Category: Sector Wise GST

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Are all services provided by the Government or local authority exempted from payment of tax ?

  1. No, all services provided by the Government or
    a local authority are not exempt from tax.
  2. As for instance,services, namely,

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or
outside the precincts of an airport or a port;

(iii) transport of goods or passengers; or

(iv) any service, other than servicescovered under (i) to (iii) above, provided to business entities are not exempt and that these services are liable to tax.

That said, most of the services provided by the Central
Government, State Government, Union Territory or local
authority are exempt from tax.

These include services provided by government or a local authority or governmental authority by way of any activity in relation to any function
entrusted to a municipality under Article 243W of the Constitution and services by a governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution.

[FAQ1: Government Services

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When we issue gold as raw material to our Job Worker for Job Work and he returns that gold as finished goods,what GST treatment will be done and how to calculate the value

  1. The job worker, if registered, would be required to pay GST at the rate of 5% on job charges only.
  2. The jewellery manufacturer would in turn take credit of GST paid on such
    job work and may utilize the same for payment of GST on his outward supply of manufactured jewellery.
  3. However, if the job worker is exempted from registration, the jewellery
    manufacturer would be required to pay GST on his input supply from the job worker [of jewellery made out of precious metal given by him] on reverse charge basis.
  4. Nonetheless, he would be eligible to avail input credit of the tax so paid under
    reverse charge mechanism.

( FAQ 8: GEMS AND JEWELLERY)

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When we are selling Gold, Diamond or Silver Jewellery to the end consumer (Customer) like a Gold Chain weighing10gm at a total value of Rs. 30,000/- (gold value is Rs. 28000/- and making charges on that gold chain is Rs 2000/-), can we charge GST @3% on the total value or @3% on the gold value and @5% on making charges

GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.

( FAQ 7: GEMS AND JEWELLERY)

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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 transitional credit that can be availed on the existing stocks held by a registered person under GST, who was not required to be registered under the existing law

  1. In terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with Section 140(3) of the CGST Act, 2017, a registered person who was not registered under the existing law and who is not in possession of any document evidencing payment of central excise duty in respect of the goods held in stock, shall be allowed credit at the rate of sixty per cent on such goods which attract central tax at the rate of nine per cent or more and forty per cent for the other goods of the central tax applicable on supply of such goods after 01st July 2017 and the said amount shall be credited in the electronic credit ledger after the central tax payable on such supply has been paid.
  2. In case where integrated tax is paid, the amount of ITC would be at the rate of thirty per cent and twenty per cent respectively of integerated tax.
  3. This facility is available for a maximum period of 6 months from the appointed day (i.e. upto 31st December, 2017) or till the goods are sold out, whichever is earlier.

( FAQ 8: DRUGS AND PHARMACEUTICALS)

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How loan and licensee units carry out their operations in GST regime

GST law does not have any special provision for loan and licensee units. Where the contract are in the nature of performance of job-work, these units can opt to follow the procedure laid down in section 143 of the CGST Act, 2017 i.e. the principal can send any inputs etc. to such units without payment of tax and  the principal can clear the goods from the premises of such units if the principal declares these units as his additional place of business or where such units are themselves registered under section 25 of CGST Act, 2017.

[FAQ 4: Drugs and Pharmaceuticals]