Month: September 2017

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I have more than one SEZ unit in different States; do I need to take separate registrations? Also, I have two SEZ units in one State. Can I take a single registration

(1) Yes. Under GST, every entity shall take GST registration in each State from which it makes taxable supplies. However, a single registration can be taken for all your SEZ units within a State, whether located in one SEZ or more than one SEZ.
(2) A person having unit(s) in a Special Economic Zone as well as outside the SEZ in a State shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017).

(FAQ 14: IT/ITES)

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I am an agent in India of a foreign IT/ITES provider (principal located outside India). For agency services, I bill the principal in convertible foreign exchange. Whether GST liability arises in this case

  1. You are an intermediary and the place of supply of the service provided by you to the principal is in India irrespective of the mode of payment.
  2. Hence, GST is payable on the services provided by you as an intermediary to the principal.

( FAQ 13: IT/ITES)

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What factors determine the location of ‘C’ (in question 11) as being outside India

In terms of section 2 (15) of the IGST Act, 2017, the location of a service provider is to be determined by applying the following steps sequentially:
(1) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(2) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(3) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and
(4) in absence of such places, the location of the usual place of residence of the supplier.
The location of ‘C’ is to be determined by applying the criterion from
(2), or (3), or as the case may be, (4).

(FAQ 12: IT/ITES)

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I am an Indian Company who makes software and sells it outside the country. I have hired a firm (not a related party) ‘C’ located abroad to facilitate the supply of software in Europe and the USA; would I be liable to pay GST on the payments that I make to this entity abroad

  1. No. In this case, ‘C’ is covered by the definition of ‘intermediary’ [section 2(13) of the IGST Act, 2017].
  2. The place of supply of such intermediary service is location of the supplier in terms of section 13(8) of the IGST Act, 2017.
  3. As ‘C’ is located outside India, GST is not payable in this case.

(FAQ 11: IT/ITES)

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I am a whole seller of rice dealing in both branded and un-branded rice. I purchase them locally (i.e. from within the State) and also from outside the State (inter-State purchase). In the last financial year my turnover was Rs 5.5 Crore. Today, I am not registered under VAT. (i) Will I have to get myself registered now?

Rice put in a unit container and bearing a registered brand name is taxable @ 5%. In accordance with the provisions of section 22 of the CGST Act, 2017 (applicable in your case), a person becomes liable to be registered in the State/UT from where he makes taxable supply of goods or services or both if his aggregate turnover (which includes value of exempt supplies as well) in a financial year exceeds Rs.20 Lakh. Hence, liability to get registration accrues in your case from the date the aggregate turnover in the current financial year
exceeds Rs.20 lakh.

(FAQ-9 (i) :Food Processing)

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Would I be liable to pay GST on reverse charge even if the foreign supplier of software from whom I buy for use in my firm registered under GST was to accept the payment in Indian Rupees

  1.  Yes, you would be liable to pay GST.
  2. A supply is treated as an import of service if the following conditions are satisfied:
    (1) the supplier of service is located outside India;
    (2) the recipient of service is located in India; and
    (3) the place of supply of service is in India.
  3. The place of such supply would be taken to be the location where the firm is registered (in GST) and the supplies would attract integrated tax (IGST).
  4. The factum of which currency was used to pay the consideration is immaterial.

( FAQ 10: IT/ITES)

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How to determine the location of the recipient

  1. Location of the recipient of service is defined in section 2(14) of the IGST Act.
  2. A recipient of services is treated as located outside India if his place of business where he receives services is outside India or, if he does not have a place of business, his usual place of residence is outside India .

( FAQ 9: IT/ ITES)

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How do I determine whether IT services provided by me constitute export of service

The supply of any service is considered an export of service, where the following conditions are met:
(1) the supplier of service is located in India;
(2) the recipient of service is located outside India;
(3) the place of supply of service is outside India;
(4) the payment for such service has been received by the supplier of
service in convertible foreign exchange; and
(5) the supplier of service and the recipient of service are not
merely establishments of a distinct person in accordance with
explanation 1 of section 8 of the IGST Act, 2017.

(FAQ 7: IT/ITES)