Author: abhishek

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Whether advertising and communication material (banners/hoardings/posters) provided to distributors would be treated as supply in the course of business by the company thereby not requiring any reversal of ITC

  1.  Where the material is provided free of cost: This would not amount to a supply and hence no tax is payable on such transaction and in such a case credit availed by the company would need to be reversed in accordance with section 17(5) of the CGST Act, 2017.
  2. Where the material is provided for a consideration: This would amount to a normal supply.

(FAQ 1: GEMS AND JEWELLERY )

Comments There is no provision under 17(5) requiring reversal of ITC on supply of free material

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Whether discounts can be claimed as an abatement from the price for assessing GST

  1. In terms of Section 15(3) of the CGST Act, 2017, the value of supply for charging GST shall not include any discount which is given before or at the time of the supply if such discount has been duly recorded in the Invoice issued in respect of such supply.
  2. The value of supply shall also not include any discount which is given after the supply has been effected, if such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices and ITC attributable to such discount has been reversed by the recipient of the supply.

( FAQ 16: DRUGS AND  PHARMACEUTICALS)

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What is the effect of non-payment of consideration in respect of taxable supplies received by the recipient

  1.  If the recipient fails to pay to the supplier the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, the amount of input tax credit availed proportionate to the amount of consideration not paid
    would be added to his output tax liability along with Interest thereon.
  2. The ITC so reversed can be reclaimed by the recipient after payment of consideration along with tax payable there on subsequently.
  3. This provision is not applicable in respect of deemed supplies made without consideration in terms of Schedule I to the CGST Act, 2017.

( FAQ 13: DRUGS AND PHARMACEUTICALS)

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Whether deemed credit is available in respect of goods purchased from tax free zones

  1. The deemed credit in terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with Section 140(3) of the CGST Act, 2017 would be available in respect of the goods, which were not unconditionally exempt from the whole of the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 or were not nil rated in the said Schedule.
  2. As the goods purchased from tax free zones were exempted from duty payment under a Notification issued under Section 5 of the Central Excise Act, 1944 and not Nil rated in the First Schedule to the Central Excise Tariff Act, 1985, the deemed credit would be available in respect of such goods held in stock on the appointed day.

(FAQ 10: DRUGS AND PHARMACEUTICALS)

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Whether a manufacturer can avail deemed credit in respect of transitional stocks on the appointed day in respect of the stocks for which duty paying document is not available

  1. In terms of the proviso to Section 140(3) of the CGST Act, 2017, the manufacturer is not eligible to avail deemed credit in respect of transitional stocks, for which duty paying document is not available.
  2. Such credit is not available in case of SGST except where VAT was payable on the basis of MRP.

(FAQ 9: DRUGS AND PHARMACEUTICALS)

Commets: Under SGST credit is available only on first stage taxable goods