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GST: Frequently Asked Questions(FAQs) for Traders

Goods and Services Tax - GST - Dated:- 17-8-2017 - Q 1. How will GST benefit the Trading Community? Ans. Under GST, a trader would be entitled to avail input tax credit paid on their domestic procurements of goods and services unlike the present indirect tax regime. Presently, a significant portion of indirect taxes namely Central Excise and Service Tax form part of the cost component for a trader. This will not be the case under GST. He will now be able to take credit of all taxes paid by him. .....

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Will all traders necessarily have to register under GST? Ans. A trader dealing only in exempted goods or where his turnover is below ₹ 20 Lakhs in the financial year (but not engaged in inter-State supplies) is not required to register under GST. Q 3. Are monthly returns required to be filed by a trader not opting to pay tax under the composition scheme? Ans. Traders not opting to pay tax under composition scheme need to file returns on a monthly basis. Form GSTR-1 is to be filled for outw .....

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made. The provisions are as follows: i) intra-State supplies to consumers (B2C supplies) - tax-rate wise summary; ii) inter-State supplies to consumers (B2C supplies) of value up to ₹ 2.5 lakhs - State-wise and tax-rate wise summary; iii) inter-State supplies to consumers (B2C supplies) of value above ₹ 2.5 lakhs - specified invoice wise details; iv) supplies to resellers (B2B) - specified invoice wise details. Q 5. Under GST, will traders be required to declare their IEC at the time .....

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taxes on further supplies. GSTIN would be used for the purpose of credit flow of IGST on import of goods and refund of IGST paid in case of export. Q 7. Is there any scheme for payment of taxes under GST for small traders? Ans. Yes. Composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to ₹ 75 lakhs (Rs. 50 lakhs for special category States). The basic objective is to bring simplicity and reduce cost of compliance for the small taxpayers .....

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states, the limit of turnover is ₹ 50 Lakhs in the preceding financial year:- a) Arunachal Pradesh b) Assam c) Manipur d) Meghalaya e) Mizoram f) Nagaland g) Sikkim h) Tripura and i) Himachal Pradesh Q 9. What is the rate of tax under Composition levy? Ans. The rate for traders shall be 1% (0.5% CGST plus 0.5% SGST) of the turnover in the state. Q 10. Who are the persons(traders) not eligible for composition scheme? Ans. Following persons will not be allowed to opt for composition scheme: .....

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for the scheme. The traders should not be supplying through E commerce operator in which case he will have to compulsorily register. Further in case a trader is supplying exempted goods, he need not register. It is also important to note that the trader can procure the goods from outside the State and yet he would be eligible for availing the composition scheme. Q 11. When will a trader have to pay tax? Ans. A trader, if registered under GST, will have to pay tax on monthly basis on or before 2 .....

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ear i.e. till 31st March? Ans. No. The option availed shall lapse from the day on which his aggregate turnover during the financial year exceeds ₹ 75 Lakhs/50 Lakhs. Once he crosses the threshold, he shall file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days of the occurrence of such event. Every person who has furnished such an intimation, may electronically furnish at the common portal, a statement in FORM GST ITC-01 containing details of the stock of in .....

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on which tax is payable by the composition dealer on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and compensation cess. Q 14. Can a person who has opted to pay tax under the composition scheme avail Input Tax Credit on his inward supplies? Ans. No. A taxable person opting to pay ta .....

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not charge tax from the recipient. Therefore the person purchasing from him cannot take any credit. Q 16. Are monthly returns required to be filed by the person opting to pay tax under the composition scheme? Ans. No. Such persons need to file a simplified quarterly returns in Form GSTR-4. The GSTR-4 needs to be filed electronically on the GSTN common portal by the 18th day of the month succeeding the quarter relating to the supplies. Q 17. What is the basic information that need to be furnished .....

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es received from unregistered persons by the composition dealer under reverse charge at normal rates and not composition rates. The tax can be paid by the 18th day of the month succeeding the quarter in which such supplies were received. The information relating to such supplies should by shown by the composition dealer in Table 4 of Form GSTR 4. In respect of other notified supplies in which GST is chargeable on reverse charge basis, the composition dealer will have to pay tax at normal rates. .....

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d as an intimation. Q 20. In case a person has registration in multiple states? Can he opt for payment of tax under composition levy only in one state and not in other state? Ans. No. Any intimation under sub-rule (1) or sub-rule (3) of Rule 3 of the CGST Rules, 2017 in respect of any place of business in any State or Union territory shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number. Q 21. What is the effective date of .....

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ffective date of registration; Intimation shall be considered only after the grant of registration and his option to pay tax under composition scheme shall be effective from the effective date of registration. Persons opting for composition after obtaining registration (The intimation is filed under Rule 3(3) in Form GST CMP-02) The beginning of the financial year Q 22. What are the conditions and restrictions subject to which a person is allowed to avail of composition levy? Ans. The person exe .....

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t been purchased from an unregistered supplier and where purchased, he pays the tax under reverse charge mechanism; (d) he shall pay tax under reverse charge mechanism where he purchases goods or services from an unregistered person; (e) he was not engaged in the manufacture of notified goods namely icecream and other edible ice, pan masala and tobacco and manufactured tobacco products; (f) he shall mention the words composition taxable person, not eligible to collect tax on supplies at the top .....

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er II of the CGST Rules, 2017. Q 24. Can a trader having duty paying documents (including a First stage dealer or a second stage dealer) claim the Cenvat credit on the stock held on the appointed date viz 1st July, 2017? Ans. Yes, a trader having duty paying documents including a first stage dealer or second stage dealer can claim Cenvat Credit as per section 140(3) of the CGST Act, 2017 subject to fulfilment of following conditions: (a) such inputs are used or intended to be used for making tax .....

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rs? Ans. A manufacturer may have cleared some goods to a dealer prior to the GST, and in case a dealer who was not registered under the Central Excise Act, however is registered under CGST Act, 2017. A special provision has been made in the CENVAT Credit Rules, 2004 to take care of such cases. In such a situation, the manufacturer may issue a credit transfer document to the dealer subject to the following conditions: (a) The value of such goods is higher than rupees twenty-five thousand per piec .....

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d Central Excise Division, name, address and GSTIN number of the person to whom it is issued, description, classification, invoice number with date of removal, mode of transport and vehicle registration number, rate of duty, quantity, value and duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 paid thereon. (d) The manufacturer is satisfied that the dealer to whom Credit Transfer Document is issued is in possession of such manufactured goods in the form in whi .....

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. (h) A dealer availing credit using Credit Transfer Document on manufactured goods shall not be eligible to avail credit under provision of rule 117 (4) of the CGST Rules, 2017 on identical goods manufactured by the same manufacturer available in the stock of the dealer. (i) The dealer availing credit on the basis of Credit Transfer Document shall, at the time of making supply of such goods, mention the corresponding Credit Transfer Document number in the invoice issued by him under section 31 .....

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). If duty paid invoices are not available, then a deemed credit scheme is made available to the traders as per the details below: Sr.No Category of Taxpayer Details to be provided Amount of ITC available 1 Trader (not liable to be registered under Central Laws) (Form TRANS-1 is to submitted on or before 30.09.2017) Stock of Inputs (held as inputs/ semi-finished / finished goods) to be used for making taxable supplies where duty paying documents are available with the trader Amount of duty paid .....

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12%) In case of inter-State supplies, 30% or 20% of integrated tax paid will be allowed. Q 27. Will the compliance process under GST be complicated for traders under GST? What measures have been put in place to ease burden of compliance on small traders? Ans. No. The compliance process will be automated and easy for traders. The following steps have been taken by the Government in this regard. a) Small traders with a turnover below ₹ 20 Lakhs need not register under GST. b) An easy to unde .....

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ess under GST is completely online. There will be minimal interface or no interface with the tax authorities. f) Small taxpayers can use the services of GST practitioners at a nominal cost to take care of their compliances under GST. g) GST Suvidha providers (GSPs) will be providing easy to use applications which will provide an interface with the GST network for easy and smooth compliances under GST. h) Strict time lines have been prescribed which shall be adhered to by all proper officers. Reg .....

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nt without any verification. The amount of refund will be directly credited to beneficiary s bank account. Q 28. Stock transfers have been made taxable in GST. Will it impact adversely? Ans. The objective of taxing the stock transfers is just to ensure that the ITC moves along with the supply of goods to the place where a supply is finally consumed. This is to ensure that the taxes accrue to the State where a supply is consumed. If the stock transfers are not taxed, the ITC would not flow to oth .....

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