Author: abhishek

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What is the scope of exemption to education?

Entry 13 in the notification exempts ‘educational institution’ from tax on services provided ‘to student, faculty or staff’. As such any income flowing to the institution must bear a direct nexus to the relationship of ‘student, faculty or staff’ whatever may be the service that is provided. But, if the income is indicated to be otherwise than under this relationship, even though between same persons, exemption will abate. For example, payment towards building fund by a student admittedly is not in pursuance of that relationship because it is not towards tuition or any associated service.

(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Services – FAQ NO. 34)

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Time of supply of services under reverse charge mechanism where the supplier of service is associated enterprises

In case of associated enterprises located within India, the time of supply in terms of
Section 13(3) shall be the earliest of the following:
(a) Date of payment as per books of accounts of the recipient; or
(b) Date on which payment is debited in the bank account of the recipient; or
(c) Sixty days from the date of issuing invoice or any other document, by whatever
name called, in lieu thereof by the supplier; or
If it is not possible to determine the time of supply under the aforesaid clauses, the time
of supply shall be the date of entry in the books of account of the recipient of supply.
Thus, the same provisions as applicable to a supplier who is not associated enterprise
will apply for services provided by associated enterprises located in India.
Where associated enterprises is located outside India, the time of supply shall be the
earliest of the following dates:
(a) Date of entry in the books of accounts of the recipient; or
(b) Date of payment.

Particulars Non-associated enterprises Associated Enterprises
Date on which payment is entered in books of accounts August 14, 2017 August 14, 2017
Date on which payment is debited to bank account August 17, 2017 August 17, 2017
Date of issuance of invoice August 10, 2017 August 10, 2017
Sixty days from the date of issuing invoice October 08, 2017 October 08, 2017
Date of entry in the books of accounts of the recipient August 10, 2017 August 10, 2017
Time of supply August 14, 2017 August 10, 2017

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF SERVICES: FAQ NO. 20)

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What would be the time of supply of services taxable under reverse charge mechanism

In terms of Section 13(3) of the CGST Act, 2017, the time of supply of services for remittance of tax under reverse charge mechanism shall be the earliest of the following:
(a) Date of payment recorded in the books of accounts of the recipient;
(b) Date of debit in bank account of the recipient;
(c) 60 days from the date of issue of invoice or any other document in lieu thereof by the supplier; or If it is not possible to determine the time of supply under the aforesaid clauses, the time of supply shall be the date of entry in the books of account of the recipient of supply.
In case of associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME OF SUPPLY OF SERVICES: FAQ NO. 18)

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Is immovable property exempt from GST?

Yes, but only land and building as per entry 6 in schedule III. Immovable property comprises of various other forms other than just land and buildings and they may not be exempt from GST. They could be taxable as ‘services’.

(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Services – FAQ NO. 32)

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Whether the advance received prior to provision of service is liable to tax under GST Law

In terms of Section 13 of the CGST Act, 2017, the criteria to decide time of supply of services includes the date on which payment is received by the supplier. Accordingly, the service provider should remit the applicable taxes on such advances in the month in which the money is received in advance even otherwise the services are not supplied / provided.
Subsequently, when the invoice is issued with respect to the advance payments received earlier, the same shall be declared in the returns pertaining to the month in which the invoice is issued, by giving reference of the ‘Transaction ID’ generated at the time of remitting taxes on the advance payments (in the earlier tax periods).

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME OF SUPPLY FOR SERVICES: FAQ NO. 17)

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Is ‘lucky draw’ eligible to exemption from GST?

Lucky draw is a game of chance and schedule III identifies ‘lottery and bingo’ as the only taxable supplies. As such, lucky draw is not taxable but the prize (if not in money) will be liable to tax as there is consideration though not in monetary form

(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Goods – FAQ NO. 31)

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What is time of supply of service with respect to receipt of amount in excess of the invoice amount (e.g.: Invoice is issued for ` 5,000 on August 22, 2017 by the supplier. Subsequently, the recipient pays scenario 1: ` 5,500/- and scenario 2: ` 8,000/-)

The provisions with respect to services in case of receipt of amount in excess of the invoice amount, are same as those applicable for goods and discussed in answer to Q. 8 above. The provisions for services are contained in proviso to Section 13(2) of the CGST Act.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME OF SUPPLY OF SERVICES: FAQ NO. 16)