Q 1: How can a trader avail ITC while selling goods/services to unregistered/exempted GST traders?

Ans: The fact that a registered person is supplying goods to an unregistered or exempted person has no consequence on availment of ITC by the supplier..

Q 2: Please clarify the procedure of availing ITC on Additional Compensation Cess on some products like Tobacco, Coke, Cigarettes.

Ans: ITC of cess can be used only for payment of cess

Q 3: Please clarify ITC Credit status for the following condition: If Recipient (Good & Service) is registered under GST & Re-seller/Supplier is under exemption OR composition schemes

Ans: In case of unregistered dealer, recipient will pay tax on reverse charge basis. He can get the ITC provided he fulfills other conditions as mentioned in section 16 of the CGST Act, 2017.

 In case of purchase from composition taxable person, the composition person cannot charge any tax and hence the question of availing ITC does not arise.

Q 4: Please clarify ITC Credit status for the following condition: On GST Deducted Commission for Distributor registered under GST Taxpayer

Ans: Any deductions under TDS/TCS provisions from amount paid or credited to the supplier shall be credited to the electronic cash ledger which can be used for payment of tax.

Q 5: Please clarify ITC Credit status for the following condition: if Commission received Without Deducting GST in cases where distributor under Exemption OR composition Scheme

Ans: The section concerning GST deduction (Section 51 of CGST Act, 2017) has not been operationalized till now. But if the distributor is under threshold exemption or under composition scheme, the requirement for GST deduction depends upon the taxable supply and value of contract rather than the nature of the supplier.

Q 6: How should importers take credit of clean energy cess paid on goods lying as stock 30.06.2017?

Ans: No credit for clean energy cess can be taken.

Q 7: Since our products are under 0% and we are using various services like telephone, professional charges for which we will be paying GST to our registered service providers and this amount will not be utilized towards any payment of outward goods. Are we eligible for refund on the services obtained and GSTN paid for the same? If yes what is the procedure? If no what is the accounting effect?

Ans: You are not eligible for refund of unutilized Input Tax Credit as there is no tax on output supply.Tax paid on such services may be accounted along with the services availed i.e. booked as expenses.

Q 8: Whether ITC Transition provisions on goods purchased within the State on which tax on MRP has been paid, covered under 140(3) or 140(1)? If covered under 140(1) then how a credit claim be made, as presently in Vat return only the amount is reflected and it is non-adjustable?

Ans: Section 140 (1) of CGST Act is applicable for a person who was registered under the existing laws (e.g. under Central Excise, Service Tax, Value Added Tax). And therefore, credit of taxes paid on inputs was getting recorded in the returns filed. Section 140 (3) of CGST Act is applicable for persons who were not liable for registration under existing laws or who were selling/providing non-taxable, exempt goods/services but their supplies are liable to tax under GST. Please also refer to Section 140 of the SGST Act of your respective state and the associated rules.

ARE-1 procedure is being dispensed with except in respect to commodities which continue to attract Central Excise duty.

Q 9: Please clarify on availment of input tax credit of GST paid on trucks, commonly used for G.T.A business, Safex, Multi-modal and packing business?

Ans: No ITC is permitted to GTA engaged in providing GTA services which are under RCM and are treated as exempted supplies in the hand of GTA. However, if GTA is also liable to pay tax under forward charge as supplier, he is not permitted to avail ITC if he is claiming the concessional rate of 5%. If ITC is claimed, the GST rate for GTA in forward charge will be 18%.

Q 10: What will be the Input Credit of newly launched project of building construction after 01.07.2017?

Ans: ITC is permitted to pay output tax of construction/work contract services. Please see section 17(5) (c ) and (d) of CGST Act, 2017.

Q 11: What are the provisions under CGST Act as to the eligibility of CENVAT credit of service tax on invoices which are received after the appointed date for the services received under the service tax regime?

Ans: ITC is available in terms of section 140(5) of CGST Act, 2017.

Q 12: How a service Provider can get input GST credit benefit in pure labour Contract under Input Credit?

Ans: He needs to use input for furtherance of business and should fulfill the conditions mentioned in section 16 of CGST Act, 2017. The input should not fall within the negative list provided in section 17(5) of the CGST Act, 2017.

Q 13: GSTR-1 (Point 9) – As banks are eligible to claim only 50% of Input credit consider excluding banks from reporting of exempt/ non-GST supplies in GSTR-1?

Ans: Return Rules have already been notified. It is not possible to make exception for one sector.

Q 14: Clarification is sought for the following: Penal Interest on loans and advances

Ans: Penal interest is a consideration for tolerating an act and it is a supply of service and will be taxable.

Q 15: In case of takeover of a Partnership firm by a Private Limited Company, then who will get the ITC credit? And who should file the GST TRAN-1?

Ans: If the business is transferred as a going concern, and liabilities are also transferred then ITC can be transferred to the company. The company can file TRAN-1.

Q 16: Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize for payment of SGST in Madhya Pradesh?

Ans: SGST of one State cannot be utilized for discharging of output tax liability of another State.

Q 17: How one can use SGST credit for the payment of IGST on another state?

Ans: SGST Credit can be used for payment of IGST liability under the same GSTIN only.

Q 18: Can one State CGST be used to pay another state CGST?

Ans: The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only.

Q 19: In case of service supplied, should the credit be given to the state where it is billed or the state it is rendered?

Ans: Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit

Q 20: Company is engaged in manufacturing of cement & power. Which rule to be referred for reversal of credit related to power business?

Ans: Detailed rules for reversal of ITC when the supplier is providing exempted and non-exempted supplies have been provided in ITC Rules.

Q 21: How will the credit / debit note from unregistered supplier be reported to GSTN and ITC claimed in the same?

Ans: Like invoice, credit/debit notes on behalf of unregistered person will be given by registered person only. Further, GSTR2 provides for reporting of same by the recipient.