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 Transition process under GST, a list of frequently asked question is prepared which is as given below:
Question 1 : How do I avail transition credit ?
Answer: Transition credit can be availed by filing the respective forms under Transition rules.
Question 2 : Please provide the clarity on area based exemption 50/2003 in UK & HP.
Answer: Area based exemptions will not be continued under GST. It will be operated through the route of reimbursement as prescribed.
Question 3 : We manufactured excisable goods. But unit availed the exception benefits 50/2003. What about my dealers stock?
Answer: The dealer will get deemed credit @ 40% / 60% of the CGST paid on supply of such goods in GST. If the goods are branded and greater than Rs. 25,000, full credit using CTD can be availed.
Question 4 : A trader buys from manufacturer not registered in excise as his turnover is below 1.5cr. Then in such case can trader take ITC on stock up to 40%?
Answer: Yes deemed credit will be available subject to satisfaction of other conditions as prescribed.
Question 5 : I am a trader. I have excise paid purchase invoice. Whether I can claim credit of full excise duty on closing stock of 1st July 2017
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 6 : If a trader purchases directly from manufacturer & has documents showing excise, will he get full excise credit or 40% of CGST?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 7 : If a FSD (First Stage Dealer) purchases directly from manufacturer and has value cum excise duty and excise duty is not separately shown will he get full credit?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 8 : Is the full excise credit also available to traders who purchases directly from manufacturers and excise is separately shown in invoice?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 9 : In June 17 Vat return no amount carried forward & held stock of Rs. 50 lakhs. Then can we take credit of that stock or not?
Answer: The supplier would be eligible to carry forward the closing balance of ITC from VAT return for June 17.
Question 10 : What will be the impact of closing stock which has been already paid vat on 1st July?
Answer: The supplier would be eligible to carry forward ITC on such stock from VAT return for June 17.
Question 11 : If in Vat return refund claimed in June 17 & no balance credit in GST. Then what's the position of submission of Form C
Answer: Refund claimed under existing law will be handled as per the provisions of the existing law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules of the respective State SGST Rules.
Question 12 : Some service was provided on 28.06.2017 but Invoice will be raised on 05.07.2017. Whether we have to charge Service Tax or GST?
Answer: If Point of Tax arises after appointed date, then GST will be chargeable on such supply.
Question 13 : Would we be eligible for credit on Capital Goods in transit and received post GST?
Answer: No provision for such credit is there in GST law.
Question 14 : What about VAT balance pending on transition date?
Answer: Balance VAT credit in the return will be transferred as SGST Credit.
Question 15 : What about deemed export against Form H?
Answer: Form H will not be there in GST.
Question 16 : Who will bear tax difference on closing stocks as on 30th June 2017? Whether the manufacturer/dealer or government?
Answer: Closing ITC in VAT return will be allowed to be carry forward in GST.
Question 17 : How will we get input credit on stock in hand for spare parts billed from other state, excise, CST and entry tax paid?
Answer: For all inputs with duty paying documents available respective CGST / SGST credit will be available. But credit of CST will not be available.
Question 18 : A trader buys from manufacturer not registered in excise as his turnover is below 1.5 crore. then in such case can traders take ITC on stock up to 40%
Answer: Deemed Credit will be available on stock in hand provided the conditions of section 140(3) read with Rule 1(4) of Transition Rules are satisfied.
Question 19 : Whether we will be eligible for credit of duty paid on Capital Goods in transit and received post GST?
Answer: No such provision in GST.
Question 20 : Can ITC of Swach Bharat Cess or Krishi Kalyan Cess be carried forward under GST?
Answer: No
Question 21 : Will Clean Energy CESS on imported Coal @ Rs. 400 PMT continue to be applicable in GST?
Answer: No. Clean Energy Cess is being repealed. Coal, however, will be subject to compensation cess @ Rs 400/- per tonne.
Question 22 : Whether closing balance of edu cess and secondary higher education cess prior to 1st Mar 2015 can be carried forward in GST?
Answer: No it will not be carried forward in GST as it is not covered by definition of “eligible duties and taxes” under Section 140 of the CGST Act.
Question 23 : Can u clarify for 40℅ benefit on closing stock does 1 year limit apply or not ?
Answer: Deemed credit will be available for all stock procured within a 1 year period.
Question 24 : Till what time is transition credit available? Where do I need to declare my input stock?
Answer: The window to declare transition credit forms is three months from the appointed day. Please refer to transition rules for more details.
Question 25 : After implementation of GST, will EOU scheme continue or not?
Answer: GST has no special dispensation for EOUs. As to whether they exist for any other purpose may be seen from the FTP.
Question 26 : I was unregistered in excise before and now in 18% slab? Can I take credit of stock if I don’t have invoices?
Answer: Deemed credit will be available to you for stock as duty paying documents are not available, subject to provisions of section 140 (3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Question 27 : I enjoyed SSI Exemption in Excise and did not register; how do I now take credit of stock lying with me?
Answer: Credit may be availed on the basis of document evidencing payment of duty on inputs as per section 140(3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Question 28 : For textile trader or manufacturers, with input stock without payment of excise duty but GST being charged on final sale, shall we get credit of such stock?
Answer: Credit of stock which was unconditionally exempt from excise duty or was NIL rated shall not be available. Please see Rule 117(4) of the CGST Rules, 2017.
Question 29 : Can a spice manufacturer take ITC of central excise paid on packing material lying in stock as on 30/06/17?
Answer: If he has duty paying documents then he will get full credit of central excise duty paid on stock held by him.
Question 30 : I made booking for hotel for a trip in October. Invoice raised already. Would I need to pay GST if payment will be done on 15 July?
Answer: If the invoice has been raised and payment made before the 1st of July 2017 then GST will not be applicable.
Question 31 : If rent received in advance before appointed day and person not liable to service tax then does RCM liability arise?
Answer: The liability of RCM under GST will arise only after 1st of July 2017.
Question 32 : Is there any format for invoice under GST? If yes, please provide the link of the same.
Answer: No there is no particular format. Rule 46 of the CGST Rules, 2017 prescribes the particulars to be contained in Invoice.
Question 33 : Whether from 1st July sequence of invoice no. will change? Or can we follow the same sequence?
Answer: Same sequence can be followed provided conditions laid down in Section 31 of the CGST Act, 2017 read with Rule 46 of CGST Rules, 2017 are met.
Question 34 : Whether existing UT-1, Bond will suffice? Whether existing ARE 1 form will exist?
Answer: Circular No. 4/4/2017-GST dated 07.07.2017 has clarified that the existing Bonds/LUTs shall be valid till 31.07.2017 after which the Bonds/LUTs shall have to be executed in the newly prescribed formats. New formats of bond and LUT have been prescribed under Rule 96A of CGST Rules, 2017. ARE-1 procedure is being dispensed with except in respect to commodities which continue to attract Central Excise duty.
Question 35 : Can we get ITC for capital expenditures like vehicles, solar panels etc for company use?
Answer: ITC on capital goods is generally available if they are used in the course or furtherance of business. However, credit is not available on cars, unless you are in a business of imparting driving training, or supplying such cars. A list of item on which ITC is not available is provided in Section 17 of the CGST Act, 2017.
Question 36 : If my turnover is less than 1.5 crores, do I need to mention HSN code on my invoice?
Answer: Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5 crores.
Question 37 : We are Excise registered dealers and have stock older than 1 year for which Excise is paid. Will we get Input tax credit?
Answer: You will be entitled to carry forward closing balance of CENVAT credit shown in your last return filed under Central Excise Act.
Question 38 : I was unregistered earlier. Now I want to register under composition scheme. Can I take ITC of my duty paid stock?
Answer: No, a person registering under the composition scheme cannot take ITC on inputs.
Question 39 : I have Excise registration. I now want to migrate using composition scheme. What is to be the treatment of ITC?
Answer: Not eligible for ITC under composition scheme. Your ITC lying in balance will lapse.
Question 40 : I paid for a service in June 2017 but am likely to receive the service in August 2017. Can I avail ITC for the same?
Answer: Credit on such inputs services will be allowed subject to satisfaction of conditions prescribed in Section 140 (5) of the CGST Act.
Question 41 : For taxpayers with centralized registration under Excise/ST, what is to be treatment of CENVAT after migration?
Answer: CENVAT credit lying in balance in the return filed for period upto 30.06.17 is to be allowed as CGST credit as per Section 140(8) of the CGST Act, 2017 read with Rule 117(2) of CGST Rules, 2017.
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)
In order to clear doubts which arises in the mind of public during Transition process under GST, a list of frequently asked question is prepared which is as given below:
Question 1 : How do I avail transition credit ?
Answer: Transition credit can be availed by filing the respective forms under Transition rules.
Question 2 : Please provide the clarity on area based exemption 50/2003 in UK & HP.
Answer: Area based exemptions will not be continued under GST. It will be operated through the route of reimbursement as prescribed.
Question 3 : We manufactured excisable goods. But unit availed the exception benefits 50/2003. What about my dealers stock?
Answer: The dealer will get deemed credit @ 40% / 60% of the CGST paid on supply of such goods in GST. If the goods are branded and greater than Rs. 25,000, full credit using CTD can be availed.
Question 4 : A trader buys from manufacturer not registered in excise as his turnover is below 1.5cr. Then in such case can trader take ITC on stock up to 40%?
Answer: Yes deemed credit will be available subject to satisfaction of other conditions as prescribed.
Question 5 : I am a trader. I have excise paid purchase invoice. Whether I can claim credit of full excise duty on closing stock of 1st July 2017
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 6 : If a trader purchases directly from manufacturer & has documents showing excise, will he get full excise credit or 40% of CGST?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 7 : If a FSD (First Stage Dealer) purchases directly from manufacturer and has value cum excise duty and excise duty is not separately shown will he get full credit?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 8 : Is the full excise credit also available to traders who purchases directly from manufacturers and excise is separately shown in invoice?
Answer: Full transition credit of such duty will be available on stock in hand in respect of which you have duty paying excise document subject to conditions under Section 140(3) of the CGST Act.
Question 9 : In June 17 Vat return no amount carried forward & held stock of Rs. 50 lakhs. Then can we take credit of that stock or not?
Answer: The supplier would be eligible to carry forward the closing balance of ITC from VAT return for June 17.
Question 10 : What will be the impact of closing stock which has been already paid vat on 1st July?
Answer: The supplier would be eligible to carry forward ITC on such stock from VAT return for June 17.
Question 11 : If in Vat return refund claimed in June 17 & no balance credit in GST. Then what's the position of submission of Form C
Answer: Refund claimed under existing law will be handled as per the provisions of the existing law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules of the respective State SGST Rules.
Question 12 : Some service was provided on 28.06.2017 but Invoice will be raised on 05.07.2017. Whether we have to charge Service Tax or GST?
Answer: If Point of Tax arises after appointed date, then GST will be chargeable on such supply.
Question 13 : Would we be eligible for credit on Capital Goods in transit and received post GST?
Answer: No provision for such credit is there in GST law.
Question 14 : What about VAT balance pending on transition date?
Answer: Balance VAT credit in the return will be transferred as SGST Credit.
Question 15 : What about deemed export against Form H?
Answer: Form H will not be there in GST.
Question 16 : Who will bear tax difference on closing stocks as on 30th June 2017? Whether the manufacturer/dealer or government?
Answer: Closing ITC in VAT return will be allowed to be carry forward in GST.
Question 17 : How will we get input credit on stock in hand for spare parts billed from other state, excise, CST and entry tax paid?
Answer: For all inputs with duty paying documents available respective CGST / SGST credit will be available. But credit of CST will not be available.
Question 18 : A trader buys from manufacturer not registered in excise as his turnover is below 1.5 crore. then in such case can traders take ITC on stock up to 40%
Answer: Deemed Credit will be available on stock in hand provided the conditions of section 140(3) read with Rule 1(4) of Transition Rules are satisfied.
Question 19 : Whether we will be eligible for credit of duty paid on Capital Goods in transit and received post GST?
Answer: No such provision in GST.
Question 20 : Can ITC of Swach Bharat Cess or Krishi Kalyan Cess be carried forward under GST?
Answer: No
Question 21 : Will Clean Energy CESS on imported Coal @ Rs. 400 PMT continue to be applicable in GST?
Answer: No. Clean Energy Cess is being repealed. Coal, however, will be subject to compensation cess @ Rs 400/- per tonne.
Question 22 : Whether closing balance of edu cess and secondary higher education cess prior to 1st Mar 2015 can be carried forward in GST?
Answer: No it will not be carried forward in GST as it is not covered by definition of “eligible duties and taxes” under Section 140 of the CGST Act.
Question 23 : Can u clarify for 40℅ benefit on closing stock does 1 year limit apply or not ?
Answer: Deemed credit will be available for all stock procured within a 1 year period.
Question 24 : Till what time is transition credit available? Where do I need to declare my input stock?
Answer: The window to declare transition credit forms is three months from the appointed day. Please refer to transition rules for more details.
Question 25 : After implementation of GST, will EOU scheme continue or not?
Answer: GST has no special dispensation for EOUs. As to whether they exist for any other purpose may be seen from the FTP.
Question 26 : I was unregistered in excise before and now in 18% slab? Can I take credit of stock if I don’t have invoices?
Answer: Deemed credit will be available to you for stock as duty paying documents are not available, subject to provisions of section 140 (3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Question 27 : I enjoyed SSI Exemption in Excise and did not register; how do I now take credit of stock lying with me?
Answer: Credit may be availed on the basis of document evidencing payment of duty on inputs as per section 140(3) of the CGST Act, 2017 read with Rule 140(4) of CGST Rules, 2017.
Question 28 : For textile trader or manufacturers, with input stock without payment of excise duty but GST being charged on final sale, shall we get credit of such stock?
Answer: Credit of stock which was unconditionally exempt from excise duty or was NIL rated shall not be available. Please see Rule 117(4) of the CGST Rules, 2017.
Question 29 : Can a spice manufacturer take ITC of central excise paid on packing material lying in stock as on 30/06/17?
Answer: If he has duty paying documents then he will get full credit of central excise duty paid on stock held by him.
Question 30 : I made booking for hotel for a trip in October. Invoice raised already. Would I need to pay GST if payment will be done on 15 July?
Answer: If the invoice has been raised and payment made before the 1st of July 2017 then GST will not be applicable.
Question 31 : If rent received in advance before appointed day and person not liable to service tax then does RCM liability arise?
Answer: The liability of RCM under GST will arise only after 1st of July 2017.
Question 32 : Is there any format for invoice under GST? If yes, please provide the link of the same.
Answer: No there is no particular format. Rule 46 of the CGST Rules, 2017 prescribes the particulars to be contained in Invoice.
Question 33 : Whether from 1st July sequence of invoice no. will change? Or can we follow the same sequence?
Answer: Same sequence can be followed provided conditions laid down in Section 31 of the CGST Act, 2017 read with Rule 46 of CGST Rules, 2017 are met.
Question 34 : Whether existing UT-1, Bond will suffice? Whether existing ARE 1 form will exist?
Answer: Circular No. 4/4/2017-GST dated 07.07.2017 has clarified that the existing Bonds/LUTs shall be valid till 31.07.2017 after which the Bonds/LUTs shall have to be executed in the newly prescribed formats. New formats of bond and LUT have been prescribed under Rule 96A of CGST Rules, 2017. ARE-1 procedure is being dispensed with except in respect to commodities which continue to attract Central Excise duty.
Question 35 : Can we get ITC for capital expenditures like vehicles, solar panels etc for company use?
Answer: ITC on capital goods is generally available if they are used in the course or furtherance of business. However, credit is not available on cars, unless you are in a business of imparting driving training, or supplying such cars. A list of item on which ITC is not available is provided in Section 17 of the CGST Act, 2017.
Question 36 : If my turnover is less than 1.5 crores, do I need to mention HSN code on my invoice?
Answer: Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5 crores.
Question 37 : We are Excise registered dealers and have stock older than 1 year for which Excise is paid. Will we get Input tax credit?
Answer: You will be entitled to carry forward closing balance of CENVAT credit shown in your last return filed under Central Excise Act.
Question 38 : I was unregistered earlier. Now I want to register under composition scheme. Can I take ITC of my duty paid stock?
Answer: No, a person registering under the composition scheme cannot take ITC on inputs.
Question 39 : I have Excise registration. I now want to migrate using composition scheme. What is to be the treatment of ITC?
Answer: Not eligible for ITC under composition scheme. Your ITC lying in balance will lapse.
Question 40 : I paid for a service in June 2017 but am likely to receive the service in August 2017. Can I avail ITC for the same?
Answer: Credit on such inputs services will be allowed subject to satisfaction of conditions prescribed in Section 140 (5) of the CGST Act.
Question 41 : For taxpayers with centralized registration under Excise/ST, what is to be treatment of CENVAT after migration?
Answer: CENVAT credit lying in balance in the return filed for period upto 30.06.17 is to be allowed as CGST credit as per Section 140(8) of the CGST Act, 2017 read with Rule 117(2) of CGST Rules, 2017.
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)
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