: What is aggregate turnover? Answer: As per section 2(6) .....

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nregistered person pay reverse tax? Answer: A registered person receiving taxable goods or services from a supplier who is not registered, would be liable to pay GST under reverse charge mechanism. However, in terms of notification no. 8/2017-Central Tax (rate) dated 28th June, 2017, aggregate value of supplies of goods and/or service received by a registered person from any or all the suppliers, who is or are not registered, upto five thousand rupees in a day is exempt from tax un­der rever .....

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ween the buyer and the supplier and the goods are returned fully or partially, as found unfit for use, can the excess paid tax component be adjusted from future tax liability? Answer: In such cases, the supplier may issue a credit note to the recipient in accordance with the provisions of section 34(1) of the CGST Act, 2017. Question 15: Whether deduction of Liquidity Damage (LD)/Penalty deduction from contractor s bills and charging Penalty for non-lifting of coal till targeted minimum level to .....

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date of issue of invoice or the date of receipt of payment, whichever is earlier. Accordingly, GST would be payable on advance payment received prior to issuance of the invoice. Question 17: Will the supplier have to issue receipt voucher against each advance received? Answer: Yes, as per section 31(3)(d) of the CGST Act, 2017 the supplier has to issue a receipt voucher for every advance received. Question 18: How do I show the advance received in GSTR 1? Answer: Where against an advance the in .....

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dvances against the tax payable on the invoices uploaded in Form GSTR-1 shall have to be done in Table 11 of Form GSTR-1. Question 19: In case no supplies are made against an advance, will the dealer have to issue a refund voucher only for the advance or for advance including GST? Answer: Refund voucher has to be made for the full value of advance, including the amount of GST. Question 20: It will be difficult to link between Advance Receipt Voucher and invoices in case of sales billing on Cash .....

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djusted in totality. While raising the invoice subsequent to receipt of advance, the tax payable will get reduced by the amount of tax paid on the advance and balance amount of advance may be adjusted against future supplies. Question 21: Will GST charged on purchase of all earth moving machinery including JCB, tippers, dumpers by a mining company be allowed as input credit? Answer: The provision of Sec. 17(5) (a) of the CGST Act, 2017 restricts credit on motor vehicle for specified purposes lis .....

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22: Whether GST is payable on royalty (to be paid to Government)for Mining Lease granted by State Govt. Answer: Yes, on royalty GST will apply under reverse charge mechanism. Further, such payment of GST under reverse charge mechanism would be eligible as ITC in the hands of the recipient of supply for payment of GST. Question 23: Is ITC available on hiring of immovable properties (land, office, warehouse, processing unit, stock yards) for facilitation of mining operations? Answer: Yes. GST paid .....

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ng amount of unutilised input credit be refunded by the Government? Answer: In terms of the provision of Section 54(3) of the CGST Act, 2017 subject to conditions, refund of unutilized input tax credit would be available in respect of zero rated supply or where ITC has accumulated on account of rate of tax on inputs being higher than the rate of taxon the output supply. However, such refund of ITC would not be available if export duty is payable on the goods so exported out of India. Question 26 .....

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t. Question 27. Whether free issue of coal to employees paid in course of employment and on the basis of wage agreement with value below ₹ 50, 000/- per employee will attract GST? Answer: Gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both (as per Schedule 1 of the CGST Act, 2017). Free issue of coal based on the wage agreement is not a gift. Therefore, free issue of coal in this ca .....

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the buyer if otherwise available. The supplier of the mineral will also pay tax on reverse charge basis on the freight charged by the GTA and the credit of the same will be available to the supplier of the mineral. In case of an ex-works contract of supply, where the GTA service has been booked by the supplier at the instance of the buyer and the service is billed by the GTA to the buyer and the minerals are billed by the supplier of the mineral to the buyer, then GTA on reverse charge shall be .....

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where there is a principal supply and other supplies are naturally bundled and supplied in conjunction with each other in the ordinary course of business. The GST rate of principal supply shall be applicable in this case i.e. GST rate as applicable to the mineral. Question 30. Exploration companies undertake exploration activities for preparing mining blocks for auction in different States in the country. They use rigs for exploration. CENVAT credit was available on rig operations under the exi .....

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ss shall be available. Question 32. Will the mining companies be eligible to take ITC for construction of townships, hospitals and schools? Answer: No. Mining companies will not be eligible for ITC on such activities even if used in course or furtherance of business. In this connection, the provisions contained in section 17(5) (c) of the CGST Act, 2017 refer. Question 33. Are minerals sent for export in processed or raw form fully exempted from payment of GST or IGST? Answer: In terms of the pr .....

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T Act, 2017 in case of return of goods on which GST was paid at the time of supply, the supplier of such goods may issue a credit note for the full value, including the amount of GST in favour of the recipient, and will be entitled to reduce his output tax liability subject to the condition that the recipient of such supply has not availed credit of such GST and if availed, has reversed his ITC on the same. Question 35. How can we take support during filing of returns, as huge mines are located .....

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) of CGST Act. 2017 is applicable on: a) Dept. or establishment of the Central Govt. or State Govt.; or b) Local authority; or c) Govt. agencies; or d) Such persons or category of persons as may be notified by the Govt. on the recommendations of the Council. Answer: TDS, under section 51 (1) of the CGST Act, 2017 will apply to supplies made to such agencies as may be mandated by the Government for TDS. As of now, this section has not been notified and therefore TDS is not applicable on any suppl .....

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portal along with the invoice (challan in the case of movement other than by way of supply). Question 38. Whether an Input Service Distributer (ISD) will be eligible to distribute the ITC in respect of services received during April 17 to June 17 even if the invoices are raised and submitted by contractors after appointed date i.e. in July 17. Answer: In terms of section 140(7) of the CGST Act, 2017 the ISD will be able to distribute the available credit even if the invoices are received after t .....

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sale/stock transfer under CST Act. The benefit of concessional rate/nil rate is available conditional upon production of the statutory forms. Therefore,allowing migration of the credit that has accrued on account of sale/stock transfer having been made on concessional rate/nil rate should be given only on production of the statutory forms. Even otherwise, the taxpayer would have claimed refund of this ITC and such refund would have been given only on production of the statutory forms. It has bee .....

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ried forward. Question 41. What will happen to the balance available in the current account (PLA) under Central excise, deposited in cash in advance by any assesse? Answer: Balance in PLA will not be under transition to GST since that has not been appropriated to the Government account which will be determined post completion of the pending assessment. The same can be claimed as refund under the Central Excise Law. Question 42. Whether credit of Green Cess (Clean Energy Cess) paid on coal and av .....

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inuous supply of goods? Answer: Such supplies are in the nature of continuous supply as the invoices are raised periodically. The individual dispatches may be covered under delivery challans and invoice may be issued for the supplies made during a period as per the contract. Question 45. In case of coal, the applicable Compensation Cess is a Fixed Amount of ₹ 400/- per MT. Under above situation, how such apportionment is possible since in case of FSA Sale, supply of different grade of coal .....

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