Skip navigation
All Places > Discuss > Current Issues > GST > Blog
1 2 3 Previous Next

GST

34 posts

In this blog, we look at a query on possible carry forward of accumulated CENVAT credit as CGST credit, and no SGST credits while SGST would be payable on future supplies.

 

Query:

As part of the transitional credits, unutilised CENVAT credits would be carried forward as CGST credit only, and if the company has local supplies (intra-State), it would be liable to pay CGST and SGST. While it would use the balance of credit in CGST, SGST would be a cash outflow - how should one manage this?

 

Response:

Yes, the above situation would result in a case of carry forward of CGST credit balance and a payable (cash outflow) of SGST. This would arise only in cases where the company would effect local / intra-State supplies. Nevertheless, this would not apply if the purchases during the post GST period (till such time the CGST balance is exhausted) are largely inter-State. In such a situation, the credit that would accrue on inward supplies would be IGST which can be fully utilised for payment of SGST on local supplies – this would also ensure that the CGST balance does not further accumulate.  

 

Additional Comments: Would not apply if the supplies are inter-State, since such supplies would be liable to IGST and CGST balance can be completely utilised for payment of IGST.

 

Author: N R Badrinath

 

 With GST set to be implemented, www.withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business. To read more such curated content or to give us your valuable feedback head to our webpage www.withdia.com, or download our Android/iOS app on your phone and have all this knowledge accessible on the go!

In this blog, we look at a query on centralised registration and carry forward of CENVAT Credit.

 

Query:

The company has obtained a Centralized Registration under the Service Tax law. The ST-3 return for the period ended 31st March 2017 has been filed under this registration. The company will also file the short period return upto the day immediately preceding the appointed day under this registration. However, since the company has development centres in Bangalore, Chennai, Hyderabad, Pune, Trivandrum, Kolkatta, Gurgaon, Noida, and Delhi, the company will be obtaining GST registration in the States of Tamil Nadu, Telangana, Maharashtra, Kerala, West Bengal, Haryana, Uttar Pradesh and Delhi.  How will the CENVAT Credit appearing in the short-period return be apportioned and carried forward under various State-wise registrations under GST?

 

Response:

The whole of the CENVAT credit carried forward in the short period return filed in Bangalore – centralised registration will be allowed to be carried forward as CGST in the GST registration in the State of Karnataka. 

While the law provides that such credit can be transferred to any other registered persons under GST, having the same PAN as that of the Bangalore registration, there is no prescribed mechanism for apportionment to various States, of CENVAT credits appearing in the short period return filed under the current centralized service tax registration.

 

Author: P V Srinivasan

 

 

 

With GST set to be implemented, www.withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business. To read more such curated content or to give us your valuable feedback head to our webpage www.withdia.com, or download our Android/iOS app on your phone and have all this knowledge accessible on the go!

In this blog, we look at a query on registration requirement for a start-up. 

 

Query:

 

A Start-up company, with its registered office in the State of Karnataka, engaged in a business which involves innovation, development, deployment or commercialization of mobile Apps driven by information technology has commenced commercial operations during FY 2016-17. The users download the APP on their mobile phones on payment of an annual subscription / licence fee. The turnover of the company for the year is not likely to cross Rs 20 lakhs in a financial year. Is the company required to obtain a registration?

 

Response:

 

The Start-up company, no doubt, is supplying a service for a consideration. However, the aggregate turnover in the financial year does not exceed Rs 20 lakhs, which is the threshold limit upto which a supplier is not required to obtain registration. Hence, the Start-up company would not ordinarily be required to obtain registration under the Central Goods and Services Tax Act, 2017 [CGST Act] and the Karnataka State Goods and Services Tax Act, 2017 [SGST Act].

However, clients of the Start-up company are mobile users. It may be possible that the address on record of the location of such users is another State i.e. other than Karnataka. In such an event, there would an inter- State supply of service from Karnataka. Since the Start-up company is making an inter-State supply, it would be required to obtain registration under the CGST Act and the SGST Act in Karnataka and the threshold of Rs. 20 lacs indicated above would not be applicable.

Additional comments: Where the Start-up company referred above may not be required to keep a record of the App users. The Start-up company merely establishes a payment gateway for collecting the annual subscription fee.

It is unlikely that the nature of services provided by the Start-up company could be carried on without establishing a complete identity of any App user including his address. Thus, the address would be available on record on the supplier of service i.e. Start-up company.

Nevertheless, if it is possible to render the service without seeking the address of the App users, then the address of the location of service recipients i.e. App users, would not be available on the record of the supplier. In such circumstances, the place of supply would be the location of the supplier of services i.e. the registered or fixed establishment of the Start-up company. The supply of services will be intra-State i.e. within the State of Karnataka. Since the aggregate turnover in a financial year is not exceeding Rs 20 lakhs in the financial year, the Start-up company need not seek a registration. 

https://withdia.com/dia.html#/home?contentId=12883

Author: P V Srinivasan

 

With GST set to be implemented, www.withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business. To read more such curated content or to give us your valuable feedback head to our webpage www.withdia.com or download our Android/iOS app on your phone and have all this knowledge accessible on the go!

 In this blog, we look at a query on registration requirement for a start-up. Log in to withdia.com to read more related Q&A on the topic.

 

Query:

A Start-up company, with its registered office in the State of Karnataka, engaged in a business which involves innovation, development, deployment or commercialization of mobile Apps driven by information technology has commenced commercial operations during FY 2016-17. The users who download the APP on their mobile phones are located across India. Will a Start-up company be required to obtain registration in each of the States of India for the reason that the App users are spread all over India?

 

Response:

GST law in India is destination based. However, the administration through registration and consequential compliance are only in the origin State. Since the Start-up company is providing the service wholly from a location within Karnataka, the requirement of obtaining a registration arises only in the State of Karnataka, from which supplies are made.

 https://withdia.com/dia.html#/home?contentId=12887

 Author: P V Srinivasan

With GST set to be implemented, withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business.To read more such carefully curated content or to give us your valuable feedback head to our webpage, www.withdia.com. Or download our Android/iOS app on your phone and have all this knowledge accessible on the go!