Category: Exemption under GST

When both the taxable person and tax department have made a mistake, the same consequences will flow but equity demands that a suitable remedy be provided.

(ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTION: FAQ NO. 13)

If a bonafide belief about availability of exemption is reversed by a Court, then tax charged and collected from customer must be paid and the ITC availed, now discovered to be in error, will also be recoverable. In the interest of equity, the Courts may need to interfere and avoid this double impact.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 12)

Exemption is where tax is leviable but exempted from the payment of the tax. Exclusion from GST is stating that GST will not apply either by treating it neither as supply of goods not as services or by excluding it from section 9.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 11)

GST would have been charged, collected and deposited along with claim of ITC. If the exemption was absolute, explanation to section 11 makes it clear that the exemption must be availed. In case of omission to avail exemption, the tax charged and collected being ‘in the name of GST’ is liable to be paid to the Government under section 76. More importantly, the ITC availed in error will also be denied.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 10)

GST applicable will be recovered with benefit of ITC available only to the limited extent of the time available within section 16(4) when this mistake is realized. There is no estoppel that ITC must be availed because claim of credit is through the return filed under section 39 (section 16(2) refers) and not from the receipt of tax paid supplies.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 9)

In case of violation, exemption may be withdrawn or consequences for violating the conditions may be imposed. It is important to note that deliberate violation of exemption conditions cannot open alternative classifications or GST rate.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO.8)

Exemption issued will make specific reference to HSN code along with description of the goods to be exempted. Exemption must be jointly read so as to apply to the goods described and falling within the specific HSN code. Other goods that may also be classified in the same HSN but not matching the description will not enjoy the exemption.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO.7)

Exemption notifications will apply from the date specified in the said notification as the effective date.

(ICAI FAQ PUBLICATION 06-09-2017  EXEMPTION: FAQ NO. 6)

No, it is not possible since CGST and SGST laws will operate in a coordinated manner. However, SGST exemption does not automatically exempt the supply under CGST. So to this extent there can be difference due to changes in SGST law. But the requirement of ‘recommendation of GST Council’ being incorporated in the SGST / UTGST Acts, for grant of any such exemptions, the required balance would be maintained.

( ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTION: FAQ NO. 5)

GST on import of goods is levied under proviso to section 5(1) of IGST Act which provides that IGST will be levied ‘at the point’ when customs duties are leviable. Accordingly, to determine the IGST applicable under section 3(7) of Customs Tariff Act, reference must be made to the IGST rate prevailing on the date of levy of such IGST. Hence, any exemption issued under IGST Act will apply to import of goods.

( ICAI FAQ PUBLICATIONS 06-09-2017 EXEMPTION: FAQ NO. 4)