Category: GST

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Assuming, I apply for voluntary registration and obtain GST registration: Will I get ITC on the IGST paid on branded rice lying in stock on the date prior to the date of my liability

Yes, a person who takes voluntary registration is entitled to take credit
of input tax in respect of inputs held in stock on the day immediately preceding the date of grant of registration. In this connection, section 18(1)(b) read with section 25(3) of the CGST Act, 2017 refers.

(FAQ 9(v)(a) : FOOD PROCESSING)

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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.(iii) 90% of my turnover will of un-branded rice, while 10% only will of branded one. Can I sell both of them in one invoice?

As per Invoice Rules, a registered person supplying taxable goods is required to issue a tax invoice and in case of exempted goods, he is required to issue a bill of supply. As all the contents of bill of supply are included in the tax invoice, a separate bill of supply need not be issued in case of the exempt component. Thus, both branded and unbranded rice can be included in one invoice.

(FAQ-9 (iii) :Food Processing)

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In the scenario envisaged in previous question, the main branch is said to be entitled to ITC of the GST paid by the other branches. Thus, it is a revenue neutral situation. What are the valuation guidelines for such services

The second proviso to rule 28 of the CGST Rules, 2017
provides that where the recipient is eligible for full input tax credit,
the value declared in the invoice shall be deemed to be the open
market value of goods and services.

(FAQ 24: IT/ITES)

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What is the tax liability in a scenario where supplies are made from multiple locations (in different States) of the supplier to the recipient under a single contract

  1. Delivering services from various locations and integrated pricing for the contract as a whole is the norm in IT/ITES industry.
  2. Normally the contract or agreement with the recipient is entered into by one of the branches (let us say “Main Branch”).
  3. Therefore, in such cases of service delivery from multiple locations of the supplier to the recipient, the supply could be visualized as consisting of two distinct supplies.
  4. First supply- the different branches of the supplier located
    across different States are making the supply to the main branch
    which entered into a contact or an agreement with the recipient for
    the supply of such service.
  5. Second supply- main branch is making a supply to the customer. GST is to be levied accordingly. In such a  scenario, the main branch would get input tax credit of GST paid by the other branches on supplies made by them to the main branch.

(FAQ 23: IT/ITES)