Goods and Services Tax (GST), Frequently Asked Questions (FAQ) on Cess, Customs, Exports and Composition Scheme under GST.

GST stands for Goods and Services Tax. GST will be a single destination based consumption tax that will replace existing taxes, including CENVAT, Octroi, Sales Tax, and Excise Duty, etc. 

Unlike the old tax structure, where the state of origin received tax revenue, in the new GST model the state in which goods and services are consumed is the state that will receive the revenue. 

In order to clear doubts which arises in the mind of public during registration process under GST, a list of frequently asked question is prepared which is as given below: 

Question 1: I have a pending export refund in Service Tax. What will happen? 

Answer: Refunds under earlier laws will be given under the respective laws only
 

Question 2: As an exporter, how do I ensure that my working capital is not blocked as refunds? 

Answer: Appropriate provisions have been made in the law by providing for grant of 90% refund on provisional basis within 7 days from filing of registration.
 

Question 3: What will be the impact of GST on coal? Will the clean energy Cess on coal go or will it stay? 

Answer: Clean Environmental Cess on coal will be replaced by GST Compensation Cess.
 

Question 4: 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? 

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

Question 5: What duties will be levied on import of goods? 

Answer: Customs duty and cess as applicable + IGST+ GST compensation cess. IGST and GST compensation cess shall be paid after adding all customs duty and customs cess to the value of imports.
 

Question 6: Present Procedures have Service Tax on Nepal, But no Goods Tax on Nepal. But, With GST, what tax will apply?

Answer: The export procedure for Nepal would be same as that to other Countries.
 

Question 7: Are there exemptions for SEZ? How will a SEZ transaction happen in GST regime? 

Answer: Supplies to SEZs are zero-rated supplies as defined in Section 16 of IGST Act.
 

Question 8: How would the sale and purchase of goods to and from SEZ will be treated? Will it be export / input?

 Answer: Supply to SEZs is zero rated supplies and supplies by SEZs to DTA are treated as imports.
 

Question 9: Please clarify status of international export freight under GST as the same was exempt under POPS rules. It is zero rated in most countries. 

Answer: POS for transport of goods determinable in terms of sec 12(8) or sect 13(8) of IGST Act, 2017, depending upon location of service provider/service receiver. Exports are treated as zero rated supplies.
 

Question 10: When goods are being imported from SEZ who will pay IGST? 

Answer: Such supply is treated as import and present procedure of payment of duty continues with the variation that IGST is levied in place of CVD.
 

Question 11: Who will pay IGST when goods are procured from SEZ? Today importer is paying both BCD and CVD. 

Answer: Such supply is treated as import and present procedure of payment continues with the variation that IGST is levied in place of CVD. 




This FAQ is only for educational and guidance purposes and do not hold any legal validity. For complete details (law, rules, notifications and other information) please refer to the CBEC website (www.cbec.gov.in)