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1

FREQUENTLY ASKED QUESTIONS

(FAQs)

ON

GOODS AND SERVICES TAX (GST)

1ST Edition 01st July 2017

E-Book

Scanned by CamScanner

INDEX

S.No. CONTENTS PAGE

NO.

1. Sales Module 1-19

2. Transitional Provisions 20-33

3. Input Tax Credit 34-43

4. Reverse Charge 44-50

5. General Provisions (Registration, Invoice and

Tender Evaluation)

51-55

6. Procurement Module 56-58

7. CMC Module 59-65

8. Other than Procurement and CMC 66-69

9. Bill Processing Module 70-77

DISCLAIMER

The information in this booklet is intended only to provide a general overview and is not

intended to be treated as legal ad vice or opinion. For greater details, you are requested to

refer to the respective CGST/SGST/UTGST/IGST Acts. The FAQs refer to CGST and SGST

03

Acts as CGST/SGST as CGST Act and SGST Act are identical in most of the provisions.

Your valuable Comments and Suggestions and feedback on FAQ will be highly appreciated

at: [email protected], [email protected] , [email protected]. This is the First

edition of Book and Seconds edition will be issued after the comments/suggestion/feedback

of the readers or modification/amendments/further enactments in this regard.

1

FAQ’s on Sales Module

Question 1 What is Goods and Services Tax (GST)?

Answer It is a destination based tax on consumption of goods and services. It is proposed to

be levied at all stages right from manufacture up to final consumption with credit of

taxes paid at previous stages available as setoff. In a nutshell, only value addition

will be taxed and burden of tax is to be borne by the final consumer.

Question 2 What exactly is the concept of destination based tax on consumption?

Answer The tax would accrue to the taxing authority which has jurisdiction over the place of

consumption which is also termed as place of supply.

Question 3 Which of the existing taxes are subsumed under GST?

Answer The GST would replace the following taxes:

(i) taxes currently levied and collected by the Centre:

a) Central Excise duty

b) Duties of Excise (Medicinal and Toilet Preparations)

c) Additional Duties of Excise (Goods of Special Importance)

d) Additional Duties of Excise (Textiles and Textile Products)

e) Additional Duties of Customs (commonly known as CVD)

f) Special Additional Duty of Customs (SAD)

g) Service Tax

h) Central Surcharges and Cesses so far as they relate to supply of goods and

services

(ii) State taxes that would be subsumed under the GST are:

a) State VAT

b) Central Sales Tax c. Luxury Tax

c) Entry Tax (all forms)

d) Entertainment and Amusement Tax (except when levied by the local bodies)

e) Taxes on advertisements

f) Purchase Tax

g) Taxes on lotteries, betting and gambling

h) State Surcharges and Cesses so far as they relate to supply of goods and

services.

The GST Council shall make recommendations to the Union and States on the taxes,

cesses and surcharges levied by the Centre, the States and the local bodies which

may be subsumed in the GST.

Question 4 Which are the commodities proposed to be kept outside the purview of GST?

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Answer Alcohol for human consumption is kept out of GST by way of definition of GST on

constitution.

Five petroleum products:

a) petroleum crude,

b) motor spirit (petrol),

c) high speed diesel,

d) natural gas and ,

e) aviation turbine fuel

have temporarily been kept out and GST Council shall decide the date from which

they shall be included in GST.

Furthermore, electricity has been kept out of GST.

Question 5 What will be the status in respect of taxation of above commodities after

introduction of GST?

Answer The existing taxation system (VAT & Central Excise) will continue in respect of the

above commodities.

Question 6 Whether Royalty on Coal will be subsumed in GST?

Answer NO, Royalty on Coal is governed by MMDR Act, 1957 and the Act is not repealed or

amended for GST so Royalty will not be subsumed in GST. GST will be levied on

Royalty.

Question 7 Whether DMF on Coal will be subsumed in GST?

Answer NO, DMF is a part of Royalty and it is also governed by the MMDR Act, 1957. GST

will be levied on DMF.

Question 8 Whether NMET on Coal will be subsumed in GST?

Answer NO, NMET is a part of Royalty and it is also governed by the MMDR Act, 1957.

GST will be levied on NMET.

Question 9 Whether SED on Coal will be subsumed in GST?

Answer Yes, SED on coal will be subsumed in GST. SED was governed by Coal Mines

(Conservation and Development), Act 1974- Cess on Coal and The GOI through

Taxation Laws Amendment Act, 2017 (as communicated vide press release dated

07.06.2017) abolished the Coal Mines (Conservation and Development), Act 1974-

Cess on Coal, which is further confirmed by Minister of Coal vide letter no. PLA-

28018/10/2017 PLA dated 28.06.2017.

Question 10 Whether Clean Environment Cess on Coal will be subsumed in GST?

Answer Clean Energy/ Environment Cess which was governed by Finance Act, 2010 has been

abolished by Taxation Laws Amendment Act, 2017(as communicated vide press

3

release dated 07.06.2017).

However a new Cess GST Compensation Cess will be levied on Coal @ Rs. 400 per

tonne.

Question 11 Whether SSADA/ Local Cess on Coal will be subsumed in GST?

Answer No, it is a local cess levied and collected by UP Govt. and is not covered under the

Acts and provisions repealed or amended by UP SGST Act. GST will be levied on

SSADA.

Question 12 Whether MPGATSVA on Coal will be subsumed in GST?

Answer No, MPGATSVA is a local cess levied and collected by MP Govt. and is not covered

under the Acts and provisions repealed or amended by MP SGST Act. GST will be

levied on MPGATSVA.

Question 13 Whether Forest Transit fee on Coal will be subsumed in GST?

Answer No, it is governed by Indian Forest Act, 1927 and the Act is not repealed or amended

for GST so forest transit fees will not be subsumed in GST. GST will be levied on

Forest Transit Fees.

Question 14 Which authority will levy and administer GST?

Answer Centre will levy and administer CGST & IGST while respective states /UTs will levy

and administer SGST/ UTGST.

Question 15 When is supply of Coal considered as supply in the course of inter-State trade or

commerce?

Answer Supply of Coal will be considered as inter-State supply if the location of the supplier

and place of supply are in different States.. This is subject to provisions contained in

Section 10 of the IGST Act, 2017.

Question 16 What is the meaning of location of supplier & what will be the location of NCL

for Coal supply?

Answer The term location of supplier of goods has not been defined in the model IGST Law.

Therefore, the location of goods will have to be considered as the location of supplier

. Thus the Mines/Weighbridge from where the goods are proposed to dispatch will be

treated as Location of NCL.

Question 17 What is the place of supply for coal?

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Answer As per Section 10(1) (a) of IGST Act, 2017, place of supply involving movement of

goods, location where movement of goods terminates for delivery to the recipient.

For example:

Weighbridge Delivery of

goods

Place of supply

will be delivery

of goods

Nature of

supply

Tax

Jayant (MP) Varanasi, UP UP Inter State IGST @ 5%

Jayant (MP) Jabalpur, MP MP Intra State CGST @ 2.5%

SGST @ 2.5%

Question 18 What is the place of supply where Coal is delivered to a person on the direction

of a third person?

Answer Earlier this situation was known as E1 sales.

As per Section 10(1)(b) of the IGST Act, 2017 if movement is at the instance of the

third person to a recipient (by way of instruction or transfer of documents of title to

goods or otherwise), the place of supply will be principal place of business of third

person (i.e. address in Registration Certificate). A pictorial diagram is depicted to

explain the same:

Transaction between Jayant and A – place of supply is principal place of business of

A

Transaction between A and B is also supply

(a) Transaction between supplier (Jayant) and third party (A in the above diagram)

Compare column 1 and 2

Location of

NCL (1)

Address

of Buyer

i.e. A

Delivery of

Goods to

B (Ship

to)(3)

Place

of

supply

Nature of

Supply

Applic

ability

Remark

Jayant (M.P) U.P Haryana U.P Inter-state IGST Location

Jayant Project Located in M.P.

A

B

Bill to

Ship to

5

Jayant (M.P) M.P U.P M.P Intra-state SGST/

CGST

of buyer

will be

treated

as place

of

supply

Jayant (M.P) U.P M.P U.P Inter-state IGST

Jayant (M.P) U.P U.P U.P Inter-state IGST

(b) Transaction between third party (A in the above diagram) and person actually

receiving the goods (B in the above diagram). Compare column 2 and 3

Location of

NCL (1)

Address of

Buyer i.e.

A

Delivery of

Goods to

B (Ship

to)(3)

Place

of

supply

Nature of

Supply

Applicability

Jayant (M.P) U.P Haryana Haryana Inter-state IGST

Jayant (M.P) M.P U.P U.P Inter-state IGST

Jayant (M.P) U.P M.P M.P Inter-state IGST

Jayant (M.P) U.P U.P U.P Intra-state SGST/CGST

Question 19 What are the taxes that are levied on an intra-State supply?

Answer In terms of Section 9 of the CGST Act, 2017, intra-State supplies are liable to CGST

& SGST.

In terms of Section 7 of UTGST Act, 2017, intra-State supplies effected by a taxable

person located in Union Territory (within the Union Territory) will be liable to CGST

& UTGST.

Question 20 What are the taxes that are levied on an inter-State supply?

Answer In terms of Section 5 of the IGST Act, 2017, inter-State supplies are liable to IGST.

Question 21 Are the valuation provisions similar for both inter-State and intra-State

supplies?

Answer Yes. Section 15 is common for all supplies.

Question 22 What is the scope of the term ‘supply’ as defined in CGST Act, 2017?

Answer As per Sub-section (1) of Section 7, Supply includes:

1. all forms of supply of goods or services or both such as sale, transfer, barter,

exchange, license, rental, lease or disposal made or agreed to be made for a

consideration by a person in the course or furtherance of business;

2. import of services for a consideration whether or not in the course or

6

furtherance of business;

3. the activities specified in Schedule I, made or agreed to be made without a

consideration; and

4. the activities to be treated as supply of goods or supply of services as referred

to in Schedule II.

It is pertinent to mention here that branch transfer from one state to another would be

taxable.

Question 23 What will be the time of supply of goods, generally?

Answer Generally, in terms of Section 12 of CGST Act, 2017, the time of supply of goods

shall be the earliest of the following:

(a) Date of issue of invoice; or

(b) Due date of issue of invoice; or

(c) Date on which supplier receives the payment; or

(d) Date on which payment is entered in books of accounts of the supplier; or

(e) Date on which payment is credited to the bank account

Question 24 What will be time of supply in coal?

Answer As per the provision of section 31, we are liable to issue the invoice at the dispatch

point i.e. weighbridge, thus the time of supply will be the time of issue of invoice.

In case of receipt of advance time of supply will be the earliest of the following:

a) Date on which we receive the payment; or

b) Date on which payment is entered in books of accounts; or

c) Date on which payment is credited to the bank account

However CGST/SGST/IGST will be levied on unsettled advance on the last day of

month.

A separate schedule will be prepared in the prescribed format.

Question 25 Whether supply of goods or services without consideration is liable to tax?

Answer The activities enumerated in Schedule I will qualify as supply even if made without

consideration. Accordingly, such supplies in the absence of consideration are liable to

tax. To illustrate, following are the activities which will qualify as supply in the

absence of consideration and eventually would be liable to tax:

1. Permanent transfer or disposal of business assets where input tax credit has

been availed on such assets.

2. Supply of goods or services or both between related persons or between

distinct persons as specified in section 25, when made in the course or

furtherance of business

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Provided that gifts not exceeding fifty thousand rupees in value in a financial year by

an employer to an employee shall not be treated as supply of goods or services or

both.

3. Supply of goods—

(a) By a principal to his agent where the agent undertakes to supply such goods

on behalf of the principal; or

(b) By an agent to his principal where the agent undertakes to receive such goods

on behalf of the principal.

4. Import of services by a taxable person from a related person or from any of his

other establishments outside India, in the course or furtherance of business.

Question 26 Whether the schedule 1 is having any implication on our Industry?

Answer Yes, the Clause 2 of schedule 1 will be applicable on the following transaction;

1) Coal Transfer to Projects/mines located outside state.

2) Depot Transfer to Projects/mines located outside state

3) Transaction between subsidiaries for reimbursement of Expenses/stock

transfer

4) Apex Charges of Coal India Limited

5) Guarantee fee charged by Coal India Limited

6) Transactions with CMPDIL

Question 27 Whether transfer of Coal to another branch located outside the State is taxable?

Answer Yes, Coal transfer from one Mine to another mine located outside the state is

taxable. Transferor mine has to issue Taxable Invoice under GST regime by levying

IGST.

Further, it is important to note that, supply of goods to a branch / unit located within

the same State having separate registration would also be liable to tax since both such

units (supplying unit and recipient unit) would qualify as distinct person.

However supply of goods to a Branch/unit located within the state having same

registration number would not be treated as supply.

Question 28 What will be the price of Goods in case of interstate stock transfer?

Answer This situation is covered under Rule 28 of CGST Rules,2017 wherein it is stated that

the value of the supply of goods or services or both between distinct persons as

specified in sub-section (4) and (5) of section 25 or where the supplier and recipient

are related, other than where the supply is made through an agent, shall,-

(a) be the open market value of such supply;

(b) if open market value is not available, be the value of supply of goods or services

8

of like kind and quality;

(c) if value is not determinable under clause (a) or (b), be the value as determined by

application of rule 4 or rule 5, in that order:

Provided that where goods are intended for further supply as such by the recipient,

the value shall, at the option of the supplier, be an amount equivalent to ninety

percent of the price charged for the supply of goods of like kind and quality by the

recipient to his customer not being a related person:

Provided further 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 or

services:

Question 29 What will be the price of coal in case of interstate stock transfer?

Answer As the coal is dispatch to other mines for further sale, as per the Rule 28 of CGST

Rule,2017 of valuation Rule, the price may be taken ninety percent of the price

charged for the supply of goods of like kind and quality by the recipient to his

customer not being a related person.

This becomes clumsy as synchronization of invoice may be required

It is prudent to take basis price on declared Grade along with applicable levies like

Royalty, DMF, NMET, MPGATSVA, Transit fee to arrive taxable value under GST.

In this case, IGST will be levied @ 5% on Taxable value so arrived.

Question 30 Bina, Dudichua and Khadia Mines is having production from MP mines as well

as UP Mines. All dispatch is made from dispatch point located in Uttar

Pradesh. Suppose, sale are made from above mines of coal produced from MP,

what will be treatment of tax deposited in MP exchequer like Royalty, DMF,

NMET, MPGATSVA, Transit fee.

Answer In this case, levies like Royalty, DMF, NMET, MPGATSVA,Transit fee which is

deposited in MP exchequer will be taken as reimbursement of tax from coal buyer

and applicable GST will be deposit on same.

Question 31 Suppose, 1000 tonn coal is dispatched from UP dispatch point, out of which 600

tonn coal produced from UP mines and remaining was related to MP mines on

which applicable levies like Royalty, DMF, NMET, MPGATSVA, Transit fee

has already been deposited with MP authority. How the invoice will generate

and what will be the treatment of taxes which has already been deposited with

9

MP Tax Authority?

Answer A separate format of invoice is prepared for the above situation. We have to

mentioned the separate Quantity (Quantity produced from MP as well as UP) at the

invoice. On UP Produced quantity i.e 600 tonee. UP Royalty, DMF, NMET,

SSADA, Transit fee (if applicable) will be levied and for remaining MP Produced

quantity reimbursement of Royalty, DMF, NMET, MPGATSVA, Transit fee will

be taken in same invoice and afterwards, CGST, SGST or IGST as the case may be

will levied.

Question 32 Bina, Khadia and Dudichua Mine are basket mines, wherein coal is produced

from MP mines as well as UP Mines. However dispatch point is located in UP

Mines. Suppose, coal is produced for G-10 grade from Bina Mines of MP state

and coal is transfered to stock yard of Bina mine in UP state. At the time of

dispatch of coal, Technical team informed that stock coal is G-11 coal. We have

already deposited the Royalty, DMF, and NMET on G-10 coal at higher price.

Now, if Invoice is generated on G-11, coal at lower price. Whether differential

taxes will be borne by NCL as cost?

Answer Whatever the taxes other than GST have deposited with Madhya Pradesh exchequer

due to production of coal from Madhya Pradesh, the same will be taken as

Reimbursement of taxes from Customer. A separate Invoice series has been

designed for such kind of situations.

Question 33 When does the liability to pay GST arise?

Answer Section12 of the CGST/SGST Act, the liability to pay tax on goods shall arise at the

time of supply.

The time of supply of goods shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier or the last date on which he is required,

under sub-section (1) of section 31, to issue the invoice with respect to the supply;

or

(b) the date on which the supplier receives the payment with respect to the supply:

Provided that where the supplier of taxable goods receives an amount up to one

thousand rupees in excess of the amount indicated in the tax invoice, the time of

supply to the extent of such excess amount shall, at the option of the said

supplier, be the date of issue of invoice in respect of such excess amount.

Question 34 When does the liability to pay GST arise in respect of supply of Coal?

Answer In this case credit sale, the liability of GST will arise from the date of issue of

invoice.

10

Where the advance has been received from customer, the lability will be arise; the

date on which NCL receives the payment with respect to the coal supply.

Thus, we are liable to deposit the GST on unsettled advance on the last day of month.

Question 35 What is the time period within which invoice has to be issued for supply of

Goods?

Answer As per Section 31 of CGST/SGST Act a registered taxable person shall issue a tax

invoice showing description, quantity and value of goods, tax charged thereon and

other prescribed particulars, before or at the time of

(a) removal of goods for supply to the recipient, where supply involves movement of

goods or

(b) Delivery of goods or making available thereof to the recipient in other cases.

Question 36 What is Removal?

Answer Removal is defined u/s 2(96) of the Act. Removal in relation to goods means,

a) dispatch of the goods for delivery by the supplier thereof or by any other person

acting on behalf of such supplier; or

b) collection of the goods by the recipient thereof or by any other person acting on

behalf of such recipient

It can be seen that removal is complete as soon as the goods are dispatched. However,

where the supply is such that the recipient collects the goods from the supplier, the

point at which the good are collected would be the time of removal of the goods The

dispatch (or collection, as the case may be) would trigger the liability to raise the

invoice, and the supplier should not wait until the goods reach the destination.

Question 37 Who can remove the goods?

Answer Goods can be removed by way of:

a. Dispatch by the supplier himself

b. Dispatch by any person acting on behalf of the supplier

c. Collection by the recipient himself

d. Collection by any person acting on behalf of the recipient

Question 38 What should the contents of a tax invoice be?

Answer As per the provisions of CGST Act, alongwith Rule 46 of CGST Rules,2017, the

Invoice form should contain the below mentioned details :

a) Name, address and GSTIN of the supplier;

b) A consecutive serial number (not exceeding sixteen characters) containing

only alphabets and/or numerals, unique for a financial year;

11

c) Date of its issue;

d) Name, address and GSTIN/ Unique ID Number, if registered, of the recipient;

e) Name and address of the recipient and the address of delivery, along with the

name of State and its code, if such recipient is unregistered and where the

taxable value of supply is fifty thousand rupees or more;

f) HSN code of goods or Accounting Code of services;

g) Description of goods or services;

h) Quantity in case of goods and unit or Unique Quantity Code thereof;

i) Total value of goods or services;

j) Taxable value of goods or services taking into account discount or abatement,

if any;

k) Rate of tax (CGST, SGST or IGST);

l) Amount of tax charged in respect of taxable goods or services (CGST, SGST

or IGST);

m) Place of supply along with the name of State, in case of a supply in the course

of inter-State trade or commerce;

n) Place of delivery where the same is different from the place of supply;

o) Whether the tax is payable on reverse charge;

p) the word “Revised Invoice” or “Supplementary Invoice”, as the case may be,

indicated prominently, where applicable along with the date and invoice

number of the original invoice; and

q) Signature or digital signature of the supplier or his authorized representative.

Question 39 What is HSN code of Coal?

Answer HSN code of Coal is 27011990.

Question 40 Whether it is mandatory to quote HSN code of Coal in each invoice?

Answer As per notification no 12/2017 dated 28/06/2017,A registered person having annual

turnover in the preceding financial year as specified in column (2) of the Table below

shall mention the digits of Harmonised System of Nomenclature (HSN) Codes, as

specified in the corresponding entry in column (3) of the said Table, in a tax invoice

issued by him under the said rules.

Serial

Number

Annual Turnover in the

preceding Financial Year

Number of Digits of

HSN Code

(1) (2) (3)

1. Upto rupees one crore fifty lakhs Nil

12

2. more than rupees one crore fifty

lakhs and upto rupees five crores

2

3. more than rupees five crores 4

In our case, it will be mandatory to mention 4 digit of HSN code (i.e.,2701) in Coal

Sale Invoice.

Question 41 Is it mandatory to issue invoice for every trip or a consolidated invoice can be

issued on monthly basis, in case of stock transfer of coal from one state to

another state?

Answer As per the GST Act and Rules thereon, it is mandatory to issue invoice for every trip.

Question 42 Some customers’ requests for issue of consolidated commercial Invoice on

monthly dispatch along with Excisable invoice issued at weighbridge for the

convenience of their accounting. Whether the same practice can be continued in

GST regime also?

Answer We have to issue separate taxable Invoice for each and every dispatch from dispatch

point in the prescribe format of GST. No monthly consolidated commercial invoice

will be issued. However on the request of consumer, a consolidated report/statement

for dispatch Quantity and value may be provided for their reconciliation purpose.

Question 43 Can a consolidated ‘revised invoice’ be issued to every recipient for supplies

made during the period before registration is granted?

Answer As Per Proviso to Rule 53 of CGST Rules 2017, it is mandatory to issue separate tax

invoices in the following cases:

a) Supplies to registered persons;

b) Inter-state supplies to unregistered persons where the taxable value of the

supply exceeds Rs. 250,000.

A consolidated invoice can be issued to an unregistered recipient (State-wise

consolidation) not covered above.

Question 44 What is the value of taxable supply to be adopted for the levy of GST on Coal?

Answer The value of taxable supply of goods and services shall ordinarily be ‘the transaction

value’ which is the price paid or payable, when the parties are not related and price is

the sole consideration. Section 15 of the CGST/SGST Act further elaborates various

inclusions and exclusions from the ambit of transaction value. For example, the

transaction value shall not include refundable deposit, discount allowed subject to

certain conditions before or at the time of supply.

Question 45 What is transaction value?

13

Answer Transaction value refers to the price actually paid or payable for the supply of goods

and or services where the supplier and the recipient are not related and price is the

sole consideration for the supply. It includes any amount which the supplier is liable

to pay but which has been incurred by the recipient of the supply.

Question 46 What shall be the Taxable value for the charge of GST for Coal?

Answer GST will be charged on Transaction value. Transaction value will include following:

a) Basic Value

b) High capacity Sizing Charges

c) Sizing Charges

d) Transportation Charges

e) Royalty

f) DMF

g) NMET.

h) SSADA, if applicable

i) Forest Transit Fees, if applicable

j) MPGATSVA, if applicable

k) Any other changes as per terms of FSA/E-Auction scheme.

Question 47 What will be the treatment in case of grade slippage of Coal?

Answer We have to issue Credit Note in case of grade slippage of Coal as per the provision

of section 34 (1) of CGST Act within 30 days from the date of coal sampling report.

It is important to note that as per the provision of section 34 (2), the credit note has

to be issued before September following the end of the financial year in which such

supply was made, or the date of furnishing of the relevant annual return, whichever

is earlier and the tax liability shall be adjusted in the GSTR-1.

The Relevant provision section 34(2) is reproduced here below;

“Any registered person who issues a credit note in relation to a supply of goods or

services or both shall declare the details of such credit note in the return for the

month during which such credit note has been issued but not later than September

following the end of the financial year in which such supply was made, or the date

of furnishing of the relevant annual return, whichever is earlier and the tax liability

shall be adjusted in such manner as may be prescribed:

Provided that no reduction in output tax liability of the supplier shall be

permitted, if the incidence of tax and interest on such supply has been passed

14

on to any other person.”

Question 48 Suppose, Coal is supplied in the month of January, 2018 there was dispute on

the grade of coal. Coal Sampling report is received on 25.09.2018 showing the

grade slippage. What will be last date to issue the credit note.

Answer The credit note can be within the 30 days of price revision but not later than

September of the following month or Annual filing of return whichever is earlier.

Question 49 Whether credit Note will be issued along with the benefit of SGST, CGST or

IGST?

Answer As per the clause of FSA, Credit note will be issued only for the Basic Price. It is

prudent to mention here that, as per the present practice, we are issuing credit note

only for the basic price without statutory levies.

The same practice will be continuing in GST regime also.

Question 50 What happen if the Coal Sampling result declared after the month of

September of following month of coal dispatch year? Whether the credit note

can be issued?

Answer We understand that the credit note can be issued even after September; however

benefit of reduced tax cannot be passed on to buyer after the September of following

month.

In our case, we are issuing the Credit note only for Basic Price without statutory

levies. Thus we assume that there will not be any hurdle to issue credit note even

after September of following month. However to avoid dispute with authority,

kindly try to issue credit note on or before September of the following month.

Question 51 Will my tax liability be reduced if I issue a Credit Note?

Answer Yes, subject to fulfillment of following conditions:

(a) It can be proven that the incidence of tax and interest have not been passed on to

any person;

(b) The details of the credit note are declared within the prescribed timelines

(c) The recipient of the supply should accept credit note in his return of inward supply

and reduce his claim of input tax credit to the extent reduction of tax liability.

Note : Credit note should be not later than September following the end of the

financial year in which such supply was made, or the date of furnishing of the

relevant annual return, whichever is earlier and the tax liability shall be adjusted in

such manner as may be prescribed

Question 52 What will be the treatment in case of grade upgradation of Coal?

Answer We have to issue Debit Note in case of grade upgradation of Coal as per the

15

provision of section 34 (3) of CGST Act, within 30days from the date of coal

sampling report.

Question 53 Whether Single Debit/Credit Note can be issued for all kind of adjustment for

disputed period?

Answer In GST regime, this practice will not work. Separate debit note will be used against

the each and every invoice.

Question

54 Like credit note, the condition of issuance of Debit note on or before filing the

return of September month will apply?

Answer Debit note can be issued at any time; there is no condition that the credit note has to

issue on or before September of following month or before filing the annual return.

The only condition describe in section 34 (4), is that the registered person who issue

the Debit Note shall declare the detail of such debit note in the return for the month

during which debit note has been issued and the tax lability shall be adjusted in such

manner as may be prescribed.

Question

55 What will be the content of Revised Tax Invoice/Debit note/Credit note as per

GST Act and Rules?

Answer As per Rule 53 of CGST Rule,2017, “A revised tax invoice referred to in section 31

and credit or debit note referred to in section 34 shall contain the following particulars

-

(a) the word “Revised Invoice”, wherever applicable, indicated prominently;

(b) name, address and GSTIN of the supplier;

(c) nature of the document;

(d) a consecutive serial number not exceeding sixteen characters, in one or multiple

series, containing alphabets or numerals or special characters -hyphen or dash

and slash symbolised as “-” and “/”respectively,, and any combination thereof,

unique for a financial year;

(e) date of issue of the document;

(f) name, address and GSTIN or UIN, if registered, of the recipient;

(g) name and address of the recipient and the address of delivery, along with the

name of State and its code, if such recipient is un-registered;

(h) serial number and date of the corresponding tax invoice or, as the case may be,

bill of supply;

(i) value of taxable supply of goods or services, rate of tax and the amount of the

tax credited or, as the case may be, debited to the recipient; and

(j) signature or digital signature of the supplier or his authorized representative:

16

Question 56 Whether issuance of Advance Receipt Voucher is mandatory in case of receipt of

advance from customer?

Answer Yes, A “Receipt voucher” containing prescribed particulars should be issued on

receipt of any advance payment towards supply of goods or services. Receipt

voucher is a document issued as per Section 31(3)(d) when advance is collected/

received in relation to supply of Goods or Services. GST will be Payable on

unsettled pending advances on the last day of month. In case of E-Auction sale DO

cum Advance Receipt voucher will be issued. In case of FSA sale, Advance

receipt voucher will be issued.

Question 57 What will be the content of Advance Receipt voucher?

Answer As per Rule 50 of CGST Rule, 2017, a receipt voucher referred to in clause (d) of

sub-section (3) of section 31 and as per provisions of Rule 50F of CGST Act,

2017,shall contain the following particulars:

i. Name, address and GSTIN of the supplier;

ii. A consecutive serial number not exceeding sixteen characters, in one or

multiple series, containing alphabets or numerals or special characters -hyphen

or dash and slash symbolised as “-” and “/”respectively, and any combination

thereof, unique for a financial year

iii. Date of its issue;

iv. Name, address and GSTIN or UIN, if registered, of the recipient;

v. Description of goods or services;

vi. Amount of advance taken;

vii. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

viii. Amount of tax charged in respect of taxable goods or services (central tax, State

tax,integrated tax, Union territory tax or cess);

ix. Place of supply along with the name of State and its code, in case of a supply in

the course of inter-State trade or commerce;

x. Whether the tax is payable on reverse charge basis; and

xi. Signature or digital signature of the supplier or his authorized representative:

Provided that where at the time of receipt of advance,

a) The rate of tax is not determinable, the tax shall be paid at the rate of 18%;

b) The nature of supply is not determinable; the same shall be treated as

inter-state supply.

Question 58 How Advance Receipt voucher will be issued when at the time of recipient of

advance, nature of supply is not determinable?

17

Answer As per Rule 50 of CGST Rules, when the nature of supply is not determinable; the

same shall be treated as inter-state supply and IGST may be levied on this

transaction.

Question 59 What does “date of receipt of payment” mean?

Answer It is the earliest of the date on which the payment is entered in the books of accounts

of the supplier or the date on which the payment is credited to his bank account.

Question 60 Suppose, during the month we have to supply 10,000 tonne of Coal under FSA

sale, however advance is received for 6000 tonne. What will be the time of

supply?

Answer Time of supply for 6000 tonne will be the date of receipt of advance. However, GST

will be deposited on unsettled advance on the last date of month. For remaining 4000

tonne, time of supply will be the date of issue of Invoice u/s 31.

Question 61 Will GST Compensation Cess will be levied on reject/ungraded coal?

Answer Yes GST Compensation Cess will be levied on reject/ungraded coal also.

Question 62 Will GST compensation Cess be levied on Advance Receipt?

Answer Time of supply in respect of Compensation cess has not been prescribed till date, so

the comment can’t be made at this juncture. It will be informed within due course of

time.

Question 63 Suppose Coal is supplied before appointed date, however Coal sampling report

is received after appointment date Excise Duty, VAT & other statutory levies

has already been deposited and then grade of coal is upgraded. What will be the

treatment for the same?

Answer Section 142 (2) (a) deals with this kind of situation. We have to issue debit Note

under GST regime by leying CGST, SGST or IGST as the case may be within 30

days of such price revision.

The relevant portion of the section 142 (2) (a) is as under

“Where, in pursuance of a contract entered into prior to the appointed day, the

price of any goods or services or both is revised upwards on or after the

appointed day, the registered person who had removed or provided such goods

or services or both shall issue to the recipient a supplementary invoice or debit

note, containing such particulars as may be prescribed, within thirty days of

such price revision and for the purposes of this Act such supplementary invoice

or debit note shall be deemed to have been issued in respect of an outward

supply made under this Act;”

In view of the above we have to issue supplementary Invoice within 30 days of such

18

Price revision, i.e., from the date of coal sampling report.

Question 64 Suppose in above case, sampling report results in grade slippage. What will be

the treatment for the same?

Answer Section 142 (2) (b) deals with this kind of situation. We have to issue Credit Note

under GST regime within 30 days of such price revision.

The relevant portion of the section is as under

(b) where, in pursuance of a contract entered into prior to the appointed day, the price

of any goods or services or both is revised downwards on or after the appointed day,

the registered person who had removed or provided such goods or services or both

may issue to the recipient a credit note, containing such particulars as may be

prescribed, within thirty days of such price revision and for the purposes of this Act

such credit note shall be deemed to have been issued in respect of an outward supply

made under this Act:

Provided that the registered person shall be allowed to reduce his tax liability on

account of issue of the credit note only if the recipient of the credit note has reduced

his input tax credit corresponding to such reduction of tax liability.

In view of the above we have to issue Credit Note within 30 days of such Price

revision.

Question 65 What happens when DO cum advance receipt under E-auction is expired and

there is un-lifted Coal?

Answer When DO is expired & unsettled advance is pending, as per the present practice we

are refunding the amount for un-lifted Coal and this practice will also continue under

GST, However we have to issue a Refund Voucher for the same.

Question 66 What will be the content of Refund Voucher?

Answer As per the Rule 51 of CGST Rule 2017,a refund voucher referred to in clause (e) of

sub-section (3) of section 31 shall contain the following particulars:

1. Name, address and GSTIN of the supplier;

2. A consecutive serial number not exceeding sixteen characters, in one or multiple

series, containing alphabets or numerals or special characters -hyphen or dash

and slash symbolised as “-” and “/”respectively, and any combination thereof,

unique for a financial year

3. Date of its issue;

4. Name, address and GSTIN or UIN, if registered, of the recipient;

19

5. Number and date of receipt voucher issued in accordance with provisions of sub-

rule 5;

6. Description of goods or services in respect of which refund is made;

7. Amount of refund made;

8. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

9. Amount of tax paid in respect of such goods or services (central tax, State tax,

integrated tax, Union territory tax or cess);

10. Whether the tax is payable on reverse charge basis; and

11. Signature or digital signature of the supplier or his authorized representative.

Question 67 What will be the treatment of unexpired DO issued under existing tax laws,

there is still un-lifted quantity?

Answer A fresh DO will be issued for balance un-lifted Quantity as per GST regime and due

to reduction of levies, if any refund arise the same will be refunded immediately.

Question 68 For Scrap sale other than coal, the same invoice series is used?

Answer A separate Invoice series will be used for Scrap sale other than coal.

Question 69 What Shall be the consequence if supply is made without issue of Invoice?

Answer

1) As per Section 122(1)(i) Where a taxable person who supplies any goods or

services or both without issue of any invoice or issues an incorrect or false

invoice with regard to any such supply he shall be liable to pay a penalty of

ten thousand rupees or an amount equivalent to the tax evaded whichever is

higher.

2) Prosecution can be made against the officer in default as per the

provision of section 132

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FAQs on transitional Provisions

Question 1 What provisions of GST Act and rules deals with transitional provisions?

Answer Transitional Provisions are described Under section 139 to 142 under Chapter XX of

CGST Act along with Transition Rules as described under chapter XIV of CGST

Rule, 2017

Question 2 What is the significance of transitional provisions of GST Act and rules?

Answer Transition provisions are incorporated under GST to enable existing taxpayers to

migrate to GST in a transparent and accurate manner.

One of the major concerns for businesses is the availability and eligibility for

claiming input tax credit when the current indirect tax regime changes to GST.

To guard these transactions and events, the CGST Act and Rule, 2017 has certain

transition provisions w.r.t. the closing balance of input tax credit with existing

taxpayers under the existing indirect tax regime

Question 3 What type of credits is eligible to be carried forward in GST regime?

Answer Every Registered taxable person other than the person opting the composition

scheme under GST Act is eligible to carry forward the cenvat credit/ITC on the

following:-

1) Cenvat credit on input,

2) Cenvat Credit on input services

3) Cenvat credit on capital goods

4) Input Tax credit on VAT paid goods

in GST regime (In CGST AND SGST Electronic credit register) is allowed as

appeared in last return subject to fulfillment of certain conditions.

It may however be noted that, credit of CST will not be available.

Question 4 What shall be the treatment of Unutilised Cenvat Credit of Input/ Capital

Goods/Input services?

Answer Unutilised Cenvat Credit can be carried forward in GST regime (In CGST and SGST

Electronic credit register) as appearing in last return subject to fulfilment of certain

conditions.

Question 5 What are the conditions to carry forward unutilized Cenvat Credit of Inputs/

Capital Goods/Input services?

Answer The conditions to carry forward unutilized Cenvat Credit of Inputs/ Capital

Goods/Input services, are as follows:-

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1) Person is registered taxable person under GST regime as well as Existing tax

laws

2) He has not opted composition scheme under section 10 of CGST Act, 2017

3) He is eligible to take credit under existing tax laws as well as GST laws.

Eligibility to take

credit under Existing

law

Eligibility to take

credit under GST

law

Carry forward

for unutilized

credit

Eligible Eligible Yes

Not Eligible Eligible No

Eligible Not Eligible No

4) He has furnished all the returns required under the existing law for the period

of six months immediately preceding the appointed date.

For example: service provider, he has filed service tax return for IInd half year

for the year 2016-17 on or before 25.04.2017.

5) The said credit is not related to goods manufactured and cleared under such

exemption notifications, as are notified by the Government.

Question 6 Will CENVAT credit (or VAT credit) carried forward in the last return prior to

GST under existing laws be available as ITC under GST?

Answer Yes, CENVAT credit (or VAT credit) carried forward in the last return prior to GST

under existing laws will be allowed to be carried forward subject to fulfillment of

conditions, as mentioned in above question.

Question 7 Which form is prescribed for carry forward of existing duties/taxes under GST?

Answer GST TRAN-1 form has been prescribed for the purpose of carry forward of existing

duties/taxes under GST.

Application for availment of credit of existing duties/taxes under GST to be made

electronically in form GST TRAN-1 within 90 days, in terms of section 140 of CGST

Act, 2017

Question 8 What precautions are to be taken for carry forward of existing duties/taxes

under GST?

Answer The following precautions are to taken for carry forward of existing duties/taxes

under GST :-

1) Input/Input Services/Capital goods received, however the same has not been

recorded in books of accounts or recorded in books of accounts but not

22

considered in ER-1, Carry forward of same in GST regime is not allowed. Thus

availed and record all the eligible cenvat credit in ER-1

2) Carry forward of Cenvat credit and ITC credit in GST regime very carefully, if

registered person has wrongly enjoyed/carry forward the credit in GST portal,

the same will be recovered as arrear of tax under GST.

Question 9 What shall be the treatment of VAT credit on items which were not eligible for

input tax credit in the existing law but are eligible for Input tax credit in GST

Regime?

Answer As per the prevalent provisions of GST Act and laws, we will be entitled to credit

only when ITC on such goods are admissible under the existing law and is also

admissible in GST. Since credit is not available under the existing law on such goods,

GST input credit is not available on such items.

Question 10 Will Education Cess and Secondary and Higher Education Cess which is being

carried forward as per the return be allowed to be carried forward as CGST?

Answer No, as per the clarification given by authority through twitter dated 27.06.2017

Education Cess and Secondary and Higher Education Cess being carried forward as

per the return shall not be allowed to be carried forward as CGST.

Question 11 Will Krishi Kalyan Cess which is being carried forward as per the return be

allowed to be carried forward as CGST?

Answer No, as per the clarification given by authority through twitter dated 27.06.2017 Krishi

kalyan cess being carried forward as per the return shall not be allowed to be carried

forward as CGST.

Question 12 What is the meaning of “Unavailed Cenvat Credit of Capital goods” for the

purpose of GST Act and Rules?

Answer The expression “unavailed CENVAT credit” means the amount that remains after

subtracting the amount of CENVAT credit already availed in respect of capital goods

by the taxable person under the existing law from the aggregate amount of CENVAT

credit to which the said person was entitled in respect of the said capital goods under

the existing law.

For example: As per the existing provision of Cenvat Credit Rule, Cenvat credit on

capital goods can be availed 50% on the year of purchase and 50% can be availed any

other subsequent year form the year of purchase. There is possibility that the

unavailed cenvat credit be there on the appointment day

Question 13 Can we avail the unavailed Cenvat Credit in respect of Capital Goods in GST?

Answer Yes, NCL being a registered person is eligible to avail unavailed Cenvat credit in

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respect of Capital goods in GST.

As per the provisions of GST Law, A registered person, shall be entitled to take, in

his electronic credit ledger, credit of the unavailed CENVAT credit in respect of

capital goods, not carried forward in a return, furnished under the existing law by

him, for the period ending with the day immediately preceding the appointed day in

such manner as may be prescribed.

Provided that the registered person shall not be allowed to take credit unless the said

credit was admissible as CENVAT credit under the existing law and is also

admissible as input tax credit under this Act.

Question 14 Whether Cenvat credits on Inputs/Input services/capital goods, pertaining to

Bills/Invoices relating to a period more than a year, will be eligible to be carried

forward in GST?

Answer As per the provisions of GST law, as long as the credit is eligible (including the

condition on time limit) under the earlier State / Central law, credit can be rightly

availed.

There is no specific time limit on the period to which such transitional credit should

pertain to under the CGST law.

Question 15 Are we eligible to carry forward Cenvat credit of such Capital Goods which

were received before 1st April, 2016 but no CENVAT Credit or partial

CENVAT Credit was availed on them till the year 2016-17, under GST?

Answer Yes, the unavailed cenvat credit of such capital goods may be eligible to be brought

forward in GST.

As per Rule 4(2) (b) of the CENVAT Credit Rules, the CENVAT Credit on capital

goods which has not been availed in the first year will be available in any financial

year subsequent to the financial year in which it was purchased. Therefore, credit on

capital goods can be claimed till the extent of unavailed portion, if it is admissible as

credit under the existing as well as in GST law.

However to avoid dispute, It is prudent to avail the Cenvat Credit of such kind of

Capital Goods in Excise Return of the June Month.

Question 16 What if, in the above question instead of Capital Goods, inputs had been

purchased before 1st July, 2016?

Answer If inputs had been purchased before 1st July, 2016, then no input tax Credit would be

available under GST. The CENVAT Credit Rules, 2004 clearly provide for a time

period of one year from the date of issue of invoice for CENVAT Credit to be

24

availed. If this period of one year has been elapsed, no Input Tax Credit will be

admissible under the CENVAT Credit Rules. Hence, the same would not be available

under GST either.

Question 17 What shall be the treatment of various components of Cenvat Credit (such as

service tax, excise duty, cess, etc) in GST transition?

Answer All components of Cenvat Credit in the last return would merge into one single input

tax credit under the CGST electronic credit ledger. The taxes being subsumed lose

their individual identity under the GST Act.

Question 18 How will the credit be claimed in our case as we have separate registrations for

all Projects under Service Tax and Vat Act in the same state?

Answer Since multiple registrations of a particular State would be consolidated into a single

GST registration in that State (except in case of distinct business verticals), the credits

brought forward in multiple returns would also be consolidated into a single input tax

credit in the respective CGST ledger of that State.

So, for MP projects Credit brought forwarded for each project will be consolidated in

our GST ledger of MP state and for UP projects Credit brought forwarded for each

project will be consolidated in our GST ledger of UP state

Question 19 Which amount shall be carried forward/migrated to GST, if the amount of

cenvat credit appeared in accounting codes i.e 340315,340317 and 340320 as on

30.06.2017 is greater than the amount as appeared in Cenvat credit register as

on date.

Answer The amount of Cenvat Credit as reflected in the Excise returns of immediately

preceding month (i.e., June 2017) shall be eligible to be carried forward/migrated in

GST.

The amount of cenvat credit appeared in Books of accounts is immaterial. The input

tax credit carried forward as per the last return under the earlier law for the period

ending with the day proceeding the day when the GST becomes applicable will only

be taken into account.

The same principal shall apply in case of carry forward of Input Tax credit of VAT in

SGST, too.

Question 20 Will Central Sales Tax (CST) paid under the earlier law be available as credit

under GST?

Answer No, the transitional provisions do not permit credit of Central Sales Tax paid, even

though such component may be present in inputs in stock or inputs contained in

Semi-finished goods or finished goods.

25

Question 21 Can we claim the credit in respect of CENVAT, and VAT paid on goods under

present law and which is in transit as on the transition date?

Answer Yes, credit can be claimed subject to the following prerequisites -

we have to record the invoice in books of accounts within 30 days or such extended

time not more than 30 days except CST and Entry tax

Question 22 Will the credit be available if the Invoice is made on or before 30th June, 2017

but material is received by the supplier on or after 1st July, 2017 in respect of

Input/input services?

Answer Section 140 subsection (5) envisages such a situation wherein Invoice is raised prior

to the appointed date and received after the appointed date and credit would be

permissible provided the purchase is recorded by the receiver within 30 days.

However we have to ensure that the goods have been removed from supplier’s

premises before 30th June 2017 from Lorry receipt or any other document.

It shall further be noted that, the above provisions apply only to Inputs/Input

services in Transit. No such benefit is available for Capital Goods (including

spares) under Transit.

Question 23 Can we reclaim the Cenvat credit of Input Services in GST pertaining to Input

services which were provided under the earlier law on whom Cenvat credit was

availed, However Cenvat Credit on the same was reversed on account of non-

payment of the consideration within a period of three months?

Answer Yes, We can reclaim the same, provided we have made the payment for that supply of

services within a period of three months from the appointed day.

Question 24 Can the recovery of Credit wrongly/erroneously enjoyed the under the existing

law, may be recovered under the GST Law?

Answer Yes, the recovery relating to ITC wrongfully enjoyed, unless recovered under the

existing law, will be recovered as arrears of tax under GST

Question 25 What shall be the implications of GST on existing appeals/revisions, appellate

which is pending before CESTAT, New Delhi goes in our favour, whether refund

will be made in GST? What will happen if the decision goes against NCL?

Answer As per the provision of section 142(6) & 142(7) of CGST Act, 2017, The refund will

be made in accordance with the provisions of the existing law only. In case any

recovery is to be made then, unless recovered under existing law, it will be recovered

as an arrear of tax under GST.

If any demand of existing taxes is imposed, the same shall be payable in cash mode

(not as an adjustment from Cenvat Credit/Input Tax Credit), likewise, if any refund is

26

determined in favour of NCL, the same shall be received in cash (not as an

adjustment from Cenvat Credit/Input Tax Credit)

Question 26 How shall the refund arising from revision of return(s) furnished under the

existing law be dealt in GST?

Answer As per the provision of Section 142(9)(b) of CGST Act, 2017, Any amount found to

be refundable as a consequence of revision of any return under the existing law after

the appointed day will be refunded in cash in accordance with the provisions of the

existing law

B. Treatment of Ongoing Contracts Question 1 What do we mean by Ongoing Contracts?

Answer Contracts where the supply order/Letter of award has been issued before appointed

date and supply or service is expected to be received after the appointed date of GST

(i.e., 01.07.2017).

Question 2 In case of ongoing Contracts where supplier order is issued before appointed

date on basic price along with Excise Duty and VAT/CST, however supply is

made after appointed date. Howe the invoice will issue against these supply.

Answer After the appointed date supplier has to issue invoice as per GST laws and Rules and

GST will be charged on basic price. Invoice should be in accordance with the

Provision of Chapter VI of CGST Rule, 2017

Question 3 What are the implications in respect of upward price revision for goods removed

or services provided prior to the appointed date?

Answer As per the Provision of Section 142(2) of CGST Act, 2017, The supplier shall issue a

supplementary invoice/ debit note within 30 days of the price revision and charge

GST on such supplementary invoice/ debit note. The rate as per the GST schedule

will apply..

Question 4 What are the implications in respect of downward price revision for goods

removed or services provided prior to the appointed date?

Answer As per the Provision of Section 142(2) of CGST Act, 2017, The supplier shall issue a

credit note within 30 days of price revision and mention the value of GST on such

credit note. The supplier will be allowed to reduce his tax liability subject to the

recipient reducing his input tax credit to such extent.

Question 5 If services are provided after the appointed date pursuant to a contract entered

into prior to the appointed date, which tax is payable?

Answer As per section 142(10) of CGST Act, 2017, the goods or services or both supplied on

27

or after the appointed day in pursuance of a contract entered into prior to the

appointed day shall be liable to tax under the provisions of this Act

Question 6 Whether supply of goods and services post appointed date is liable to tax under

CGST even otherwise the tax thereon is paid under the State VAT laws and

service tax laws respectively?

Answer Yes, as per section142(11)(c) the tax under the CGST is liable to be paid in case of

supply of goods and services both post appointed date even otherwise the tax thereon

is paid under the State VAT laws or chapter V of Finance Act, 1994. However, the

taxable person is entitled to claim credit of VAT paid and service tax paid under the

existing laws (State VAT laws and service tax law) and pay the differential taxes

under the CGST Act, 2017 to the extent of supplies effected after the appointed date.

Question 7 If tax on goods had already been paid under existing law do we have to pay

again?

Answer As per Section (11) (a) notwithstanding anything contained in section 12, no tax shall

be payable on goods under this Act to the extent the tax was leviable on the said

goods under the Value Added Tax Act of the State;

Question 8 If tax on Services had already been paid under existing law do we have to pay

again?

Answer As per Section (11) (b) notwithstanding anything contained in section 13, no tax shall

be payable on services under this Act to the extent the tax was leviable on the said

services under Chapter V of the Finance Act, 1994;

Question 9 Where supply order in respect of inputs and input services has been issued and

supply/service is to be received after appointment date (tentatively 01.07.2017)

and supplier has provided the invoice as per existing tax laws, what precautions

is required?

Answer This situation is Known as In-Transit goods and covered under under the provision of

section 140(5) of CGST Act, 2017.

Where supply order in respect of inputs and input services has been issued and

supply/service is to be received after appointment date (tentatively 01.07.2017) and

supplier has provided the invoice as per existing tax laws, then following precautions

is to be taken:

a) Kindly identify such kind of transaction wherein supply order has been issued,

however supply is expected to receive within 20 days (as the projects has to

record the same in books within 30 days) from appointed date. Kindly discuss

with supplier and collect the information whether he will charge the tax under

28

GST regime or earlier tax laws

b) NCL has to record this transaction within 30 days of appointed date; otherwise

the same will not be allowed to carry forward

c) No Invoice under earlier law will be entertained after 25th July, 2017 of in

transit goods.

d) Keep the detail of such kind of transaction and retain the invoice in separate

file carefully.

e) Before processing the payment, obtain a declaration in stamp paper from

supplier that he has deposited the applicable tax with statutory authorities

under existing tax law (Excise/VAT/CST) in following manner;

It is hereby declare that the I/we/company…………………has

deposited the tax as mentioned in Invoice as per the existing provision

of tax and also submitted the return in time. It is submitted that if later

on Cenvat Credit as carry forward in GST regime by NCL is reversed

due to fault of us (non-filing of return, Non deposition of Taxes) then

I/We/ Company/Firm…………………… will bear the same along with

interest and penalty and despite the same to NCL.

f) In case of non-declaration of above, the amount to the extent of statutory dues

may be withheld.

g) Arrange to make the payment immediately without any delay; it is informed

that if the payment has not been made within 90 days from the date of invoice,

NCL is liable to reverse the same along with interest.

h) It is further informed that the benefit of avail the Cenvat credit of in-transit

items is only limited to Input and Input services. The benefit of this section

will not be available for Capital Goods. Thus the for in transit Capital goods,

kindly request to supplier to issue the invoice under GST Regime, if any

invoice is found to be issued by supplier under earlier law, then amount may

be withheld on the account of statutory levies

Question 10 What are the precautions to be taken where Forms like C Form/E Form are pending?

a) Kindly make the list of pending Form C, F, E-1 which NCL has to issue on

procurements and issue the same immediately, it is expected that the commercial

tax portal will not be capable to issue these after September, 2017.

b) Kindly make the list of pending C, F, E-1 which project has to receive from coal

buyer or transferee projects, kindly arrange to collect the same immediately

It is pertinent to mention here that Input Tax credit will be reversed to the extent of

differential amount pending Form C, Form F against sale/stock transfer of coal

29

Question 11 What will be treatment of ongoing Contracts after appointment date where

supplier is Manufacturer and Price is exclusive of tax considering supply is

domestic supply

Answer We understand that in this case supplier had quoted Excise duty, CST/VAT and

Entry tax extra as per the earlier laws and supply order had been issued accordingly.

However, appointment date, the supplier has to issue invoice as per the GST law and

GST will be charged on Basic price. As the Taxes are extra, no hurdle will be arising

in this case as there may no change in basic Price.


supplier is dealer and price is exclusive of tax considering supply is domestic

supply.

Answer We understand that basic price quoted by dealer will be inclusive of Excise duty as

dealer cannot charge excise duty, However dealer might have quoted VAT/CST extra.

1) After the appointed date supplier has to issue invoice under GST regime.

2) We have to derive the assessable value for levying GST and for price

comparison under both regime.

3) CGST, SGST and IGST (as applicable) will be computed on assessable value

and price comparisons will be made for price along with GST and price along

with earlier tax regime

4) If price comparisons results in decrease in price – the same will be deducted

from invoice

5) If price increases due to GST, the same will be reimbursed subject to supplier

issues invoice as per GST provisions and charge GST as per applicable rate.

Question 13 How Assessable value will be calculated in the above mentioned case?

Answer Assessable value will be the higher of the following:

a) Reverse calculation by taking effect of excise duty on price excluding

VAT/CST/Entry tax

b) Deducting the amount of minimum Cenvat Credit and other statutory levies

as appeared in BOQ from price excluding VAT/CST/Entry tax

c) Deducting the minimum amount of Cenvat Credit and other statutory levies

as agreed by supplier price excluding VAT/CST/Entry tax


supplier is dealer and price is exclusive of tax considering supply is imported

supply

30

Answer We understand this is case of indirect import and Basic price quoted by dealer will be

inclusive of CVD and SAD. However dealer may have charged VAT or CST extra.

1) After the appointed date supplier has to issue invoice under GST regime.

2) We have to derive the assessable value for levying GST and for price

comparison under both regime.

3) CGST, SGST and IGST (as applicable) will be computed on assessable value

and price comparisons will be made for price along with GST and price along

with earlier tax regime.

4) If price comparisons results in decrease in price – the same will be deducted

from invoice

5) If price increases due to GST, the same will be reimbursed subject to supplier

issues invoice as per GST provisions and charge GST as per applicable rate


Assessable value will be the higher of the following:

a) Reverse calculation by taking effect of CVD and SAD on price excluding

VAT/CST/Entry tax

b) Deducting the amount of minimum Cenvat Credit and other statutory levies

as appeared in BOQ from price excluding VAT/CST/Entry tax

c) Deducting the minimum amount of Cenvat Credit and other statutory levies

as agreed by supplier price excluding VAT/CST/Entry tax

Question 16 What will be treatment of ongoing Contracts after appointment date where price

is inclusive of tax

Answer In this case the price quoted by dealer/Manufacturer will be inclusive of Excise

duty/CVD/SAD, CST/VAT and Entry Tax, as the case may be

a) After the appointed date supplier has to issue invoice under GST regime.

b) We have to derive the assessable value to charge GST.

c) Final price will be computed after charging CGST, SGST/IGST (as applicable)

d) If price comparisons results in decrease in price – the same will be recovered

from their invoice

e) If price increases due to GST, the same will be reimbursed subject to supplier issues invoice as per GST provisions and charge GST as per applicable rate.


Answer a) Reverse calculation by taking effect of VAT or Entry Tax,CST and EXCISE

Duty or CVD,SAD as the case may be.

31

b) Minimum Cenvat Credit and other statutory levies as appeared in BOQ

c) Minimum amount of Cenvat Credit and other statutory levies as agreed by

supplier

Question 18 What will be treatment of ongoing Contracts where the extension in delivery is

provided on the request of supplier

Answer we understand the delay in supply is due to supplier fault and extension of time has

been provided to him . If the price is increase due to implementation of GST the

same will not be reimbursed and will be borne by supplier, in case of reduction in

price due to GST the supplier is expected to pass the benefit of same to NCL

Question 19 How the assessable value will compute where the supplier was exempted for

charging excise duty, VAT, CST on the basis of notification issued by authority

under earlier law and he has not charge the exempted taxes in BOQ at the time

of bidding.

Answer Where supplier was exempt to charge excise duty, VAT , CST by way of any

notification issued by authority under earlier law and while determine the L-1 the

same was considered , in this situation, Exempt tax will be considered NIL while

computing the assessable value by reverse calculation.

Question 20 What will be the treatment in case of ongoing contracts, where partial supply

has been made before appointed date and invoice has been issued under earlier

tax laws?

Answer In this case, as per the provision of Section 142(10), Supplier has to issue invoice

under GST regime, however where on partial supply the invoice has been issued

under earlier law, to that extent, no need issue invoice again.

PART C Treatment of Ongoing Contracts of other than Procurements Question 1. What will be the treatment in case of ongoing Works contracts, where Price is

exclusive of Tax?

Answer We understand that, where Service Provider had quoted Service Tax and CST/VAT

extra as per the earlier laws and work order had been issued accordingly. Contract has

not been completed

After appointment date, the supplier has to issue invoice as per the GST law and

GST will be charged on Basic price. As the Taxes are extra, no hurdle will be arising

in this case as basic Price is constant.

Question 2. What will be the treatment in case of ongoing Works contracts, where Price is

inclusive of Tax?

32

Answer In this case the price quoted by Service Provider will be inclusive of Service Tax and

CST/VAT.

After appointment date, Service Provider has to issue Invoice under GST regime. In

this case, Assessable value will be the higher of the following;

a) Reverse calculation by taking effect of VAT or CST and Service Tax

b) Deducting the amount of minimum Cenvat Credit and other statutory

levies as appeared in BOQ from price excluding VAT/CST/ Service Tax

c) Deducting the minimum amount of Cenvat Credit and other statutory

levies as agreed by supplier price excluding VAT/CST/ Service Tax

Final Price will be computed after charging CGST and SGST or IGST.

Question 3. What will be the treatment in case of Price change due to above calculation?

Answer Comparison of both prices will be made, if price is reduced due to implementation

of GST, the same will be recovered from their Invoice or if the price is increased the

same will be reimbursed, if Service Provider will raise the invoice for higher price as

per the provision of GST.

Question 4. What will be the treatment in case of Contracts (Other than Works Contract)

where price is exclusive of Tax?

Answer We understand that basic price quoted by Service Provider will be exclusive of

service Tax.

After the appointed dated, Service Provider has to issue the invoice under GST

regime; and GST will be charged on Basic price. As the Taxes are extra, no hurdle

will be arising in this case as there may no change in basic Price.

Question 5. What will be the treatment in case of Contracts (Other than Works Contract)

where price is inclusive of Tax?

Answer We understand that Basic price quoted by Service Tax will be inclusive of Service tax

After appointment date the Service Provider has to issue Invoice under GST regime

and in this case, we have to compute the Basic value/Assessable value to charge GST,

the will be the higher of the following;

a) Reverse calculation by taking effect of Service Tax

b) Deducting the amount of minimum Cenvat Credit and other statutory

levies as appeared in BOQ from price excluding VAT/CST/ Service Tax

c) Deducting the minimum amount of Cenvat Credit and other statutory

levies as agreed by supplier price excluding VAT/CST/ Service Tax

Afterwards, CGST and SGST or IGST as applicable will be computed

Question 6. What will be the treatment in case of Price change due to above calculation?

33

Answer Comparison of both prices will be made, if price is reduced due to GST, the same will

be recovered from their Invoice or if the price is increased the same will be

reimbursed, if Service Provider will raise the invoice for higher price under GST

Regime.

Question What will be the treatment of ongoing services, which was covered under

Reverse charge mechanism under existing law (whether fully or partially) and in

GST regime out of the purview of Reverse charge.

Answer Service provider will issue GST invoice as per the provision of CGST Act and CGST

Rules, 2017 by levying GST as per applicable rate.

.

34

FAQs ON INPUT TAX CREDIT

Question 1 What is meaning of Input in GST regime

Answer As per section 2(59) of CGST Act, “Input” means any goods other than capital

goods used or intended to be used by a supplier in the course or furtherance of

business

Question 2 What is Capital Goods in GST?

Answer As per section 2(19) of CGST Act Capital Goods” means goods, the value of which

is capitalized in the books of account of the person claiming the input tax credit and

which are used or intended to be used in the course or furtherance of business

Question 3 What is Input Services in GST?

Answer As per section 2(60) of CGST Act, “Input Service” means any service used or

intended to be used by a supplier in the course or furtherance of business

Question 4 What is Input Tax Credit?

Answer As per section 2(56) of CGST Act, Input Tax credit means credit of “Input Tax”

Question 5 What is Input Tax?

Answer As per section 2(62) of CGST Act, Input Tax in relation to a registered person,

means CGST, SGST/ UTGST and IGST charged on the inward supply of goods or

services or both, made to him excluding the tax paid on supplies liable to composite

tax.

It further includes the integrated tax applicable on import of goods and the tax

payable under reverse charge mechanism.

Question 6 Who can avail the Input Tax Credit?

Answer Supplier of Goods and service provider can avail the Input Tax credit on of IGST,

CGST, SGST, UTGST, GST Cess paid by their supplier.

Question 7 Whether NCL can avail the Input Tax credit on input supply and services?

Answer NCL is supplier of coal, thus NCL can avail the input tax credit on input, capital

goods and Input service used for extraction of coal subject to fulfillment of certain

condition.

Question 8 What are the conditions to be fulfilled for entitlement of ITC?

Answer The Following conditions are to be fulfilled by NCL for entitlement of ITC:

a) NCL is in the possession of proper tax documents like invoice/ debit note

issued by a registered supplier or any other tax paying documents in the

prescribed format as per section 31and as per the chapter VI of CGST Rule

35

b) NCL has received the goods and /or services or both

c) Supplier has deposited the tax charged on such supply to the Government

(by way of cash or by utilizing input tax credit)

d) Supplier has a furnished a valid return

e) Such supply of goods or services are used or intended to be used in the

course or furtherance of business

f) NCL has claimed the Input Tax in GSTR-2

g) NCL has paid the value of goods or services along with GST thereon. In

case the payment is not made within a period of 180 days from the date of

invoice issued by supplier, NCL shall reverse the credit with interest as

applicable. The above shall not apply in case where GST liability is on NCL

under RCM

h) ITC shall not be available in respect of invoice or debit note after the due

date of filing of return for the month of September following the FY in

which such invoice of debit note has been issued, or the date of filing of

Annual Return, whichever is earlier. e.g. ITC would not be available on

Invoice issued by supplier in September 2017 after 20.10.2018 or the actual

date of filing Annul Return (on or before 31.12.2018), whichever is earlier

i) Deprecation on GST component has not been claimed under Income Tax.

Question 9 What are the eligible Documents for claiming input tax credit?

Answer As per Rule 36(1) of CGST Rule, the input tax credit shall be availed by a

registered person, including the Input Service Distributor, on the basis of any of the

following documents [rule 1(1) of Input Tax Credit Rules].

a. An invoice issued by the supplier of goods or services or both in accordance

with the provisions of section 31;

b. An invoice issued in accordance with the provisions of clause (f) of sub-section

(3) of section 31, subject to the payment of tax;

c. A debit note issued by a supplier in accordance with the provisions of section

34;

d. A bill of entry or any similar document prescribed under the customs act, 1962

or rules made thereunder for the assessment of integrated tax on imports;

e. An input service distributor invoice or input service distributor credit note or

any document issued by an input service distributor in accordance with the

provisions of sub-rule (1) of rule 54.

36

Question 10 What is content of Invoice for availing Input Tax credit?

Answer The contents of Invoice for availing Input Tax Credit has been prescribed in section

31 of CGST Act and as per rule 46 of the CGST Rules, Subject to rule 54, a tax

invoice referred to in shall be issued by the registered person containing the

following particulars, namely,-

(a) Name, address and Goods and Services Tax Identification Number of the

supplier;

(b) A consecutive serial number not exceeding sixteen characters, in one or

multiple series, containing alphabets or numerals or special characters hyphen

or dash and slash symbolised as “-” and “/” respectively, and any combination

thereof, unique for a financial year;

(c) Date of its issue;

(d) Name, address and Goods and Services Tax Identification Number or Unique

Identity Number, if registered, of the recipient;

(e) Name and address of the recipient and the address of delivery, along with the

name of the State and its code, if such recipient is un-registered and where the

value of the taxable supply is fifty thousand rupees or more;

(f) Name and address of the recipient and the address of delivery, along with the

name of the State and its code, if such recipient is un-registered and where the

value of the taxable supply is less than fifty thousand rupees and the recipient

requests that such details be recorded in the tax invoice;

(g) Harmonised System of Nomenclature (HSN) code for goods or services;

(h) Description of goods or services;

(i) Quantity in case of goods and unit or Unique Quantity Code thereof;

(j) Total value of supply of goods or services or both;

(k) Taxable value of the supply of goods or services or both taking into account

discount or abatement, if any;

(l) Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(m) Amount of tax charged in respect of taxable goods or services (central tax,State

tax, integrated tax, Union territory tax or cess);

(n) Place of supply along with the name of the State, in the case of a supply in the

course of inter-State trade or commerce;

(o) Address of delivery where the same is different from the place of supply;

(p) Whether the tax is payable on reverse charge basis; and

(q) Signature or digital signature of the supplier or his authorised representative

Question 11 What shall be the consequences, when invoice issued by supplier is not in

37

accordance with the provisions of section 31 and invoice rules?

Answer As per the provision of Rule 36(2) of CGST Rule,2017 , Input tax credit shall be

availed by a registered person only if all the applicable particulars as specified in

the provisions of Chapter VI are contained in the said document, and the relevant

information, as contained in the said document, is furnished in FORM GSTR-2 by

such person.

Accordingly, we may lose Input tax credit when invoice issued by supplier is not in

accordance with the provision of section 31 and invoice rule.

Question 12 What is the time limit to avail the Input Tax credit?

Answer Input tax credit can be availed immediately on the receipt of goods and service and

proper Invoice.

However, as per the provision of Section 16(4) Input tax cannot be availed

a) Where invoice date is old more than one year or

b) After filing of return for the month of September following the end of financial

year to which such invoice or invoice relating to debit note pertains

c) Furnishing the annual return

whichever is earliest.

It means ITC would not be available on invoice issued by supplier or service

provider between 01.09.2017 to 31.03.2018 after 20.10.2018 or date of annual

filing of Return (i.e on or before 31.12.2018), whichever is earlier.

Question 13 Suppose, Supply was made in the month of June, 2017 and Invoice is having

same date. what is the last date of availing the Input Tax credit

Answer One year from the date of invoice. Input tax credit can be availed on or before June,

2018 subject to prior filing of annual return for the FY 2016-17.

Question 14 Suppose, Supply along with invoice was made in the month of November, 2017.

What is the last date of availing the Input Tax credit?

Answer Input Tax credit can be availed within 1 year from the date of invoice, but cannot be

availed;

a) After Filing of Return for the month of September following the end of

financial year to which such invoice or invoice relating to debit note

pertains

b) After filing of Annual Return

Thus for invoice dated November, 2017, Input tax credit can be availed till

September, 2018.

38

Question 15 In above question, what shall be the consequence, if the annual return for F/Y

2017-18 is filed in the month of June, 2018?

Answer In this case, Input Tax credit for invoice dated November, 2017 can be availed till

the Return of May, 2018.

Question 16 Whether, it can be said that for Invoice received after October of any

particular year; the time limit to avail Input Tax Credit is less than one year

?

Answer Yes, this statement is correct. In view of section 16(4), in case of invoices receive

after October, the taxable person gets less than one year to take input tax credit.

Question 17 Earlier ITC was available on Inputs/Capital Goods/Input Services used in

mining activities only. Whether the same condition will apply in GST regime

also?

Answer The basic requirement for availing Input Tax Credit in GST regime, is that “such

supply of goods or services are used or intended to be used in the course of or for

furtherance of business”.

In view of the above, ITC of GST paid on Inputs/Capital Goods/Input Services

which are used or intended to be used in offices is also eligible for ITC.

Question 18 As per the provisions of existing Cenvat Credit Rules, Cenvat credit on Capital

goods is available @ 50% in first year and remaining in subsequent years.

Whether the same rules has been adopted in GST regime also?

Answer No, entire credit of GST paid on Capital Goods as well as Inputs and Input services

would be available instantly on its receipt by the Output supplier.

Even though the terms input and capital goods have been separately covered and

defined in GST Act, there is no restriction of availment of credit to the extent of

50% on capital goods in the year of its receipt.

Question 19 Whether Input Tax credit can be availed on advances made to supplier or

service provider?

Answer No, If advance payment was made before receipt of goods and services, input tax

credit cannot be taken as goods and services are not received.

At the time of payment of GST on advance, the supplier of goods and services

cannot issue tax invoice. He will only 'receipt voucher’ and Receipt Voucher is not

a valid document to avail Input Tax credit.

Question 20 Whether in case of Input or Capital Goods received in Installments, Input Tax

credit can be availed?

Answer As per section 16(2) of CGST Act, Where the goods against an invoice are received

39

in lots or instalments, the registered taxable person shall be entitled to the credit

upon receipt of the last lot or Instalment.

Question 21 What will happen when supplier has not deposited the GST as indicated in

Invoice

Answer Input Tax credit will not be available until the supplier has deposited the GST.

Question 22 What shall be the consequences when supplier does’nt files the GSTR-1?

Answer The Input tax credit will not be available as the same will not be appearing in our

GSTR-2A, until the supplier files his GSTR-1.

However, we can Provisionally claim the ITC in GSTR-2, Input Tax credit will be

availed only after supplier files his return and deposits the tax thereon.

Question 23 What will be consequence, when payment against the taxable invoice has not

been made to supplier or service provider within 180 days of date of invoice?

Answer As per Rule 37(1) of CGST ACT,2017, -

“A registered person, who has availed of input tax credit on any inward supply of

goods or services or both, but fails to pay to the supplier thereof, the value of such

supply along with the tax payable thereon, within the time limit specified in the

second provision to sub-section (2) of section 16, shall furnish the details of such

supply, the amount of value not paid and the amount of input tax credit availed of

proportionate to such amount not paid to the supplier in FORM GSTR-2 for the

month immediately following the period of one hundred and eighty days from the

date of the issue of the invoice.

Provided that the value of supplies made without consideration as specified in

Schedule I of the said Act shall be deemed to have been paid for the purposes of the

second proviso to sub-section (2) of section 16.”

Question 24 What will be the consequence, in case ITC has already been availed and

utilized and payment is not made within 180 days from the date of the issue of

invoice?

Answer As per Rule 37(2) of CGST Act, 2017, an amount equal to the input tax credit

availed along with interest shall be added to output tax liability of NCL by GST

portal.

Question 25 What if, in above case, suppose, NCL made the payment after 180 days of date

of invoice?

Answer NCL will be entitled to avail the credit of Input tax along with interest already

reversed after making the payment against the supply.

Question 26 Whether proportionate ITC would be available if partial payment is made

40

against the invoice?

Answer We understand from the Rule 37(1), proportionate ITC would be reversed to the

extent of value not paid. In view of Rule 37(1) of CGST Rules, proportionate ITC

will be allowed if proportionate payment is made.

Question 27 What activities are blocked/ineligible for ITC?

Answer i. Motor vehicles and other conveyances

ii. Food and beverages, outdoor catering, beauty treatment, health services,

cosmetic and plastic surgery

iii. Rent-a-cab, life insurance and health insurance

iv. Travel benefits extended to employees on vacation such as leave or home

travel concession

v. Works contract services when supplied for construction of an immovable

property (other than plant and machinery)

vi. Goods or services received by a taxable person for construction of an

immovable property (other than plant and machinery) on his own account

including when such goods or services or both are used in course or

furtherance of business

vii. Goods or services or both on which tax has been paid under section 10

(composition scheme)

viii. Goods or services or both used for personal consumption

ix. Goods lost, stolen, destroyed, written off or disposed of by way of gift or

free samples

x. Any tax paid in terms of sections 74, 129 and 130 of CGST Act. This covers

GST paid after detection of fraud or suppression or goods removed in

contravention of GST Act

Question 28 Whether the Works contract services availed by NCL is eligible for Input tax

credit?

Answer No, As per section 17(5)(c) of CGST Act, Works contract services when supplied

for construction of an immovable property(other than plant and machinery) is not

eligible for ITC

Here, Other than plant and machinery' means input tax credit of GST paid on plant

and machinery procured will be available.

Question 29 Define Plant and Machinery under GST law.

Answer Under CGST Act, 'plant and machinery' is defined as follows :

"Plant and machinery" means apparatus, equipment, and machinery fixed to earth

41

by foundation or structural support that are used for making outward supply of

goods or services or both and includes such foundation and structural supports but

excludes-

(i) land, building or any other civil structures

(ii) telecommunication towers; and

(iii) pipelines laid outside the factory premises.

Question 30 Whether, ITC will be available on construction of project office building?

Answer No, as per the provision of section 17(5) (d) of CGST Act, Goods or services

received by a taxable person for construction of an immovable property (other than

plant and machinery) on his own account even if such goods or services or both are

used in course or furtherance of business

Question 31 Whether ITC on renovation, repairs of office building will be available?

Answer No, “construction” includes re-construction, renovation, additions or alterations or

repairs, to the extent of capitalization, to the said immovable property

Question 32 What is the major condition for eligibility of Input Tax credit?

Answer The supply or service should be used for furtherance of business.

Question 33 Whether ITC will be available when the supply is made of supplier who opt the

composition scheme?

Answer No, ITC will not be available when the supply is made by supplier who opt the

composition scheme.

Question 34 Whether Input tax credit is available in respect of Input tax paid on use of

mobile phones/laptops/as given to employees?

Answer Yes. The mobile phones/ laptops would be covered under the definition of ‘inputs’

as they are used in the course/ furtherance of business and hence, the input tax paid

on such goods will be available as input tax credit

Question 35 Whether supplies or service provided for Nehru Shatabdi Chikitshalay,

Residential colonies will be eligible for ITC?

Answer No, GST paid on supplies procured or service received for Nehru Shatabdi

Chikitshalay, residential colonies will not be eligible for ITC as they are not related

for furtherance of business.

Question 36 Whether ITC can be availed if depreciation is claimed on tax component?

Answer Where the registered taxable person has claimed depreciation on the tax component

of the cost of capital goods under the provisions of the Income Tax Act, 1961, the

input tax credit on the said tax component shall not be allowed.

Thus, the Capitalization should be made without GST.

42

Question 37 Whether input tax credit is allowed on inputs which become waste and is sold

as scrap? or

What would be the tax liability on removal of capital goods after use?

Answer Where ITC has been availed, higher of the following would be payable:

(i) amount equal to the input tax credit taken on the said capital goods or plant and

machinery reduced by the percentage points as may be specified (i.e 5% per Qtr)

(ii) Tax on the transaction value of such capital goods or Plant and Machinery

determined under section 15 of CGST Act.

However, in case of bricks, moulds and dies, jigs and fixtures are supplied as scrap,

the taxable person may pay tax on the transaction value of such goods determined

under section 15 of CGST Act.

Question 38 What is implication of GST on sale of scrap of store items (Plant and

machinery etc) by NCL?

Answer We understand that, as per survey off policy issued by CIL, the assets are sold off

as scrap after the use of minimum 10 year. We also noted that the some assets are

appearing in surveyed off since 2000.

Thus, if the capital assets are procured before 01.03.2011(day when coal becomes

excisable) and cenvat credit has not been availed and utilized, (in Excise Register

or GST Register) the GST would not be payable on scrap sale of Plant and

Machinery as neither Cenvat credit avail nor GST Credit, no question of reversal of

ITC will arise. In this issue, we have favorable Judgment in our own case.

However, we have to establish that the items sold as scrap was procured before

01.03.2011 and cenvat credit was not availed. This becomes very clumsy.

It is prudent to charge GST on sale of scrap and issue Proper Invoice accordingly.

Question 39 Whether input tax credit is allowed on inputs which become waste and is sold

as scrap?

Answer If the goods have been destroyed in full without using in production process, input

tax credit will not be available.

However, if in the process of manufacture some inputs become waste and are sold

as scrap, credit will be available.

Further, output tax shall be payable on sale of such waste/scrap

Question 40 In case the supplier is not registered in GST, whether ITC would be available

43

or not?

Answer In such case GST would be payable under reverse charge and ITC of the same

would be available provided other conditions of eligibility are fulfilled.

Question 41 What is the manner of utilization of CGST, SGST / UTGST and IGST?

Answer (i) Input tax Credit of SGST can be utilised for payment of SGST first and balance

for payment of IGST on outward supply.

(ii) Input tax Credit of UTGST can be utilised for payment of UTGST first and

balance for payment of IGST on outward supply.

(iii) Input tax Credit of CGST can be utilised for payment of CGST first and

balance for payment of IGST on outward supply.

(iv) Input tax Credit of IGST can be utilised for payment of IGST, CGST and SGST

(in that order) on outward supply.

Input tax credit of CGST and SGST/UTGST is not inter-changeable.

Question 42 Where goods and/or services are used partly for business and partly for other

purposes, how much of ITC would be available?

Answer The amount of Input Tax credit shall be restricted to so much of the input tax as is

attributable to the purposes of his business

Question 43 What will be consequence if ineligible ITC wrongly availed?

Answer If at any stage, we observe that we have availed and utilized ineligible ITC, the

same will be reversed along with interest immediately without any delay, otherwise

the following may be consequences;

1) Where credit has been taken wrongly, the same shall be demanded from the

registered person by issuing show cause notice under sections 73 and 74 of

CGST Act.

2) Penalty may be imposed

3) Prosecution from 6 month to 5 year

44

FAQ’s on Reverse Charge under Goods and Services Tax (GST)

Question 1 What is Reverse Charge?

Answer Normally, GST is payable by 'taxable person' who is supplying goods and service.

However, in some cases, GST is payable by recipient of the goods or services or

both. This is termed as 'reverse charge'.

As per section 2(98) of CGST Act "Reverse charge'' means the liability to pay tax by

the person receiving goods and/or services instead of the supplier of such goods

and/or services under section 9(3) or 9(4) of CGST Act or section 5(3) or 5(4) of

IGST Act.

Question 2 Which supplies are covered under Reverse charge?

Answer As per the provision of Section 9(3) of CGST Act which reads as follows ;

The Central or a State Government may, on the recommendation of the Council, by

notification, specify categories of supply of goods or services or both the tax on

which is payable on reverse charge basis and the tax thereon shall be paid by the

recipient of such goods or services or both and all the provisions of this Act shall

apply to such person as if he is the person liable for paying the tax in relation to the

supply of such goods or services or both.

As per notification no 13/2017, Central tax dated 28/06/2017, following services

are covered under reverse charge :-

i. Goods Transport Agency (GTA)

ii. Services supplied by an individual advocate including a senior advocate by

way of representational services before any court, tribunal or authority,

directly or indirectly, to any business entity located in the taxable territory

iii. Services supplied by an arbitral tribunal to a business entity

iv. Services provided by way of sponsorship to any body corporate or

partnership firm.

v. Services supplied by the Central Government, State Government, Union

territory or local authority to a business entity excluding, -

(1) Renting of immovable property,and

(2) Services specified below-

(i) Services by the Department of Posts by way of speed post,

45

express parcel post, life insurance, and agency services provided

to a person other than Central Government, State Government

orUnion territory or local authority;

(ii) Services in relation to an aircraft or a vessel, inside or outside

the precincts of a port or an airport;

(iii) Transport of goods or passengers

vi. Services supplied by a director of a company or a body corporate to the said

company or the body corporate.

vii. Services supplied by an insurance agent to any person carrying on insurance

business

viii. Services supplied by a recovery agent to a banking company or a financial

institution or a nonbanking financial company.

ix. Supply of services by an author,music composer, photographer,artist or the

like by way of transfer or permitting the use or enjoyment of a copyright

covered under clause (a) of sub-section (1) of section 13 of the Copyright

Act, 1957 relating to original literary, dramatic,musical or artistic works to a

publisher, music company,producer or the like.

Question 3 Whether the purchase from unregistered supplier is covered under reverse

charge?

Answer Yes, purchases/procurement from unregistered supplier by registered supplier is

covered under Reverse charge, CGST and SGST will be payable by the recipient.

Further Recipient has to raise self-invoice.

Question 4 Whether GST will be levied on Royalty on Coal?

Answer Yes, GST will be levied on Royalty on Coal

Question 5 Whether GST on Royalty will be covered under Reverse charge mechanism?

Answer Yes, GST on Royalty on Coal will be covered under reverse charge mechanism, it

will be treated as service supplied by central government.

Question 6 What will be the rate of GST on Royalty?

Answer As per the Rate available, the Rate of GST on royalty will be 18%

Question 7 What is self-invoice under Reverse charge?

Answer In case of reverse charge, if supplier or service provider is unregistered then

Recipient will issue Invoice under GST regime and is liable to deposit the GST

thereon. Invoice raised by Recipient is known as self-invoice.

Question 8 Whether self-invoice has to be issued in all activities and procurement covered

under Reverse charge?

46

Answer When the supply is made by unregistered supplier, then recipient is liable to issue

the Invoice in prescribed format.

This situation is describe in section 31(3)(f). Relevant clause of section is

reproduced here below;

“As per the section 31 (3)(f), a registered person who is liable to pay tax under sub-

section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods

or services or both received by him from the supplier who is not registered on the

date of receipt of goods or services or both;”

However, a monthly consolidated self-invoice may be made for all services made

under Reverse charge mechanism.

Question 9 What is the time of supply of goods in case of reverse charge?

Answer As per the section 12 (3) of CGST Act, In case of supplies in respect of which tax is

paid or liable to be paid on reverse charge basis, the time of supply shall be the

earliest of the following dates, namely:—

(a) the date of the receipt of goods; or

(b) the date of payment as entered in the books of account of the recipient or the

date on which the payment is debited in his bank account, whichever is earlier; or

(c) the date immediately following thirty days from the date of issue of invoice or

any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause

(a) or clause (b) or clause (c), the time of supply shall be the date of entry in the

books of account of the recipient of supply.

Question 10 What is the relevance of time of supply?

Answer Time of supply is relevant in determination of the point of taxation.

Question 11 When will be due date of payment of GST when goods are purchase from

unregistered supplier and goods has been received in NCL premises?

Answer In this case, time of supply will be the date of recipient of goods. However, the GST

can be deposited at any time before filing of GSTR-3 of that month

Question 12 What will be the time of supply in the above case, if goods have not been

received; however, supplier has raised the non-taxable Invoice?

Answer In this case, time of supply will be the date immediately following thirty days from

the date of issue of invoice.

For example:

Supply order has been issued for procurement from Unregistered supplier on

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15.09.2017, suppler raised the invoice on 20.09.2017, however goods has been

supplied on 03.11.2017

In this case, time of supply will be 19.10.2017, and we have to deposit the tax under

Reverse charge before filing the GSTR-3 of October month.

Question 13 Whether there is any exemption to purchase from unregistered person?

Answer Notification No. 08/2017 dated 28/06/2017 has provided the exemption of Rs. 5000

per day per GSTIN number subject to :

a) It should be intra state supply

b) Rs. 5000 per day for all units covered under one GSTIN.

Question 14 In case of procurement form unregistered supplier, Which department of NCL

will issue the Invoice finance or user?

Answer As per the office order dated 30.06.2017 of Hon’ble Director Finance, NCL and its

Projects will not procure even petty items like stationery from unregistered person.

Thus no question arises for issue of self Invoice.

Without prejudice to the above, we understand that, User section will issue the

invoice in prescribe format and intimate to finance department without any delay.

Finance department will arrange to make the GST payment under Reverse charge as

per the provision of CGST Act and rule thereon.

Question 15 What is the time of supply of Services in case of reverse charge

Answer As per the section 13 (3) of CGST Act, In case of supplies in respect of which tax is

paid or liable to be paid on reverse charge basis, the time of supply shall be the

earlier of the following dates, namely:––

(a) the date of payment as entered in the books of account of the recipient or the

date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or

any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause

(a) or clause (b), the time of supply shall be the date of entry in the books of account

of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the supplier

of service is located outside India, the time of supply shall be the date of entry in the

books of account of the recipient of supply or the date of payment, whichever is

earlier

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Question 16 Suppose, Goods Transporter which is covered under reverse charge, service of

GTA is availed for the month of October, 2017 and GTA raised invoice on

02.11.2017. Payment to GTA against services has been made on 15.12.2017

What will be time of supply and due date for payment of tax.

Answer Time of supply will be the earliest of following;

1) Time of payment i.e 15.12.2017

2) The day following 60 days from the date of invoice issued by GTA

02.11.2017+ 60 days =01.01.2018

Time of supply would be 15.12.2017 and NCL has to deposit the tax before filing

the GST return for the month of December, 2017

Question 17 What if, in above example the payment has been released to transporter on

02.03.2018

Answer Time of supply will be the earliest of following;

1) Time of payment i.e 02.03.2018

2) The day following 60 days from the date of invoice issued by GTA

02.11.2017+ 60 days =01.01.2018

Time of supply would be 01.01.2018 and NCL has to deposit the tax before filing

the GST return for the month of January, 2018

Question 18 Suppose, in above example, payment to Transporter is made after 180 days,

then NCL is liable to reverse the Input tax availed.

Answer The concept of payment of supply/service within 180 days would not apply on taxes

deposited under Reverse charge.

Question 19 In case of activity covered under Reverse charge and service provider being

unregistered person; which section will issue self-invoice, User section or

Finance Section?

Answer In this case user section will issue self-invoice in the prescribe format within 60 days

from the date of issue of invoice or any other document by service provider and

intimate to Finance department along with the documents issued by Service

provider. Finance department will arrange to make the GST payment under Reverse

charge as per the provision of CGST Act and rule thereon

Question 20 Whether tax deposited under Reverse charge is eligible for Input tax?

Answer Yes, Once tax is paid, its input tax credit is available if such supply of goods or

services or both are otherwise eligible for input tax credit

Question 21 In existing tax, Cenvat credit on service taxes deposit under reverse charge can

be availed on the basis of challan. Whether the same documents are eligible

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under GST regime?

Answer No, Input tax cannot be availed on the basis of challan. As per the CGST Act and

Input tax Rule, Input tax credit can be availed on the basis of documents as

prescribed in Rule 36(1) of CGST Rule. Payment Challan has not been included in

the prescribed documents.

Thus, if the supply is made by Registered supplier or service is provided by

registered service provider, and then invoice issued by supplier/service provider will

be the valid documents for Input tax credit.

If supply is made by unregistered supplier or service is provided by unregistered

service provider, then NCL has to issue Invoice as per the prescribe format and self-

invoice will be the valid document for claiming Input tax credit

Question 22 What will be consequence if self-invoice is not raised within the prescribe time

as mentioned above?

Answer We understand that if self-invoice is not issued within the prescribe time, then,

finance Section will not be able to make the GST tax payment under Reverse charge.

Consequence:

1) We have to make GST Tax payment along with interest and penalty.

2) Penalty of Rs 10,000 will be levied for Non- issuance of Invoice as per the

provision of section 122.

3) Prosecution can be made to officer in default as per the provision of section

132.

Question 23 Whether Manpower service is covered under Reverse charge?

Answer Notification no. 13/2017 dated 28/08/2017 prescribes only nine activities which are

covered under reverse charge.

We understand that manpower service is not covered under reverse charge unlike

present system.

Question 24 Whether security service is covered under reverse charge?

Answer No, Notification no. 13/2017 dated 28/08/2017 prescribes only nine activities which

are covered under reverse charge.

We understand that security service is not covered under reverse charge unlike

present system.

However, security services provided by CISF may be covered under Government

support services.

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Services supplied by the Central Government, State Government, Union Territory or

Local authority to business are covered under Reverse charge.

Thus, security services provided by CISF will be covered under reverse charge.

Question 25 Whether Rent-a-cab is covered under Reverse Charge?



We understand that Rent-a-cab service is not covered under reverse charge unlike

present system.

However, If Rent-a –cab service is provided by unregistered person, then it will be

covered under reverse charge.

Question 26 Whether Works Contract service is covered under Reverse Charge?



We understand that works contract service is not covered under reverse charge

unlike present system.

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GENERAL FAQs APPLICABLE TO ALL DEPARTMENTS/SECTIONS (REGISTRATION, INVOICE AND TENDER EVALUATION)

Question 1 What will be the Vendor codes, whether the existing vendor codes will continue

in GST regime?

Answer As per the direction of Competent authority it is decided that Vendor code will be

the PAN of the Vendor. All the existing vendor codes will be updated accordingly.

single vendor code will be allotted against one PAN. Multiplicity of vendor codes to

one single vendor will be abolished.

Question 2 What is the threshold limit for getting registered in GST?

Answer As per the provisions of CGST Act, threshold for GST registration has been fixed at

Rs.20 lakhs and Rs.10 Lakhs for vendors in certain states, viz; (States of Arunachal

Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland,

Sikkim, Tripura, Himachal Pradesh and Uttarakhand).

Similarly, Under the CGST Act, option of registration under composition scheme for

Specified classes of tax-payers whose turnover is upto Rs. 75 Lakhs is available.

(The threshold is to be calculated with respect to PAN based all India aggregate

turnover in a financial year).

Question 3 What is the GST registration number of NCL?

Answer GST Act and Rules prescribe state wise registration of each assesse.

Accordingly, GST Registration Number of NCL in case of supply for MP is

23AABCN4884H1ZE and in case of supply of UP is 09AABCN4884H1Z4.The

Registration of NCL Kolkata Desk Office shall be 19AABCN4884H1Z3.

It is mandatory to provide the GST number of NCL in supply order/Letter of award,

so that, supplier/service provider can mention the same in invoice, to enable NCL to

get the benefit of Input Tax credit.

Question 4 Whether procurement of goods/receipt of services, permitted from unregistered

Parties?

Answer As per Office order of Hon’ble Director(F) circular dated 03.07.2016,Mandatory

registration of bidder with statutory authorities like Income Tax, Excise etc (if

applicable), is required, unless they are specifically exempt from registration under

specific notification / circular / section / rule issued by statutory authorities.

The same guideline will also be applicable in GST Regime.

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Question 5 What are the documents which unregistered bidder has to submit at the time of

bidding for claiming exemption from GST registration?

Answer The bidder claiming exemption in this respect shall submit supporting documents as

well as certificate from Practicing CA/CMA/CS that Bidder is fulfilling all the

conditions prescribed in notification to make him exempt from registration.

For Example: If Bidder is exempt from Registration under CGST ACT, 2017 due to

his aggregate turnover is less than 20 lakh then bidder has to submit the copy of

Notification along Certificate from Practicing CA/CMA/CS that Aggregate turnover

from all business is less than 20 Lakhs; hence he is exempt from Registration under

GST Act, 2017.

Question 6 What type of supporting documents can be provided to claim exemption in

registration under GST regime?

Answer a) Certificate from Practicing CA/CMA/CS that Aggregate turnover from all

business is less than 20 Lakhs;

b) Income Tax return or Books of accounts

c) Prevalent documents in trade

d) Any other documents prescribed by authorities from time to time

Question 7 Will exemption from registration be allowed to the bidder located outside the

state of supply (where state of supplier is different from place of supply)?

Answer No, As per Section 10(2), the benefit of exemption from registration is available

when place of supply and location of supplier is in same state.

In other words, the person has to take mandatory registration in case of interstate

supply.

Question 8 What will be the treatment if procurement is done from unregistered dealer?

Answer The supply will be covered under Reverse Charge mechanism and tax will be paid by

NCL and NCL has to prepare self-invoice. For details kindly refer FAQs for

reverse charge.

Question 9 Whether a supplier of services is eligible to pay tax under composition scheme?

Answer No, a supplier of services is not eligible to opt for composition scheme. However, a

supplier supplying composite supply involving supply of service or goods being food

or any other article for human consumption or any drink (other than alcoholic liquor

for human consumption) is eligible to opt for payment of taxes under composition

scheme.

Question 10 Can bidders opting composition scheme, allowed to charge GST?

Answer NO, as per section 10(4) of CGST Act, A taxable person to whom the provisions of

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sub-section (1) apply shall not collect any tax from the recipient on supplies made by

him nor shall he be entitled to any credit of input tax.

Accordingly, Bidder opting composition scheme u/s 10 shall not be allowed to charge

GST.

Question 11 What precautions need to be taken if bidder has opted for composition scheme?

Answer If bidder is eligible for Exemption of GST or lower than the normal rate is applicable

(Bidder has opted Composition Scheme) in their case, then bidder has to upload the

authenticated document towards such exemption online & furnish the authentic

documents along with certificate of practicing CA/CMA/CS clearly mentioning that

Bidder is eligible to opt the scheme and fulfilling all the condition as mentioned in

notification in this regard.

One has to verify the following, regarding registration, while evaluation of tenders :-

a) Location of the Supplier/Bidder

b) Place of Supply

c) Turnover of Supplier/Bidder (Turnover of the Supplier/Bidder is to be verified

on the basis of last filed Income Tax return/ Books of Account).

(If place of supply and supplier are located in same state and turnover is below

Rs.75 Lakhs then bidder may opt composition scheme).

Note: When location of supplier and Place of Supply is in different state then the

benefit of Composition in not available

Question 12 Will NCL be eligible to take benefit of input Tax credit, in case of procurement

from bidder/supplier opting composition scheme?

Answer A Taxable person paying taxes under composition scheme is not entitled to collect

taxes from the recipient in terms of Section 10(4) of the CGST Act, 2017.Hence,

there does not arise a question for the recipient to claim input tax credit.

Accordingly, NCL would not be able to avail the benefit of Input Tax Credit in case

of procurement from Supplier/Bidder opting Composition scheme.

Question 13 What is the effective date for presenting Invoice as per the Format prescribed

by GST ACT and Rules?

Answer All Invoices on or after 01st July 2017 will be issued and accepted as per GST Regime

only.

Question 14 What are the contents of invoice as per the provisions of CGST Act, and Tax

Invoice rules under GST?

Answer As per Rule 46 of CGST Act, 2017,the Invoice form should contain the below

mentioned details, otherwise NCL will not get the benefit of Input Tax credit :-

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(a) Name, address and GSTIN of the supplier;

(b) A consecutive serial number containing only alphabets and/or numerals,

unique for a financial year;

(c) Date of its issue;

(d) Name, address and GSTIN/ Unique ID Number, if registered, of the recipient;

(e) Name and address of the recipient and the address of delivery, along with the

name of State and its code, if such recipient is unregistered and where the taxable

value of supply is fifty thousand rupees or more;

(f) HSN code of goods or Accounting Code of services;

(g) Description of goods or services;

(h) Quantity in case of goods and unit or Unique Quantity Code thereof;

(i) Total value of goods or services;

(j) Taxable value of goods or services taking into account discount or abatement,

if any;

(k) Rate of tax (CGST, SGST or IGST);

(l) Amount of tax charged in respect of taxable goods or services (CGST, SGST

or IGST);

(m) Place of supply along with the name of State, in case of a supply in the

course of inter-State trade or commerce;

(n) Place of delivery where the same is different from the place of supply;

(o) Whether the tax is payable on reverse charge;

(p) the word “Revised Invoice” or “Supplementary Invoice”, as the case may be,

indicated prominently, where applicable along with the date and invoice number

of the original invoice; and

(q) Signature or digital signature of the supplier or his authorized representative

Question 15 What is the additional information required in Invoice in case of Coal

Transportation invoice?

Answer In Case of Coal Transporter the Following Addition information is required;

1) Gross weight of consignment

2) Name of the Consignor

3) Name of Consignee

4) Register Number of Goods Carriage

5) Detail of Goods Transported

6) Detail of Place of origin and destination

7) GSTIN Number of person liable for paying tax whether as consignor,

consignee or GTA

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Question 16 Will there be any change in evaluation of Tender, under GST Regime?

Answer Yes, Under GST regime, emphasis shall be made while comparing bids of Registered

bidders, unregistered Bidders, Bidders opting Composition scheme, location of

Bidders, Place of supply of the proposed order etc.

All these factors may have significant impact on determination of L-1 status of

Bidders.

Question 17 What specific points have to be observed, while evaluation of tenders, in GST

regime with respect to registered bidders, Unregistered bidders and Bidders

opting composition scheme?

Answer In case of registered bidders and when the tendered item is eligible for Input Tax

credit then the L-1 status shall be decided by deducting the Input tax Credit (CGST,

SGST or IGST or UTGST as the case may be) Amount /Minimum CENVAT Amount

component from the Total Rate by the system.

However, if Bidder has opted composition scheme to deposit GST under section 10 of

CGST Act, 2017, he will not be entitled to charge GST, however system may

calculate GST by reverse calculation, in this case CGST/SGST/IGST/UTGST will

not deducted while determining the L-1 status.

In case of Bidder is exempted from Registration under GST ACT and submitted the

required documents as mentioned above, NCL is liable to deposit the CGST, SGST as

per the Provision of CGST Act, then the same will be included in cost while

computing the landed price. However if the tendered items is eligible for Input Tax

credit, the same will be deducted while computing the L-1Status.

Accordingly, price comparisons shall be made and L-1 status may be determined.

Question 18 On what value shall the evaluation of tenders be made?

Answer Evaluation of Tenders shall be done on total cost basis i.e. Total Landed Cost

(inclusive of taxes and duties, after availing Input Tax (CGST, SGST or IGST, if

any).

Question 19 What is the applicability of reverse charge?

Answer Kindly refer FAQs on reverse charge.

Question 20 What is the applicability of Input Tax credit?

Answer Kindly refer FAQs on Input tax credit.

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FAQs on Procurement

Question 1 What will be the transitional provisions in case of procurement?

Answer Transitional provisions are discussed in detail in our module of “FAQ on Transitional

provisions”.

Question 2 Will NIT be revised with respect to, taxation clause for future contracts?

Answer Yes, NIT has to be revised as per the provisions of GST. Revised Taxation clause

regarding GST has already been circulated to the concerned department.

Question 3 What will be the evaluation process in case bidder is a registered supplier?

Answer In case of registered supplier, transaction value will be exclusive of GST, we have to

add applicable GST and deduct eligible Input tax credit for arriving at evaluation

price.

Question 4 What will be the evaluation process in case dealing with unregistered Supplier?

Answer This situation will be covered under Reverse charge mechanism; NCL has to pay tax

and issue self-invoice.

While evaluating the proposal, the above should be kept in mind and bidder will

quote invoice price without GST and we have to add applicable GST and deduct

eligible Input tax credit for arriving at evaluation price.

Question 5 What will be the evaluation process in case of dealing with supplier covered

under composition scheme?

Answer As the supplier is covered under composition scheme, they cannot charge GST from

the NCL on supplies made. The GST will be considered as NIL in this case. And

evaluation will be based on basic price only.

Question 6 What precautions to be taken before accepting Invoice for payment?

Answer On receipt of invoice or other similar document for processing, verify the following:

a) Whether the Invoice/Debit Note/Bill of Entry issued by the supplier of

goods is in accordance with the provisions of GST

b) Whether valuation is as per Section 15 and is consistent with BOQ

c) Whether correct amount of GST has been charged according to BOQ

d) For any deduction (on account of quality or other reasons), supplier has to

issue credit note.

e) Whether item is eligible for ITC

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f) Check the date of Invoice for ensuring payment within 180 days.

g) Declaration from supplier is obtained or not.

h) Proper DRR entry and accounting in prescribed code for smooth filing of

Return.

Question 7 What will be the time limit for making payment against invoices?

Answer Payment (Full payment) is to made within 180 days, so user department has to ensure

that Invoice should reach Finance department within the permissible limit as

prescribed by competent authority.

Question 8 What changes will come in case of Import?

Answer In case of imports, CVD and SAD will be replaced by IGST.

Question 9 What precautions need to be taken for availing Input tax credit?

Answer Kindly refer module “ FAQs on ITC”.

Question 10 What is the Tender Evaluation Process with respect to Tax Portion/GST; in case

of supply from Indian Supplier?

Answer For Indian Manufacturers /Sole Selling Indian Agent, tender shall be evaluated with

respect to taxation aspects as follows :

Total Landed Cost (total of price elements – a to f above).

a) Net Ex-works (Basic Price) For Indian Manufacturers or Net Indian

Port/Warehouse Price (For Sole Selling Indian Agent).

b) Packing & Forwarding charges

c) Freight charges as indicated by the bidder.

d) Insurance charges – as indicated by the bidder.

e) Any other taxes / duties as legally leviable and spelt out clearly by the bidder

f) CGST, SGST or IGST or UT-GST (as per prevailing GST ACT, 2017 and

rule thereon) on the date of offer

In case of NCL is eligible to avail the benefit of Input Tax credit of tendered items,

the value of CGST, SGST or IGST will be deducted/ reduced to the extent of setoff

allowed to NCL (depending upon the nature/category of item) for arriving at the

landed price.

Bidders are required to provide documentary evidence for claiming concessional rate

of Taxes & Duties, if any. If the bidder fails to provide documentary evidence for

claiming concessional taxes/duties, for evaluation purpose, the maximum applicable

rate of taxes & duties will be taken into account by the Purchaser.

Bidders are required to provide documentary evidence for claiming concessional rate

of Taxes & Duties, if any. If the bidder fails to provide documentary evidence for

58

claiming concessional taxes/duties, for evaluation purpose, the maximum applicable

rate of taxes & duties will be taken into account by the Purchaser.

Question 11 What is the Tender Evaluation Process with respect to Tax Portion/GST; in

case of supply from Overseas Supplier?

Answer For Overseas Manufacturer ( for FOB Offer), tender shall be evaluated with respect

to taxation aspects as follows :

Tenderers should quote firm price on FOB basis only, indicating the currency.

i) The total price will be estimated in the following manner to arrive at the CIF price

and the Total landed price of the Import offers:-

a) Freight Charges from FOB Port of Shipment to Kolkata Port :

Sectors Freight

For USA, Canada and Japan 12% of Net FOB value

All other Sectors 10% of Net FOB value

b) Insurance charges shall be considered @ 0.5% of the net FOB price.

c) The CIF price will be multiplied by the Exchange Rate between Indian

Rupees and the quoted foreign currency, prevailing on the date of

opening of the price bid. The applicable Exchange Rate will be as

captured/ provided by the NIC server/bidding portal of NIC / time of

opening of price bids.

d) Customs Duty and IGST and any other Cess/Duty as applicable on

assessable value (CIF plus landing charges and Indian agency

commission if any quoted separately) will then be added on the CIF

price, thus converted into Indian currency. Landing charges will be

considered @ 1% of CIF Value.

e) On this net price, 2% of FOB will be added as port clearance and

forwarding charges and 3% of net FOB as estimated average inland

freight up to destination, to arrive at the total price (landed price).

In case of NCL is eligible to avail the benefit of Input Tax credit of tendered items,

the value of IGST will be deducted/ reduced to the extent of setoff allowed to NCL

(depending upon the nature/category of item) for arriving at the landed price.

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FAQs On CMC

Question 1 What will be the transitional provisions in case of CMC contracts?

Answer Kindly refer our module on “FAQs on Transitional Provisions”.

Question 2 What are the rates prescribed for various services under the GST Regime?

Answer The GST Council has broadly approved the GST rates for services at Nil, 5%, 12%,

18% and 28% as listed below. It will be subject to further vetting during which the

list may undergo some changes.

Question 3 What types of Services are availed by NCL under CMC Module?

Answer We understand that, NCL is availing services of Overburden Removal outsourcing,

crushing of Coal, transportation of Coal, loading of coal in tippers in case of Road

Transport and loading of Coal into Railway Wagons in case of supply of coal by rail.

Question 4 How are the Services of Coal Transportation, Tipper Loading and Wagon

Loading classified in the Existing Tax Regime i.e., Under Finance Act and

Service Tax Rules?

Answer We understand that, the Services of Overburden removal outsourcing is classified

under Other Services, Coal Transportation and tipper loading are classified into GTA

Services whereas the service of wagon Loading is classified under Cargo Handling

services as per the existing Finance Act and Service Tax Rules.

Question 5 Shall the Existing Classification of above services, will change in GST Regime?

Answer No, the Classification of the Overburden removal outsourcing, transportation and

loading services shall remain constant in GST regime too, i.e., Services of

overburden removal outsourcing are classified under Other Services, Services of Coal

Transportation and tipper loading will be covered under Goods Transport Agency

services and Services of wagon Loading shall be covered under Cargo handling

services in GST Regime also.

Question 6 What is the concept of composite services and Mixed Services is as described in

CGST Act?

Answer The Concept of Composite, Principal and mixed supply as defined in Section 2(30),

2(90) and 2(74) of CGST Act, are :

As per the provisions of Section 2(30) of the CGST Act “composite supply” means

a supply made by a taxable person to a recipient consisting of two or more taxable

supplies of goods or services or both, or any combination thereof, which are naturally

bundled and supplied in conjunction with each other in the ordinary course of

business, one of which is a principal supply;

Illustration.— Where goods are packed and transported with insurance, the supply of

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goods, packing materials, transport and insurance is a composite supply and supply of

goods is a principal supply;

As per the provisions of Section 2(90) of the CGST Act “principal supply” means

the supply of goods or services which constitutes the predominant element of a

composite supply and to which any other supply forming part of that composite

supply is ancillary;

As per the provisions of Section 2(74) of the CGST Act “mixed supply” means two

or more individual supplies of goods or services,or any combination thereof, made in

conjunction with each other by a taxable person for a single price where such supply

does not constitute a composite supply.

Illustration— A supply of a package consisting of canned foods, sweets, chocolates,

cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a

mixed supply. Each of these items can be supplied separately and is not dependent on

any other. It shall not be a mixed supply if these items are supplied separately

Question 7 How does the taxability of Composite services differ from taxability of Mixed

services, under GST regime?

Answer As per Section 8 of CGST Act, The tax liability on a composite or a mixed supply

shall be determined in the following manner, namely:—

(a) a composite supply comprising two or more supplies, one of which is a principal

supply, shall be treated as a supply of such principal supply; and

(b) A mixed supply comprising two or more supplies shall be treated as a supply of

that particular supply which attracts the highest rate of tax.

Question 8 Whether the combined services of Coal transportation, loading and unloading is

covered under Composite Services or Mixed Services, as defined in CGST Act?

Answer We understand that, the combined services of Coal Transportation, Loading and

Unloading is naturally bundled services as without loading, transportation cannot be

possible. Thus, it will be covered under composite services as defined under section

2(30) of CGST Act.

Further, in circular no. 186 dated 05.10.2015, it is clarified by CBEC that loading,

transportation and unloading is naturally bundled service & covered under GTA.

Since the principal supply is coal transportation, the composite service shall be

classifiable under GTA Services.

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Question 9 Whether GTA services can be availed from unregistered Service provider?

Answer As per the provisions of Notification no 5/2017 issued under GST – In exercise of

the powers conferred by sub-section (2) of section 23 of the Central Goods and

Services Tax Act, 2017 (12 of 2017), the Central Government hereby specifies the

persons who are only engaged in making supplies of taxable goods or services or

both, the total tax on which is liable to be paid on reverse charge basis by the

recipient of such goods or services or both under sub-section (3) of section 9 of the

said Act as the category of persons exempted from obtaining registration under the

aforesaid Act.

Accordingly, we understand that in case of transporters providing GTA services as

well as Cargo Handling services, thus the benefit of this exemption may not be

available to transporters.

Question 10 What is the complete procedure of Coal transportation by GTA prevailing in

NCL?

Answer Coal is transported from coal face to coal stockyards by our own dumpers. From coal

stockyards the coal is loaded into tippers by transporter by pay-loader to transport the

coal from stockyards to coal handling plant situated within the mine premises. The

tippers are weighted at weighbridge of NCL where weighment slips are generated

which contains particulars like truck number, tare weight, gross weight, net weight,

time, etc. As the truck registration numbers are specific for contractors, the

contractors are identified and contractor-wise weighbridge register is maintained

which contains date, daily weighment, serial number, truck number, gross weight,

tare weight, net weight and time of weighment. On the basis of this register, monthly

statement of transportation for every contractor is prepared for payment purposes.

Question 11 What shall be the rate for Goods Transport Agency Services in GST?

Answer As per notification no. 11/2017 (Central tax) dated 28.06.2017 vide entry no. 9(iii)

rate of central tax on Services of goods transport agency (GTA) in relation to

transportation of goods (including household goods for personal use) is 2.5%, We

understand that rate of SGST will also be 2.5%. Thus the Total rate will be 5%.

Furthermore, loading and unloading services may be treated as supporting services in

GTA, (Kindly refer entry no 11 of notification no. 11/2017 (Central tax) dated

28/01/2017). Provided that the central rate of supporting services of GTA is 2.5%

which is similar to GTA Services.

In view of the above GTA & its supporting services i.e. loading and unloading are

covered under 5% slab.

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As per notification no. 08/2017 (Integrated tax) dated 28.06.2017 vide entry no. 9(iii)

rate of integrated tax on Services of goods transport agency (GTA) in relation to

transportation of goods (including household goods for personal use) is 5%.

Furthermore, loading and unloading services may be treated as supporting services

in GTA, (kindly refer entry no 11 of notification no. 08/2017 (Integrated Tax dated

28/01/2017). Provided that the integrated rate of supporting services of GTA is 5%

which is similar to GTA Services.

In view of the above GTA & its supporting services i.e. loading and unloading are

covered under 5% slab.

Question 12 Whether the Benefit of Input Tax Credit will be available to NCL on GST paid

on GTA services under reverse charge, in GST Regime?

Answer Yes, The Benefit of Input tax credit shall be available to NCL on GST paid on GTA

services by NCL under Reverse charge.

Question 13 Whether all transporter services will be treated as GTA services?

Answer No, as per GST Act, Goods transport agency means any person who:-

a) Provides the service in relation to transport of goods by road

b) Issue consignment note

Issuance of consignment note is main criteria for classification of transport service

under Goods Transport Agency. In view of above, transporter fulfilling the above

condition will be treated as GTA.

Question 14 What will be the consequence when transporter will not issue consignment note?

Answer In this case, service of transporter will be treated as Goods transport service instead

of GTA and rate of tax will be 18% instead of 5% and it will be covered under

forward charge.

Question 15 What will be the content of consignment note?

Answer In Case of Coal Transporter the Following will be the content of the consignment

note;

a. Gross weight of consignment

b. Name of the Consignor

c. Name of Consignee

d. Registration Number of Goods Carriage in which the goods are transported

e. Detail of Goods Transported

f. Detail of Place of origin and destination

g. GSTIN of Consigner, Consignee and GTA (if available)

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h. GSTIN Number of person liable for paying tax whether as consignor, consignee

or GTA

Question 16 Whether the Goods Transport Services are covered under Reverse Charge in

GST regime?

Answer Yes, NCL is availing services of Goods Transport Agency for transportation. As per

notification no. 13/2017 Central Tax (rate) dated 28.06.2017, Services provided or

agreed to be provided by a goods transport Agency (GTA) in respect of

transportation of Goods by road is covered under reverse Charge and the Service

recipient is liable to pay 100% of tax on reverse charge basis. Therefore, NCL being

Service recipient of GTA Services will be liable to pay 100% GST on the

transportation services availed, as per the prevailing provisions of GST Act.

Question 17 What code shall be mentioned by GTA in their invoices- HSN or SAC?

Answer Goods transport agents provide services of loading, transportation and unloading of

Coal hence they shall mention Service Accounting Code that i.e. SAC in their

invoices. These services are covered under the heading 9965.

Question 18 Whether any declaration is required from GTA?

Answer Yes, a declaration is required from GTA that he has not availed benefit of Input tax

credit on inputs/input services used in supplying the GTA services.

Question 19 What activities are covered under Wagon loading Services availed by NCL?

Answer Hiring of Payloaders and tippers for mechanical transfer of ROM coal into tippers at

pit head Stock yard of mines and wharfwall of Projects into railway wagons

including transportation of Coal from stockyard of one project to wharfwall of other

Project.

The Loading-transportation-unloading activity will be covered under GTA Services,

as explained in above question and NCL will pay GST under reverse charge and on

Railway wagon loading NCL will reimburse the GST to service provider Upon

submission of the bills in format prescribed by NCL and fulfillment of other

conditions in this regard.

Question 20 Whether the consignment note in respect of coal transportation services be

issued on each transaction or on a periodical basis?

Answer Under the GST regime, the Consignment note shall be issued individually for each

trip by transporter and not on consolidated basis like existing practice.

Question 21 Whether wagon loading service provider or OB outsourcing service provider

has to mandatorily get them registered under GST at state where they are

providing these services?

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Answer Yes, these services have to be provided in mines located in MP and UP. They can’t

provide these services without coming to the location of recipient. Thus they have to

mandatorily get themselves registered in the location of services. The same has also

been clarified by Twitter dated 27.06.2017

Question 22 What Shall be the rate of GST payable on Wagon loading Services availed by

NCL?

Answer The rate of tax on Wagon Loading services shall be 18% in GST.

Question 23 Whether benefit of Input Tax Credit is available on GST paid on Wagon

Loading Services availed by NCL?

Answer Yes, the benefit of Input Tax Credit shall be available to NCL on the GST paid on

Wagon Loading Services by NCL.

Wagon Loading Services is classifiable under Cargo Handling Services, which is

eligible for Input Tax Credit.

Question 24 Whether Wagon loading Services are covered under Reverse Charge in GST

regime?

Answer No, Wagon loading Services (Cargo handling services) are not covered under

Reverse Charge in GST regime. GST on wagon loading services shall be paid fully

be service provider. Service provider may get the reimbursement of the GST Paid by

him, provided submission of the Invoice as per format prescribed under GST and

indication of the amount of CGST, SGST (as the IGST will not be applicable) on the

Invoice/Bill provided to NCL.

Moreover, the Service Provider also has to submit a declaration on invoice or as

separate Annexure along with that CGST, SGST as mentioned in Invoice has been

deposited and Prescribed return has been uploaded on GST Portal as per the

provision of GST Act and rules thereon.

Amount of Statutory levies like CGST,SGST will be released when the same will

appear in GSTR-2A of NCL in the common portal of GST

Question 25 What Shall be the rate of GST payable on Overburden removal outsourcing

availed by NCL?

Answer The rate of tax on Overburden removal outsourcing shall be 18% in GST.

Question 26 Whether benefit of Input Tax Credit is available on GST paid on Overburden

removal outsourcing services availed by NCL?

Answer Yes, the benefit of Input Tax Credit shall be available to NCL on the GST paid on

Overburden removal outsourcing services by NCL.

Overburden removal outsourcing Services is classifiable under Other Services, which

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is eligible for Input Tax Credit.

Question 27 Whether Overburden removal outsourcing service is covered under Reverse

Charge in GST regime?

Answer No, Overburden removal outsourcing services (Other Services) are not covered under

Reverse Charge in GST regime. GST on Overburden removal outsourcing services

shall be paid fully be service provider. Service provider may get the reimbursement

of the GST Paid by him, provided submission of the Invoice as per format prescribed

under GST and indication of the amount of CGST, SGST/IGST (as the case may be)

on the Invoice/Bill provided to NCL.

Moreover, the Service Provider also has to submit a declaration on invoice or as

separate Annexure along with that CGST, SGST (IGST will not be applicable) as

mentioned in Invoice has been deposited and Prescribed return has been uploaded on

GST Portal as per the provision of GST Act and rules thereon.

Amount of Statutory levies like CGST,SGST or IGST will be released when the same

will appear in GSTR-2A of NCL in the common portal of GST

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FAQs on other than Procurement and CMC

Question 1 What will be the transitional provisions in case of Works contract?

Answer Kindly refer our module on “FAQs on Transitional Provisions”.

Question 2 What is the meaning of Works Contract in context of GST?

Answer As per section 2(119) of CGST Act “works contract” means a contract for building,

construction, fabrication, completion, erection, installation, fitting out, improvement,

modification, repair, maintenance, renovation, alteration or commissioning of any

immovable property wherein transfer of property in goods (whether as goods or in

some other form) is involved in the execution of such contract.

Question 3 Is movable property covered under the definition of works contract in GST?

Answer No, as per section 2(119) of CGST Act works contract will only be for immovable

property.

Question 4 Whether erection and commissioning of Coal handling plant covered under

works contract?

Answer We understand that Coal handling plant; will become immovable property after

completion/erection. Hence, Completion, Erection and commissioning of Coal

handling plant will be covered under works contract.

Question 5 Can Reverse charge mechanism be applicable for Works contract?

Answer No, as per notification no. 13/2017 dated 28/06/2017, Works Contract will not be

covered under Reverse charge.

Question 6 What will be the GST rate in case of works contract?

Answer GST will be levied based on the place of supply on the rates of services. As per as per

notification no. 11/2017 dated 28/06/2017, rate of CGST for works contract is

prescribed as 9%. We understand the same will be rate for SGST. Then the rate of tax

on works contract will be 18%.

Question 7 Whether abetment (40% and 70%), as prevalent in existing tax regime shall

continue to be available in case of works contract in GST regime?

Answer No abatement has been prescribed for works contract service so far.

Currently VAT is payable on the works contract. Service tax is being paid @15% on,

either 40% (on new work) or 70% (on repair, maintenance work) of the Value.

The concept of abatement is abolished in GST.

Question 8 Whether Civil Contractor has to get register in the location of Services.

Answer Yes, they have to mandatorily get themselves registered in the location of services.

The same has also been clarified by Twitter dated 27.06.2017

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Question 9 Whether transactions involving supply of consumables will be covered under

works contract?

Answer No, as per section 2(119) of CGST Act, transfer of property in goods is required.

Question 10 Whether repair and maintenance will be covered under works contract?

Answer Yes, the repair and maintenance of immovable property shall be covered under works

contract however repair and maintenance of movable property is not covered in works

contract.

Question 11 Whether the works contract in relation to immovable property under the GST

regime be treated as supply of goods or supply of services?

Answer In terms of entry (a) to clause 6 of schedule II, the works contract in relation to

immovable property under the GST regime should be treated as supply of service.

Question 12 What would be the time of supply in case of works contract?

Answer In terms of entry (a) to clause 6 of schedule II, the works contract in relation to

immovable property under the GST regime should be treated as supply of service.

Accordingly, in terms of Section 13, the time of supply of services shall be the

earliest of the following:

(a) Date of issue of invoice; or

(b) Due date of issue of invoice under Section 31; or

(c) Date when the payment entry in relation to supply of services is recorded in books

of accounts; or

(d) Date on which the payment is credited to supplier’s bank account.

Question 13 Can a particular transaction be a supply and service both?

Answer No, In schedule II of CGST Act both Supply and Services are defined separately.

Question 14 Is it required to distinguish whether a particular supply involves supply of goods

or services?

Answer Yes. The CGST Act, 2017 specifies certain provisions separately for supply of goods

and supply of services viz., Section 12 and Section 13 provides for ascertaining time

of supply of goods and time of supply of services respectively; similarly separate

provisions have been specified for ascertaining place of supply of goods and place of

supply of services. Further, the rate of tax applicable to supply of goods and supply of

services may be different. Accordingly, it is important to distinguish whether a

particular transaction involves supply of goods or supply of services.

Question 15 How to distinguish whether a particular supply involves supply of goods or

services?

Answer The Schedule II appended to CGST Act, 2017 enlists the activities which are to be

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treated as supply of goods or supply of services. One may refer Schedule II with

reference to Section 7 to classify whether the transaction involves supply of goods or

supply of services.

Question 16 Whether renting of Motor cab is covered under reverse charge?

Answer As per the Notification no .13/2017 dated 28.06.2017, only 9 services are covered

under reverse charge. Rent-a-cab is not included in Reverse charge.

Question 17 What will be the GST rate in case of renting of Motor cab?

Answer As per notification no. 11/2017 (Central Tax) dated 28.06.2017 prescribes the central

rate of GST;

(i) Renting of motorcab where the cost of fuel is included in the consideration

charged from the service recipient, the rate shall be 2.5 percent.

(ii) Rental services of transport vehicles with or without operators, other than (i)

above, the rate shall be 9 percent.

We understand that, the SGST rate shall be same as CGST rates, as indicated above.

Moreover, as per Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017

prescribes the rate of IGST;

(i) Renting of motorcab where the cost of fuel is included in the consideration

charged from the service recipient, the rate shall be 5 percent

(ii) Rental services of transport vehicles with or without operators, other than (i)

above, the rate shall be 9 percent.

Question 18 Will NIT be revised with respect to, taxation clause for future contracts?

Answer Yes, NIT has to be revised as per the provisions of GST.

Question 19 Will evaluation of tenders be done on the basis of Price exclusive of taxes or

Price inclusive of taxes?

Answer Evaluation of Tenders shall be done on total cost basis i.e. Total Landed Cost

(inclusive of taxes and duties, after availing Input Tax(CGST,SGST).

Question 20 What will be the evaluation process in case bidder is a registered service

provider?

Answer In case of registered service provider Basic price will be exclusive of GST, we have

to add applicable GST and deduct eligible Input tax credit for arriving at evaluation

price.

Question 21 What will be the evaluation process in case dealing with unregistered service

provider?

Answer This situation will be covered under Reverse charge mechanism; NCL has to pay tax

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and issue self-invoice.

While evaluating the proposal, the above should be kept in mind and bidder will

quote invoice price without GST and we have to add applicable GST and deduct

eligible Input tax credit for arriving at evaluation price.

Question 22 What are the contents of invoice as per the provisions of CGST Act, and Tax

Invoice rules under GST?

Answer Kindly refer module “General FAQs”.

Question 23 What is the effective date for presenting Invoice as per the Format prescribed by GST ACT and Rules?

Answer All Invoices on or after 01st July 2017 will be issued and accepted as per GST Regime

only.

Question 24 Whether Bio Medical waste treatment services availed by NSC Hospital is

exempt under GST as in existing Service tax?

Answer Yes, services of treatment of Bio medical waste availed by NSC hospital is exempt

from GST.

As per entry no. 75, of notification no 12/2017 of Central Tax (rate) dated

28.06.2017, Services provided by operators of the common bio-medical waste

treatment facility to a clinical establishment by way of treatment or disposal of bio-

medical waste or the processes incidental thereto are leviable to NIL rate of tax.

Question 25 Whether Ambulance services availed by NSC Hospital is exempt under GST as

in existing Service tax?

Answer Yes, services of Ambulance availed by NSC hospital is exempt from GST.

Kindly refer entry no. 74, of notification no 12/2017 dated 28.06.2017 of Central Tax

(rate).

Question 26 What will be the time limit for making payment against invoices?

Answer Payment (Full payment) is to made within 180 days, so user department is to ensure

that Invoice should reach Finance department within the permissible limit as

prescribed by competent authority. `For more details kindly refer FAQ on ITC.

Question 27 What will be the conditions for availing Input tax credit?

Answer Kindly Refer our Module on “FAQs on Input Tax Credit” regarding questions related

to Input tax credit.

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FAQs For Bill Passing Officer

Question 1 What are the precautions to be taken by the bill passing officer before

processing the bill of supply of goods and/or services for payment?

Answer On receipt of invoice or other similar document for processing from user section,

verify the following:

i. Whether the Invoice/Debit Note/Bill of Entry issued by the supplier of

goods or services or both is in accordance with the provisions of GST

ii. Where invoice is for Transportation service verify the additional conditions

as per Rule 8

iii. Whether transaction/taxable valuation is made as per Section 15.

iv. Whether correct amount of GST (CGST,SGST/ IGST) has been charged

v. Whether supply/service is eligible for ITC

vi. Verify the date of Invoice for ensuring payment within 180 days.

vii. Declaration from supplier regarding payment of tax and filing of GSTR

returns is obtained or not.

viii. Proper accounting for smooth filing of GSTR Return.

Question 2 What would be the value of supply of goods/services?

Answer As per the provisions of Sec. 15 of CGST Act along with Determination of value of

Supply Rules, “Where the supplier and the recipient (i.e. NCL) of the supply are not

related and the price is the sole consideration for the supply, value of supply of

goods or services or both shall be the transaction value, which is the price actually

paid or payable for the said supply of goods or services or both [Sub-section (1) of

Sec.15]

Question 3 Which items are to be included in Transaction Value of supply?

Answer Following items are to be included:

(i) Basic Price

(ii) Other agreed charges as per terms of supply order/LOA

(iii) any taxes, duties, cesses, fees and charges levied under any law for the time

being in force other than CGST / SGST / UTGST / IGST / GST Cess

(iv) amount paid by recipient (NCL) on behalf of supplier in relation to supplies

made and not included in the price actually paid or payable

(iv) incidental expenses, including commission and packing charges charged by the

supplier at the time of, or before delivery of goods or supply of services

(v) interest or late fee or penalty for delayed payment of any consideration

(vi) subsidies directly linked to the price excluding subsidies provided by the

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Central Government and State Governments

Question 4 Which items are to be excluded from Transaction value of supply?

Answer The value of the supply shall not include:

i. 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.

ii. any discount which is given after the supply has been effected, if-

a. 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

b. input tax credit as is attributable to the discount on the basis of document

issued by the supplier has been reversed by the recipient of the supply.

Question 5 As per the prevailing practice the user department deducts some amount

directly from the invoice of supplier / service provider on account of shortfall in

quality of goods / services supplied or due to any other reason. Whether the

same practice will continue under GST regime? What will be the treatment, if

user department accepts the invoice at a lower value than the Invoice Value?

Answer No, this practice will not work under GST regime,

Under GST regime ;

(i) supplier / service provider has to issue Credit Note in accordance with Sec.34

(iii) input tax credit as is attributable to such deduction on the basis of

document issued by the supplier shall be reversed by the recipient (i.e. NCL) of the

supply

Question 6 What precautions are to be taken to ensure that ITC can be availed by NCL?

Answer Kindly refer to the FAQ on ITC.

Question 7 Why it is necessary to obtain self-declaration from supplier/service provider

that they have file GSTR Return and deposit GST

Answer If the supplier fails to deposit GST or fails to file GST Return, NCL would not be

able to avail the benefit of ITC, until supplier or service provider file their GSTR

Return and deposit entire tax.

Therefore, it is necessary to take declaration from supplier that he has already or he

will deposit GST and file return, because in case of wrong declaration( when inspite

of declaration , supplier has not deposit the tax or failed to file the GSTR), necessary

action may be instituted against him due to ITC loss incurred by NCL

Question 8 How to ensure supplier / service provider has deposited the GST ?

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Answer We cannot ensure whether supplier has deposited GST or not and whether he has

filed the return, until it is auto-populated in our GSTR 2A.

However, the following documents can be taken from supplier to minimize the risk

of non-availability of ITC:

(i) Self-declaration in prescribed format

(ii) Copy of gstr 1 and gstr 3

(iii) Copy of challan

Question 9 What are the consequences if the supplier has not deposited GST on supplies

made to NCL or fails to upload the details of such supplies in his GSTR 1?

Answer In such case, amount to the extent of GST may be withheld from supplier’s bill.

Question 10 What would happen if the payment of bill could not be made within 180 days

from the date of invoice due to fault of supplier/service provider?

Answer When the payment of bill could not be made within 180 days due to fault of supplier

/ service provider due to reasons such as the invoice is not in prescribed format or

other reasons, then withhold the amount of tax (GST) along with interest(if any

suffered by NCL) while making payment to supplier.

Question 11 Where the payment of invoice is made partially, whether ITC would be

available?

Answer As per Rule 37(1) of CGST ACT,2017, -(1) A registered person, who has availed of

input tax credit on any inward supply of goods or services or both, but fails to pay to

the supplier thereof, the value of such supply along with the tax payable thereon,

within the time limit specified in the second proviso to sub-section (2) of section 16,

shall furnish the details of such supply, the amount of value not paid and the amount

of input tax credit availed of proportionate to such amount not paid to the supplier in

FORM GSTR-2 for the month immediately following the period of one hundred and

eighty days from the date of the issue of the invoice:

Provided that the value of supplies made without consideration as specified in

Schedule I of the said Act shall be deemed to have been paid for the purposes of the

second proviso to sub-section (2) of section 16. (For details kindly refer FAQ on

ITC)

Question 12 What are the activities / supplies covered under Reverse Charge?

Answer Kindly refer FAQ on Reverse Charge.

Question 13 Whether CGST, SGST/UTGST and IGST will be simultaneously charged in

the same invoice?

Answer No, bill passing officer has to verify that:

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i. In case of Intra-state supply of goods / services CGST and SGST is charged and

ii. In case of inter-state supply of goods and/or services, only IGST is charged by

the supplier.

(For details, kindly refer FAQ on Sales)

Question 14 What is Intra state supply of goods and / or services?

Answer In simple words, Where the location of the supplier and the place of supply of

goods/services are in the same State or same Union territory, then Supply of goods

and/or services shall be treated as intra-state supply.

Question 15 Whether services availed by NCL will be interstate ?

Answer We understand that the service provider are providing the service at our

location/projects/mines, thus service availed by NCL will always be covered under

Intra sate supply and CGST and SGST will be levied.

Question 16 What is Interstate supply of goods and / or services?

Answer Following shall be treated as interstate supply of goods/services:

(i) Where the location of the supplier and the place of supply are in––

a. two different States;

b. two different Union territories; or

c. a State and a Union territory,

then supply of goods /services shall be treated to be supply in the course of inter-

State trade or commerce

(ii) Supply of goods imported into the territory of India, till they cross the customs

frontiers of India, shall be treated to be a supply of goods in the course of inter-State

trade or commerce

(iii) Supply of services imported into the territory of India shall be treated to be a

supply of services in the course of inter-State trade or commerce

Question 17 What is the concept of “Input Service Distributor” in context of GST?

Answer “Input Service Distributor” means an office of the supplier of goods or services or

both which receives tax invoices issued under section 31 towards the receipt of input

services and issues a prescribed document for the purposes of distributing the credit

of central tax, State tax, integrated tax or Union territory tax paid on the said

services to a supplier of taxable goods or services or both having the same

Permanent Account Number as that of the said office.

Question 18 What is the Purpose of Input Service Distributor, in context of NCL?

Answer Invoices received in NCL Head Office against the services attributed to projects/HQ

can be distributed to concerned projects through mechanism of 'Input Service

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Distributor’.

We understand that CIL and CMPDIL will raise invoices for Apex charges,

Guarantee fees, service charges, wherein services are availed by all the projects of

NCL and Invoice for CMPDIL charges along with GST is issued to AFM-NCL HQ.

These charges are related to Project as services are availed by the Projects of NCL,

AFM-HQ/Central Accounts will act as ISD and distribute these charges among

Projects by raising ISD Invoice.

Question 19 What is current practice for distribution of above expenses?

Answer We understand that CIL and CMPDIL raise invoice for Apex charges, Guarantee

fees, service charges, and CMPDIL charges along with service tax to AFM-NCL

HQ, which was subsequently apportioned by AFM-HQ/Central Accounts, to all

projects/units on the proportion of Production through Debit Note without service

tax. Due to centralized Registration, Cenvat credit is availed by NCL HQ directly.

Question 20 Whether the same practice will continue in GST Regime?

Answer Under GST regime, MP and UP is having separate Registration. GST Credit will be

apportioned among all projects. As per the policies of NCL, Charges may be

apportioned on the basis of Production; However GST credit will be apportioned

on the basis of Turnover. ISD invoices will be issued instead of debit notes.

Question 21 Whether it is mandatory to make the apportionment of GST credit on

Turnover basis?

Answer Yes, as per the Provision of section 20 (2) (e), the credit of tax paid on input services

attributable to all recipients of credit shall be distributed amongst such recipients

and such distribution shall be pro rata on the basis of the turnover in a State or

turnover in a Union territory of such recipient, during the relevant period, to the

aggregate of the turnover of all recipients and which are operational in the current

year, during the said relevant period.

Further as per rule 4 of Input Tax Credit Rules Distribution of input tax credit will

be on the basis of turnover.

Question 22 Whether the current accounting practice in respect to ITC will continue?

Answer No, the existing accounting codes for taxation will be non-operating w.e.f.

01.07.2017, the details of existing accounting codes which are going to be abolished

are as under :

S.no. Description Account Codes

1. Liability for Clean Energy cess 810762

2. Sales Tax on Coal-Central 810701

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3. CST on Stores/Scrap Sale 810703

4. Sale Tax on Cess- Central 810754

5. Entry Tax on Coal Sale 810757

6. Provision for Entry Tax 820300

7. Cenvat Receivable Service Tax 340315

8. Cenvat Receivable -Deferred 340317

9. Cenvat Receivable 340320

10. Advance Excise Duty 340550

11. Excise Duty on Coal 810763

12. Excise Duty- Stowing 810708

13. Service Tax- Reverse Charge 810735

14. Swach Bharat Cess- Service tax 810949

15. Krishi Kalyan Cess-Service Tax 810951

16. VAT Receivable 340316

17. Sales Tax on Coal - State 810702

18. S.T. Stores/ Scrap-State 810704

19. Commercial Tax 810740

20. VAT payable 810745

21. Sale Tax on Cess- State 810755

22. ST on Sale of Tender paper 810933

23. ST Work Contracts- State 810733

Question 23 What will be new accounting code for GST?

Answer CIL has provided the following new codes for GST Accounting:

S.no. Description Account Codes

1 Liability on CGST on Coal 810766

2 Liability on SGST on Coal 810767

3 Liability on IGST on Coal 810768

4 Liability of GST Compensation Cess on Coal 810770

5. Liability on CGST on Scrap 810775

6. Liability on SGST on Scrap 810776

7. Liability on IGST on Scrap 810777

8. Liability on CGST on Services 810778

9. Liability on SGST on Services 810779

10. Liability on IGST on Services 810780

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11 Liability on IGST on DTI 810781

12 Liability of CGST on Tender Paper 810782

13 Liability of SGST on Tender Paper 810783

14 Liability on IGST on Tender paper 810784

15 Input Tax Credit of CGST on Input -Eligible 340132

16 Input Tax Credit of SGST on Input- Eligible 340133

17 Input Tax Credit of IGST on Input- Eligible 340134

18 Input Tax Credit of CGST on Input- Ineligible 340141

19 Input Tax Credit of SGST on Input- Ineligible 340142

20 Input Tax Credit of IGST on Input- Ineligible 340143

21 Input Tax Credit of CGST on Input Services -Eligible 340135

22 Input Tax Credit of SGST on Input Services - Eligible 340136

23 Input Tax Credit of IGST on Input Services - Eligible 340137

24 Input Tax Credit of CGST on Input Services -

Ineligible

340144

25 Input Tax Credit of SGST on Input Services -

Ineligible

340145

26 Input Tax Credit of IGST on Input Services –

Ineligible

340146

27 Input Tax Credit of CGST on Capital Goods -Eligible 340138

28 Input Tax Credit of SGST on Capital Goods - Eligible 340139

29 Input Tax Credit of IGST on Capital Goods - Eligible 340140

30 Input Tax Credit of CGST on Capital Goods -

Ineligible

340147

31 Input Tax Credit of SGST on Capital Goods -

Ineligible

340148

32 Input Tax Credit of IGST on Capital Goods –

Ineligible

340149

33 Input Tax of Credit of GST-Ineligible 004808

34 Input Tax Credit of GST Compensation Cess 340131

35 CGST Advance 340551

36 SGST Advance 340552

37 IGST Advance 340553

38 UTGST Advance 340554

39 GST Compensation Cess advance 340555

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40 CGST Advance paid under protest 340622

41 SGST Advance paid under protest 340623

42 IGST Advance paid under protest 340624

43 GST Compensation cess Advance paid under protest 340626

44 CGST refundable 340627

45 SGST refundable 340628

46 IGST refundable 340629

47 GST Compensation cess refundable 340631

48 CGST TDS 810771

49 SGST TDS 810772

50 IGST TDS 810773

Question 24 Why separate Accounting codes are required for ineligible credit ?

Answer As we have to segregate the eligible and ineligible Input Tax Credit from GSTR-2A

(which includes eligible as well ineligible Input Tax Credit), which will be auto

populated. If we have separate schedules for eligible Input Tax Credit as well as

ineligible Input Tax Credit, segregation can be done immediately without any

hurdle.

Question 25 What will be done with ineligible Cenvat Credit, appearing in relevant

accounting code as mentioned above?

Answer At the end of the month the same will be transferred to revenue codes (004808,

Input Tax credit of GST Ineligible) by passing Journal Vouchers.

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