Faq S On Levy And Collection Under Igst Regime Igst Faq S 2017

Q 1. On what transactions IGST shall be levied?

Ans. Transactions of supplies of goods and/or services in the course of inter-State trade or commerce

Q 2. On what value IGST shall be levied?

Ans. The value of the transaction shall be determined under Section 15 of the CGST Act

Q 3. Is there any rate prescribed under IGST?

Ans. Rate not exceeding 28% shall be notified by Central Government

Q 4. Who shall decide the rate to be notified?

Ans. The Central government shall decide the rates on the recommendation of the GST Council

Q 5. Who is responsible to pay the GST?

Ans. Generally, the provider of supply is liable to pay GST, in certain cases the liability gets transferred on the recipient of service on reverse charge basis.

Q6. Is reverse charge mechanism applicable only to services?

Ans. No, Reverse charge applies to supplies of both goods and services.

Q 7. How will IGST be levied on Imports?

Ans. Supply of goods/services in the course of import into the territory of India shall be deemed to be a supply of goods/services in the course of inter-state trade or commerce and therefore, IGST shall be levied on all such imports

Q8. When is IGST on imports leviable?

Ans. IGST shall be levied and collected in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975, at the point when custom duties are levied on the said goods under Sec 12 of the Customs Act, 1962, on a value as determined under the first mentioned Act.

Q 9 When is an e-commerce operator liable to tax?

Ans. Central Government on recommendation of Council shall specify category of services the tax which shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions of this Act shall apply to such electronic commerce operator

Q 10. What is the implication if the e-commerce operator doesn’t have a physical presence in India?

Ans. In such situations, any person representing the e-commerce operator for any other purpose in the taxable territory shall be liable.

Q 11. What if both the e.-commerce operator and representative do not have a physical presence in India?

Ans. In such situations, the e-commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

Q 12. How does IGST apply when two branches of a company are located in say Karnataka and Tamil Nadu and there are movement of goods/services between the said branches?

Ans. In accordance with Explanation 1(ii) to sub-sec (3) of Section 5 of IGST Act, an establishment of a person in a State and any of his other establishments outside the State, shall be treated as distinct persons. Considering the above, the branch in the State of Karnataka shall be treated as a different entity from the branch in the State of Tamil Nadu and levy shall get attracted accordingly.

Q13. How does IGST apply when there is a Head office in Bangalore (in India) and branch in say, Singapore and service is rendered by the branch to Head office?

Ans. Explanation 1 to Section 5 of the Revised Model IGST Law clearly states that ‘an establishment of a person in India and any of his other establishments outside India shall be treated as establishments of distinct persons.’ In this case the Singapore branch and head office in Bangalore shall be treated as distinct entities for the purpose of levy of IGST. Further, Section 3 states that supply of services in the course of import into the territory of India shall be deemed to be a supply of services in the course of inter-State trade or commerce. And according to Section 5, Integrated Goods and Services Tax is levied on all supplies of goods and/or services made in the course of inter-State trade or commerce Therefore, in the instance case, IGST will be levied on service rendered from Singapore branch to head office in Bangalore

Q 14. Are all exemptions from tax on intra-State supplies apply to inter-State supply of the same goods or services as well?

Ans. Unless otherwise specified all exemptions for intra-State supplies would apply in respect of inter-State supplies as well.

Q 15. How can an exemption to service be granted by Central Government?

Ans. 1. An exemption could be generally provided with or without conditions. If provided without any condition i.e. absolute exemption, the person shall not pay any tax. 2. The exemption could be specially provided, owing to exceptional circumstances to be stated in the order granting such exemption

Q 16. Can an explanation to the exemption notification issued by Central Government be issued at any time subsequently?

Ans. No. Explanation to a notification can be issued within one year from the date of the original notification and such explanation shall be considered to have always been the intention of the law and its applicability would be retrospective.

Q17. When shall an exemption come into force?

Ans. Any exemption by way notification or order shall

1. Come into force on the date of its issue by the Central Government for publication in the Official Gazette or from any date subsequent to the date of its issue as may be specified therein; and

be made available on the official website of the department of the Central Government.