- For exports upto 30th June, 2017 refund may be claimed under the provisions of the Chapter V of the Finance Act, 1994.
- Exports made on and after 1st July would be eligible for refund under the GST law.
( FAQ 29: IT/ITES)
I am a software provider, registered at Mumbai. I supply software to my clients in Bangalore – would I be required to take a registration in Karnataka
No. The supplies would be treated as inter –State supplies and IGST is chargeable on the same.
(FAQ 28: IT/ITES)
What is the format for invoices to be issued in the case of reverse charge payment of GST
- No separate format for any type of invoicing including selfinvoicing has been prescribed.
- The contents of the invoice have been prescribed in Rule 46 of the CGST Rules, 2017.
( FAQ 27: IT/ITES)
Is the requirement of transferring of credit through ISD mechanism mandatory
- The ISD provision under the CGST Act, 2017 is not mandatory.
- It only provides the manner of distribution of ITC wherever the
business entity wishes to distribute the ITC as an Input Service
Distributor.
( FAQ 26: IT/ITES)
Can payment of IGST on reverse charge basis on import of goods/services be done through book entry or ITC
No. GST payable on reverse charge basis is to be discharged
through cash only. Rule 85(4) of the CGST Rules, 2017 refers.
(FAQ 25: IT/ITES)
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)
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
- Delivering services from various locations and integrated pricing for the contract as a whole is the norm in IT/ITES industry.
- Normally the contract or agreement with the recipient is entered into by one of the branches (let us say “Main Branch”).
- 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.
- 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. - 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)
How will the defective parts be sent to the mother warehouse/repairing centre for repair by the downstream repairing centres? What is the tax liability
- The defective parts shall be sent for repair on a delivery challan accompanied by such e-way bill as may be prescribed.
- GST shall be chargeable on the repair amount, including the cost of parts, charged by the repairing centre.
( FAQ 22: IT/ITES)
An Original Equipment Manufacturer (OEM) has an obligation to provide repair services to their customers in the warranty period. This activity is outsourced by OEM to ‘D’, who bills the OEM for the services he provides to the customer. What is the tax liability of ‘D’
‘D’ is providing service to the OEM. GST is payable on the value
of any supplies made by ‘D’ to OEM i.e. in respect of bills raised by ‘D’ on
the OEM.
(FAQ 21: IT/ITES)
What would be the tax liability on replacement of parts (no consideration is charged from a customer) under a warranty and whether the supplier is required to reverse the input tax credit
- As parts are provided to the customer without a consideration under warranty, no GST is chargeable on such replacement.
- The value of supply made earlier includes the charges to be incurred during the warranty period.
- Therefore, the supplier who has undertaken the warranty replacement is not required to reverse the input tax credit on the parts/components replaced.
(FAQ 20: IT/ITES)