Confused about the upcoming Goods and Services Tax (GST) and what it means to your business? Send in your queries to our expert team today and watch out for the answers in this column. Mail queries to askbl@thehindu.co.in
This set of questions is answered by K Vaitheeswaran, advocate and tax consultant based in Chennai.
In the GST regime, export of goods is zero rated. There are two options.
An exporter can pay the IGST (Integrated GST) applicable on the goods at the time of export and seek a refund.
Alternatively, the goods can be exported without tax under a letter of undertaking or other prescribed procedure, and the exporter is entitled to claim refund of the taxes paid on inputs.
As on date there is no mechanism for purchase of goods without GST for the purpose of export.
However, the GST Council holds the power to notify such categories as deemed exports.
Retired persons who are unregistered under GST are appointed as retainers to carry out certain accounting functions. What would be the tax implications on the company?
The services provided by the employee to the employer in the course of employment is not considered ‘supply of services’ under the GST Law.
However, where a person does not qualify as an employee but merely provides certain services on a monthly basis, the transaction would be a service liable to GST.
Since, in your case, the retired person is not registered and the company that receives the service is registered, GST would be payable by the company under the reverse charge mechanism.
I am a trader in pharmaceutical products. The manufacturer pays the excise duty, but in the invoice, the excise duty is not reflected separately but included in the price. Can I avail input tax credit in respect of my inventory held prior to the introduction of GST?
There are elaborate provisions with procedural requirements in connection with transition benefits.
If the trader holds stock procured within a year before the appointed date and the stock is covered by invoices showing the payment of duty, then the duty amount would qualify as GST credit.
In your case, since the invoice does not reflect the excise duty, you can only claim proportionate relief under a scheme approved by the GST Council.
For stock procured within a year before the appointed date, on supply, CGST (Central GST) will have to be paid. The government will give back a certain percentage of the CGST paid through the portal.
The scheme is subject to various conditions including filing requirements.
Is share brokerage liable to GST?
In case the brokerage in a year is more than the threshold limit of ₹20 lakh, GST is applicable at the general rate of 18 per cent. It is also pertinent to note that the threshold limit has to be seen by aggregating all supplies of goods and services including non-taxable and exempt supplies.
I operate an air-conditioned restaurant in Kerala. What would be the GST implications?
A Division Bench of the Kerala High Court had struck down the levy of service tax on restaurants in the State on the grounds that the transaction is sale of goods and only VAT can be levied.
In the GST regime, supply of goods being food or other article for human consumption (excluding alcoholic liquor) by way of or as part of any service is treated as ‘supply of services’.
The GST rate for AC and non-AC restaurants is 18 per cent and 12 per cent respectively. Restaurants with an annual turnover of up to ₹75 lakh qualify for a ‘composition scheme’ and can pay just 5 per cent GST.