E-Book

INDEX

S.No. CONTENTS PAGE NO.

1. Sales Module 1-22

2. Services provided/availed and Scrap Sale 23-47

3. Reverse Charge Mechanism 48-60

4. GST on Payments to Employees 61-65

5. Input Tax Credit (ITC) 66-86

6. Input Service Distributor (ISD) 87-91

7. Anti-Profiteering Provisions Under GST 92-106

8. GST TDS 107-118

9. E-way Bill 118-131

10. General Provisions (Registration, Invoice and

Tender Evaluation)

132-136

11. Procurement Module 137-140

12. CMC Module 141-146

13. Other than Procurement and CMC 147-152

14. Bill Processing Module 153-161

15. Accounting of GST 162-178

16 Impact of GST on working capital of coal

industry

179-184

DISCLAIMER

The information in this booklet is intended only to provide a general

overview and is not intended to be treated as legal advice or opinion.

For greater details, it is requested to refer to the respective

CGST/SGST/UTGST/IGST Acts. The booklet is compilation of

queries raised by projects/vendors/service provided time to time and

refers to provision of CGST/SGST Act.

Your valuable Comments and Suggestions and feedback on FAQ will

be highly appreciated at: nclcorptax1@gmail.com,

hemant.ncl@nic.in, hemant@coalindia.in. This is the Second edition

of Book and revised edition will be issued after the valuable

comments/suggestion/feedback of the readers or

modification/amendments/further enactments in this regard.

1

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 is 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?

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

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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 is the status in respect of taxation of above commodities after introduction of

GST?

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

commodities.

Question 6 Whether Royalty on Coal is 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 is subsumed in GST. GST is levied on Royalty as the Royalty

is part of sale price.

Question 7 Whether DMF on Coal is subsumed in GST?

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

levied on DMF as the DMF is part of sale price..

Question 8 Whether NMET on Coal is subsumed in GST?

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

levied on NMET as the NMET is part of sale price..

Question 9 Whether SED on Coal is subsumed in GST?

Answer Yes, SED on coal is 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 Ministry of Coal vide letter no. PLA-28018/10/2017 PLA dated 28.06.2017.

Question 10 Whether Clean Environment Cess on Coal is 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 release

dated 07.06.2017).

However a new Cess GST Compensation Cess is levied on Coal @ Rs. 400 per tonne.

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

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Answer No, SSADA 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 is levied on SSADA.

Question 12 Whether MPGATSVA on Coal is 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 is levied on

MPGATSVA.

Question 13 Whether Forest Transit fee on Coal is 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 is 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 is 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 is the location of NCL for Coal

supply?

Answer Location of Supplier of service has been defined in section 2(71) of CGST Act and

Section 2(15) of IGST Act. However the term location of supplier of goods has been

defined neither in CGST Act nor in IGST Act. Therefore, the location of goods/coal will be

considered as the location of supplier. Thus the Mines/Weighbridge from where the coal is

proposed to dispatch will be treated as Location of NCL.

Question 17 What is the place of supply for coal?

Answer

We understand that Coal is movable goods and sale of coal can not be completed without

moment of coal.

As per the provision of section 10(1) (a) of IGST Act, 2017, where the supply of goods

involves moment of goods, place of supply of goods, shall be location of goods at the time

at which movement of goods terminates for delivery to the recipient.

For example:

4

Weighbridge Delivery of

goods

Place of supply

is 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 In Pre GST Era, this situation is well known as E-1 sales. However concept of E-1 sale has

been omitted in GST Era.

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

person(First buyer) to a recipient (by way of instruction or transfer of documents of title to

goods or otherwise), the place of supply is 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 Buyer 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

Applicabi

lity

Remark

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

of buyer

is treated

as place

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

ST

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

Jayant Project

Located in M.P.

A

B

Bill to

Ship to

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

(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 levied on an intra-State supply?

Answer As per the provision of Section 9 of the CGST Act, 2017, intra-State supplies attract

CGST & SGST.

As per the Provision of Section 7 of UTGST Act, 2017, intra-State supplies effected by a

taxable person located in Union Territory (within the Union Territory) is liable to CGST &

UTGST.

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

Answer As per the Provision 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. Provisions of section 15 is equally applicable on all kinds of 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 furtherance of

business;

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

consideration; and

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

also be taxable.

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Question 23 What is the continuous supply of goods?

Answer As per the Provision of section 2(32) of CGST Act, continuous supply of goods" means a

supply of goods which is provided, or agreed to be provided, continuously or on recurrent

basis, under a contract, whether or not by means of a wire, cable, pipeline or other

conduit, and for which the supplier invoices the recipient on a regular or periodic basis

and includes supply of such goods as the Government may, subject to such conditions, as

it may, by notification, specify;

Question 24 Whether the supply of Coal under E-Auction is covered under continuous supply of

goods?

Answer It is given to understand that under E-Auction sale is (DO cum ARV) Delivery order cum

Advance Receipt Voucher is issued to successful bidder for allotment of coal. As per the

term of (DO cum ARV), coal buyer has to lift the coal from allocated dispatch point. Coal

Buyer lifts the coal through their own lorry/truck and makes various trips in a day. As per

the terms of E-Auction, DO cum ARV is valid for 45 days which indicates that the coal

buyer has to lift the allocated quantity within 45 days from the issue of DO cum ARV.

Schedule of lifted and unlifted quantity is maintained after each lifting through

weighbridge software. A statement is generated at the end of month to determine the

unlifted quantity.

It appears that supply of coal is provided continuously under the contract (DO Cum ARV)

and periodic statement is prepared for lifted as well as unlifted quantity, thus the supply of

coal will be treated as continuous supply of goods as defined in section 2(32) of CGST

Act, 2017

Question 25 Whether the supply of Coal under FSA/Linkage is covered under continuous supply

of goods?

Answer It is given to understand that under Fuel Supply Agreement (FSA), NCL is having supply

agreement with power producing companies for supply of coal for long period. At the

beginning of each month mine wise quantity of coal is allocated, which can be modified at

any time due to change in circumstances. Coal buyer lifts the coal through

Rail/MGR/Road/conveyer belt. A statement is generated at the end of each month to

determine the lifted as well as unlifted quantity against the allocated quantity.

It appears that supply of coal is provided continuously under long term contract (FSA) and

periodic statement is prepared for lifted as well as unlifted quantity, thus the supply of

coal will be treated as continuous supply of goods as defined in section 2(32) of CGST

Act, 2017

Question 26 What is the time of supply for goods?

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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 by the supplier; or

(b) last date on which supplier of goods require to issue 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 27 What is difference in normal supply of goods and continuous supply of goods?

Answer In normal supply of goods, Invoice is issued at the dispatch point for each and every

dispatch. However in case of continuous supply of goods, Consolidated periodically

(weekly, Monthly etc) Invoice can be issued against the supply made in particular period.

However on each and every dispatch, delivery challan is issued.

Question 28 Whether supply of goods or services without consideration is liable to tax?

Answer The activities enumerated in Schedule I of CGST Act will qualify as supply even if made

without consideration. Accordingly, such supplies in the absence of consideration are also

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.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 person from a related person or from any of his other

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

Question 29 Whether the activities describe in schedule I is having any implication on our

Industry?

Answer Yes, the Clause 2 of schedule I is applicable on the following transaction;

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

2) Depot Transfer to Projects/mines located outside state

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3) Transaction between subsidiaries for reimbursement of Expenses/stock transfer

against Book Adjustment.

4) Apex Charges of Coal India Limited (However payment is made through Book

Adjustment)

5) Guarantee fee charged by Coal India Limited (However payment is made through

Book Adjustment)

6) Transactions with CMPDIL

Question 30 Whether transfer of Coal to another branch located outside the State is taxable?

Answer Yes, transfer of coal from one Mine to another mine located outside the state is taxable

event in GST. Transferor mine/project 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 (GSTIN) would not be treated as supply.

Question 31 What is 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 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 32 What is the price of coal in case of interstate stock transfer of coal?

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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 is levied @ 5% on Taxable value so arrived.

Question 33 Bina, Dudichua and Khadia Mines are having production from MP mines as well as

UP Mines. All dispatch of Bina, Khadia is made from dispatch point located in Uttar

Pradesh. Suppose, sales from above mines are made out of mines of coal produced

from MP, what shall be the treatment of tax deposited in MP exchequer like

Royalty, DMF, NMET, MPGATSVA, Transit fee?

Answer In this case, Actual amount of statutory levies like Royalty, DMF, NMET, MPGATSVA,

Transit fee is deposited in MP exchequer is taken as reimbursement of tax from coal buyer

and applicable GST is deposit on same.

Question 34 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 shall the invoice be generated and what is

the treatment of taxes which has already been deposited with MP Tax Authority?

Answer A separate format of invoice is prepared for this kind of situation. Project has to mention

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) is levied and for remaining MP Produced quantity reimbursement of Royalty,

DMF, NMET, MPGATSVA, Transit fee is taken in same invoice and afterwards, CGST,

SGST or IGST as the case may be will levied.

Question 35 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 under MP zone and coal

is transferred 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 (Lower grade of 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 are

borne by NCL as cost?

Answer Whatever the Statutory levies other than GST have been deposited with Madhya Pradesh

10

exchequer due to production of coal from Madhya Pradesh, Actual amount of statutory

levies is taken as reimbursement of statutory levies from coal customer. A separate

Invoice series has been designed for such kind of situations.

Question 36 When will be Taxable event and its relevance?

Answer Taxable event determines the liability to pay tax under GST regime. As per the provision

of section12 of the CGST/SGST Act, (taxable event) liability to pay tax on goods shall

arise at the Time of supply.

Question 37 What is Time of Supply?

Answer 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 38 When is the taxable event for supply of Coal?

Answer Taxable event or liability of GST for supply of coal will arise from the due date of issue of

invoice.

Question 39 What is the time period within which invoice has to be issued for supply of Goods?

Answer As per Section 31(1) 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 40 What is the time period within which invoice has to be issued in continuous supply of

goods?

Answer As per the provision of Section 31(1) of CGST/SGST Act, In case of continuous supply of

goods, where successive statements of accounts or successive payments are involved, the

invoice shall be issued before or at the time each such statement is issued or, as the case

may be, each such payment is received.

Question 41 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

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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 42 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 43 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;

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;

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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 44 What is HSN code of Coal?

Answer HSN code of Coal is 27011990.

Question 45 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.

S.No Annual Turnover in the preceding

Financial Year

Number of Digits of

HSN Code

(1) (2) (3)

1. Upto rupees one crore fifty lakhs Nil

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 is mandatory to mention 4 digit of HSN code (i.e., 2701) in Coal Sale

Invoice.

Question 46 What is the taxable event for NCL in case of Spot and Forward E-Auction made

through Road sale/Rail mode?

Answer It is decided in the meeting held on 17.11.2017 the following will be taxable event for Spot

and Forward E-Auction Road sale/Rail

Taxable event Time of issue of invoice

At the end of month, when schedules

of lifted and unlifted quantity is

prepared or expiration of Delivery

order whichever is earlier

a) A single GST invoice will be issued to

coal buyer at the end of each month

against the supply made in that month.

Delivery challan will be issued at the time

of removal for each trip/truck/rack.

b) Where the whole quantity against the

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Delivery order has been lifted within a

month, then invoice will be issued at the

time of completion of Delivery order.

Question 47 What is the taxable event for NCL in case of Linkage/FSA Road sale?

Answer It is decided in the meeting held on 17.11.2017 the following will be taxable event for

Linkage/FSA Road sale for NCL :

Taxable event Time of issue of invoice

At the end of month, when schedules of

lifted and un-lifted quantity is prepared

a) A single GST invoice will be

issued to coal buyer at the end of

each month against the supply

made in that month.

b) Delivery challan will be issued at

the time of removal for each

trip/truck/rack

Question 48 What is the taxable event for NCL in case of coal sale made under FSA Rail

Sale/MGR Sale for NCL?

Answer It is decided in the meeting held on 17.11.2017 the following will be taxable event for

FSA Rail Sale/MGR Sale for NCL :

Taxable event Time of issue of invoice

Removal of Coal Rake wise single Invoice for each rake

Question 49 What is the taxable event for Rope way and belt Sale for NCL?

Answer It is decided in the meeting held on 17.11.2017 the following will be taxable event for

Rope way and belt Sale for NCL:

Taxable event Time of issue of invoice

At the end of day, when schedules of

transfer of coal is prepared

A consolidated single Invoice will be

issued at the end of day against the

quantity lifted in a day

Question 50 What is the taxable event for Interstate coal transfer from one Project to another

project having separate GSTIN?

Answer It is decided in the meeting held on 17.11.2017 the following will be taxable event for

Interstate coal transfer from one Project to another project having separate GSTIN:

Taxable event Time of issue of invoice

At the end of month, when schedules of

transfer of coal from one mine to

another mine is prepared

a) A single GST invoice will be

issued to transferor mine at the end

of each month against the supply

made in that month.

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b) Delivery challan will be issued at

the time of removal for each

trip/truck/rack

Question 51 What is the value of taxable supply (Transaction value) for 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 52 What is transaction value?

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

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

a) Basic Value

b) High capacity loading Charges

c) Sizing Charges, if any

d) Transportation Charges, if applicable

e) STC (Surface Transportation charges)

f) Royalty

g) DMF

h) NMET.

i) SSADA, if applicable

j) Forest Transit Fees, if applicable

k) MPGATSVA, if applicable

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

Question 54 What is 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.

15

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 on to any other

person.”

Question 55 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 is last date to issue the credit note.

Answer The credit note is to be issued immediately on receipt of price revision but not later than

September of the financial year following the F.Y. in which supply was made or the date

of Annual filing of return whichever is earlier.

Question 56 Whether credit Note is issued along with the benefit of SGST, CGST or IGST?

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

newly entered FSA in GST Era, there is provision for issuance of Credit Note along with

GST Credit unlike erstwhile FSA. No amendment is made in relevant clause of FSA till

date.

It is noted that in Pre GST Era, some projects has issued credit note along VAT/Sale Tax

credit and commercial tax Authority has rejected the credit note on the ground that there is

no provision in FSA to issue Credit Note along with statutory levies. The issue of whether

credit note can be issued along with VAT/Sale Tax credit is subjudice and pending before

Hon’ble Jabalpur High Court.

It is pertinent to mention here that, as per the present practice, we are issuing credit note

only for the basic price without statutory levies.

Considering the above facts, Competent Authority of NCL has decided that concerned

Project will issue credit Note strictly as per the provision of respective FSA

Question 57 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 following the end of F.Y. in

16

which supply is made.

Thus in case credit Note is issued along GST credit; it cannot be issued after the end of

September of the following financial year of coal dispatch. In this case credit note without

GST credit can be issued. In case Credit Note is issued without GST Credit, it can be

issued at any time.

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

Thus,there is no hurdle to issue credit note even after September following the F.Y. in

which supply is made. However the same can be recorded in GSTR-1.

Question 58 Whether tax liability would be reduced on issue of a Credit Note?

Answer Yes, tax liability can be reduced on issue of credit note 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 not be issued 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 59 What is the treatment in case of grade upgradation of Coal?

Answer In case of grade upgradation of Coal, Debit Note is to be issued as per the provision of

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

Question 60 Whether Single Debit/Credit Note can be issued for all kind of adjustment for

disputed period?

Answer Single credit note/Debit Note can be issued against all adjustment for disputed period.

However in NCL we have adopted practice to issue separate debit note/credit note for each

adjustment.

Question

61 Whether the condition of issuance of Debit note on or before filing the annual return

or before September end of F.Y. following the year in which supply is made, is

applicable for issue of debit note?

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

or before September month of F.Y. following the F.Y. in which supply is made or before

filing the annual return.

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

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

17

which debit note is issued and the tax lability shall be adjusted in such manner as may be

prescribed.

Question

62 What is 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:

Question 63 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 is Payable on unsettled pending advances on the last day of

month. However CBEC vide Notification number 66/2017 dated 15.11.2017 exempted all

tax payer from payment of tax on advance received in case of supply of goods.

Thus, no GST is payable on advance received on or after 15.11.2017 for supply of coal

However issuance of DO cum Advance Receipt voucher against the advance received

for E-Auction and Advance receipt voucher for advance received for FSA sale will

continue.

Question 64 GST payment against advance received for sale of coal is abolished w.e.f 15.11.2017

vide notification number 66/2017 dated 15.11.2017. Is there is any requirement to

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issue ARV against advance received on or after 15.11.2017

Answer CBEC vide notification number 66/2017 dated 15.11.2017 provides exemption from

payment of tax on advance received in case of supply of goods. However the concept of

issue ARV has not been rescinded.

Thus, in case of advance received on or after 15.11.2017, it is obligatory to issue ARV as

per the provision of section 31(3)(d) without GST amount. At NCL practice to issue DO

Cum ARV or Advance Receipt voucher will continue.

Question 65 Whether GST is payable on advance received against service on or after 15.11.2017

Answer CBEC vide Notification number 66/2017 dated 15.11.2017 exempt all tax payer from

payment of tax on advance received in case of supply of goods.

The above notification provided the relaxation to pay GST on advance payment received

against goods. Thus GST is payable on advance received against service on or after

15.11.2017.

Question 66 What is 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

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supply.

Question 67 How is the Advance Receipt voucher issued when nature of the supply is not

determinable at the time of receipt of advance?

Answer As per Rule 50 of CGST Rules, if the nature of supply is not determinable at the time of

receipt of advance; the same shall be treated as inter-state supply and IGST may be levied

on this transaction.

Question 68 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 69 Suppose, during the month we have to supply 10,000 tonne of Coal under FSA sale,

however advance is received for 6000 tonne. What is the time of supply?

Answer CBEC vide notification number 66/2017 dated 15.11.2017 provides the relaxation to pay

GST on advance payment received against goods.

Thus, time of supply for whole 10,000 tonee of coal will be date of issue of Invoice u/s 31,

accordingly GST will be payable after issuance of invoice.

Question 70 Will GST Compensation Cess is levied on reject/ungraded coal?

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

Question 71 Will GST compensation Cess be levied on Advance Receipt?

Answer CBEC vide notification number 66/2017 dated 15.11.2017 provides the relaxation to pay

GST on advance payment received against goods. Thus no cess is payable at the time of

receipt of advance.

Question 72 Suppose Coal is supplied in pre GST Era and corresponding levies Excise Duty, VAT

& other statutory levies has already been deposited in Pre GST Era. However Coal

sampling report is received in GST Era grade of coal is upgraded. What is 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;”

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

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

Question 73 What if in above case, sampling report results in grade slippage?

Answer Section 142 (2) (b) deals with such 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 74 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 Refund Voucher as per the provision of section 31(3)(e ) read with Rule 51 will

be issued.

Question 75 What is 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;

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

5;

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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 76 What is the treatment of unexpired DO issued under existing tax laws, there is still

un-lifted quantity?

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

reduction of levies, if any refund arise the same is refunded immediately.

Question 77 Whether same invoice series can be used for scrap sale other than coal?

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

Question 78 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

Question 79 Who will issue E-way Bill for coal sale

Answer

Coal Buyer or their transporter will arrange E-way Bill on Coal dispatch. NCL will not

responsible for any action taken by CGST/SGST Authority on coal buyer or their

transporter for noncompliance of E-way Bill rules.

Kindly refer the E-way Bill chapter for detail

Question 80 As the supply of coal against DO or FSA sale is covered under continuous supply of

goods and periodic invoice is issued, what will be relevant documents for generation

of E-way bill?

Answer

Truck wise/rack wise delivery challan is issued at the dispatch point in case of

continuous supply. It is informed that E-way bill can be generated on the basis of

delivery challan issued at the dispatch point.

Question 81 As per the terms of FSA, if coal buyer fails to make payment, they are liable to pay

interest. Whether the interest charged from coal buyer will attract GST, if yes then

what will be Rate of GST?

Answer As per the provision of section 15(2)(d) interest or late fee or penalty for delayed payment

22

of any consideration for any supply will be included in value of supply(Transaction

value). The same will attract GST with same rate as applicable on original supply against

which interest is being received for delay in payment.

Thus Interest charged for delay payment from FSA supplier will attract GST with same

rate as applicable on coal i.e 5%.

Question 82 What is Time of supply in case of Interest or late fee or penalty charged for delayed

payment?

Answer As per the Provisions of section 12(6) of CGST Act, 2017, the time of supply to the

extent it relates to an addition in the value of supply by way of interest, late fees or

penalty for delayed payment of any consideration shall be the date on which the

supplier receives such addition in value.

Thus the time of supply for interest or late fee or penalty charged for delay payment will

be the date on which the same is realized from customer.

Question 83 In case of Interest charged for delayed payment, when would the liability of GST

payment arise; from the date of issue of Invoice or from the date of realization of

interest?

Answer It is noted that time of supply for interest charged for delayed payment is the date on

which the supplier receives such addition in value. Thus the liability of GST will arises

from the date of realization of interest not on the day when the interest actually becomes

due.

Question 84 NCL is in process of implementation of Usance Letter of Credit for timely receipt of

coal sale price. Whether the same will make any impact/change in issuance of

invoice/debit note?

Answer

No change is required for issuance of invoice/debit note due to implementation of Usance

Letter of credit.

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Services Provided/Received And Scrap Sale

Question 1 What are the Output Services/ Services Provided by NCL?

Answer NCL is predominantly engaged in extraction and selling of coal from opencast mines in

the states of MP and UP and it is not engaged in providing output services other than

Renting of Immovable property. NCL only provides output service of renting of

immovable properties (viz; residential quarters, shops and other commercial complex).

Question 2 What is time of supply for services under GST?

Answer As per Section 13(2) of the CGST Act,

The time of supply of services shall be the earliest of the following dates, namely:—

Clause Conditions Time of supply

(a) When the invoice is issued within

the period prescribed under section

31(2)

Date of issue of invoice by the

supplier or the date of receipt of

payment, whichever is earlier;

(b) When the invoice is not issued

within the period prescribed under

sub-section (2) of section 31

The date of provision of service,

or the date of receipt of payment,

whichever is earlier; or

(c) in a case where the provisions of

clause (a) or clause (b) do not

apply

The date on which the recipient

shows the receipt of services in

his books of account

(d) Where the supplier of taxable

service 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

relating to such excess amount.

Explanation.––For the purposes of clauses (a) and (b)––

(i) the supply shall be deemed to have been made to the extent it is covered by the

invoice or, as the case may be, the payment;

(ii) “the date of receipt of payment” shall be the date on which the payment is

entered in the books of account of the supplier or the date on which the

payment is credited to his bank account, whichever is earlier.

Question 3 What is the significance of time of supply under GST?

Answer As per section 13(1) of CGST Act 2017, The liability to pay tax on services shall arise at

the time of supply.

24

Question 4 What shall be the time of supply in case of services covered under reverse charge?

Answer The time of supply for services covered under reverse charge shall be :

1) The date of payment

2) The date immediately after sixty (60) days from the date of issue of invoice by the

supplier

whichever is earlier.

Question 5 What is mixed and composite supply under GST?

Answer Composite and mixed supply has been defined under GST Act as follows:

Sec 2 (30) “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 1— Where goods are packed and transported with insurance, the supply of

goods, packing materials, transport and insurance is a composite supply and supply of

goods is a principal supply;

Illustration 2- Combined services of Coal transportation, loading and unloading

Sec 2 (90) “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;

Section 2 (74) “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 1- 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;

Illustration 2- Combined services of collection of garbage from door to door,

transportation of garbage and disposal of garbage.

Question 6 Whether there is any criteria to determine a service is naturally bundled or not?

Answer “‘Bundled service’ means a bundle of provision of various services wherein an element of

provision of one service is combined with an element or elements of provision of any

other service or services.’

No straight jacket formula can be laid down to determine whether a service is naturally

25

bundled in the ordinary course of business. Each case has to be individually examined in

the backdrop of several factors some of which are outlined hereunder.”

Certain illustrative indicators (not determinative but indicative) of bundling of services in

ordinary course of business are –

There is a single price or the customer pays the same amount, no matter how much

of the package they actually receive or use.

The elements are normally advertised as a package

The different elements are not available separately.

The different elements are integral to one overall supply – if one or more is

removed, the nature of the supply would be affected.

If the nature of services is such that one of the services is the main service and the

other services combined with such service are in the nature of incidental or

ancillary services which help in better enjoyment of a main service.

Question 7 What is the difference between Composite supply and Mixed Supply?

Answer

Basis Composite Supply Mixed Supply

Items

supplied

‘If various elements of a bundled

service are naturally bundled in

the ordinary course of business

and cannot be supplied

independently of each other

Various items supplied are not

naturally bundled and items

are supplied independently of

each other.

Main item Principal item Item having highest rate of tax

GST rate

applicable

GST shall be leviable at the rate

applicable on principal item

GST shall be leviable at the

rate applicable on item having

highest rate of tax

Question 8 What is the GST implication on mixed and composite supply?

Answer 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 9 Whether the combined services of Coal transportation, loading and unloading

covered under Composite Services or Mixed Services, as defined in CGST Act?

26

Answer We understand that, the combined services of Coal Transportation, Loading and

Unloading may be covered under Composite services as defined under Section 2(30) of

CGST ACT.

Since the principal supply is coal transportation, the composite service shall be

classifiable under GTA Services.

Question 10 Whether MARC (Maintenance and repair contracts) will be covered under

composite supply?

Answer Under the MARC contract, service provider is liable to provide the maintenance service

and during the repair and maintenance, if any supply item is required that will be

arranged and maintained by supplier. It appears that repair and goods supplied during

repair are naturally bundled and thus covered under Composite supply and the principle

supply will determine whether it is supply of goods or supply of service.

The principle supply can be determined from the agreement entered between the parties

and the invoices being raised by the vendor.

Question 11 What shall be the GST implication on purchase of Dumper along with payment for

transportation charges and Transit Insurance?

Answer The combined services of Dumper, Transportation service and Transit insurance will be

covered under Composite services as defined under Section 2(30) of CGST ACT.

The GST rate on Dumper is 28%, transportation service is 5% or 12% and transit

insurance is 18%, since the principal supply is dumper, the composite service shall be

leviable to GST @ 28%.

Question 12 What is the GST implication on output service of renting of immovable property by

NCL?

Answer As per the term of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, renting

of residential dwelling for use as residence, shall be exempt from the levy of GST. Thus,

renting of immovable property given by NCL for residential purpose will be exempt from

GST. The SAC code for the renting of residential properties is 997212.

In case of rent from commercial properties, GST will be levied on total rent received

inclusive of the incidental charges, if any (electricity charges, maintenance charges etc) as

the same is treated as composite supply.. The GST rate for the same shall be 18% and

SAC code is 997211.

Question 13 What shall be the GST implication on supply of water?

Answer GST will be NIL on supply of unprocessed water/raw water/unrefined water whereas GST

@ 18% shall be leviable on supply of processed/refined water.

Question 14 What is the GST implication on deduction of water charges from the invoice of civil

contractors against water supply?

27

Answer It is given to understand that NCL is providing unprocessed water to civil contractors

during contract period for use in civil works. NCL is recovering 1% of invoice value as

charges against this supply which is deducted from their invoices at the time of payment.

Since, NCL is supplying unprocessed water, therefore GST will be charged at Nil rate for

this supply. The HSN code for the same is 2201.

The time of supply will be treated as the time of recovering of water charges from invoice.

Project is liable to issue bill of supply as per the provision of CGST Act,2017.

Question 15 What shall be the GST implication on supply drinking water supply by IWSS to UP

Projects of NCL?

Answer Both IWSS Khadia and UP Projects are covered under same GSTIN of NCL UP i.e.,

09AABCN48841Z4, this will not be treated as supply under GST Act.

Question 16 What shall be the GST implication on supply of processed/refined water by IWSS to

MP projects of NCL?

Answer In compliance of the provisions of GST Act, NCL has separate registration i.e, GSTIN,

for both MP as well as UP state. As per provision of section 25(5) of the CSGT Act, MP

& UP projects will be treated as distinct persons for the purposes of this Act”.

Thus, Supply of refined/processed water by IWSS, UP to MP projects shall be treated as

taxable supply attracting GST @ 18% under SAC code of 9969.

Question 17 What shall be the GST implication on supply of electricity by NCL?

Answer Electricity is good and covered under HSN code 2716 and attracts GST at NIL rate. Thus

if Electricity is supplied independently it will attract GST at NIL rate.

However, when electricity is supplied along with residential and commercial property

then the same will be chargeable to GST at the rate of principal supply i.e., rent.

Question 18 What shall be the GST implication on supply of electricity in residential houses by

NCL?

Answer Electricity when supplied with residential dwelling will be treated as composite supply

and shall be chargeable to GST at the rate of principal supply i.e., at the rate of GST

applicable on renting for residential property.

Since GST on residential property is covered under NIL rate, consequently electricity

supplied along with residential property attract GST at NIL rate.

Question 19 What shall be the GST implication on supply of electricity in let out commercial

properties by NCL?

Answer Electricity when supplied with commercial building will be treated as composite supply

and shall be chargeable to GST at the rate of principal supply i.e., at the rate of GST

applicable on renting for commercial property.

Since, commercial property is leviable of GST @ 18% therefore electricity charges shall

28

also be leviable to GST @ 18% in such cases.

Question 20 What shall be the GST implication on supply of Electricity independently to civil

contractors by NCL?

Answer In case electricity supplied independently will attract GST at NIL rate.

Question 21 What shall be the GST implication on levy of liquidated damages and Penalty by

NCL?

Answer Liquidated Damages are being levied as compensation for Non-Performance or Breach of

Contract, Late Delivery of Supplies etc.

Paragraph 5 of Schedule II to CGST Act read with Section 7(1) (d) of the GST Act, 2017

includes list of activities to be treated as ‘supply of services’ which inter alia comprises –

“(e) agreeing to the obligation to refrain from an act, or to tolerate an act or situation, or to

do an act“.

In case of Liquidated Damages, there is an act of Non-Performance / Breach and the same

has been tolerated by NCL by way of charging compensation in form of levy of liquidated

damage. Therefore, GST shall be levied on the additional amount so charged by way of

compensation as Liquidated damages @ 18% under the SAC code 99979.

Question 22 What shall be the time of supply for liquidated damages and penalty?

Answer The time of supply for liquidated damages and penalty shall be the time of deduction of

LD/penalty from supplier’s bills. (Kindly refer answer to question no 2 above)

Question 23 What are the accounting codes used for recording Penalty income?

Answer It is noted that following accounting codes are used for booking of penalty/LD etc

1) 000703(Penalty recovery from supplier)

2) 000705 (Penalty recovered from customer),

3) 000737 (Penalty from contractors)

Any amount booked under the above code will be treated as Income of NCL and will be

treated supply of services under obligation to refrain from an act/tolerate an act, and attract

GST @ 18%

Question 24 What are the various kinds of penalty levied on Explosives Contractor?

Answer Penalty is levied on explosives contractor on occurrence of four types of failures by the

suppliers:

1) Recovery of cost due to blasts failure

2) 1% deduction of basic value of supplies made during the quarter in which Random

testing Product failure costs

3) Liquidated damages for late supply of goods

4) Recovery due to non-achievement of benchmark powder factor

Question 25 What is the accounting treatment and GST implication on various kinds of penalties

29

imposed on Explosives Contractor?

Answer There are four kinds of penalty levied on explosive (as enumerated in question above);

some of the explosives are covered under the tax slab of 28% and NCL is claiming ITC

thereon, however GST rate of penalty on LD is 18%.

Particulars Accounting Applicability

of GST

Treatme-nt

Recovery of cost due to Blasts

Failure

Booked as

Income under

Accounting

code

“000703”

18% Project will

issue GST

Invoice and

recover

penalty along

with GST

1% deduction of basic value of

supplies made during the quarter

in which Random Testing

Product Failure occurs.

Liquidated Damages for late

supply of goods

Recovery due to non-

achievement of benchmark

Powder Factor

The same will

be adjusted to

consumption

by treating

the same as of

poor quality.

ITC availed

will be

reversed on the

basis of credit

note issued by

supplier

Supplier will

be issue

credit note

Question 26 What shall be the GST implication on recovery of bond money by NCL?

Answer As per terms of CIL Executive Rules, if a management trainee resigns/leaves the

organization before 5 years of completion of its service, NCL is eligible to forfeit/recover

the Bond amount deposited by NCL. This implies to NCL Agreeing to refrain from doing

an act or Forbearance of an Act which is treated as service being provided by NCL under

GST.

The SAC code for 9997 and the rate of GST on the same is 18%.

Question 27 What shall be the GST implication on buyback of laptops by executives of NCL?

Answer As per the CIL scheme for providing Laptop/tablet or devices of similar categories to

Executives of Coal India Limited and its Subsidiaries, executives are required to

compulsorily buy-back the laptop at a price equivalent to 5 % of original purchase price

after expiry of a period of 3 years from the date of purchase. This buyback of laptop

tantamount to sale of laptop by NCL to the concerned executives at residual value i.e., 5%

of purchase price being 5% of Rs.70000 i.e., Rs. 3500.

The company will charge GST @ 18% on this sale transaction and recover GST at 18%

(i.e, 18% of Rs. 3500 -Rs.630/-) along with 5% of original purchase price from

30

employees.

Question 28 What are the services received/input services by NCL?

Answer NCL receives many kinds of services. Complete list of services cannot be produced;

however for the sake of brevity, indicative list of the significant services is provided

hereunder:

1) GTA Services

2) Wagon loading services

3) Overburden removal service

4) Coal crushing

5) Works contract service

6) MARC contracts

7) Repair and maintenance service

8) Hiring of Vehicle/ Renting of Motor cab

9) Security Service from CISF and other than CISF

10) Sponsorship services

11) Government Support service

12) Advocate Service

13) Tax consultancy

14) Audit service

15) Arbitral tribunal

16) Engagement of retired employees as Consultants

17) Catering Services

18) Cleaning services

19) Sewage and Waste collection, treatment and disposal and other environmental

protection services

20) Treatment of Bio Medical waste by Clinical Establishment/NSC

21) Ambulance Services

22) Selling of space for advertisement in print media

23) Agriculture/Horticulture

24) Service of Independent Director

Question 29 What is the meaning of works contract services in GST?

Answer Works contract has been defined in section 2(119) of the CGST Act 2017, as “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

31

contract;

Question 30 Whether services undertaken (viz; installation, fitting out, improvement,

modification, repair, maintenance) on movable property will be covered under

works contract?

Answer In GST regime, works contract is limited to services undertaken only on immovable

property unlike as prevalent in Service Tax/Pre GST regime. The treatment of works

contract under GST will be applicable only for immovable properties.

Accordingly, services undertaken (viz; installation, fitting out, improvement,

modification, repair, maintenance) on movable property will not be covered under works

contract

Question 31 What is the rate of GST and SAC code for the service of works contract?

Answer GST rate for works contract is 18%, the SAC code for Work Contracts is 9954.

Question 32 What will be the GST rate in case of work contract for CSR activities?

Answer As per the notification no. 20/2017- Central Tax (Rate) dated 22.08.2017 GST will be

levied at concessional rate of 12% instead of 18% for the following activites:

1. Composite supply of works contract as defined in clause (119) of section 2 of the

Central Goods and 6 - 2 Services Tax Act, 2017, supplied by way of construction,

erection, commissioning, installation, completion, fitting out, repair, maintenance,

renovation, or alteration of,-

a) a road, bridge, tunnel, or terminal for road transportation for use by general

public;

b) a civil structure or any other original works pertaining to a scheme under

Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

c) a civil structure or any other original works pertaining to the “In-situ rehabilitation

of existing slum dwellers using land as a resource through private participation”

under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for

existing slum dwellers;

d) a civil structure or any other original works pertaining to the “Beneficiary led

individual house construction / enhancement” under the Housing for All (Urban)

Mission/Pradhan Mantri Awas Yojana;

e) a pollution control or effluent treatment plant, except located as a part of a

factory; or

f) a structure meant for funeral, burial or cremation of deceased.

2. Composite supply of works contract as defined in clause (119) of section 2 of the

Central Goods and Services Tax Act, 2017, supplied by way of construction, erection,

commissioning, or installation of original works pertaining to,-

32

a) railways, excluding monorail and metro;

b) a single residential unit otherwise than as a part of a residential complex;

c) low-cost houses up to a carpet area of 60 square metres per house in a housing

project approved by competent authority empowered under the 'Scheme of

Affordable Housing in Partnership' framed by the Ministry of Housing and Urban

Poverty Alleviation, Government of India;

d) low cost houses up to a carpet area of 60 square metres per house in a housing

project approved by the competent authority under-

I. the “Affordable Housing in Partnership” component of the Housing for

All (Urban) Mission/Pradhan Mantri Awas Yojana;

II. any housing scheme of a State Government;

e) post-harvest storage infrastructure for agricultural produce including a cold

storage for such purposes; or mechanised food grain handling system, machinery

or equipment for units processing agricultural produce as food stuff excluding

alcoholic beverages.

Question 33 Explain Repair and Maintenance service in context of NCL.

Answer Repair and maintenance service in NCL include repair and maintenance of movable

property like machinery and equipment, furniture, telecommunication, electrical and

household appliances as well as repair and maintenance of immovable property like

Building, CHP etc

Question 34 What is the rate of GST and SAC code for the service of repair and maintenance?

Answer The rate of GST on repair and maintenance services is 18% payable under forward charge

and the relevant SAC code for the same is 9987.

Question 35 What is Motor Vehicle as per GST?

Answer As per section 2 (76) of the CGST Act 2017 “motor vehicle” shall have the same

meaning as assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988;

As per Section 2(28) in The Motor Vehicles Act, 1988 “motor vehicle” or “vehicle”

means any mechanically propelled vehicle adapted for use upon roads whether the power

of propulsion is transmitted thereto from an external or internal source and includes a

chassis to which a body has not been attached and a trailer; but does not include a vehicle

running upon fixed rails or a vehicle of a special type adapted for use only in a factory or

in any other enclosed premises or a vehicle having less than four wheels fitted with engine

capacity of not exceeding 4[twenty-five cubic centimetres]; 1[twenty-five cubic

centimetres];"

Question 36 What is Hiring of Vehicle/ Renting of Motor vehicle services in context of NCL?

Answer Hiring of Vehicle or renting of motor vehicle includes hiring of light vehicle

33

(Taxi/Cab/Motor car/Bus) for transportation of employees of the company.

Question 37 What is the rate on hiring of vehicle services or renting of motor vehicle? Whether

the service of Hiring of Vehicle/renting of vehicle covered in Forward charge or

reverse charge?

Answer The GST implication on availing hiring of vehicle services or renting of motor vehicle in

various scenarios is enumerated hereunder :

Type of

Service

Provider

Type of

Service

receiver

Rate of

GST

Reverse

charge

or

Forward

charge

Certification to be obtained

from Service provider

Non

corporate

and

Registered

NCL 5%

(Diesel cost cost

included)

Reverse

Charge

(w.e.f

01.10.20

19)

Kindly obtain certificate

from service provider that

Service Provider is not

availing the benefit of input

tax credit.

Kindly ensure that Invoice

issued by service provider

specifies that GST is payable

under reverse charge

Non

corporate

and

Registered

NCL 12%

(Diesel cost cost

included)

Forward

charge

Kindly obtain certificate

from service provider that

they have opted the scheme

of 12% and availing ITC on

their input

Corporate

and

Registered

NCL 5% or 12%

(Diesel cost

included)

Forward

Charge

Non

Corporate

and

Registered

NCL 18%

(When

diesel cost

not included

in invoice)

Forward

Charge

Unregister

ed

NCL NIL NA Kindly obtain certificate

from service provider that

their turnover does not

34

exceed the minimum amount

as prescribed in the Act for

registration.

Question 38 Does NCL avail security services?

Answer Yes, NCL avails security services in mines as well as townships, through both CISF as

well as private security personnel (other than CISF).

Question 39 Whether GST for Security services are payable under reverse charge?

Answer Security services availed in NCL and payment of GST on the same is enumerated

hereunder :

Service provider Mode of payment of GST Other Details

CISF Reverse charge SAC code 9991 and GST

rate shall be 18%

Person other body

corporate i.e.,

individual or firm

(i.e. other than

company).

Reverse charge

(w.e.f. 01.01.2019)

SAC code 9985 GST rate

shall be 18%

Body Corporate Forward charge SAC code 9985 GST rate

shall be 18%

Question 40 What is the meaning of Sponsorship services in context of NCL?

Answer The meaning of Sponsorship is nowhere defined in CGST Act, however section 65(99a)

of Finance Act, 1994 defined the Sponsorship; The same definition can be adopted for

GST era. Finance Act, 1994 states that sponsorship include

a) Naming of an event after the sponsor;

b) Displaying the sponsor’s company logo or trading name;

c) Giving the sponsor exclusive or priority booking rights;

d) Sponsoring prizes or trophies for competition.

e) But does not include any financial or other support in the form of donation or gift

by the donors subject to the condition that the service provider is under an

obligation to providing anything in return of such action.

Sponsorship is also a type of advertisement, but, one incurs the expenditure on behalf of

other in case of sponsorship services. Advertisement services are where one is incurring

any expenditure on its own behalf for promoting of its own product/sale. There is a very

35

thin line of difference between advertisement and sponsorship services. If the service

fulfills all conditions as per the definition mentioned above, the same is classifiable under

sponsorship service else it would tantamount to advertisement services.

Question 41 What is the GST implication on sponsorship service vis-à-vis advertisement service?

Answer In GST Act, Sponsorship and Advertisement are two different services are having

different rate of tax. Advertisement is covered under forward charge and attracting GST

5% and 18% on Print media and digital media respectively, However Sponsorship service

is covered under Reverse Charge mechanism attracting GST @ 18%.

Question 42 Explain sponsorship services in context of NCL.

Answer Where any payment is made by NCL towards sponsorship services (as explained in

answer 35 above), NCL is liable to pay tax under Reverse charge. However, Sponsorship

paid for sporting events organized by certain specified persons/entities shall be exempt

from the payment of GST.

Question 43 What is the rate of GST and SAC code for sponsorship services?

Answer The SAC code for sponsorship services provided to specified persons/entities are exempt

from levy of GST and covered under SAC code 9985 however other than exempt

sponsorship services will covered under SAC 9983 under the head of Other Professional,

Technical and business services and leviable to tax @18% under reverse charge

mechanism.

Question 44 Which are the specified persons/entities the provision of sponsorship services to

whom is exempt from levy of GST?

Answer As per Notification No. 12/2017- Central Tax (Rate) dated 28.08.2017 no GST is payable

for sporting events organized by the following :

a) by a national sports federation, or its affiliated federations, where the participating

teams or individuals represent any district, State, zone or Country;

b) by Association of Indian Universities, Inter-University Sports Board, School

Games Federation of India, All India Sports Council for the Deaf, Paralympic

Committee of India or Special Olympics Bharat;

c) by the Central Civil Services Cultural and Sports Board;

d) as part of national games, by the Indian Olympic Association; or

e) under the Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme

wherein recognized sporting event means any sporting event,-

(i) organised by a recognised sports body where the participating team or individual

represent any district, state, zone or country;

(ii) organised –

(A) by a national sports federation, or its affiliated federations, where the

36

participating teams or individuals represent any district, state or zone;

(B) by Association of Indian Universities, Inter-University Sports Board, School

Games Federation of India, All India Sports Council for the Deaf,

Paralympic Committee of India or Special Olympics Bharat;

(C) by Central Civil Services Cultural and Sports Board;

(D) as part of national games, by Indian Olympic Association; or

And, Wherein “recognised sports body” means –

(i) the Indian Olympic Association;

(ii) Sports Authority of India;

(iii) a national sports federation recognised by the Ministry of Sports and Youth

Affairs of the Central Government, and its affiliate federations;

(iv) national sports promotion organisations recognised by the Ministry of Sports

and Youth Affairs of the Central Government;

(v) the International Olympic Association or a federation recognised by the

International Olympic Association; or

(vi) a federation or a body which regulates a sport at international level and its

affiliated federations or bodies regulating a sport in India;

Question 45 What is the GST implication on Selling of space for advertisement in print media?

Answer GST rates on selling of space for advertisement in print media is enumerated hereunder:

S.no. Criteria GST rate

1 Advertisement through print media 5%

2 Advertisement through digital media 18%

The SAC code for the same is 9983.

Question 46 Which Government support services are excluded from reverse charge mechanism?

Answer In terms of notification No. 13/2017- Central Tax (Rate) dated 28.06.2017, Services

(except certain specified services) supplied by the Central Government, State

Government, Union territory or local authority to a business entity are covered under

reverse charges except the following :

(1) renting of immovable property, and

(2) services specified below-

services by the Department of Posts by way of speed post, express parcel post, life

insurance, and agency services provided to a person other than Central

Government, State Government or Union territory or local authority;

services in relation to an aircraft or a vessel, inside or outside the precincts of a

37

port or an airport;

Transport of goods or passengers.

Thus if above services are provided by Government to business organization, business

organization is not liable to pay GST under reverse charge.

Question 47 Whether GST is leviable on Royalty, NMET and DMF paid by NCL ?

Answer NCL is depositing Royalty, DMF and NMET as per the provision of MMDR ACT, 1957

levied by the Central Government which is statutory levies. This will be treated as

Government support services. NCL shall be liable to pay GST on the above services under

reverse charge and all provisions of reverse charge may apply mutatis multandis to these

services.

The SAC code for this service is 9973 and rate of GST leviable for the same is 18%.

Question 48 What shall be the GST implication on provision of training for skill development by

agencies to villagers under CSR, in terms of MOU signed between NCL and such

agencies?

Answer In terms of Press release by Ministry of Finance dated 22.03.2018, any services provided

by the below mentioned agencies shall be exempt from GST,

a. the National Skill Development Corporation set up by the Government of India;

b. a Sector Skill Council approved by the National Skill Development Corporation;

c. an assessment agency approved by the Sector Skill Council or the National Skill

Development Corporation;

d. a training partner approved by the National Skill Development Corporation or the

Sector Skill Council, in relation to-

the National Skill Development Programme implemented by the National Skill

Development Corporation; or

a vocational skill development course under the National Skill Certification and

Monetary Reward Scheme; or

any other Scheme implemented by the National Skill Development Corporation.

Therefore, Skill development services provided by above agencies shall be exempt from

levy of GST.

Question 49 What is the GST implication on skill development services provided by Directorate

General of Training, MoSD availed by NCL?

Answer Services of assessing bodies empaneled centrally by the Directorate General of Training,

Ministry of Skill Development and Entrepreneurship by way of assessments under the

Skill Development Initiative Scheme is exempt from GST.

38

Question 50 What is the GST implication on training services provided by Deen Dayal

Upadhyaya Grameen Kaushalya Yojana implemented by the MoRD availed by

NCL?

Answer Services provided by training providers (Project implementation agencies) under Deen

Dayal Upadhyaya Grameen Kaushalya Yojana implemented by the Ministry of Rural

Development, Government of India by way of offering skill or vocational training

courses certified by the National Council for Vocational Training are exempt from GST.

Question 51 Whether Services of an advocate taken by NCL are covered under reverse charge

mechanism?

Answer Services of an advocate are covered under reverse charge mechanism and NCL being the

service recipient is liable to pay GST on the same under reverse charge.

Question 52 What is the rate of GST and SAC code for Services of an advocate taken by NCL?

Answer The SAC code for this service is 9982 and rate of GST leviable for the same is 18%.

Question 53 Whether rate of GST and SAC code for Tax consultancy services availed by NCL?

Answer

The SAC code for Tax consultancy and preparation services provided by

professionals/Practitioners other than Advocates to is 9982 and rate of GST for the same

is 18% under forward charge

Question 54 Whether rate of GST and SAC code for Audit service taken by it?

Answer The SAC code for Financial auditing services and Other similar services is 9982 and rate

of GST leviable for the same is 18% under forward charge.

Question 55 Whether Arbitration and conciliation service taken by NCL are covered under

reverse charge?

Answer GST on arbitration and conciliation services are payable under reverse charge mechanism

therefore, NCL shall pay GST under reverse charge for arbitration and conciliation

services availed.

Question 56 What is the rate of GST and SAC code for Arbitration and conciliation service taken

by NCL?

Answer The SAC code for Arbitration and conciliation service taken by NCL is 9982 and rate of

GST for the same is 18%.

Question 57 What is the rate of GST and SAC code for Catering services availed by NCL?

Answer The SAC code for this service is 9963 and GST on it shall be payable at the rate of 18%

payable under forward charge.

Question 58 Explain Cleaning services in context of NCL.

Answer Cleaning services include services as follows:-

1) Disinfecting and exterminating services

2) Window cleaning services

39

3) General cleaning services

4) Specialized cleaning services for reservoirs and tanks

5) Sterilization of objects or premises (operating rooms)

6) Furnace and chimney cleaning services

7) Exterior cleaning of buildings of all types

8) Cleaning of transportation equipment

9) Other cleaning services not elsewhere covered.

Question 59 What is the rate of GST and SAC code for cleaning services availed by NCL?

Answer The SAC code for cleaning services is 9985 and GST on it shall be payable at the rate of

18% payable under forward charge.

Question 60 What is the SAC code and GST rate on Sewage and Waste collection, treatment and

disposal and other environmental protection services by it?

Answer The SAC code Sewerage, sewage treatment and septic tank cleaning services service is

9994 and GST on it shall be payable at the rate of 18% payable under forward charge.

Question 61 Explain the service of Treatment of Bio Medical waste by Clinical Establishment in

context of NCL? Whether NCL is eligible to claim input tax credit of GST paid on

this service?

Answer The captioned service includes Services provided by operators of the common bio-

medical waste treatment facility to a clinical establishment, i.e., Nehru Shatabadi

Chikitshalay(NSC) or other hospitals of NCL, by way of treatment or disposal of bio-

medical waste or the processes incidental thereto

Services of treatment of Bio medical waste availed by NSC or other hospitals of NCL

hospital is exempt from GST.

Question 62 What is the GST implication on service of Collection of garbage from door to door,

transportation of garbage and disposal of same through trolley or other suitable

arrangement?

Answer As all the three services Collection of garbage from door to door (Part A),

transportation of garbage (Part B) and disposal of same through trolley or other

suitable arrangement (Part C) are not a natural bundled services, thus as per the CGST

Act and Rule, it will be treated as mixed supply. As per the provision of section 8(b) of

CGST Act, 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. (kindly refer answer 4

and 5 above)

In the caption work, all of three services as mentioned in Part-A, B and C is covered under

18% tax slab. As per the CGST Act and Rule thereon, service of Collection of garbage

40

from door to door and disposal will be covered under HSN Code 999423 i.e. General

waste collection services will attract GST @ 18% payable under forward charge.

Question 63 What is the GST implication on Ambulance Services in context of NCL?

Answer The following services are exempt from the levy of GST :-

(a) health care services by a clinical establishment, an authorized medical practitioner or

para-medics;

(b) services provided by way of transportation of a patient in an ambulance, other than

those specified in (a) above

Therefore, Services of Ambulance availed by NSC hospital is exempt from GST

Question 64 What is the GST rate and SAC code on Sitting Fees to Independent Director?

Answer The SAC code for service of sitting fees of independent directors service is 9997 and the

rate of GST is 18%.

Question 65 Whether Sitting Fees to Independent Director is covered under Reverse Charge

mechanism?

Answer Yes, sitting fees to independent directors is covered under reverse charge mechanism;

therefore NCL being the service recipient will have to pay GST under reverse charge for

sitting fees paid to independent directors.

Question 66 Whether GST shall be leviable on healthcare facilities/medical services to patients

other than NCL employees?

Answer All healthcare services by a clinical establishment or authorized medical practitioner by

way of diagnosis or treatment or care for illness, injury, deformity, abnormality or

pregnancy are currently exempt from GST. Therefore, no GST shall be levied on

healthcare facilities/medical services to patients other than NCL employees.

Question 67 Whether GST is leviable on recovery made from employees on account of school bus

facilities provided to their children?

Answer Yes, GST is leviable on recovery made from employees against school bus facility.

Projects shall make annual recovery along with GST instead of monthly recovery from

employees against these facilities. Projects will issue invoice as per GST Act, against this

recovery.

Question 68 Whether GST is applicable on grant given to Officers club/workers club?

Answer Club is having separate governing body and unregistered entity, thus grant given to club

will attract GST under reverse charge u/s 9(4) of CGST Act. However, Government has

given exemption for the applicability of provision of section 9(4) of CGST Act; vide

notification no. 38/2017-CT (Rate) dt 13.10.2017.

Question 69 What shall be the GST implication on sale of tender paper by the Company?

41

Answer In case of sale of tender papers by the company, Invoice shall be issued as per provisions

of GST Act and Rules. The applicable rate of GST shall be 12% and the HSN codes shall

be 4911

Question 70 Whether Laptop can be purchased from a dealer registered under Composition

scheme?

Answer There is no restriction on purchase of laptops from composition dealers by executives

within the price prescribed by company in this regard; however, NCL will not be able to

claim ITC on the same as the suppliers opting composition scheme cannot issue GST

invoice.

Question 71 What shall be the GST applicability on laptops in case of transfer of Executives of

NCL?

Answer

The GST applicability on laptops on various types of transfers of executives as

enumerated hereunder :

Case Applicability of GST

Inter project transfer of employee

within the state

GST will not applicable

Inter project transfer of employee

outside the state (MP to UP or

vice versa)

It will be treated as supply and transferor

project has to issue tax invoice as per the

provision of section 31 along with Rule

46 of CGST Rule, 2017 with the name

of concern project and subsidiary.

Inter subsidiary transfer of

employee

Retirement of

Employee/resignation of

employee

It will be treated as supply and

transferor project has to issue tax

invoice as per the provision of section

31 along with Rule 46 of CGST Rule,

2017 with the name employees.

Question 72 What shall be the GST payable on laptops provided by company in case of transfer

of Executive to other subsidiaries of Coal India?

Answer

Section 18(6) of the CGST Act, 2017 specifies that in case of supply of capital goods,

on which ITC has been taken, the registered person shall pay an amount equal to the ITC

taken on such goods reduced by prescribed percentage or the GST payable on the

transaction value of such capital goods, whichever is higher. Further, as per Rule 44(6)

of the CGST Rules, 2017, ITC for the purpose of Section 18(6) shall be computed on a

pro-rata basis taking the useful life of an asset as 60 months.

Position in case laptops are being transferred to employees / co-subsidiary at the time of

42

transfer of employees:-

The transfer of laptops would amount to supply of laptops and would be

chargeable to GST @ 18% (HSN 8471).

Since the Company would have claimed ITC on the laptops as aforesaid, the

provisions of Section 18(6) of CGST Act readwith Rule 40(2) and Rule 44(6) of

the CGST Rules, shall become applicable which provide that the assessee shall

reverse ITC / pay the higher of following amount:-

(A) Actual ITC availed reduced by 5% per quarter from the date of Invoice

issued by original supplier of laptop [in other words, the life of asset has

to be considered as 5 years)

(B) GST on sale value of laptop

Question 73 What is the GST implication on Yoga services availed by NCL?

Answer

CBIC vide circular no 66/40/2018-GST (F.NO. 354/314/2017-TRU) has clarified that

services provided by entity registered under Section 12AA of the Income Tax Act, 1961

by way of advancement of religion, spirituality or yoga are exempt. Therefore, services

provided by entity registered under Section 12AA of the Income Tax Act, 1961 by way of

advancement of religion, spirituality or yoga are exempt from GST. However, if the entity

providing the yoga service is not registered under Section 12AA then the service taken

shall be chargeable to GST @ 18% under SAC code .

Question 74 What shall be the GST implication on composite supply including supply of solar

plant pump along with boring, overhead tank with supporting structure and other

civil work?

Answer

Relevant legal provisions of GST regarding composite supply of solar plant is enumerated

hereunder :

i) As per the Entry number 234 of Notification number 01/2017- Central

Tax(Rate) dated 28.06.2017; Renewable energy device (Bio-gas plant, Solar

Power based device or Solar Power generating System, Wind mills, Wind

Operated Electricity Generator (WOEG), Waste to energy plants / devices,

Solar lantern / solar lamp, Ocean waves/tidal waves energy devices/plants) will

attract the CGST @ 2.5%.

ii) Vide Notification number 24/2018 Central Tax(Rate) dated 31.12.2018, it is

43

clarified that If the goods specified in this entry(Entry Number 234) are

supplied, by a supplier, along with supplies of other goods and services, the

value of supply of goods for the purposes of this entry shall be deemed as

seventy per cent of the gross consideration charged for all such supplies,

and the remaining thirty per cent of the gross consideration charged shall

be deemed as value of the said taxable service.”;

iii) Vide Notification number 27/2018- Central Tax(Rate) dated 31.12.2018, it is

clarified that service by the way of construction or engineering or installation

or other technical services, provided in relation of setting up of (Bio-gas plant,

Solar Power based device or Solar Power generating System, Wind mills,

Wind Operated Electricity Generator (WOEG), Waste to energy plants /

devices, Solar lantern / solar lamp, Ocean waves/tidal waves energy

devices/plants) will attract the CGST @ 9%.

GST rate on composite supply of of solar plant pump along with boring, overhead tank

with supporting structure and other civil work will be as under;

i) 70% of Gross considering of composite supply will be treated as supply of

goods and attract GST @ 5% (2.5% CGST and 2.5% SGST or 5% IGST as

the case may be)

ii) 30% of Gross considering of composite supply will be treated as supply of

service and attract GST @ 18% (9% CGST and 9% SGST)

Question 75 What shall be the GST implication on availment of FIO test service of rail weigh

bridge from Railways by NCL?

Answer It is given to understand that railway is providing FIO test service of rail weigh Bridge

and taking consideration with the name of Hire cum haulage charges for test wagon.

Railway will conduct the testing service and they will use their wagon for testing. As per

CGST Act and Rules thereon captioned service provided by railway will be treated as

“Technical testing and analysis services” which will be covered under HSN code 998346

and attract GST @ 18%. As the service provider is Indian Railway (Government), as per

the notification no 13/2017 dated 28.06.2017, the same will be covered under Reverse

Charge Mechanism.

Question 76 What is the GST implication on Horticulture services availed by NCL?

Answer Horticulture and/or Agriculture services are exempt from the levy of GST, therefore,

when there is a sole supply of horticulture services, GST shall not be levied.

However, when Horticulture services are provided along with other services like

44

maintenance of garden along with civil work in garden and single NIT is issued for all the

activities then the captioned work will be treated as mixed supply as per the provision of

section 2(74) of CGST Act, 2017 and as per the provision of section 8(b) of CGST Act,

2017 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. Thus, GST will be levied at the rate

applicable for maintenance of garden i.e., 18% in such case.

Question 77 What is the GST implication on Hotel services availed by NCL?

Answer As per amendment prescribed by Notification no 20/2019- Central Tax (Rate) dated

30.09.2019. The rate of GST on hotel accommodation service as below: –

S.No. Transaction Value per Unit

(Rs) per day GST

Rate of GST

1. Rs 1000 and less Nil

2. Rs 1001 to Rs 7500 12%

3. Rs 7501 and more 18%

Before the amendment, GST was leviable on the basis of tariff value, however, after the

amendment, tariff value is irrelevant and GST will be charged on the basis of actual

transaction value.

Catering in premises with daily tariff of unit of accommodation of Rs 7501 and

above shall be at 18% with ITC.

Question 78 Whether GST is leviable on store items sold as scrap?

Answer As per the provisions of CGST Act, 2017, GST shall be leviable on store items sold as

scrap. The applicability of CGST, SGST or IGST on any scrap sale shall depend upon the

location of supplier and place of supply.

In case of intrastate sale of scrap, CGST and SGST shall be leviable as per the provisions

of GST Laws. In case of Interstate sale of scrap, IGST shall be leviable as per provisions

of GST Laws.

Invoice shall be issued as per the provision of section 31 of CGST Act, 2017 along with

Rule 46 & 47 of CGST Rule, 2017

Question 79 What will be Taxable event and its relevance?

Answer Taxable event determine the liability to pay to tax. As per the provision of section12 of

the CGST/SGST Act, (taxable event) liability to pay tax on goods shall arise at the Time

of supply.

Question 80 What is Time of Supply of goods?

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

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

45

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

(d) 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 81 What is Time of supply in Scrap sale?

Answer As per the provision of section 31, suppler liable to issue the invoice at the time of removal

of scrap, thus the time of supply is the time of issue of invoice.

Question 82 When is the taxable event for supply of Scrap?

Answer Taxable event or liability of GST will arise from the date of issue of invoice.

Question 83 What is the time period within which invoice has to be issued for supply of Goods?

Answer As per Section 31(1) 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 84 What is Removal?

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

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

acting on behalf of such supplier; or

d) 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 85 What will be the removal of scrap in case of NCL?

Answer Removal of scrap shall be the treated when the scrap is made available to buyer for lifting.

Question 86 What are the GST rates and HSN codes of various scrap items sold as scrap?

Answer The GST Rate and HSN code of Scrap items is as under;

S.No. Particulars HSN Rate of GST

1. Waste Oil (after use of Lubricating Oil ) 3403 18%

2. Waste Oil (after use of Petrol, diesel, ATF) 2710 NIL

46

3. Empty Drums 7204 18%

4. Batteries 8548 18%

5. Tyres 4012 28%

6. Copper Wires 7408 18%

7. Scrap of Wire 7408 18%

8. Drill Scrap 7204 18%

9. Iron & Steel Scrap 7204 18%

10. Shovel Scrap 7204 18%

11. Dumper Scrap 7204 18%

12. Radiator Scrap 7204 18%

13. Battery Scrap 8548 18%

14. Scrap of OTR tyre. 4012 28%

15. Retreaded or used pneumatic tyres of

rubber; solid or cushion tyres, tyre treads

and tyre flaps of rubber

4012 18%

15. Crane Scrap 7204 18%

16. Aluminium Scrap 7602 18%

17. Waste and Scrap of parts of machinery 8548 18%

18. Non Ferrous scrap like Copper/Brass 7404 18%

19. Scrap copper power cables 7404 18%

20. Scrap copper trailing cables 7404 18%

21. Scrap aluminum, power cables 7602 18%

22. Scrap Rubber Material 4004 5%

23. Scrap wire rope 7312 18%

24. Scrap Conveyor Belting (If made of Iron and

Steel)

7326 18%

25. Scrap Rubber Beltings (N/N Belting) 4010 18%

26. Scrap HEMM Equipment sold in cut pieces 8487 18%

27. Scrap Plant and Machinery 8487 18%

28. Parts of Vehicles (Tractor) 8708 18%

29. Parts of Vehicles (Other Than Tractor) 8708 28%

30. Machine Parts 8431 18%

31. Mild Steel Pipes 7304 18%

32 Fan 8414 18%

Question 87 What shall be the GST implication on payment of ground rent by scrap buyer?

Answer It is noted that scrap buyer is liable to pay ground rent if scarp is not lifted within the

47

stipulated time. This payment is in the nature of incidental charges.

As per the provisions of Section 15(2)(C) of the CGST Act, The value of supply shall

include incidental expenses, including commission and packing, charged by the supplier

to the recipient of a supply and any amount charged for anything done by the supplier in

respect of the supply of goods or services or both at the time of, or before delivery of

goods or supply of services;

Therefore, ground rent shall attract GST with same rate as applicable on original supply

(scrap sale) against which ground rent is being received for delay in lifting.

Question 88 Whether Sale of Old Drums to employees constitutes supply for NCL?

Answer Sale of old Drums to employees will be treated supply for NCL and NCL is required to

issue tax invoice as per the provision of section 31 along with Rule 46 of CGST Rule,

2017. HSN code for the same shall be 7204 and rate of GST applicable shall be 18%.

Question 89 What shall be the GST implication on sale of old Drum at nominal value to

Employees?

Answer In case of sale of Drum at nominal value to employees, GST shall be charged on such sale

at market price/fair market value of Drums irrespective of the amount collected from

employer.

Question 90 Who will generate the E-way bill for the sale of scrap?

Answer The Buyer of the scarp shall arrange to generate E-way bill for the sale of scrap.

48

Reverse Charge Mechanism

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 person 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 There are two kind of supplies covered under Reverse charge mechanism:

a) Activities notified by government of specified categories- Section 9(3). As per the

provisions of Section 9(3) 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

b) Supplies of specified categories by unregistered person- Section 9(4). As per Sec

9(4) of CGST Act, if a registered person purchases goods/services from an

unregistered dealer then the registered taxpayer is liable to pay GST on reverse

charge basis. However amended provision of CGST Act, 2018 states that “The

Government may, on the recommendations of the Council, by notification, specify

a class of registered persons who shall, in respect of supply of specified categories

of goods or services or both received from an unregistered supplier, pay the tax on

reverse charge basis as the recipient of such supply of goods or services or both,

and all the provisions of this Act shall apply to such recipient as if he is the person

liable for paying the tax in relation to such supply of goods or services or both.”.

Which shows that only specified goods and services are covered under this

provision.

The similar provisions are also under section 5(3) and 5(4) of IGST Act.

Question 3 What are the activities specified by Govt. on which GST is liable to be paid on

reverse charge u/s 9(3)?

Answer Government vide notification no. Notification No. 13/2017- Central Tax (Rate) dated 28th

49

June 2017 has prescribed the services covered under reverse charge which is updated time

to time.

List of Services on which GST is to be paid under reverse charge as updated on

01.01.2020 is given below

1. Supply of Services by a goods transport agency (GTA) who has not paid central

tax at the rate of 6%, in respect of transportation of goods by road.

2. Services supplied by an individual advocate including a senior advocate by way of

representational services before any court, tribunal or authority, directly or

indirectly

3. Services supplied by an arbitral tribunal to a business entity

4. Services provided by way of sponsorship to any body corporate or partnership firm

5. Services supplied by the Central Government, State Government, Union

territory or local authority to a business entity excluding, -

a. Renting of immovable property, and

b. Services specified below-

i. Services by the Department of Posts by way of speed

post, 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

5A. Services supplied by the Central Government, State

Government, Union territory or local authority by way of renting of

immovable property to a person registered under the Central Goods and

Services Tax Act, 2017 (12 of 2017).

5B. Services supplied by any person by way of transfer of development

rights or Floor Space Index (FSI) (including additional FSI) for

construction of a project by a promoter

5C. Long term lease of land (30 years or more) by any person against

consideration in the form of upfront amount (called as premium, salami,

cost, price, development charges or by any other name) and/or periodic

rent for construction of a project by a promoter

6. Services supplied by a director of a company or a body corporate to the

said company or the body corporate.

50

7. Services supplied by an insurance agent to any person carrying on

insurance business

8. Services supplied by a recovery agent to a banking company or a

financial institution or a nonbanking financial company.

9. 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.

10. Supply of services by the members of Overseeing Committee to

Reserve Bank of India

11. Services supplied by individual Direct Selling Agents (DSAs) other

than a body corporate, partnership or limited liability partnership firm to

bank or non-banking financial company (NBFCs).

12. Services provided by business facilitator (BF) to a banking company

13. Services provided by an agent of business correspondent (BC) to

business correspondent (BC).

14. Security services (services provided by way of supply of security

personnel) provided to a registered person:

Provided that nothing contained in this entry shall apply to, –

I. (a) a Department or Establishment of the Central Govt. or State

Government or Union territory; or

(b) local authority; or

(c) Governmental agencies;

which has taken registration under the Central Goods and Services

Tax Act, 2017 only for the purpose of deducting tax under section 51

of the Act and not for making a taxable supply of goods or services; or

II. a registered person paying tax under section 10 of the said Act.

15. Services provided by way of renting of any motor vehicle designed to

carry passengers where the cost of fuel is included in the consideration

charged from the service recipient, provided to a body corporate

16. Services of lending of securities under Securities Lending Scheme,

1997 (“Scheme”) of Securities and Exchange Board of India (“SEBI”),

as amended

Question 4 List of Goods on which GST is liable to be paid on Reverse Charge u/s 9(3)

Answer List of goods covered under reverse charge mechanism:

51

S/

No.

Description of supply of Goods Supplier of

goods

Recipient of

Goods

1 Cashew nuts, not shelled or peeled Agriculturist Any registered

person

2 Bidi wrapper leaves (tendu) Agriculturist Any registered

person

3 Tobacco leaves Agriculturist Any registered

person

4 Silk yarn Any person who

manufactures silk

yarn from raw

silk or silk worm

cocoons for

supply of silk

yarn

Any registered

person

4A Raw cotton Agriculturist Any registered

person

5 Supply of lottery State

Government,

Union Territory

or any local

authority

Lottery

distributor or

selling agent

6 Used vehicles, seized and confiscated

goods, old and used goods, waste and

scrap

Central

Government,

State

Government,

Union territory or

a local authority

Any registered

person

Question 5 List of services availed by NCL to be covered under Reverse Charge?

Answer We understand the following services availed by NCL shall be covered under Reverse

charge;

a) GTA Services

b) Advocate services

c) Services of an arbitral tribunal

d) Siting fee paid to Independent directors

52

e) Royalty, DMF, NMET deposited to Government (Services supplied by

government)

f) CISF Security services

g) Sponsorship services

h) Services provided by way of renting of any motor vehicle designed to carry

passengers where the cost of fuel is included in the consideration charged

from the service recipient, provided to a body corporate

i) Security Services (services provided by way of supply of security

personnel)

j) Goods purchased from unregistered person (List of goods yet to be

notified)

k) Covered under Reverse charge as availed due to availed from unregistered

person

i) IEM Services

ii) Engagement of Ex-officer as Retainer of company

Question 6 What are the compliances in respect of supplies under reverse charge mechanism?

Answer Compliances in respect of supplies under reverse charge mechanism:

1. As per section 31 of the CGST Act, 2017 read with Rule 46 of the CGST Rules, 2017,

every tax invoice has to mention whether the tax in respect of supply in the invoice is

payable on reverse charge. Similarly, this also needs to be mentioned in receipt voucher

as well as refund voucher, if tax is payable on reverse charge.

2. Maintenance of accounts by registered persons: Every registered person is required to

keep and maintain records of all supplies attracting payment of tax on reverse charge

3. Any amount payable under reverse charge shall be paid by debiting the electronic cash

ledger. In other words, reverse charge liability cannot be discharged by using input tax

credit. However, after discharging reverse charge liability, credit of the same can be taken

by the recipient, if he is otherwise eligible.

4. Invoice level information in respect of all supplies attracting reverse charge, rate wise,

are to be furnished separately in the table 4B of GSTR-1.

5. Advance paid for reverse charge supplies is also leviable to GST. The person making

advance payment has to pay tax on reverse charge basis.

Question 7 What is self-invoice under Reverse charge?

53

Answer In case activities are covered under reverse charge & supplier is unregistered, Recipient is

liable to issue Invoice under GST regime and to deposit the GST. Invoice raised by

Recipient is known as self-invoice. Self Invoice will be the relavant document to avail the

benefit of eligible ITC. Unregistered person cannot issue taxable invoice and charge GST,

Thus ITC can’t be availed though GST is deposited under Reverse charge in absence of

self invoice.

Question 8 Whether self-invoice has to issue in all activities and procurement covered under

Reverse charge.

Answer When the supply is made by unregistered supplier for notified goods & services, then only

recipient is liable to issue the Invoice in prescribe 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;”

For example: If GTA is registered under GST and opt to charge GST at 5% under RCM, in

that case though the activity is covered under RCM, however no need to issue self invoice

as service provider is registered person and issues taxable invoices.

Question 9 What is Payment Voucher? What will be the contents of Payment Voucher?

Answer As per the provision of section 31(3)(g) of CGST Act, 2017, A registered 0person, who is

liable to pay tax under Reverse charge, shall issue Payment Voucher at the time of

making the payment. As per the Rule 52 of CGST Rule, 2017, payment voucher shall

contain the following particulars;

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

supplier if registered;

(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 of the

recipient;

(e) description of goods or services;

(f) amount paid;

54

(g) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(h) amount of tax payable in respect of taxable goods or services (central tax,

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

(i) 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; and

(j) signature or digital signature of the supplier or his authorised representative.

Question 10 What is the taxable event for activities covered under reverse charge

Answer Time of supply determines the liability to payment of tax. Provisions of Time of supply for

reverse charge cases has been describe under section 12(3) and 13(3) of CGST Act, 2017

for Goods and services respectively which are as under;

Time of supply of Goods covered under

Reverse charge

Time of supply of services covered

under Reverse charge

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.

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

55

in the books of account of the recipient of

supply or the date of payment, whichever

is earlier

Question 11 Due date of payment of GST in case goods are purchased from unregister supplier

and goods has already been received in NCL premises

Answer Time of supply of notified goods/services will be the date of recipient of goods. However,

the GST can be deposited at any time before filing of GSTR-3B of that month

Question 12 What if, in the above case, goods have not been received; however, supplier has

raised the nontaxable Invoice?

Answer In this case time of supply will be the date immediately following thirty days from the date

of issue of invoice in case of goods.

Question 13 In case of procurement is made by NCL form unregistered supplier, Which section

will issue the Invoice finance or user?

Answer User section will arrange to produce the invoice immediately in any case before the end of

the month from the date of invoice for payment. At the time of payment self invoice will

be automatically generated from Coalnet. (The specified good has not been notified yet)

Question 14 Suppose, supplier engaged in providing security service which is covered under

reverse charge, service is availed for the month of October, 2019 and GTA raised

invoice on 02.11.2019. Payment to Service provider against services has been made

on 15.12.2019 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 15.12.2019

2) The day following 60 days from the date of invoice issued by GTA

02.11.2019+ 60 days =01.01.2020

Time of supply would be 15.12.2019 and NCL has to deposit the tax before filing the GST

return for the month of December, 2019 i.e. on or before 20/01/2020.

Question 15 Suppose, in above example the payment has been released to Service provider on

02.03.2020

Answer Time of supply will be the earliest of following;

1) Time of payment i.e 02.03.2020

2) The day following 60 days from the date of invoice issued by GTA

02.11.2017+ 60 days =01.01.2020

Time of supply would be 01.01.2020 and NCL has to deposit the tax before filing the GST

return for the month of January, 2020 i.e on or before 20.02.2020.

Question 16 Suppose, in above example, payment to Service provider is made after 180 days, then

NCL is liable to reverse the Input tax availed.

56

Answer The concept of reversal of credit under Rule 36(4) 0f CGST Rules will not apply on taxes

deposited under Reverse charge.

Question 17 In case of activity covered under Reverse charge and service provider is unregistered

person, which section will issue self-invoice, User section or Finance Section?

Answer In this case user section will immediately arrange to provide the Invoice to Finance section

in any case within 60 days from the date of issue of invoice or any other document 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 and generate self

invoice as well as payment voucher through Coalnet.

Question 18 Whether tax deposited under Reverse charge is eligible for Input tax.

Answer Yes, Once tax is deposited, its input tax credit is available if such supply of goods or

services or both are otherwise eligible for input tax credit

Question 19 In existing tax, Cenvat credit on service taxes deposit under reverse charge can be

availed on the basis of challan. The same documents are eligible 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 Rules 2017.

It is noted that Payment Challan has not been included in the prescribe documents.

Thus, if the supply is made by Registered supplier or service is provided by registered

service provider, 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 registered service

provider, then NCL has to issue Invoice as per the prescribe format and self-invoice will

be the valid documents for Input tax credit

Question 20 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, in that case,

finance Section will not be able to make the GST tax payment under Reverse charge.

Consequence:

3) We have to make GST Tax payment along with interest and penalty.

4) Penalty of Rs 10,000 will be levied for Non- issuance of Invoice as per the

provision of section 122.

5) Prosecution can be made to officer in default as per the provision of section

132.

57

Question 21 Whether GST on Security services (other than CSIF) also covered under Reverse

charge mechanism?

Answer It is noted that CISF service is already covered in RCM, however security services are also

included in the list of RCM w.e.f 01.01.2019 by the virtue of notification no. 29/2018

dated 31.12.2018.

Any registered person receiving Security services (services provided by way of supply of

security personnel) from any person other than a body corporate is required to pay GST on

RCM basis.

Question 22 What is the applicability of GST on renting of motor Vehicle till 30.09.2019?

Answer Vide notification No. 11/2017 dated 28.06.2017 the following tax structure is prescribed

w.r.t renting of motor vehicle:

Situation Service provider

availing the benefit

of ITC

Rate

When fuel charges are included in gross

consideration

YES 12%

NO 5%

When fuel charges are not included in

gross consideration

NO 18%

Question 23 What is the amendment in applicability of GST on renting of motor vehicle after

30.09.2019 and what will be the effect of the same on NCL?

Answer It is noted GST on hiring of vehicle is covered under forward charge mechanism.

However CBIC vide Notification number 22/2019-Central Tax (Rate) dated 30.09.2019,

services of hiring of vehicle is covered under RCM subject to fulfilment of prescribed

conditions, relevant provision of notification is as under “service of hiring of motor

vehicle provided to a body corporate by any person other than body corporate opt to pay

GST @5% when service provider is not availing the benefit of ITC of input and Capital

goods is covered under Reverse charge mechanism with effect from 01.10.2019.”

The effect of the amendment on NCL is enumerated as per the table below:-

Type of

Service

Provider

Type of

Service

receiver

Rate of GST Reverse

charge or

Forward

charge

Certification

to be obtained

from Service

provider

Non corporate

and Registered

NCL 5%

(Diesel cost cost

included)

Reverse

Charge

Obtain

certificate

from service

provider that

Service

Provider is not

58

availing the

benefit of input

tax credit.

Kindly ensure

that Invoice

issued by

service

provider

specifies that

GST is payable

under reverse

charge

Non corporate

and Registered

NCL 12%

(Diesel cost cost

included)

Forward

charge

Obtain

certificate

from service

provider that

they have

opted the

scheme of 12%

and availing

ITC on their

input

Corporate and

Registered

NCL 5% or 12%

(Diesel cost

included)

Forward

Charge

Non Corporate

and Registered

NCL 18%

(When diesel

cost not

included in

invoice)

Forward

Charge

Unregistered NCL NIL NA Obtain

certificate

from service

provider that

their turnover

does not

59

exceed the

minimum

amount as

prescribed in

the Act for

registration.

Question 24 What is the relevant date of applicability of RCM in case of Renting of motor

Vehicle?

Answer The notification shall be effective from 01.10.2019.

As per the provision of Section 14 of the CGST Act, where service has been provided

before the date of notification i.e., 01.10.2019 and invoice is also dated before

01.10.2019, reverse charge as mentioned in point 1 of the table, shall not apply.

Question 25 What if service of hiring of vehicle is availed on 25.09.2019 before the date of

notification, however invoice is issued by service provider on 30.10.2019 i.e. after the

date of notification and payment is also made on 01.11.2019 (after the date of

notification)

Answer Where service is provided before the date of notification, invoice is issued after the date of

notification and payment is also made after the date of notification time of supply will be

date of invoice or date of payment whichever is earlier. In this case Time of supply will be

the date of invoice and provision of RCM will be applicable.

Question 26 What will be the taxable event when there is change in GST rate or nature (Forward

charge to Reverse Charge or vice versa) through notification?

Answer Change in rate of GST

Services provided

or Goods received

Invoice issued Payment Date Taxable event

Before After Before Payment date is

time of supply

Before Before After Invoice date

Before After After Invoice date/

payment date

whichever is earlier

After Before After Date of Payment

After Before Before Invoice date/

payment date

whichever is earlier

After After Before Invoice date

Question 27 Will GST TDS will be applicable if GST is applicable under reverse charge?

Answer Provision of GST TDS shall not be applicable in the activities covered under reverse

charge, in the table above

Question 28 What will be the Modus operandi of activities covered under RCM where service

recipient is NCL (M.P./U.P.) project, however paying authority is Kolkata Desk

office ?

Answer In this situation practical difficulties will arise, as service provider will issue the invoice

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with the name of actual user (under GSTIN of MP/UP) and paying authority is Kolkata

desk office (W.B) . Kolkata desk office cannot deposit the RCM under their GSTIN as the

actual user is liable to report the RCM.

The following will be the modus oprendi:

1. Kindly ensure that the invoice is issued in the name of service recipient i.e.,

concerned project of NCL ,under the registration number of NCL MP or NCL UP

and it should not be issued under the ISD registration of Kolkata desk office as Input

service distributor (ISD) cant deposit the GST under reverse charge.

2. Incharge (Kolkata desk office) shall arrange to provide the information regarding

hiring charges to concern project of NCL within 10th

of the following month, to

ensure payment of GST under reverse charge and/or other compliance, as may be

applicable in the below mentioned format:

GSTIN Name Invoice No. Invoice date Taxable Amt. IGST

3. Debit memo along with original invoice will be forwarded to project as per extant

practice

4. No GST TDS will be deducted.

Question 29 What will be the Modus operandi of cases where service recipient is NCL, however

paying authority is CIL Delhi Office, the transaction is covered under Reverse

charge, under GST rate of 5%

Answer 1) AFM HQ may ensure to collect the information regarding hiring charges related to

NCL, to ensure payment of GST under reverse charge and/or other compliance, as

may be applicable in the below mentioned format:

GSTIN Name Invoice

No.

Invoice

date

Taxable

Amt.

IGST

2) Kindly ensure that Invoice is issued with the GSTIN number of NCL.

3) Kindly ensure that Delhi Office has not deducted the GST TDS on this activity.

4) AFM may make necessary correspondences with Delhi Office in this regard, if

required.

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GST on Payments to Employees

Question 1 What are the activities treated as supply even if made without consideration?

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

consideration. Accordingly, such supplies without consideration will attract GST. 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:

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 2 What is related person as per GST Act? What is the relevance to determine related

person?

Answer Related persons is defined u/s 2(84) of the GST Act, Persons shall be deemed to be related

if they fall under any of the categories below:

(a) Officer/ director of one business is the officer/ director of another business

(b) Businesses are legally recognised as partners

(c) An employer and an employee

(d) Any person holds at least 25% of shares in another company either directly or

indirectly

(e) One of them controls the other directly or indirectly

(f) They are under common control or management

(g) The entities together control another entity

(h) They are members of the same family

(i) Persons include a legal person who can be individuals, HUF, company, firm, LLP,

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co-operative society, body of individuals, local authority, government etc or an

artificial juridical person. It also includes entities incorporated outside India.

Persons who are associated with one another’s business or is a sole agent or sole

distributor or sole concessionaire shall be deemed to be related.

Question 3 What are the activities which are neither treated as supply of good nor treated as

supply of services?

Answer Schedule III of the CGST Act, prescribe the list of activities which neither treated as

supply of goods nor treated as supply of services. [Section 7(2)(a)]

As per Schedule III, the following activities or transactions which shall be treated neither

as a supply of goods nor a supply of service:

S.No Activities to be treated neither as a supply of goods nor a supply of services

1. Services by an employee to the employer in the course of or in relation to his

employment.

2. Services by any court or tribunal established under any law for the time being in

force.

3.

a) The functions performed by the Members of Parliament. Members of State

Legislature. Members of Panchayats. Members of Municipalities and

Members of other local authorities:

b) The duties performed by any person who holds any post In pursuance of the

Constitution of the Constitution in that capacity: or

c) The duties performed by any person as a Chairperson or a Member or a

Director in a body established by the Central Government or a State

Government or local Authority and who is not deemed as an employee before

the commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including transportation of the

deceased.

5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II. sale of building,

6. Actionable claims, other than lottery, betting and gambling

Question 4 Will GST be applicable on payments made to Employees?

Answer The taxable event in GST is supply of Goods. It is noted that as per provision of schedule

III read with section 7 of CGST Act, 2017; Services by an employee to the employer in

the course of or in relation to his employment shall be treated neither as a supply of

goods nor a supply of services, thus out of purview of GST. However as per the

provision of schedule I read with section 7 of CGST Act, 2017; GST will be payable if

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there is supply of free goods and services to any employees exceeding Rs 50,000/- in

value in a financial year would trigger GST.

Hence, transactions which are excluded from the levy of tax for transactions between

employee and employer are

1. Supply of services by employee to employer in the course of employment

2. Gifts by Employer to employee not exceeding Rs 50,000 in a Financial Year

Question 5 What will be considered as gift to employees?

Answer

The term gift has not been defined in GST Acts and Rule, Whereas Section 122 of the

Transfer of Property Act, 1882 (TOPA) defines the term "gift" as follows:

"Gift is the transfer of certain existing movable or immovable property made

voluntarily and without consideration, by one person, called the donor, to another,

called the done, and accepted by or on behalf of the donee."

Thus, gift is something voluntary supplied without any consideration. That Amenities

provided to employee, which is not the part of CTC or employer is not obligated to

provide the same under employment term will be treated as Gift.

Question 6 Whether PRP and Ex-gratia will be treated as Gift and attract GST?

Answer

No, PRP (Performance related payment) and Ex-Gratia paid to Coal India employee could

not be treated as gift as it is the part of CTC and CIL is under obligation to give the same

to employees. Gift is any perquisites paid to employees which is not part of their CTC or

employer is not under the obligation to provide the same to their employees.

Question 7 Whether amount distributed on May day as reward for achieving the production

target is considered as Gift and attract GST?

Answer

It is given to understand that in case of excellent performance (achieving the target) of

company, NCL distributes some profit as reward to all employees. As the same is not part

of CTC and is voluntary in nature as NCL Management is not under the obligation of

employment term to provide the same, moreover the same was not the part of CTC or

NCWA, and this may be treated as Gift and will be covered under the definition of Supply

of CGST. However the monetary value of gift/cash reward is less than Rs 50,000/-, Thus,

this cash reward will not trigger GST. Suppose NCL Management had announced to give

cash reward of Rs 55,000 instead of Rs 13,000, then this would trigger GST.

Question 8 List out the major payments/benefits provided by NCL to its Employees and

implication of GST thereon.

Answer The following table shows the detail of remuneration paid to employees of CIL and

subsidiaries and impact on GST thereon

S.No Particulars Treated as GST Remarks

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Supply

under

GST Act

Applicable

1 Salary, Wages,

Allowances ,Bonus etc.

No No Out of Purview of GST

as Coal India Limited

is under obligation (due

to term of

employment/NCWA)

to provide the same to

its employees

2 Arrear of salary No No

3 Ex-Gratia No No

4 Performance Related

Pay

No No

5 Contribution to P.F. &

Other Funds

No No

6 Gratuity No No

7 Leave Encashment No No

8 Medical Expenses No No

9 Education Facilities to

employees children

No No

10 Canteen/Free Coupons

for Canteen

No No

11 Rent Free

Accommodation

No No

12 Town Administration No No

13 Water supply/Power

supply

No No

14 Car Facility No No

15 Training to employees in

India or Outside India

No No

16 Scholarship to

employees Children

Yes Yes, if

value of

supply is

more than

Rs

50,000/-

Would be treated as

Supply and GST will

attract, as Coal India

Limited is not under

any obligation to

provide the same to its

employees.

The same is voluntary

provided by

Management to

17 Cash reward Yes

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employees.

18 Forfeiture of MT Bond

money due to

resignation/any other

reason

Yes Yes It will be treated as

supply of service under

“Agreeing to refrain

from doing an act and

attract GST”.

Question 9 Whether GST would be levied on Bond amount recovered/forfeited at the time of

resignation of an Executive and what will be the GST rate on the same?

Answer Yes, GST will be levied on the bond money forfeited/recovered as the same will be

treated as supply of service under “Agreeing to refrain from doing an act and attract

GST”. GST will be levied at 18%.

Question 10 What shall be the implication of GST on scholarship provided by the company to

employee children?

Answer GST will be applicable when the value of supply (Scholarship) is more than Rs 50,000/-.

It is given to understand that NCL management provides scholarship to employee

children for higher studies who score merits in examination. The same is not part of CTC

and is voluntary in nature, NCL Management is not under the obligation of employment

term to provide the same, moreover the same was not the part of CTC or NCWA, Thus

this will be treated as Gift and will be covered under the definition of Supply under GST.

It would be treated as Supply and GST will attract if value of supply is more than Rs.

50000/-, as Coal India Limited is not under any obligation to provide the same to its

employees.

Question 11 What shall be the GST implication on buyback of laptops by executives of NCL?

Answer As per the CIL scheme for providing Laptop/tablet or devices of similar categories to

Executives of Coal India Limited and its Subsidiaries, executives are required to

compulsorily buy-back the laptop at a price equivalent to 5 % of original purchase price

after expiry of a period of 3 years from the date of purchase. This buyback of laptop

tantamount to sale of laptop by NCL to the concerned executives at residual value i.e., 5%

of purchase price being 5% of Rs.70000 i.e., Rs. 3500.

The company will charge GST @ 18% on this sale transaction and recover GST at 18%

(i.e, 18% of Rs. 3500 -Rs.630/-) along with 5% of original purchase price from

employees.

Question 12 What Will be the GST implication on amount recovered from employees on account

of school bus facility provided for their children?

Answer Yes, It will be treated as supply and GST will be levied thereon

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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?

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 5 What is Input Tax Credit?

Answer Input Tax Credit has been defined under Section 2(63) of the GST Act, 2017 which means

the credit of Input Tax.

Question 6 What is Electronic Credit ledger?

Answer As per section 2(46) of the CGST Act 2017, Electronic credit ledger means the Electronic

credit ledger as referred in 49(2). As per section 49(2) of the CGST Act 2017, The input

tax credit is self-assessed in return of registered person shall be credited to electronic

credit ledger in accordance with section 41.It means ITC availed on the basis of self-

assessment will be credited in electronic credit ledger for utilization.

Question 7 Who can avail the Input Tax Credit?

Answer Taxable person engaged in providing taxable supply of Goods or service can avail the

benefit of Input Tax credit on of IGST, CGST, SGST, UTGST, GST Cess paid by their

supplier subject to fulfillment of prescribed conditions in this regard.

Question 8 Whether NCL can avail the Input Tax credit on input supply and services?

Answer NCL being supplier of coal 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 9 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:

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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

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 of GST

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 (not yet notified) – NCL and its

projects avail the ITC based on GSTR 2A (when the same is appearing in GSTR

2A)

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 is liable to reverse the credit along 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 or debit note has been issued, or the date of filing of Annual Return,

whichever is earlier. e.g. ITC for the invoice issued in FY 2019-20 would not be

available after 20.10.2020 or the actual date of filing Annul Return (on or before

31.12.2020), whichever is earlier

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

Question 10 What is the major condition for eligibility of Input Tax credit?

Answer The supply or service should be used for furtherance of business.

Question 11 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.

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

provisions of section 31;

b. Any self-invoice issued by the recipient in case of inward supply from unregistered

person or supplies which attract GST payment under RCM, subject to payment of Tax

as per the provision of section 31(3)(f) of the CGST Act.

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

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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.

Question 12 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

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

Question 13 What shall be the consequences, when invoice issued by supplier is not in 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 invoice, and the relevant information, as contained in the

invoice, is furnished in FORM GSTR-2, not yet notified by such person.

Accordingly, NCL will not be able to get the benefit of Input tax credit if invoice issued

by supplier is not in accordance with the provision of section 31 and invoice rule.

Question 14 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 15 What is the maximum time limit to claim 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) 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) Furnishing the annual return

whichever is earliest.

It means ITC would not be available on invoice issued by supplier or service provider

between 01.04.2019 to 31.03.2020 after filing the GSTR 3B of september 2020, i.e.,

20.10.2020 or date of annual filing of Return, whichever is earlier.

However, as provided in Rule 37(4) of CGST Rules 2017, the above time limit is not

applicable where a claim is made for re-availing of any credit that had been reversed

earlier due to non-payment of consideration within 180 days of date of issue of invoice by

the supplier.

Question 16 A person has a single GST registration in respect of two different trade names. Can

he set off input tax credit from one trade name against the output tax liability of the

other?

Answer All input tax credits can be set off against the output tax liability of the same GSTIN

irrespective of the different businesses or trade names present for a particular taxable

70

person.

Question 17 Suppose, Supply was made in the month of June, 2019 and Invoice is having same

date. what is the last date of availing the Input Tax credit

Answer Input tax credit can be availed immediately on receipt of goods along with invoice or

before filing of return for September 2020 i.e., on or before 20/10/2020 subject to prior

filing of annual return for the FY 2019-20.

Question 18 Suppose, Supply along with invoice was made in the month of November, 2019.

What is the last date of availing the Input Tax credit?

Answer Input Tax credit can be availed immediately on receipt of Goods or service or any future

date, 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, 2019, Input tax credit can be availed till September,

2020,if annual return is filed before September,2020 then last date of availing ITC is date

return of preceding month of filing annual return.

Question 19 In above question, what shall be the consequence, if the annual return for F/Y 2019-

20 is filed in the month of June, 2020?

Answer In this case, Input Tax credit for invoice dated November, 2019 can be availed till the

Return of May, 2020.

Question 20 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 21 Can Input tax credit be allowed in the same month if the supplier has shown it as an

outward supply even though the recipient receives the goods in the next month?

Answer All the conditions for availing input tax credit should be satisfied as provided under

section 16(2) of the CGST Act 2017. One of the conditions for availing the ITC is the

receipt of goods or services or both. Without actual receipt, the input tax credit cannot be

availed. So, input tax credit should only be available in the month when the goods are

actually received.

Question 22 Whether in any circumstances ITC can be availed without receipt of goods in own

factory?

Answer There is a condition in section 16(2)(b) that ITC can be availed when goods or services or

both has been received. However this clause is having an exception. Explanation to

Section 16(2)(b) of the CGST Act provides for deemed receipt of goods where the goods

71

are delivered by the supplier to the recipient or any other person on the direction of the

recipient, whether acting as agent or otherwise, before or during movement of goods

either by way of transfer of document of title to goods or otherwise. In this situation

original recipient can avail the benefit of ITC without receiving the goods.

Question 23 Will a person get the input tax credit if he has not actually received the services but

has been received by some other person on the direction of that person?

Answer As per Explanation (ii) in Section 16(2)(b) of the CGST Act 2017, it has been stated that

the registered person will be deemed to have received the services where these services

have been provided by the supplier to any person on the direction of and on account of

such registered person.

Question 24 Whether Input tax credit on Inputs and Capital Goods is allowed in one installment?

Answer Yes, Input tax credit will be available in full with respect to inputs, capital goods as well

as input service subject to fulfillment of the prescribed condition under section 16(2) of

the CGST Act. Even in the case of supply of goods in lots/installments, this credit would

be available in full on the receipt of the last lot/installment.

The existing concept of partial credit on purchase of capital goods under the CENVAT

Credit Rules, 2004 (i.e., 50% in the year of receipt and 50% in subsequent years) has been

done away with.

Question 25 What if one has received the goods along with invoice in the month of January 2020,

however, could not take credit in the month of January as DRR is not prepared due

to pendency of inspection report?

Answer In this case ITC can be availed in subsequent month when DRR is prepared, but cannot be

availed;

a) After Filing of Return for the month of September following the end of financial

year to which such invoice

b) After filing of Annual Return

Question 26 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 27 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 have been adopted in GST regime also?

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Answer No, entire credit of GST paid on Capital Goods as well as Inputs and Input services would

be available instantly on the receipt of such supply along with invoice.

Even though the terms input and capital goods have been separately covered and defined

in GST Act, however, there is no restriction of availment of credit to the extent of 50% on

capital goods in the year of its receipt.

Question 28 Whether Input Tax credit can be availed on advances made to supplier or service

provider?

Answer As per the amended provision of GST, GST will not be attracted on advance payment

made for goods. However, GST will be attracted on advance against supply of services.

Service provider is liable to issue Advance receipt voucher (ARV) on advances. If

advance payment was made before receipt of services, input tax credit will not be

available on the basis of ARV.

At the time of payment of GST on advance, the supplier of services cannot issue tax

invoice. He will only issue 'advance receipt voucher’ and advance receipt voucher is not a

valid document to avail Input Tax credit. Further for availing ITC, one condition is goods

or service shall be received, otherwise ITC can’t be availed..

Question 29 Whether ITC on Input destroyed/ pilfered, and shortage is available?

Answer Section 17(5)(h) specifically restricts input tax credit on goods lost, stolen, destroyed,

written off or disposed by way of gift or free samples. Therefore, input tax paid on goods

which are destroyed/ pilfered and where shortage has occurred will not be eligible unless

if loss occurred during production process or after goods entered the store.

Question 30 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 in lots

or instalments, the registered taxable person shall be entitled to avail credit upon receipt of

the last lot or Installment.

Question 31 Are there any transaction where full input tax credit can be availed by NCL even if

the same is not appearing in GSTR 2A?

Answer NCL may avail full input tax credit (if otherwise available), irrespective of appearance in

GSTR 2A, in respect of the following:

1) IGST paid on imports

2) GST deposited under reverse charge mechanism

3) Credit received from Input service distributor.

Question 32 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.

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Question 33 What shall be the consequences when supplier does’nt files the GSTR-1?

Answer When the supplier doesn’t files its GSTR 1, corresponding detail of invoice won’t appear

in GSTR 2A. In such cases, ITC will be restricted with respect to those invoices/debit

notes, details of which are not uploaded by supplier/not appearing in GSTR 1 to the extent

of 10% of the eligible credit available in GSTR 2A.

The said restriction is only applicable for invoices/debit notes on which credit is availed

after 09.10.2019. NCL can avail ITC of the mentioned invoice only to the extent of 10%

of eligible credit (ITC as available as per GST 2A) excluding invoices on which credit is

otherwise not available.

Question 34 What is the restriction to avail ITC in case of invoice is not appearing in GSTR

2A,However recorded as eligible ITC in books of accounts?

Answer As per insertion of Rule 36(4) of CGST Rules 2017 inserted vide notification no 49/2019-

Central Tax dated 09.10.2019 further amended vide notification no 75/2019 dated

26.12.2019, ITC to be availed by a registered person in respect of invoices or debit notes,

the details of which have not been uploaded by the suppliers, shall not exceed 10 per cent

of the eligible credit available in respect of invoices or debit notes the details of which

have been uploaded by the suppliers. The eligible ITC that can be availed is explained by

way of illustrations, in a tabulated form, below.

In the illustrations, say a taxpayer “R” receives 100 invoices (for inward supply of goods

or services) involving ITC of Rs. 10 lakhs, from various suppliers during the month of

July, 2019 and has to claim ITC in his FORM GSTR-3B of July, to be filed by 20th

August, 2019.

Details of suppliers’ invoices

for which recipient is eligible

to take ITC

Details

Maximum ITC that can be

availed

Case 1 Suppliers have

furnished in FORM

GSTR-1,80 invoices

involving ITC of Rs.

6 lakhs as on the due

date of furnishing of

the details of outward

supplies

Particulars Rs.

ITC as per

books of

accounts of

NCL

10 lakhs

ITC appearing

in GSTR 2A of

NCL

6 Lakhs

Particulars Rs.

ITC against invoice

appearing in

GSTR- 2A

6,00,000/-

ITC against invoice

not appearing in

GSTR- 2A

(10% of 6 Lakhs)

60,000/-

Total 6,60,000/-

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Case 2 Suppliers have

furnished in FORM

GSTR-1 80 invoices

involving ITC of Rs.

7 lakhs as on the due

date of furnishing of

the details of outward

supplies by the

suppliers.

Particulars Rs.

ITC as per

books of

accounts of

NCL

10 lakhs

ITC appearing

in GSTR 2A of

NCL

7 Lakhs

Particulars Rs.

ITC against invoice

appearing in

GSTR- 2A

7,00,000/-

ITC against invoice

not appearing in

GSTR- 2A

(10% of 6 Lakhs)

70,000/-

Total 7,70,000/-

Case 3 Suppliers have

furnished in FORM

GSTR-1 75 invoices

having ITC of Rs.

9.10 lakhs as on the

due date of furnishing

of the details of

outward supplies by

the suppliers

Particulars Rs.

ITC as per

books of

accounts of

NCL

10 lakhs

ITC appearing

in GSTR 2A of

NCL

9.10Lakhs

Particulars Rs.

ITC against

invoice appearing

in GSTR- 2A

9,10,000/-

ITC against

invoice not

appearing in

GSTR- 2A

(10% of 6 Lakhs)

90,000/-*

Total Rs.

10,00,000/-

* The additional amount of ITC

availed shall be limited to ensure

that the total ITC availed does not

exceed the total eligible ITC.

Question 35 When can balance ITC be claimed in case availment of ITC is restricted, due to their

details not being uploaded by the supplier in GSTR-1?

Answer The balance ITC may be claimed by the taxpayer in any of the succeeding months(subject

to the time limit condition) provided details of requisite invoices are uploaded by the

suppliers in their GSTR-1. One can claim proportionate ITC as and when details of some

invoices are uploaded by the suppliers provided that credit on invoices, the details of

which are not uploaded remains under 10 per cent of the eligible input tax credit, the

details of which are uploaded by the suppliers.

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As in above examples as enumerated in question above,

Suppose the supplier has uploaded the invoice involving ITC to the tune of Rs.2.3 Lakhs,

then total credit that can be availed by NCL is:-

Amount available in GST 2A + 10% of amount available in GST 2A (subject to

maximum 10 Lakhs which is the maximum ITC available in the transaction)

The same is explained for Case No. 1 and 2 of the illustrations provided at question above,

as under:

Case 1

Particulars Amount

Subsequent upload of the

invoice involving ITC by the

supplier

Rs.2.3 Lakhs

Amount available in GST 2A 6 Lakhs +Rs. 2.3 Lakhs

=Rs.8.3 Lakhs

Total credit that can be

availed

“Amount available in GST 2A

+ 10% of amount available in

GST 2A” (subject to

maximum 10 Lakhs which is

the maximum ITC available

in the transaction

Rs.8.3 Lakhs+10% of

Rs.8.3Lakhs= Rs.9.13 Lakhs

Case 2

Particulars Amount

Subsequent upload of the

invoice involving ITC by the

supplier

Rs.2.10 Lakhs

Amount available in GST 2A 7 Lakhs+2.1 Lakhs= Rs.9.1

Lakhs

Total credit that can be

availed by NCL

“Amount available in GST 2A

+ 10% of amount available in

GST 2A” (subject to

maximum 10 Lakhs which is

Rs. 9.1 lakhs + Rs. 0.91 lakhs

(being 10% of Rs.9.1Lakhs) =

Rs. 10 lakhs]

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the maximum ITC available

in the transaction

Question 36 What if, the supplier uploads its GST return after the expiry of time limit prescribed

for availment of ITC by NCL?

Answer If supplier uploads the GST return after the expiry of time limit prescribed for availment

of ITC (enumerated in question above), then recipient will not be able to claim such ITC

due to lapse of the prescribed time limit and the ITC pertaining to such transaction shall

become dead loss for NCL.

Question 37 What are the safeguards adopted by NCL to deal with such complexities arising to

NCL due to non-filing of GST returns by suppliers?

NCL adopts a practice of withholding GST of suppliers till ITC pertaining to transactions

is not available in GSTR 2A of NCL and releases the same only on the appearance of such

amount in GSTR 2A of NCL.

However, GST will not be withheld for the following:-

a) Where the value of invoice is less than Rs. 10,000/- and supply/service is

ineligible for Input tax credit

b) Invoices other than final invoice of PSU

c) Running Invoice other than final invoice of supply; where number of

invoice is more than two in month like invoice of explosive

d) Invoices other than final invoice of supplier having Rate Contract with

NCL

e) Invoices other than final invoice of supplier having Depot Agreement

with NCL

f) Running invoice other than final invoice of services having Letter of

award, work agreement.

For Clause (b) to (f), liberty is taken for invoices of first month, for next month

invoice, it will be released when the detail of first invoice will be verified (after the

expiry of due date of filing of GSTR-1) and so on.

Question 38 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

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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 39 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 GSTR 3B.

Question 40 Whether the ITC so reversed (in question above) be availed again?

Answer Yes, ITC can be availed for credit of Input tax along with interest already reversed after

making the payment against the supply. Limitation as prescribed under rule 37(4) will not

be applicable in this case.

Question 41 What if the annual return has already been filed before the payment for

corresponding invoice(in question above) has been made?

Answer As provided in Rule 37(4) of CGST Rules,2017, the above time limit is not applicable

where a claim is made for re-availing of any credit that had been reversed earlier due to

non-payment of consideration within 180 days of date of issue of invoice by the

supplier.Therefore, one can avail the ITC of GST paid on the invoice even after the annual

return for the corrsponding year has been filed.

Question 42 Whether proportionate ITC would be available if partial payment is made against

the invoice?

Answer We understand from the Rule 37(1), proportionate ITC would be reversed to the extent of

invoice value not paid. In view of Rule 37(1) of CGST Rules, proportionate ITC will be

allowed if proportionate payment is made.

Question 43 What activities are blocked/ineligible for ITC?

Answer i. Motor vehicles of seating capacity of less than 13 persons excluding driver

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 only if it is not obligatory for employer to provide the same.

v. Works contract services when supplied for construction of an immovable property

(other than plant and machinery)

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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 44 Whether ITC will be available on purchase of motor vehicles by NCL?

Answer Purchase of motor vehicle was covered under blocked credit but by virtue of amendment

in section 17 of the CGST Act,However, ITC will now be available on purchase of motor

vehicles having approved seating capacity of more than 13 persons (including the driver).

ITC will also be available on general insurance services, servicing, repair, maintenance

etc. of such motor vehicles.

Question 45 Whether ITC is available on vehicles purchased for transportatation of goods?

Answer ITC is not blocked on those motor vehicles which are used for transportation of goods,

hence ITC will be available on vehicle purcahsed for transportatation of goods.

Question 46 Whether GST paid on repairs, maintenance and insurance of Motor Vehicles for

transportation of persons is eligible for ITC?

Answer The input tax credit is blocked on the repairs, maintenance and general insurance of those

motor vehicles on which input tax credit is blocked under Section 17(5)(a) of the CGST

Act 2017. So, input tax credit on repairing, maintenance and insurance of motor vehicles

for transportation of persons carrying not more than 13 persons will be blocked under

Section 17(5) provided it is not used for exceptional situations viz. transportation of

passengers, further supply and imparting training on driving.

Question 47 Can input tax credit be available on a truck or any goods vehicles used for

transportation of goods?. Also comment whether repairing, maintenance and

insurance of such vehicles will be allowable as credit?

Answer Input tax credit is not blocked on any motor vehicles for transportation for goods. Also,

any expenses in the form of repairs, maintenance and general insurance of motor vehicles

credit of which is not blocked under Section 17(5)(a) of the CGST Act 2017 will be

allowable as input tax credit under GST. So, it should be allowed as input tax credit.

Question 48 Whether the input tax credit will be available on a passenger vehicle which is used

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for transportation of goods only?

Answer If any motor vehicle is actually approved/licence issued for transportation of passenger,

however used for transportation of goods, it will not change its original form/colour.As

per the CGST Amendment Act 2018, input tax credit on motor vehicles for transportation

of persons having approved seating capacity of not more than 13 persons is blocked

subject to certain exceptional situations. Transportation of goods is not covered within this

provision. So, any motor vehicles for transportation of persons will be considered as a

blocked credit even though the same is actually used for transportation of goods.

However, it is clarified that the Input tax credit is allowable on motor vehicles which is for

transportation of goods as the same is not blocked.

Question 49 Whether ITC is available on GST paid on travel expenses of employees?

Answer ITC will not be available on services availed for extending travel benefits to employees

on vacation, such as leave or home travel concessions, until the employer is obliged under

any law for the time being in force. We understand that NCL is not legally obliged to

provide travel benefits to employees on vacation, thus ITC will not be available on

LTC/LLTC. However, ITC will be available on travel expense of employees while on

official duty/tour.

Question 50 Whether NCL is eligible to avail Input Tax credit on hiring of vehicle services or

renting of motor cab?

Answer Renting of motor cab is covered under blocked credit, therefore, input tax credit of this

service is not available to NCL.

However, when the cab is used for pick and drop to employees from office/move to

residential colonies input tax credit can be taken for the same.

Question 51 Whether NCL is eligible to avail Input tax credit on sitting fees of independent

directors?

Answer Yes, NCL can avail ITC of the GST paid on sitting fees of independent directors as the

same is used in the course of business and for the furtherance of business on the basis of

self invoice as GST is paid on this service under reverse charge mechanism.

Question 52 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 ‘capital goods’

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 53 What is the meaning of works contract services in GST ?

Answer Works contract has been defined in section 2(119) of the CGST Act 2017, as “works

contract” means a contract for building, construction, fabrication, completion, erection,

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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 54 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 55 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 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 56 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 amount.

Question 57 Whether ITC will be available on GST paid on purchase of Heavy Earth moving

machineries HEMM like Dumper, Dozer, and Dragline etc?

Answer Yes, NCL can avail input tax credit of GST paid on purchase of Dozer, Dragline, Trucks

or Other HEMM. HEMM cannot be treated as Motor vehicle and thus will be eligible for

Input tax credit as capital goods, as HEMM is used in the course/furtherance of business.

Question 58 Explain Repair and Maintenance service in context of NCL.

Answer Repair and maintenance service in NCL include repair and maintenance of movable

property like machinery and equipment, furniture, telecommunication, electrical and

household appliances and immovable property like building,CHP etc..

Question 59 Whether NCL is eligible to avail Input tax credit on repair and maintenance service

of immovable property like CHP, weigh bridge etc?

Answer Yes, NCL is eligible to avail Input tax credit on repair and maintenance services of

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immovable properties if the same falls under the category of plant and machinery. Coal

handling Plant (CHP) and weigh bridge are covered under the definition of plant and

machinery, therefore ITC will be available to NCL on repair and maintenance service of

immovable property like CHP, weigh bridge etc.

Question 60 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 61 Whether input tax credit on construction material used for construction of building

will be available to coal Industry?

Answer Section 17(5)(d) of the CGST Act 2017 states that input tax credit is blocked on goods or

services received by a taxable person for construction of an immovable property on his

own account. Only if he does not wish to retain the property but provide further supplies

of works contract services, input tax credit can be allowed. This means that a person who

receives on the property on own account will not be liable to input tax credit. The after use

of the property is immaterial once the title of the property belongs to the recipient. So,

input tax credit will not be available in respect of goods or services used for construction

of property even though the intent is to provide the said property on rent.

Question 62 Whether ITC on renovation, repairs of office building will be available?

Answer “Construction” includes re-construction, renovation, additions or alterations or repairs, to

the extent of capitalization, to the said immovable property. Thus ITC on renovation,

repair of office building would not be available if the expenditure is capitalised in books

of accounts. However if the repair is revenue in nature then ITC on repair would be

available.

Question 63 Whether ITC available on Solar Plant procured and installed?

Answer 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. ITC is available on GST paid on Solar Panel procured along with installation, the

same being treated as Plant and Machinery and used for furtherance of business.

Question 64 Whether ITC available on installation of Railway track?

Answer 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. Railway Track is not plant for machinery, therefore, ITC of GST paid on installation

of railway track would not be available.

Question 65 Whether ITC available on purchase of office equipments like Xerox machines, Fax

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machines etc?

Answer Yes, one can avail input tax credit of GST paid on purchase of office equipments like

Xerox machines, Fax machines etc as the same is used in course of business and for

furtherance of business.

Question 66 Whether supplies or service provided for Nehru Shatabdi Chikitshalay (Hospital),

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 67 Whether NCL is eligible to claim input tax credit of GST paid on Sewage and Waste

collection, treatment and disposal and other environmental protection services by it?

Answer Yes, NCL can avail input tax credit of the GST paid on Sewerage, sewage treatment and

septic tank cleaning services, if the same is used in the course of business and for the

furtherance of business.

Question 68 Whether ITC is available on GST paid on service of Treatment of Bio Medical waste

by Clinical Establishment by NCL?

Answer Services of treatment of Bio medical waste availed by NSC hospital is exempt from GST;

therefore claim of input tax credit does not arise for this service.

Question 69 Whether ITC is available to NCL for GST paid on purchase of medical equipment

for hospitals maintained by NCL?

Answer NCL cannot claim ITC of GST paid on medical equipment used in hospitals because the

Medical equipment is used in Hospital (Clinical Establishment) where output service is

exempt from GST.

Question 70 Whether ITC is available to NCL for GST paid on purchase of medicines for

hospitals maintained by NCL?

Answer No, ITC is not available on medicines purchased for hospitals maintained by NCL as the

same is used for personal consumption of employees.

Question 71 What would be the tax liability on removal of capital goods after use?

Answer Where ITC has been availed on capital goods and the capital goods has been sold after

use, higher of the following would be payable/liable to be reversed:

(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

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taxable person may pay tax on the transaction value of such goods determined under

section 15 of CGST Act.

Question 72 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 of CIL, the assets are sold off as scrap after

the use of 10 to 20 years. 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 has been availed nor GST Credit, thus 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 73 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 shall not be denied.

Further, output tax shall be payable on sale of such waste/scrap

Question 74 In case the supplier is not registered in GST, whether ITC would be available 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. However, the payment of

GST under reverse charge is suspended as on date and Government shall notify the dates

and categories of goods/services, on purchase of which GST shall be paid under reverse

charge.

Therefore, no GST is payable on purchases made/services received from unregistered

parties as on date and hence no question of claiming ITC arises for the same.

Question 75 What is the manner of utilization of CGST, SGST / UTGST and IGST?

Answer Amendments have been in existing Section 49 and a new section 49A has been inserted

pertaining to manner of adjustment of ITC. As per the amended provision, firstly the ITC

available on account of IGST will be used for payment of IGST, then left over balance

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will be used for CGST and SGST output liability. Thereafter, the ITC available on

account of CGST and SGST will be used respectively for CGST and SGST output

liability.

(i) Input tax Credit of IGST can be utilised for payment of IGST, CGST and

SGST (in that order) on outward supply.

(ii) Input tax Credit of SGST can be utilised for payment of SGST first and

balance for payment of IGST on outward supply.

(iii) Input tax Credit of UTGST can be utilised for payment of UTGST first and

balance for payment of IGST on outward supply.

(iv) Input tax Credit of CGST can be utilised for payment of CGST first and

balance for payment of IGST on outward supply.

Input tax credit of CGST and SGST/UTGST is not inter-changeable.

Question 76 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 77 What will be consequence if ineligible ITC wrongly availed?

Answer If at any stage, one observe that they 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

Question 78 Whether NCL is eligible to avail Input tax credit for GST paid for security services?

Answer Yes, ITC on GST paid for security services is available to NCL.

Question 79 Whether NCL can avail input tax credit on GST paid on sponsorship services?

Answer NCL is eligible to avail the input tax credit for GST paid on sponsorship services

provided as the same is used in the course of business and in the furtherance of business.

Question 80 Whether NCL can avail input tax credit of GST paid on deposit of Royalty, NMET

and DMF under RCM?

Answer Yes, NCL can avail input tax credit of the GST paid on deposit of Royalty, NMET and

DMF under RCM being Government support services as the same is used in the course of

business and for the furtherance of business.

Question 81 Whether Input tax credit is available on advocate services taken by NCL?

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Answer Yes, NCL can avail input tax credit of the GST paid on advocate services if the same is

used in the course of business and for the furtherance of business.

Question 82 Whether Input tax credit is available on Tax consultancy services availed by NCL?

Answer

Yes, NCL is eligible to avail input tax credit of GST paid on Tax consultancy and

preparation services provided by professionals/Practitioners other than Advocates to NCL

as the same is used in the course of business and for the furtherance of business.

Question 83 Whether NCL is eligible to avail ITC on GST paid for Audit service taken by it?

Answer Yes, NCL can avail input tax credit of the GST paid on Financial auditing services and

Other similar services as the same is used in the course of business and for the furtherance

of business.

Question 84 Whether NCL can avail benefit of input tax credit on GST paid on arbitration and

conciliation services availed?

Answer Yes, NCL can avail input tax credit of the GST paid on arbitration and conciliation

services as the same is used in the course of business and for the furtherance of business

on the basis of self-invoice and after payment of GST.

Question 85 Whether NCL is eligible for claiming input tax credit of GST paid on Catering

services availed by NCL?

Answer Yes, NCL can avail input tax credit of the GST paid on Services provided in Canteen and

other similar establishments as the same is used in the course of business and for the

furtherance of business.

Question 86 Whether NCL is eligible for claiming input tax credit of GST paid on cleaning

services availed by it?

Answer Yes, NCL can avail input tax credit of the GST paid on cleaning services as the same is

used in the course of business and for the furtherance of business

Question 87 Whether NCL can avail Input tax credit of GST paid on Selling of space for

advertisement in print media?

Answer Yes, NCL can avail input tax credit of the GST paid on Selling of space for advertisement

in print media as the same is used in the course of business and for the furtherance of

business. The SAC code for the captioned service is 9983 and the rate of GST is 5%.

Question 88 Whether NCL can avail ITC on GST paid on service of providing and laying Hume

Pipe at various locations at mines?

Answer NCL has availed the service of providing and laying Hume Pipe at various location at

mines, ITC is eligible on any supply of goods or services or both, which are used or

intended to be used in the course or furtherance of his business. providing and laying

Hume pipe at various location of Mines is necessary for smoothly run the mines, thus

caption services is used in the course or furtherance of business.

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Thus, Input Tax credit will be available on the service of providing and laying Hume Pipe

at various locations at mines.

Question 89 Whether the distributor and the recipient situated in different states can have same

PAN or different PAN number?

Answer It is mandatory that the Input Service Distributor and the recipient of credit are persons

having the same PAN, whether or not they are located in the same State.

Question 90 How will the integrated tax, central tax and state tax be distributed?

Answer In terms of Rule 39(1) (f) of the CGST Rules, 2017, the distribution is to be made by an

ISD as follows :

(a) Integrated tax as integrated tax.

(b) Central tax as central tax (if the recipient and ISD are located in the same State) and as

integrated tax (if the recipient and ISD are not located in the same State).

(c) State tax as state tax (if the recipient and ISD are located in the same State) and as

integrated tax (if the recipient and ISD are not located in the same State).

In case of distribution of central/ state tax as integrated tax, it should be ensured that the

amount distributed equals the amount of credit of central and state tax put together.

Question 91 Whether CGST can be distributed as SGST and whether SGST can be distributed as

CGST within the states and between the states?

Answer No. Section 20(1) does not permit distribution of CGST as SGST and vice versa. This

flows from the fundamentals of the GST law wherein the credit of CGST cannot be

utilized against SGST and vice versa.

Question 92 What will be the relevant document to distribute credit by ISD?

Answer An Invoice issued by ISD in line with provision of Rule 54(1) of the CGST Rules, 2017

will be the relevant document for availing the ITC.

For more details, kindly refer the chapter of ISD.

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Input Service Distributor (ISD)

Question 1 What is the meaning of Input Service Distributor (ISD) under GST?

Answer An ‘Input Service Distributor’ is defined in Section 2(61), of CGST Act as an office of the

supplier of goods or services or both which receives tax invoices towards receipt of input

services and issues a prescribed document for the purposes of distributing the credit of

central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax

(IGST) paid on the said services to a supplier of taxable goods or services or both having

same PAN as that of the ISD.

It is important to note that the ISD mechanism is meant only for distributing the credit on

common invoices pertaining to input services only and not goods (inputs or capital

goods).

Question 2 What is the need of ISD?

Answer Companies may have HQ and units at different places, which may be having separate

GSTIN. One or more of the units would be procuring certain services which would be for

common utilization of all units across the country. The bills for such expenses would be

raised on the one unit/HQ. But that unit/HQ itself would not be providing any output

supply so as to utilize the credit which gets accumulated on account of such input

services. Since the common expenditure is meant for the business of all units, it is but

natural that the credit of input services in respect of such common invoices should be

apportioned between all the consuming units. ISD mechanism enables such proportionate

distribution of credit of input services amongst all the consuming units.

For Example :

1. NCL HQ procures advertisement services for NCL as a whole. As advertisement

expenses are not alone for MP state but also for project located in UP state, Since

the common expenditure is meant for both UP and MP, Credit of input services in

respect of such common invoices should be apportioned between both states.

2. Kolkata Desk office arranges the Hotel services for stay of NCL employees at

Kolkata while in official duty/tour. Hotel bill is charges as expense in

corresponding Project. Here, Kolkata Desk office is acting as ISD and distributes

these charges among Projects by raising ISD Invoice.

Question 3 What are the essential conditions for qualifying as an ISD?

Answer The essential conditions for qualifying as an input service distributor are:

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• The Input Service Distributor should be an unit/Project of the supplier;

• Such regional supplier can be a supplier of goods or services or both;

• Such office should receive tax invoices issued in respect of receipt of input service

related to HQ or other units of HQ. Tax invoices received in respect of input/Capital

goods are not eligible for ISD benefits;

• Such unit should issue a prescribed document (ISD invoice) for the purposes of

distributing credits of CGST, SGST, IGST or UTGST, to a supplier of taxable goods or

services or both having same Permanent Account Number.

Question 4 Is separate registration required for ISD?

Answer As per Section 24 of the CGST Act, every ISD, whether or not separately registered under

GST law, have to compulsorily take registration under GST law as an Input Service

Distributor.

Question 5 Whether the distributor and the recipient situated in different states can have same

PAN or different PAN number?

Answer It is mandatory that the Input Service Distributor and the recipient of credit are persons

having the same PAN, whether or not they are located in the same State.

Question 6 Who can receive credit from an ISD?

Answer An ISD can distribute credit only to a unit which is a supplier of goods or services and has

the same Permanent Account Number as that of the Input Service Distributor.

Question 7 What are the conditions applicable to Input service distributor to distribute the

credit?

Answer In terms of Section 20(2) of CGST Act, an Input Service Distributor can distribute the

credit subject to the following conditions:

• The credit can be distributed to recipient against a document containing such details as

given in Rule 54(1) of the CGST Rules, 2017;

• The amount of credit distributed shall not exceed the amount of credit available for

distribution;

• The credit of tax paid on input service directly attributable to a recipient of credit shall

be distributed only to that recipient;

• If credit is attributable to more than one recipient, then it shall be distributed among such

recipient(s) to whom the input service is attributable on pro rata basis of the turnover in a

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State of such recipient during the relevant period, to the aggregate of the turnover of all

such recipients to whom such input service is attributable.

• If credit is attributable to all recipients, the above method of allocation on pro rata may

be applied with reference to all recipients, which are operational in current year.

Question 8 What is the procedure for distribution of Common credit?

Answer For the purposes of distributing the input tax credit, an ISD has to :

1. Issue an ISD invoice, as prescribed in rule 54(1) of the CGST Rules, 2017, clearly

indicating in such invoice that it is issued only for distribution of input tax credit.

2. The input tax credit available for distribution in a month shall be distributed in the

same month and details furnished in FORM GSTR-6. Further, an ISD shall

separately distribute both the amount of ineligible and eligible input tax credit.

3. The input tax credit on account of central tax and State tax or UT tax in respect of

recipient located in the same state shall be distributed as central tax and State tax

or UT tax respectively.

4. The input tax credit on account of central tax and State tax or UT tax shall, in

respect of a recipient located in a State or Union territory other than that of the

ISD, be distributed as integrated tax and the amount to be so distributed shall be

equal to the aggregate of the amount of input tax credit of central tax and State tax

or Union territory tax that qualifies for distribution to such recipient. The input tax

credit on account of integrated tax shall be distributed as integrated tax.

Question 9 In what manner ISD credit will be distributed for common services?

Answer The credit has to be distributed only to the unit to which the supply is directly attributable

to. If input services are attributable to more than one recipient of credit, the distribution

shall be in the pro-rata basis of turnover in the State/Union Territory.

However, if a particular input service pertains exclusively to only one unit and the bill is

raised in the name of ISD, the ISD can distribute the credit only to that unit and not to

other units. If the input services are common for all units, then it will be distributed

according to the ratio of turnover of all the units.

For Example:

1. Advertisement service availed by NCL cannot be attributed to one Project, so in

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this case the bill will be in the Registration no. of NCL HQ ISD and credit will be

distributed by NCL HQ to NCL MP and NCL UP according to the ratio of

turnover.

2. In case of hotel booking by Kolkata Desk office expense can be directly

attributable to the Project. In this case credit will be directly distributed to that

Project.

Question 10 How will the integrated tax, central tax and state tax be distributed?

Answer In terms of Rule 39(1) (f) of the CGST Rules, 2017, the distribution is to be made by an

ISD as follows :

(a) Integrated tax as integrated tax.

(b) Central tax as central tax (if the recipient and ISD are located in the same State) and as

integrated tax (if the recipient and ISD are not located in the same State).

(c) State tax as state tax (if the recipient and ISD are located in the same State) and as

integrated tax (if the recipient and ISD are not located in the same State).

In case of distribution of central/ state tax as integrated tax, it should be ensured that the

amount distributed equals the amount of credit of central and state tax put together.

Question 11 Whether CGST can be distributed as SGST and whether SGST can be distributed as

CGST within the states and between the states?

Answer No, Section 20(1) does not permit distribution of CGST as SGST and vice versa. This

flows from the fundamentals of the GST law wherein the credit of CGST cannot be

utilized against SGST and vice versa.

Question 12 What are the relevant documents to avail the credit distributed by an ISD ?

Answer An ISD invoice, as prescribed in rule 54(1) of the CGST Rules, 2017, clearly indicating in

such invoice that it is issued only for distribution of input tax credit will be the relevant

document for availing the ITC.

Question 13 What Will be the Contents of an ISD Invoice?

Answer 1. ISD Invoice has to be issued for distribution of ITC.

2. ISD Credit note has to be issued for the reduction of credit in case of ITC already

distributed.

As per sub-rule (1) of rule 54, ISD invoice or credit issued by an ISD shall contain the

following details:

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a. Name, address and GSTIN of the Input Service Distributor;

b. Consecutive Serial number (Not exceeding 16 characters); Further

• It can be in one or multiple series,

• Containing alphabets or numerals or

• Special characters hyphen or dash and

• Slash symbolized as “-“ and “/” respectively,

• Any combination thereof, unique for a financial year;

c. Date of its issue;

d. Name, address and GSTIN of the recipient to whom the credit is distributed;

e. Amount of the credit distributed;

f. Signature or digital signature of the ISD or his authorized representative

Question 14 Can ISD accept invoices on which tax is to be discharged under reverse charge

mechanism?

Answer An ISD cannot accept any invoices on which tax is to be discharged under reverse charge

mechanism. This is because the ISD mechanism is only to facilitate distribution of credit

of taxes paid. The ISD itself cannot discharge any tax liability (as person liable to pay tax)

and remit tax to government account. If Person registered as ISD wishes to take

input/input service attracting reverse charge mechanism then ISD has to get themselves

registered as normal; taxpayer.

Question 15 What Return are required to be filed by an ISD? What is the due date of filing the

Returns?

Answer An ISD will have to file monthly returns in GSTR-6 within thirteen days after the end of

the month and will have to furnish information of all ISD invoices issued against which

credit is distributed. The details in the returns will be made available to the respective

recipients in their GSTR 2A. An ISD shall not be required to file Annual return.

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Anti-Profiteering Provisions Under GST

Question 1 What is Profiteering?

Answer Profiteering is an act of making an unreasonable profit not justified by the corresponding

assumption of risk or by doing so unethically.

Question 2 What is the Difference between Profit and Profiteering?

Answer Profit is simply excess revenue left after eliminating all costs. Profit is excess of Business

revenue over business expenses.

Profiteering on the other hand, is the act of putting profit making ahead of responsibility

or ethics. Profiteering is taking unjust advantage of a current situation.

Question 3 What is profiteering in context of GST?

Answer In terms of Section 171 of the CGST Act, 2017, the suppliers of goods and services

should pass on the benefit of any reduction in the rate of tax or the benefit of input tax

credit to the recipients by way of commensurate reduction in prices. The willful action of

not passing on the above benefits to the recipients in the manner prescribed is known as

“profiteering”

Question 4 What is Anti-Profiteering?

Answer The GST Act contains a unique provision on anti-profiteering measure as a deterrent for

trade and industry to enjoy unjust enrichment in terms of profit arising out of

implementation of Goods and Services Tax in India, i.e., anti-profiteering measure would

obligate the businesses to pass on the cost benefit arising out of GST implementation to

their customers. The intention is to make it sure that whatever tax benefits are allowed, the

benefit of that reaches to the ultimate customers and is not pocketed by trade.

Question 5 What are the statutory provisions of anti-profiteering in GST law?

Answer Provisions regarding anti-profiteering is contained in section 171 of the CGST Act, as

follows:

1. Any reduction in rate of tax on any supply of goods or services or the benefit of

input tax credit shall be passed on to the recipient by way of commensurate

reduction in prices.

2. The Central Government may, on recommendations of the Council, by

notification, constitute an Authority, or empower an existing Authority constituted

under any law for the time being in force, to examine whether input tax credit

availed by any registered person or the reduction in the tax rate have actually

resulted in a commensurate reduction in the price of the goods or services or both

supplied by him.

3. The Authority referred to in sub-section (2) shall exercise such powers and

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discharge such functions as may be prescribed.

Chapter XV of the CGST Rules, 2017 comprising of 16 Rules (Rule 122 to Rule 137),

contains the detailed mechanism and procedure.

Question 6 Is there a sunset clause for Anti-Profiteering law?

Answer Yes. In terms of Rule 137 of the CGST Rules, 2017, the Anti-profiteering Authority shall

cease to exist after the expiry of two years from the date on which the Chairman of the

Authority enters upon his office unless the GST Council recommends otherwise.

Accordingly, anti-profiteering clause was valid upto 30.06.2019.

However, Government of India vide Notification no. 33/2019 dated 18.07.2019 has

amended the Rule 137 of Central Goods and Services Tax (CGST) Rules, 2017 and

extended the tenure of National authority of anti-profiteering from two years to four

years. Accordingly, sunset of the anti-profiteering would be 30.06.2021.

Question 7 What are some of the instances in which the statutory provisions of anti-profiteering

will kick in?

Answer As per the provisions of Section 171 of CGST Act, 2017 & the identical provision in

State/ UT GST Act the following may be the instances, when statutory provisions of anti-

profiteering may kick in:

i. reduction in tax rate;

ii. benefit of Input Tax Credit (ITC) available to the registered person/ supplier

Question 8 How can the benefit due to reduction in tax rate be passed to the customer?

Answer For passing the benefit due to reduction in tax rate, two types of scenrios may

emerge:

i. In case of supplies exclusive of tax, since reduction in tax rate will directly be

evidenced by invoices and the recipient will automatically get benefit of the rate

reduction.

ii. However, in case where contract of supplies is inclusive of taxes, this provision

will cast responsibility on the supplier to reduce the price due to reduction in rate

of taxes.

For example, FMCG items which are normally sold on MRP basis or some other

fixed prices by retailers, if there is any reduction in rate of tax it has to be passed

on to the ultimate recipient. Accordingly, there shall be need to revise MRP or

other prices fixed for such supplies.

Question 9 Should a customer pay extra GST on Maximum Retail Price (MRP) affixed on

goods?

Answer No. MRP is inclusive of GST and is the maximum retail price that can be charged from

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the consumers.

Question 10 In cases of over-charging in the name of GST, where can a consumer register his

complaint for redressal?

Answer Charging more than MRP attracts the provisions of Legal Metrology Act. In case of over-

charging over MRP, a complaint can be lodged on toll-free number 1800-11- 4000/14404.

There are multiple ways through which aggrieved consumers or suppliers of goods and

services can register their complaints against profiteering:

a. Online complaint facility: Complainant can register an online complaint at

http://www.naa.gov.in/complaint.php Link to see the guidelines to register online

complaint: http://www.naa.gov.in/page.php?id=guidelines-for-consumers

b. Via Mail: User can mail the complaint at:

Agencies Mail-Id Nature of the complaint

Standing

Committee

sc.antiprofiteering@gov.in

anti-profiteering@gov.in

Complaints involving

issues of all-India nature.

State-Screening

Committees

For State-wise E-mail

Addresses please refer to:

http://www.naa.gov.in/docs

/screening%20committees

% 2020-08-18.xlsx

Complaints involving

issues of local nature

c. By Post:

Agencies Postal Addresses

National Anti-

profiteering

Authority

National Anti-profiteering Authority Dept. of

Revenue, Ministry of Finance 6th Floor, Tower One

Jeevan Bharati Building Connaught Place New Delhi-

110 001.

Directorate General

of Anti-Profiteering

& Standing

Committee

Directorate General of Anti-profiteering, Dept. of

Revenue, Ministry of Finance, 2nd Floor, Bhai Vir

Singh Sahitya Sadan, Bhai Vir Singh Marg, Gole

Market, New Delhi -110 001.

Question 11 How can buyers of under-construction flats be benefitted from the anti-profiteering

provisions?

Answer CBEC vide Circular/office memorandum F.No 296/07/2017-CX.9 dated 15th

June

2017 issued by Department of Revenue, Ministry of Finance, GOI laid that the

builders are expected to pass on the benefits of lower tax burden under the GST regime to

95

the buyers of property by way of reduced prices/ installments and all the builders /

construction companies were advised that in the flats under construction, they should not

ask customers to pay higher tax rate on instalments to be received after imposition of

GST.

In pre-GST era, Central Excise duty was payable on most construction material at 12.5%.

In addition, VAT was payable on construction material at 12.5% to 14.5% in most of the

States & the construction material also suffered entry tax. The input tax credit of the

above taxes was inadmissible for meeting Service Tax liability of the builder, thus leading

to cascading of input taxes on constructed flats & a higher effective tax incidence. But

GST regime allows full input tax credit for offsetting the headline rate of 12%, thereby

reducing the effective tax incidence.

Question 12 How can the benefit due to ITC available to supplier be passed to Customers?

Answer As per provisions of Section 171 of CGST Act, the benefit of input tax credit available to

supplier due to implementation of GST shall be mandatorily passed on to the recipients by

way of commensurate reduction in prices.

There are several instances in which Cenvat Credit/ITC was not available to suppliers in

pre-GST era, however benefit of ITC related to inputs/capital goods used in supply of

goods/services is available to supplier in GST era, the benefit of the same shall

mandatorily be passed to customer. Such instances are enumerated as follows:

Registered dealer under Excise act

Unregistered supplier under excise due to turnover less than Rs1.5 crore

Work contractor/civil contractor

Suppliers who opted to pay taxes under composition scheme in Pre-GST era but

registered in GST.

Question 13 What are the provisions of Section 140(3) of CGST Act, 2017? Whether the same can

be linked with Anti profiteering?

Answer As per the provision of section 140(3) of CGST Act, the following suplliers will be

entitled to take credit in respect of eligible input held in stock and input contained in semi-

finished goods or finished goods held in stock on the 30.06.2017;

Registered dealer under Excise act

Unregistered supplier under excise due to turnover less than Rs1.5 crore

Work contractor/civil contractor

In case the above suppliers are having any running contract wherein supply/contract price

is fixed in Pre-GST era and supply is made in GST era out of the closing stock held on

30.06.2017, then the supplier should have to pass the benefit of input tax credit available,

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otherwise the same will tantamount to violation of anti-profiteering provisions by

supplier.

Question 14 What shall be the treatment of transitional credit for supplier opting composition

scheme pre-GST but obtained registration in GST era?

Answer As per the provisions of Section 140(6), A registered taxable person who was paying tax

under composition scheme in pre GST era shall be eligible for Credit of duties and taxes

on inputs held in stock as on 30.06.2017.

Credit available on inputs contained in semi- finished goods or finished goods held in

stock as on appointed day (Above benefit not available for input services) and Such

credit can be taken in the electronic credit ledger

Conditions :

• Person not paying taxes under composition scheme under GST law

• Goods must be used for taxable supply

• Otherwise eligible to take the credit under earlier law and under GST law

• Such person should be in possession of invoice/other prescribed document

• Invoices/ other prescribed document was not issued earlier than 12 months

preceding appointed day

Supplier falls in above category will get the benefit of Input tax credit on stock held

on 30.06.2017, when they made any supply to any registered person form the stock

held on 30.06.2017 against running contract, they have to mandatorily pass the

benefit to recipient.

Question 15 Modus operandi adopted in NCL to ensure that supplier has passed on the benefit of

anti-profiteering to NCL (being customer)?

Answer Every Supplier and Service provider is mandatorily required to submit the certificate from

practicing Chartered Accountant/Cost Accountant that he has passed/will pass the benefit,

if any arise in his input tax credit due to implementation of GST.

For the sake of uniformity CIL has designed format of Anti Profiteering Certificate as

follows:

S.no. Particulars Amount

1 Balance value of work and services (inclusive of existing

taxes subsumed under GST) against which Invoice has to

be raised under GST

a) Amount of services

*******

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b) Amount of Supply involved

For supply of goods, value of each item of goods (inclusive

of existing taxes subsumed under GST) against which

Invoice has to be raised under GST.

2 Less: Amount of existing taxes and duties subsumed under

GST in relation to (1) above (with detail)

*****

3 Balance amount (exclusive of existing taxes) [ 1-2] *******

4 Less: The benefit of input tax credit to the supplier (as

required under Sec 171 of CGST Act)

*****

5 Taxable value for the purpose of GST [ 3-4] *******

There should be an undertaking by the supplier that any extra benefit of input tax credit in

future shall also be passed on to the recipient.

Subsumed taxes as declared by supplier shall be cross verified on the basis of

computation prepared by respective user department on the basis of BOQ/supply

order.

For Civil Work, an additional certification is required that civil contractor/bidder has

complied the provision of Circular/office memorandum F.No 296/07/2017-CX.9 dated

15th

June 2017 issued by Department of Revenue, Ministry of Finance, GOI.

Question 16 Whether every supplier of NCL has to submit Anti profiteering certificate?

Answer All supplier of NCL have to mandatorily submit the Anti profiteering certificate.

However, Competent authority of NCL has provided relaxation in submission of

Anti profiteering Certificate to PSU and small scale supplier, as follows :

In case of supply items, where the value of supply items is less than Rs 10,000/-

In case of work contract/civil work/MARC where the value of balance work is less

than Rs 50,000/- subject to material component should be at least 50% of balance

value of work and service provider is agreed to reduce the subsumed taxes from

balance work

Purely service contract

Public Sector Undertaking

However self-declaration should be obtained from service provider in above

Question 17 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:

i) Central Excise duty

j) Duties of Excise (Medicinal and Toilet Preparations)

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

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

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

n) Special Additional Duty of Customs (SAD)

o) Service Tax

p) 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:

i) State VAT

j) Central Sales Tax c. Luxury Tax

k) Entry Tax (all forms)

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

m) Taxes on advertisements

n) Purchase Tax

o) Taxes on lotteries, betting and gambling

p) State Surcharges and Cesses so far as they relate to supply of goods and services.

Question 18 What is the meaning of running contract on appointment date?

Answer Running contract means contract which is executed before appointment date and has not

been concluded till appointment date (ie., implementation of GST)

Question 19 What if the work has been completed before GST Era, however, invoice is raised in

GST era by charging GST?

Answer This situation depicts that supplier has not raised the invoice in pre GST era and

accordingly pre GST taxes has not been deposited, thus the same will be treated as

Running Contract.

Question 20 What action has to be taken on running contract after implementation of GST?

Answer In running contract, the following action is required, due to implementation of GST:

a) Exclude the subsumed tax, if any included in contract price

b) Ensure GST will be levied on Basic price excluding subsumed taxes

c) Amend the term of contract, if any inconsistent with CGST Act and Rules thereon.

Question 21 What if, supply order (procurement item) is issued in Pre-GST era, however goods

are supplied in GST era under GST invoice?

Answer Such kind of contract can be termed as running contract. In this case, GST will be

reimbursed to supplier on Bid price excluding subsumed tax (Excise Duty, VAT/CST,

Entry tax). Supplier is liable to issue GST invoice. If supplier is a dealer/unregistered

person or opted composition scheme in Pre-GST era and supplying goods out of stock

held on 30.06.2017, then he is liable to pass on the benefit of Anti-profiteering, as per the

provision of section 140(3) or section 140(6) of CGST/SGST Act.

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Kindly refer question 13 and question 14 of this chapter for more details.

Question 22 What shall be the modus operandi for supply items of running contract, where

Supply order is issued in Pre-GST era & supplier is unregistered with Excise

authority and contract price is exclusive of VAT and Entry tax?

Answer Where bidder is unregistered supplier in Excise:

1) Bidder has to take registeration under GST Act.

2) Bidder will be eligible to get the benefit of Cenvat Credit on the stock held on

30.06.2017,as per the provision of section 140(3) of CGST Act,2017, if the supply

is made out of the stock held on 30.06.2017, then bidder is required to pass on the

benefit of ITC to recipient by way of reduced price.

3) CGST & SGST or IGST (as the case may be) will be levied on revised quoted

price (Recasted Bid price) excluding subsumed taxes and Anti-profiteering.

Question 23 What shall be the modus operandi for supply of indigenous item in running contract

and supplier is REGISTERED DEALER under Excise?

Answer It is a well settled law that, Dealer could not charge or levy the excise duty;however they

are expected to pass the benefit of Cenvat credit to recipient by the way of issuance of

dealer Cenvatable invoice, which they cannot issue under GST regime.

Evaluation of tender was also made on the basis of minimum amount of Cenvat declared

by them.

It is noted that,in GST regime, there is no difference between manufacturer and dealer.

The following points have to be taken care:

1) Identify the Basic price (excluding subsumed taxes i.e., Excise

duty,VAT,CST,Entry tax,CVD,SAD) to charge GST by the following method. The

following will be excluded from the contract price:

i. As the Excise Duty is inclusive in Bid price, Excise duty will be

computed by reverse calculation or

ii. Minimum Cenvat credit and other statuory charges as appeared in BOQ,

whichever higher

2) CGST and SGST or IGST as applicable will be calculated on value(excluding

subsumed taxes) as computed above. MM department has to ensure that the GST

have been charged on basic price. (excluding subsumed taxes)

Question 24 What shall be the modus operandi in running contract for supply items (through

indirect import) & supplier is registered under Excise as Dealer?

Answer Where bidder is registered dealer under Excise and supply is for imported goods (Indirect

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import) then the Basic price quoted by dealer will be inclusive of CVD and SAD. In GST

regime, dealer will not be able to pass the benefit of CVD and SAD by issuing dealer

invoice.

The following points have to be taken care:

1) Identify the Basic price (excluding subsumed taxes) to charge GST by the. The

following will be deducted from the quoted price:

i. As the Basic price is inclusive of CVD and SAD, CVD and SAD will be

computed by reverse calculation or

ii. Minimum Cenvat credit and other statuory charges as appeared in BOQ,

whichever higher

2) CGST and SGST or IGST as applicable will be calculated on value(excluding

subsumed taxes) as computed above.

Question 25 What shall be the modus operandi in running contract of supply items and contract

price is inclusive of Excise Duty/CVD/SAD, CST/VAT and Entry Tax?

Answer Where contract price is inclusive of Pre-GST taxes, the price quoted by

dealer/manufacturer will be inclusive of Excise duty/CVD/SAD/,CST/VAT and entry tax.

After appointment date supplier has to issue invoice under GST regime.

In this case,the following points have to be taken care of :

i. Identify the Basic price (excluding subsumed taxes) to charge GST by reverse

computation of entry tax and CST or VAT, Excise duty. Amount of Excise duty

shall not be less than amount of minimum Cenvat Credit, declared by supplier at the

time of bidding

ii. CGST and SGST or IGST as applicable will be calculated on value(excluding

subsumed taxes) as computed above. MM department has to ensure that the GST

have been charged on basic price. (excluding subsumed taxes)

Where supplier was exempt to charge excise duty,VAT,CST due to any notification issued

by authority under earlier law and while determining the L-1 the same was considered by

TC, in this situation, exempt tax will be considered nil while computing the assessable

value by reverse calculation.

Question 26 What shall be the modus operandi for running service contract where service

provider is unregistered in Service tax?

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Answer Where bidder is unregistered service provider in service tax and considered as L-1:

1) He has to take registeration under GSTregime

2) He will be eligible to get the benefit of Cenvat Credit on the input held on

30.06.2017 under transitional provision, as per the Anti-profiteering clause, he has

to pass the benefit of the same to NCL

3) CGST, SGST and IGST will be charged on total quoted basic price excluding

subsumed taxes, if any.

Question 27 What was the valuation method for works contract in Pre-GST era?

Answer The manner for determining the value of service portion of a works contract from the total

works contract is given in Rule 2A of the Service Tax (Determination of Value) Rules,

2006.

Case No 1: Actual Invoice Scheme- Where the contract was divisible and the

service provider was providing separate invoice for material & labour then

transaction value for charging service tax was:

Particulars Amount (Rs.)

Gross amount charged for the works contract *******

Less: The value of transfer of property in goods

involved in the execution of the said works contract

(***)

Value for charging service tax *******

Case No 2 : Standard Deduction Scheme- Where the contract was indivisible, the

service provider was providing composite bill of Material & service opting standard

deduction scheme

Where bifurcation of material and labour is not available i..e, In case of indivisible

contract, If the service provider is providing composite bill of material & labour then

value shall be determined in the manner explained in the table below –

Where works contract is for Deemed Value of the

material portion

shall be

Value of the service

portion shall be

(A) Execution of original works Sixty percent of the

total amount charged

for the works contract

forty percent of the

total amount charged

for the works contract

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(B) Maintenance or repair or

reconditioning or restoration or

servicing of any goods or

maintenance or repair or

completion and finishing services

such as glazing or plastering or

floor and wall tiling or installation

of electrical fittings of immovable

property

Thirty per cent of the

total amount charged

including such gross

amount

seventy per cent of

the total amount

charged including

such gross amount

If the Service provider has opted standard deduction scheme and opts to deposit service

tax on 40% or 70% as the case may be, It is evident that service provider has considered

40% or 70% portion of contract as service portion and standard deduction for material

portion is provided at the rate of 60% or 30%, thus 60% or 30% can be treated as material

portion

Question 28 What situations may emerge in works contract service to be availed by NCL in

running work contract cases in NCL?

Answer In case works contract has been awarded in Pre-GST period considering Pre GST taxes,

however, contract is to be executed in GST era,

Four types of situations may emerge:-

1) Where service provider is providing separate Invoice for supply as well as

services and price is inclusive of all taxes including service tax

2) Where service provider is providing composite Invoice for supply as well as

services and price is inclusive of all taxes including service tax

3) Where service provider is providing separate invoice for supply as well as

services and price is inclusive of all taxes except service tax

4) Where service provider is providing composite invoice for supply as well as

services and price is inclusive of all taxes except service tax

Modus operands to deal with all the above cases are enumerated in questions to

follow.

Question 29 What shall be the modus operandi to deal with the cases, for running work contract

wherein contract price is inclusive of all Taxes (including service tax) and separate

invoice is issued for material and labour components?

Answer Where works contract has been awarded in Pre-GST era and price is inclusive of all taxes

including service tax then the price quoted by Service provider will also be inclusive of

Excise duty/CVD/SAD & CST/VAT & Entry tax and Service Tax. After appointment date

103

supplier has to issue invoice under GST regime

The following points needs to be taken care of:

1) Where bidder is providing separate invoice for supply as well as services, separate

treatment will be adopted for supply and services. In this case, services will be

treated as pure services.

2) For Supply items:

i. Identify the Basic price (excluding subsumed taxes viz; Excise

duty/CVD/SAD, CST/VAT, Entry tax and Octroi).

As the price is inclusive of afore-mentioned subsumed taxes, Assessable

value will be derived by reverse calculation of taking effect of Entry tax

then VAT/CST & then Excise duty or SAD and CVD, as the case may be,

subject to Excise duty should not be less than amount of minimum Cenvat

Credit, as declared in BOQ at the time of bidding.

ii. GST (CGST&SGST or IGST) will be charged on revised quoted price

excluding all the taxes.

iii. User department has to ensure that GST has been charged on Basic Price

excluding all the taxes.

3) For Service Items: When price quoted by bidder is inclusive of service tax. Basic

price will be computed by reverse computation of service tax.

GST (CGST&SGST or IGST) will be charged on basic price i.e., on composite price of

material as well as service portion (as computed above) excluding all the taxes. User

department has to ensure that GST has been charged on Basic Price excluding all the

taxes.

Question 30 What shall be the modus operandi to deal with the cases, for running work contract

wherein; Bid Price is inclusive of all taxes including service tax and bidder is

providing composite invoice for supply as well as services under standard deduction

scheme (40% or 70%) as the case may be?

Answer When service provider preferred to opt the standard deduction scheme in line with the

provision of Rule 2A of service tax (Determination of Value) Rule 2006 & opted to issue

single invoice for work contract service and considered service portion as 40% in case of

original work or 70% in case of repairing work & service tax was levied accordingly.

Thus it can be said that, balance portion has been treated as material portion (60% in case

104

of original work and 30% in case of repairing work).

In cases where works contract has been awarded in Pre-GST era and quoted price is

inclusive of service tax as well as Excise duty, VAT/CST, Entry tax and Octroi, following

points needs to be taken care of :

i. For Service portion: Service portion can be treated as value considered

for charging service tax (40% or 70% as the case may be). Basic price will

be computed by excluding service tax reverse computation.

ii. For Supply items: Balance portion (60% or 30%) as the case may be

treated as material portion. As the price is inclusive of all taxes, thus

material price would be inclusive of Excise duty, VAT/CST & Entry Tax.

Basic price of material will be computed by reverse calculation of taking

effect of Entry Tax, VAT/CST & Excise duty.

Addition of basic price of service portion & basic price of material portion will be treated

as assessable value of charging GST.

Question 31 What shall be the modus operandi of running works contracts/Turnkey contract

where Bid Price is inclusive of Pre-GST Taxes but exclusive of service tax and

Bidder provides separate bill for supply as well as services?

Answer In cases where works contract/turnkey contract has been awarded in Pre-GST era and the

price quoted by service provider is exclusive of service tax, however it is inclusive of

VAT/CST and Entry Tax, Octroi and bidder is providing separate invoice for supply as

well as services, following points needs to be taken care of:

1) Separate treatment will be adopted for supply and services. In this case, services

will be pure services.

2) For supply items: Price quoted by bidder will be inclusive of Excise

duty/CVD/SAD, CST/VAT, Entry tax and Octroi. After appointed date (i.e.,

01.07.2017), bidder has to invoice under GST regime.

i. In this case, Assessable value will be derived by reverse calculation of

taking effect of Entry Tax, VAT /CST and Excise duty or CVD and SAD,

as the case may be, subject to Excise duty should not be less than amount

of minimum Cenvat Credit, if any appeared in BOQ.

ii. GST (CGST&SGST or IGST) will be charged on basic price as computed

excluding all the taxes.

iii. User department has to ensure that GST has been charged on Basic Price

excluding all the taxes.

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3) For Service items: Price quoted by bidder is exclusive of service tax. GST (CGST

and SGST or IGST) will be charged on basic price excluding all the taxes. User

department has to ensure that GST has been charged on Basic Price excluding all

the taxes.

GST (CGST&SGST or IGST) will be charged on basic price i.e., on composite price of

material as well as service portion (as computed above) excluding all the taxes. User

department has to ensure that GST has been charged on Basic Price excluding all the

taxes.

Question 32 What shall be the modus operandi of running works contracts/Turnkey contract

where Price is inclusive of Pre-GST Taxes but exclusive of service tax and where

bidder is providing composite invoice for supply as well as services?

Answer When service provider preferred to opt the standard deduction scheme in line with the

provision of Rule 2A of service tax (Determination of Value) Rule 2006 & opted to issue

single invoice for work contract service and considered service portion as 40% in case of

original work or 70% in case of repairing work & service tax was levied accordingly.

Thus it can be said that, balance portion has been treated as material portion (60% in case

of original work and 30% in case of repairing work).

In cases where works contract/turnkey contract has been awarded in Pre-GST era and the

price quoted by service provider is exclusive of service tax, however it is inclusive of

VAT/CST and Entry Tax, Octroi and bidder provides composite invoice for supply as

well as services, following points needs to be taken care of :

1) In this case, quoted price will be exclusive of service tax, however, may be

inclusive of Excise duty, VAT/CST and Entry Tax, Octroi. Basic price will be

computed excluding subsumed taxes.

2) GST (CGST and SGST or IGST) will be charged on basic price excluding all the

taxes.

3) User department has to ensure that GST has been charged on Basic Price

excluding all the taxes.

GST (CGST&SGST or IGST) will be charged on basic price i.e., on composite price of

material as well as service portion (as computed above) excluding all the taxes. User

department has to ensure that GST has been charged on Basic Price excluding all the

taxes.

Question 33 What shall be the modus operandi for running service contracts (other than works

contract), where price is exclusive of Tax?

Answer It is given to understand that purely service contracts are contracts involving 100%

106

services, however some consumables may be used while providing the services, this

consumable will be treated as service portion. In Pre GST era, purely service contract

attracts service tax on 100% contract value. As contract is exclusive of service tax and in

purely service contract, there are no other subsumed taxes involved in the price, thus GST

can be levied on the price.

Question 34 What shall be the modus operandi of running Contracts (other than Works

Contract) where price is inclusive of tax?

Answer In cases where Contract other than works contract/purely service contract has been

awarded in Pre-GST era, to be executed in GST era and basic price quoted by service

provider is inclusive of service tax, following points needs to be taken care of:

1) Basic price quoted by service provider will be inclusive of Service tax. Basic price

excluding service tax will be computed by reverse computation.

2) GST will be charged on Basic price excluding subsumed taxes.

3) In case of any consumable is used in providing the services, the same will be

considered as part of service instead of supply.

Question 35 What will be the treatment in case of ongoing Works contracts, where Price is

exclusive of all taxes?

Answer In cases of ongoing contracts where contract price is exclusive of all taxes. After

appointment date, the service provider has to issue invoice as per the GST law and GST

will be charged on Basic price. As all the Taxes are extra, awarded value can be treated as

basic price for charging GST.

Question 36 What shall be the modus operands of RE (Revised Estimate) approved in GST era

against the work completed in Pre-GST era?

Answer It is given to understand that supplier/service provider raise final invoice after approval of

RE (revised estimate). If any invoice is issued in GST era, charging GST against contract

executed in Pre-GST era, their treatment will be same as running contract.

Question 37 Whether subsumed taxes will be excluded on entire Revised estimate value?

Answer Subsumed Taxes will be excluded on invoice issued or to be issued in GST era.

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Tax Deducted at Source under GST

Question 1 What is meant by Tax Deducted at Source in GST?

Answer GST Laws provide for tax deduction at source (TDS) by the specified category of persons

(Deductor) from the payment made or credited to the supplier of taxable goods or services

or both (Deductee) at a prescribed rate.

[The payer (viz. deductor) is required to deduct some amount as tax from the invoice of a

supplier and pay the said deducted amount to the Government. Supplier can claim credit

of the tax so deducted as Cash Credit while discharging his GST liabilities.

It acts as a powerful instrument to prevent tax evasion and expands the tax net, as it

provides for the creation of an audit trail.

Question 2 Who are liable to deduct GST TDS?

Answer CBIC vide Notification No. 50/2018 – (Central Tax) dated 13.09.2018 clarified that the

following will be the specified category of person liable to deduct GST TDS as per the

provision of Section 51(1) of CGST Act, 2017:

1) a department or establishment of the Central Government or State Government;

2) local authority;

3) Governmental agencies;

4) an authority or a board or any other body, -

5) set up by an Act of Parliament or a State Legislature; or

6) established by any Government,

7) with fifty-one percent or more participation by way of equity or control, to carry out

any function;

8) a society established by the Central Government or the State Government or a

Local Authority under the Societies Registration Act, 1860 (21 of 1860);

9) Public sector undertakings.

Question 3 Whether NCL is liable to deduct GST TDS?

Answer Yes, in view of Notification no. 50/2018 – (Central Tax) dated 13.09.2018 and SOP dated

28.09.2019 issued by CBIC, NCL being public sector undertaking is liable to deduct GST

TDS at the time of making / crediting payment to supplier.

Question 4 When GST TDS is required to be deducted?

Answer As per the provision of Section 51 of CGST Act, 2017, GST TDS is required to be

deducted from the payment made/credited to a supplier, if the value of taxable supply (of

goods or services or both) under a contract exceeds Rs. 2,50,000/-.

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The value of Rs. 2,50,000/- is excluding the taxes leviable under GST (i.e. ‘Central tax’,

‘State tax’, ‘UT tax’, ‘Integrated tax’ & ‘Cess’).

Question 5 Whether GST TDS is required to be deducted while making payment of different

invoices, value of taxable supply in each invoice being less than Rs. 2.50 lakhs raised

under a single contract where total value of taxable supply under contract exceeds

Rs. 2.50 lakhs?

Answer As per the provision of Section 51 of CGST Act, 2017, GST TDS is required to be

deducted from the payment made/credited to a supplier, if the value of taxable supply (of

goods or services or both) under a contract exceeds Rs. 2.50 lakhs.

In view of the above provisions, where multiple invoices are raised under a single

contract, GST TDS will be deducted while making payment of each such invoice

provided that total value of taxable supply under contract exceeds Rs. 2.50 lakhs.

Question 6 Mr. A is awarded a contract say Supply Order 1 for supply of laser printer for Rs. 2

Lakhs and another contract say Supply Order 2 for Rs. 5 Lakhs for supply of

Desktop computers. Whether TDS will be deducted while making payment against

both the contracts?

Answer As value of taxable supply under Supply Order 1 is less than Rs. 2.5 lakhs, therefore GST

TDS will not be deducted while making payment against invoice issued under Supply

Order 1.

On the other hand value of taxable supply under Supply Order 2 exceeds Rs. 2.5 lakhs,

therefore GST TDS will be deducted while making payment against invoice issued under

Supply Order 2.

Question 7 Whether GST TDS is liable to be deducted in a case where, project awarded a single

contract to A Ltd. for supply of Explosives worth Rs. 2 lakhs and Diesel worth Rs. 5

lakhs? Whether GST TDS would be deducted as the total value of supply under

single contract exceeds Rs. 2.5 lakhs?

Answer Supply of Diesel is outside the purview of GST. Value of Taxable supply (i.e. supply of

Explosives) under the contract is less than Rs. 2.5 lakhs (being Rs. 2 lakhs).

Therefore, provision of GST - TDS will not be applicable.

Question 8 Suppose in the above question, Explosives of Rs. 10 lakhs is to be supplied along

supply of diesel for Rs. 5 lakhs. A Ltd. submits an invoice for Rs. 6 lakhs (Explosives

– Rs. 4 lakhs and Diesel Rs. 2 lakhs)?

109

On what amount and how much GST TDS would be deducted considering A Ltd. is

registered in Madhya Pradesh?

Answer GST TDS is to be deducted on value of taxable supply mentioned in the invoice.

Therefore, GST TDS would be deducted on Rs. 4 lakhs (being value of explosives

mentioned in invoice).

Amount of tax to be deducted:

CGST @ 1% (400000 * 1%) = Rs. 4,000/-

SGST @ 1% (400000 * 1%) = Rs. 4,000/-

Question 9 Whether GST TDS is required to be deducted against advance payment to supplier?

Answer GST TDS will be deducted against payment (whether Advance or otherwise) made to

supplier for supply of taxable goods or service.

Question 10 Whether GST TDS is required to be deducted when procurement / purchase is made

(Taxable value more than Rs. 2.50 lakhs) from a registered supplier without

awarding any contract?

Answer As per section 51 of CGST Act, 2017 GST TDS is required to be deducted from payment

made to supplier when total value of taxable supply, under a contract, exceeds Rs. 2.50

lakhs.

It is observed that the words “under a contract” are relevant merely for determining the

value of supply for TDS deduction.

Therefore, in case of any taxable supply received from registered person of value

exceeding Rs.2.5 lakhs, GST TDS is required to be deducted irrespective of the fact

whether there is any contract or not for supplying the goods or services or both.

Thus, GST TDS is required to be deducted while making payment to such supplier, who

is registered under GST.

Question 11 What are the registration requirements for TDS deductors?

Answer A TDS deductor has to compulsorily register without any threshold limit. The deductor

has a privilege of obtaining registration under GST without having required to obtain

PAN. He can obtain registration using his TAN issued under Income Tax Act, 1961.

Question 12 What is the GST TDS registration number of NCL?

Answer NCL has opted to obtain project wise GST TDS registration number on basis of TAN

number detail of which is as under:

S. No. Project GSTIN

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1. Amlori 23JBPN00417E1DR

2. Block B 23JBPN00907E1DO

3. CWS 23JBPN00677F1DB

4. Dudhichua

23ALDN00211B1DV (MP)

09ALDN00211B1DV (UP)

5. Jayant 23JBPN00415C1DX

6. Jhingurda 23JBPN00418F1DO

7. Khadia

23ALDN00181G1DI (MP)

09ALDN00181G1D8 (UP)

8. NSC 23JBPN00424E1DS

9. HQ 23JBPN00047F1DN

10. Nigahi 23JBPN00430D1DW

11. Bina 09ALDN00179E1D6

12. Krishnashila 09ALDN00979G1DU

13. Kakri 09ALDN00180F1DB

Question 13 Under which circumstances, GST TDS is not required to be deducted?

Answer GST TDS is not required to be deducted in following situations:

(i) Value of taxable supply under contract is less than or equal to Rs. 2.50 lakhs

(ii) DTI/DTR from one project to another project as no payment is involved

(iii) Receipt of Exempted goods or services

(iv) Goods on which GST is not leviable. Thus no TDS will be deducted from

payment made against supply of petrol, diesel and petroleum crude.

(v) Supply is made by unregistered supplier

(vi) Supply on which GST is payable under reverse charge

(vii) Invoice dated 30.09.2018 or earlier

(viii) Where the payment relates to “Cess” component

(ix) Payment made against the service by any court or tribunal established under

any law for the time being in force

(x) Where the location of the supplier and place of supply is in a State(s)/UT(s)

which is different from the State / UT where the deductor is registered

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Question 14 Whether GST TDS would be deducted when procurement is made from supplier

registered under composition scheme?

Answer GST TDS will be deducted on all kind of taxable supply made by registered supplier

irrelevant the status of supplier i.e., registered under composition scheme or normal

scheme.

Thus, GST TDS is required to be deducted while making payment to supplier registered

under composition scheme if value of taxable supply under the contract exceeds Rs. 2.50

lakhs.

Question 15 Whether GST TDS is required to be made on procurement made from unregistered

supplier under GST?

Answer As per SOP dated 28.09.2019 issued by CBIC, GST TDS is not required to be deducted

where the payment is made to an unregistered supplier.

Question 16 Whether GST TDS is required to be deducted while making payment against supply

covered under RCM (Reverse Charge Mechanism)?

Answer As per SOP dated 28.09.2019 issued by CBIC, GST TDS is not required to be deducted

where the GST is to be paid under reverse charge by the recipient i.e. the deductee.

Therefore, GST TDS is not required to be deducted while making payment against supply

covered under RCM (Reverse Charge Mechanism).

Question 17 What is the benefit of GST TDS to the deductee (supplier)?

Answer There will be an automatic reflection in the Electronic Ledger of the deductee (supplier)

once the deductor files his/her returns. The deductee can claim in his Electronic Cash

Ledger of this deducted tax & use it for payment of other taxes.

Question 18 Whether GST TDS is required to be deducted where Kolkata Desk Office arranged

to provide Hotel services to NCL Executives on official tour, where paying authority

is Kolkata Desk Office however invoice is raised by the Hotel in the name/GSTIN of

concerned project of NCL (MP or UP)?

Answer As per the provision of Section 51 of CGST Act, 2017, GST TDS is not required to be

deducted where the location of the supplier and place of supply is in a State/UT which is

different from the State / UT where the recipient is registered.

Here location of supplier and Place of supply is in West Bengal whereas recipient i.e.

NCL is located in Madhya Pradesh / Uttar Pradesh.

Therefore, GST TDS would not be deducted while making payment to Hotel.

Question 19 What is the rate of GST TDS?

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Answer The rate of tax deduction under GST is as follows:

Nature of Supply

Name of TDS

Rate of Tax

Inter State Supply CGST 1%

SGST / UTGST 1%

Intra State Supply IGST 2%

Question 20 What procedure is adopted by NCL to make compliance of GST TDS?

Answer Bill Passing Officer will deduct the GST TDS at the time of payment of Invoice and the

same will be recorded in voucher/classification sheet under relevant Accounting code i.e

CGST-TDS (810771), SGST-TDS (810772), IGST-TDS (810773) and AFM will arrange

to maintain the register in following format to keep the record of all TDS deductions

made by him during the month. This record will be helpful at the time for filing GSTR-7;

(This report is auto generated through Coal Net)

S.

No.

GSTIN

number

of

dedcutee

Name

of

supplier

Amount

paid to

deductee

on which

tax is

deducted

TDS-

IGST

(810773)

TDS-

CGST

(810771)

TDS-

SGST

(810772)

Total

Question 21 What is the due date of depositing GST TDS?

Answer GST TDS deducted from supplier’s invoice during a month is to be deposited to the

appropriate Govt. A/c on or before 10th

day of the following month.

Question 22 How would a DDO know that his liability for payment has been completed?

Answer Electronic cash Ledger of the DDO will be credited when tax deducted at source is

deposited in Government account. Payment of such liability (which is the tax deducted at

source) shall have to be done by debiting of the electronic cash Ledger and such debit can

be done while submitting FORM GSTR 7. So, unless the return in FORM GSTR 7 is

submitted the payment liability of the DDO will not be completed.

Question 23 What is the due date of filing GST TDS Return (GSTR7)?

Answer As per the Rule 66 of CGST Rules,2017 the prescribed form to file GST TDS Return is

GSTR 7 and the due date of filing GSTR-7 is 10th

day of the following month in which

TDS is deducted.

Question 24 Whether GSTR 7 is required to be filed for a month in which no amount of GST

TDS is deducted?

113

Answer Submission of FORM GSTR-7 is not required for a month in which GST TDS is not

deducted.

Question 25 What is the due date of furnishing GST TDS Certificate (GSTR7A) to deductee

(supplier) and what would be the consequence if the same is not furnished within due

date?

Answer As per Section 51(3) read with Rule 66 of CGST Rules, 2017, deductor is required to

issue GST TDS Certificate in Form GSTR 7A duly generated through GST portal within

five days of crediting the amount so deducted to the Government ( i.e. within 5 days of

filing GSTR 7).

As per Section 51(4) of CGST Act, 2017, if any deductor fails to furnish to the deductee

the certificate, after deducting the tax at source, within five days of crediting the amount

so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one

hundred rupees per day from the day after the expiry of such five days period until the

failure is rectified, subject to a maximum amount of five thousand rupees.

Similar late fee is applicable under SGST Act / UTGST Act.

However, in practical life Deductee (i.e. the Supplier) is not required GST TDS

Certificate as the GST TDS deducted by deductor is made available to supplier in Part-C

of GSTR 2A. After verifying GST TDS from GSTR 2A deductee can claim the same on

GST Portal and it will be transferred to his Electronic Cash Ledger.

For this reason Deductee avoids collecting GSTR 7A (GST TDS Certificate) which leads

to imposition of Late Fees on Deductor u/s 51(4) of CGST Act, 2017 without any mistake

their part.

For the sake of providing relief from penal provision to deductor, Finance Act, 2020 has

omitted the provision of Section 51(4) of CGST Act, 2017. Consequently, if deductor

failed to issue GST TDS Certificate (GSTR 7A) within 5 days of filing GSTR 7, late fees

will not be levied on deductor.

Question 26 What would be the consequence if DDO fails to deduct GST TDS or deducts an

amount which is less than the amount required to be deducted?

Answer As per Section 122(v) of CGST Act, penalty is payable by a DDO if he fails to deduct

GST TDS in accordance with the provisions of sub-section (1) of section 51, or deducts

an amount which is less than the amount required to be deducted under the said sub-

section, or where he fails to pay to the Government under sub-section (2) of section 51.

114

Amount of penalty – higher of the following:

(i) amount equivalent to tax not deducted under section 51 or

(ii) short deducted or

(iii) TDS deducted but not paid to the Government or

(iv) Rs. 10,000/-

Question 27 What would be the consequence if GST TDS is deducted but not paid or paid later

than 10th

of the succeeding month?

Answer In addition to the amount of tax deducted, deductor is also liable to pay interest in

accordance with the provisions of sub-section (1) of section 50. Interest shall be

calculated from the day succeeding the day on which such tax was due to be paid at such

rate as may be notified by the Government not exceeding eighteen per cent.

Besides Penalty shall also be levied which shall be higher of the following:

(i) GST TDS deducted but not paid to the Government or

(ii) Rs. 10,000/-

Question 28 What would be the consequence if GSTR 7 is not filed within due date?

Answer Late fee of Rs. 100/- per day under CGST Act & SGST/UTGST Act separately is required

to be paid for the period during which such failure continues subject to a maximum

amount of Rs. 5000/- each under CGST Act & SGST/UTGST Act.

Question 29 Where excess amount of tax is deducted than required to be deducted, whether

refund can be claimed by dedcutor / deductee?

Answer The refund to the deductor or the deductee arising on account of excess or erroneous

deduction shall be dealt with in accordance with the provisions of section 54.

Provided that no refund to the deductor shall be granted, if the amount deducted has been

credited to the electronic cash ledger of the deductee.

Application for refund is to be made before the expiry of two years from the relevant date

in such form and manner as may be prescribed

Question 30 Whether PSU coal buyers can deduct GST-TDS while making payment to NCL?

Answer CBIC vide notification no. 61/2018-Central Tax dated 05.11.2018 has provided relaxation

on provision to deduct GST-TDS against the payment made for supply for goods and

services from one PSU to another PSU. Accordingly, PSU coal buyers need not deduct

GST-TDS while making payment to NCL.

Question 31 What is the modus operandi adopted by NCL to deduct GST TDS wherein actual

user of goods or services and paying authority are different?

Answer Following situations may emerge :

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Case I : When the recipient project is located in MP Jurisdiction and Paying

authority is AFM HQ : AFM-HQ may deduct the GST-TDS under their registration

number and will deposit the same.

Case II : When the recipient project is located in UP Jurisdiction and paying

authority is AFM HQ (MP):

Following steps are to be taken in this regard:

1. AFM HQ will process the invoice and make the payment as per the prevailing

practice after deducting the GST-TDS. However compliance related to GST-TDS

against this transaction will be made by recipient project

2. AFM-HQ/DDO will forward the information to DDO of concerned project in

following format on or before 3rd

of following month

GSTIN

number

of

dedcutee

Name

of

supplier

Amount

paid to

deductee

on which

tax is

deducted

TDS-

IGST

(810773)

TDS-

CGST

(810771)

TDS-

SGST

(810772)

Total

3. DDO of Concern project will deposit the GST-TDS on the basis of information

received from AFM-HQ/DDO along with other liability of GST-TDS as deducted

by their project and file the GST-TDS return accordingly.

Question 32 What is the modus operandi adopted by NCL to make statutory compliance of GST-

TDS, situation wherein actual user/ recipient of NCL or its project (MP or UP)

however paying authority is Kolkata desk office?

Answer The following situations may emerge :

Case I: Payment against the Hotel Bill and Taxi Services wherein GSTIN Number of

ISD is used i.e 19AABCN4884H2Z2 :

DDO of Kolkata Desk office will deduct the GST-TDS on eligible transactions under

their own registration number and will comply all the provisions related with TDS

Case II: Payment against the expenses incurred for NCL HQ or MP Projects or UP

Projects by Kolkata Desk office wherein GSTIN Number of respective project is

used i.e 23AABCN4884H1ZE or 09AABCN4884H1Z4

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Following steps are to be taken in this regard:

1. Kolkata Desk office will process the invoice and make the payment as per the

prevailing practice after deducting the GST-TDS. However compliance related

GST-TDS against this transaction will be made by recipient project

2. DDO / Kolkata Desk office will arrange to provide the information in following

format to DDO of concerned project in the following month :

GSTIN

number

of

dedcutee

Name

of

supplier

Amount

paid to

deductee

on which

tax is

deducted

TDS-

IGST

(810773)

TDS-

CGST

(810771)

TDS-

SGST

(810772)

Total

3. DDO of Concern project will deposit the GST-TDS on the basis of information

provided from Kolkata Desk Office along with other TDS as deducted by their

project and file the TDS return accordingly.

Question 33 Whether GST TDS will be deducted against the payment for Hotel Bill (having

GSTIN Number of NCL) by CIL, Delhi Office?

Answer GST TDS will not be deducted on payment made by Delhi office to Hotel on behalf of

NCL by the virtue of the provision of section 51 of CGST Act as location of supplier and

place of supply is in a State different from the State of registration of the recipient.

Question 34 Whether GST TDS will be deducted against the payment for Taxi Bill (having

GSTIN Number of NCL) by CIL, Delhi Office?

Answer Yes, provision of GST TDS is applicable on this transaction. However, concerned project

whose Executive has availed the taxi services is liable to comply the GST TDS provision.

Question 35 What shall be the modus operands to deduct and deposit GST TDS on payment

made by Delhi Office on behalf of NCL against the Taxi Bill?

Since taxi service provider is registered in Delhi and charging IGST, TDS cannot be

deducted by CIL under their GSTIN. Following steps are to be taken:

1. Delhi office will process the invoice as per the prevailing practice and deduct the

TDS on eligible transaction as per the provision of section 51. However, other

compliance like TDS deposition, filing of TDS Return will be made by concern

project.

2. AFM-HQ/DDO will obtain the information from DDO, Delhi office on or before

3rd of the following month in following format for compliances;

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GSTIN

number

of

dedcutee

Name of

supplier

Amount paid

to deductee

on which tax

is deducted

TDS-

IGST

(810773)

TDS-

CGST

(810771)

TDS-

SGST

(810772)

Total

Question 36 What are the responsibilities of DDO in TDS under GST?

Answer 1) To know the GSTIN of his office

2) To be aware of the contract value

3) To know when to deduct TDS under GST

4) D. To know the nature of TDS (IGST or CGST & SGST/UTGST) to be deducted

& the rate of tax

5) To know the GSTIN of his/her vendors/suppliers

6) To deduct TDS while making/crediting payment

7) To generate CPIN while depositing the deducted tax

8) To pay the deducted amount of TDS to the appropriate Govt. A/c

9) To submit GSTR-7(Return)

10) To generate GSTR-7A (TDS certificate for suppliers)

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E-Way Bill

Question 1 What is an E-way bill?

Answer E-way bill is a document required to be carried by a person in charge of the conveyance

carrying any consignment of goods of value exceeding fifty thousand rupees as per the

provision of Section 68 of the Goods and Services Tax Act read with Rule 138 of the rules

framed thereunder. It is generated from the GST Common Portal for e-way bill system by

the registered persons or transporters who cause movement of goods of consignment

before commencement of such movement.

Question 2 Why is the E-way bill required?

Answer As per the provision of Section 68 read with Rule 138, every registered person who causes

the movement of goods (whether by way of supply or otherwise) of consignment value

exceeding Rs. 50000/- would be required to generate e-way bill before commencement of

movement. As per the provision of section 68(3), proper office may deemed the e-way bill

for verification at any place during the movement of goods. Thus for the compliance of

above legal provision e-way bill is required.

Question 3 What is consignment value to determine the threshold of Rs. 50,000/-

Answer As per Notification No. 12/2018 – Central Tax dated March 7, 2018 (“Notification No.

12/2018”), the term "Consignment Value", means value determined as per section 15 of

the CGST Act as mentioned on the invoice, bill of supply or delivery challan as the case

may be including the applicable tax thereon. However, such consignment value shall

exclude the value of exempted supply, where the invoice is issued in respect of both

exempt and taxable supply of goods.

Question 4 Who is liable to generate the e-way bill?

Answer As per Rule 138, any of the following can generate e-way bill:

1. Consignor

2. Consignee

3. Transporter of goods

Question 5 State the threshold prescribed by States/Union Territories for generating EWB in

case of intra State movement of goods?

Answer The threshold prescribed by States/Union Territories for generating EWB in case of intra

State movement of goods are:

Threshold Limit for EWB in

case of Intra State Supply

State(s) Union Territories

Consignment Value Above Rs. West Bengal; Tamil Nadu,

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1,00,000 Delhi

Consignment Value Above Rs.

2,00,000 for intra State

Bihar

Consignment Value Above Rs.

50000

Andhra Pradesh,

Arunachal Pradesh,

Assam, Chhattisgarh, Goa,

Gujarat, Haryana,

Himachal Pradesh, Jammu

& Kashmir, Jharkhand,

Karnataka, Kerala,

Maharashtra, Madhya

Pradesh, Meghalaya,

Manipur, Mizoram,

Nagaland, Odisha, Punjab,

Rajasthan, Sikkim,

Telangana, Uttarakhand,

Uttar Pradesh &

Puducherry

Lakshadweep,

Daman and Diu,

Andaman and

Nicobar Islands,

Dadra and Nagar

Haveli, Chandigarh

Question 6 What are pre-requisites to generate the e-way bill?

Answer The pre-requisite for generation of e-way bill are:

i) Person should be having valid GSTIN number and should be registered with e-

way bill portal.

ii) In case of un registered transporter it is mandatory for him to get enrolled on e-

waybill portal (https://ewaybillgst.gov.in) before generation of the e-way bill.

Unregistered transporter can generate e-way bill on the basis of following documents:

a) Tax invoice or bill of supply or delivery challan

b) Transporter’s Id, who is transporting the goods with transporter document number

or the vehicle number.

Question 7 Who has been casted with the ultimate responsibility of generating EWBs?

Consignor, consignee or the transporter?

Answer The primary responsibility to generate EWB shall be of the registered person who causes

the movement of goods, i.e. the consignor or the consignee, as the case may be. However,

if such consignor or consignee doesn’t generate the EWB, it may be generated by

transporter as well, if authorized by the registered person. Also, in case of supply of goods

by an unregistered person to registered person, the liability to generate EWB is on the

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recipient.

Question 8 Applicability of E-way bill for intra state supply in the state of Madhya Pradesh?

Answer As per Notification no-FA3-08/2018/1/v (43) dt. 24.04.2018, No e-way bill shall be

required to be generated for intra state movement of goods in the state of Madhya

Pradesh, except for Plywood and Laminate Sheets. Goods can be moved on the basis of

invoice or delivery challan.

Question 9 Whether EWB would be required, if transportation is done in one's own vehicle or

through a public transport?

Answer Yes, as per revised Rule 138 (2) EWB shall be required to be generated, in case the goods

are transported by consignor or consignee in his own vehicle or in a hired one or a public

conveyance, by road. In such case, the registered person causing the movement of goods

may raise the EWB after furnishing the vehicle no. in Part B of FORM GST EWB – 01, if

the value of goods being transported is more than Rs.50,000/-.

Question 10 What is the treatment of EWB for Stock Transfer – Inter-State---Intra-State

transfers?

Answer EWB is required to be generated for every movement of goods either in relation to supply

or for purpose other than supply. Therefore, EWB is to be generated for every Inter and

Intra-State transfers, where the value of consignment exceeds the Rs.50,000 in case of

inter State movement or the threshold prescribed in each State in respect of intra State

movement. However, under Rule 138(14)(d), States & UT’s are authorized to dispense

with requirement of EWB on movement of goods within such area as may be notified, like

Madhya Pradesh state vide Notification no-FA3-08/2018/1/v (43) dt. 24.04.2018 provides

the exemption for E-way bill for intrastate movement of goods in the state of Madhya

Pradesh except for Plywood and Laminate Sheets.

Question 11 Whether an EWB is required to be generated for movement of goods from one unit

of the company to another unit through own vehicle located within 10 km?

Answer Yes, EWB is required to be generated even in case of movement of goods within 10 km

(Subject to relaxation in Rule 138(14) (d) for movement of goods in notified areas).

However, it is to be noted that the exemption from generating the EWB is granted only in

such case where the goods are to be transported up to a distance of 20 Kms. from the place

of business of the consignor to a weighment bridge or from weighbridge back to the place

of such consignor. Further such exemption is subject to a condition that such movement is

accompanied by a delivery challan. Furthermore, such exemption needs to be

differentiated with the relaxation provided under Proviso to Rule 138(3), which is for

updating the Part-B (vehicle details) of the FORM GST EWB-01. The relaxation is given

only in cases, where the goods are to be transported from the place of business of

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consignor to the business of transporter up to 50 kms for further movement of such goods.

Therefore, in all other cases, where goods are being transported in motorized vehicle

EWB needs to be generated even if the distance to be covered is less than 10 km.

Question 12 How many times Part-B or Vehicle number be updated for an EWB?

Answer The user can update Part-B (Vehicle details) for each change in the vehicle or mode of

transport used in the course of movement of consignment up to the destination point.

However, the updating should be done within overall validity period of EWB. There is no

upper cap on the number of Updation of vehicle in Part B.

Question 13 When is the Part-B of E-way Bill is optional to fill?

Answer As per rule 138(3), of E-way Rules, relaxation has been provided from updating Part B

(vehicle details) of the FORM GST EWB-01. The relaxation is given only in cases, where

the goods are to be transported from the place of business of consignor to the business of

transporter up to 50 kms for further movement of such goods.

Question 14 Under which situation E-way bill is mandatorily required to be generated

irrespective of the value of the consignment?

Answer In terms of third proviso to rule 138(1), in case of interstate movement of goods for job

work it is mandatory to generate e-way irrespective of value.

Question 15 Whether E-way bill can be generated for future date invoice?

Answer E-way bill can be generated on the basis of invoice or delivery challan as the case may be

thus, E-way Bill cannot be generated for future date invoices.

Question 16 Whether any other document needs to be provided to the transporter in addition to

EWB, for movement of goods?

Answer In accordance with Rule 55A read with Rule 138A of the CGST Rules, the person in-

charge of conveyance shall carry

— Tax Invoice or Delivery Challan or Bill of Supply, as the case may be; and

— a copy of the EWB in physical form or the EWB number in electronic form or mapped

to a Radio Frequency Identification Device embedded on to the conveyance in such

manner as may be notified by the Commissioner:

EWB is an additional document and not a substitute for Tax Invoice, delivery challan or

any other prescribed document for the said transaction.

Question 17 Can information submitted for EWB be directly pushed for filing GST Returns?

Answer The information furnished in the EWB will be available to the registered supplier on the

common portal who may utilize the same for furnishing details in GSTR-1. The purpose is

to facilitate the suppliers, so that once information is furnished in the EWB format, this is

available to him for use in filing GSTR-1.

Question 18 Under which circumstances, goods can be moved without E-way bill?

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Answer As per the provision of section 138(14) of CGST Rule 2017, there is no need to generate

EWB-

(a) For notified goods;

(b) where the goods are being transported by a non-motorised conveyance;

(c) where the goods are being transported from the port, airport, aircargo complex and

land customs station to an inland container depot or a container freight station for

clearance by Customs; and

(d) in respect of movement of goods within such areas as are notified under clause (d)

of sub-rule (14) of rule 138 of the Goods and Services Tax Rules of the concerned

State.

Question 19 Who is responsible to issue E-way bill in case of Coal Sale (for any Mode of dispatch)

by NCL?

Answer It is decided in the meeting held with Coal buyer that Coal Buyer or their Transporter will

arrange E-way Bill on Coal dispatch. NCL will not responsible for any action taken by

CGST/SGST Authority on coal buyer or their transporter for noncompliance of E-way

Bill rules

Question 20 Who is responsible to issue E-way bill in case of Procurement of goods by NCL?

Answer It is given to understand that Delivery is to be effected on Door delivery basis, it is

decided supplier has to arrange the prescribed E-way bill at their end. NCL will not

responsible for any action taken by CGST/SGST Authority on or their transporter for

noncompliance of E-way Bill rules.

Question 21 Who is responsible to issue Transfer of Coal/DTI from one Project to another

Projects Within state and distance of transferee projects is less than 10 Kilometers?

Answer Wherein goods are transported for distance of less than 10 Kilometers within states, it is

optional to generate E-way bill..

Question 22 Who is responsible to issue Transfer of Coal/DTI from one Project to another

Projects within state and distance of transferee projects is more than 10 Kilometers

and value of coal/DTI/P& M in vehicle is more than Rs 50,000/- and transportation is

made through hired vehicles/GTA?

Answer In case of Transfer of Coal/DTI from one Project to another Projects within state and

distance of transferee projects is more than 10 Kilometers and value of coal/DTI/P& M in

vehicle is more than Rs 50,000/- and transportation is made through hired vehicles/GTA

Transporter/GTA has to arrange E-way Bill on the basis of delivery challan.

Question 23 Who is responsible to issue Transfer of Coal/DTI from one Project to another

Projects within state and distance of transferee projects is more than 10 Kilometers

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and value of coal/DTI/P&M in vehicle is more than Rs 50,000/- transportation is

made through own vehicles?

Answer Transferor Project will issue E-way Bill before commencement of such movement. In

case of transfer of coal, representative of M&S department arrange to issue EWB before

movement of goods, in case of transfer of store items representative of MM/store

department is responsible to issue EWB.

Question 24 Who is responsible to issue Transfer of Coal/DTI from one Projects to another

Projects or transfer of coal by Basket mines(Bina/Khadia/Dudichua) from their MP

mines to UP mines (Interstate Transfer) where value of coal/DTI/P& M in vehicle is

more than Rs 50,000/- and transportation is made through hired vehicles/GTA?

Answer Transfer of Coal/DTI from one Projects to another Projects or transfer of coal by Basket

mines(Bina/Khadia/Dudichua) from their MP mines to UP mines (Interstate Transfer)

where value of coal/DTI/P& M in vehicle is more than Rs 50,000/- and transportation is

made through hired vehicles/GTATransporter/GTA has to arrange E-way Bill on the basis

of delivery challan.

Question 25 Who is responsible to issue Transfer of Coal/DTI from one Projects to another

Projects or transfer of coal by Basket mines(Bina/Khadia/Dudichua) from their MP

mines to UP mines (Interstate Transfer) where Value of coal/DTI/P& M in vehicle is

more than Rs 50,000/- and transportation is made through own vehicles?

Answer Transferor Project will issue E-way Bill before commencement of such movement. In case

of coal transfer M&S department will arrange to issue E-way bill and in case of store

items MM/stores department will arrange to generate e-way bill.

Question 26 What is the common portal for generation of e-way bill?

Answer The common portal for generation of e-way bill is https://ewaybillgst.gov.in

Question 27 Will every Project have their own login and Password?

Answer One login can be generated against one GSTIN. However liberty has been provided to

generate Project wise sub-user. Project wise sub-user has been created in consultation with

AFM of concerned Project.

Question 28 What is the process of correction in case of typing error in filling the information for

generating e-way bill?

Answer The e-way bill once generated cannot be edited or modified. Only Part-B can be updated.

However, if e-way bill is generated with wrong information, it can be cancelled and

generated afresh. The cancellation is required to be done within twenty four hours from

the time of generation

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Question 29 Can the EWB be deleted?

Answer The EWB once generated cannot be deleted. However, it can be cancelled by the

generator within 24 hours of its generation. However if it has been verified by any proper

officer within 24 hours, then it cannot be cancelled. Further, EWB can be cancelled if,

either goods are not transported or are not transported as per the details furnished in the

EWB. A recipient has right to cancel/ reject the EWB within 72 hours of its generation or

actual receipt of goods, whichever is earlier.

Question 30 Whether EWB needs to be generated for sales returns, rejection etc.?

Answer Yes, EWB needs to be generated for any movement of goods including sales return and

sales rejection etc. It may be noted that, in relation to sales returns, EWB can be generated

in following ways:

1. Where the goods are returned on tax invoice: Where the goods are returned back

from the customer on the basis of tax invoice, EWB shall be generated by the customer as

outward movement of goods for the purpose of supply.

2. Where the goods are returned back on credit note: Where the goods are returned/

rejected back on the basis of credit note issued by the Company, EWB shall be generated

on the basis of such credit note giving reference to “Sale Returns” as the reason for inward

movement of goods.

Question 31 How can the taxpayer get himself register for the EWB portal?

Answer All the persons registered under GST shall be required to get themselves registered on the

EWB portal namely: http://ewaybillgst.gov.in using their GSTIN. Once GSTIN is entered,

the system sends the OTP to his registered mobile number and after authenticating the

same, the system enables him to generate his/her username and password for the EWS.

After generation of username and password of his choice, one may proceed to make

entries to generate EWB.

Question 32 What has to be entered in GSTIN column, if consignor or consignee is not having

GSTIN?

Answer If the consigner or consignee is unregistered taxpayer and not having GSTIN, then user

has to enter ‘URP’ [Unregistered Person] in corresponding GSTIN column.

Question 33 How does the taxpayer update his latest business name, address, mobile number or

e-mail id in the EWS?

Answer EWS http://ewaybillgst.gov.in is dependent on GST Common portal (www.gst.gov.in) for

taxpayer’s registration details like legal name/trade name, business addresses, mobile

number and e-mail id. EWS will not allow taxpayer to update these details directly. If

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taxpayer changes these details at GST Common portal, it will be updated in EWS within a

day. Otherwise, the taxpayer can update the same by selecting the option ‘Update My

GSTIN’ and the details will be fetched from the GST common portal.

Question 34 If the transporter is unregistered, then what is the procedure to get registered on

EWB portal?

Answer It is not mandatory for a transporter to get registered under GST law. However, every

unregistered transporter engaged in movement of goods shall get himself registered at

EWB portal, since the option of updation of vehicle details and assignment of EWB to

other transporter would be available to the transporter. For the purpose of such

registration, transporter shall click on “Enrolment for transporter” link at the common

portal http://ewaybillgst.gov.in. After clicking the link, the portal shall direct him to a

page where he shall be required to furnish his business details after which a unique

TRANS ID will be issued to him. Therefore, transporter on the basis of such TRANS ID

can generate EWB.

Question 35 Validity period for e-way bill?

Answer Yes. Validity of the e-way bill depends upon the distance the goods have to be

transported. The validity provided in the CGST Rules is as under:

Distance Validity Period from the Relevant Date

For a distance up to 100km One day in cases other than over

dimensional cargo

For every 100km or part thereof

thereafter

One additional day in cases other than

over dimensional cargo

Upto 20 km One day in case of Over Dimensional

cargo

For every 20 km or part thereof

thereafter

One additional day in case of Over

Dimensional Cargo

Wherein the “relevant date” shall mean the date on which the e-way bill has been

generated and the period of validity shall be counted from the time at which the e-way bill

has been generated and each day shall be counted as the period expiring at midnight of the

day immediately following the date of generation of e-way bill. For E.g.:

Suppose e-Way bill is generated at 4 AM on 4th March. Then first day would end

on 12 PM of 4th March and the second day would end on 12 PM of 5th March.

Suppose e-Way bill is generated at 11:50 PM on 6th April. Then the first day would end

on 12 PM of 6th April and the second day would end on 12

** One Dimensional Cargo- Over dimensional cargo means cargo carried as single

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divisible unit and which exceeds the dimensional limits prescribed in Rule 93 of Central

Motor Vehicle Rules, 1989 made under the Motor Vehicles Act, 1988. In simplest terms,

ODC or Over Dimensional Cargo is a cargo that protrudes outside the loading deck of the

vehicle transporting the cargo. If a truck with loading platform length of 20 feet is loaded

with cargo like TMT bars of length 22 feet, then the TMT bars qualifies as Over-

Dimension Cargo.

Question 36 Whether validity of EWB starts from update of Vehicle number or even on update of

Transporter ID?

Answer The EWB is considered valid for movement of goods when the details related to vehicle

number is furnished in Part B of FORM GST EWB-01. Therefore, the validity of EWB

will start from the date when the vehicle number will be updated in such Form, not merely

on updating Transporter ID. It is to be noted that, unique EWB number once generated

shall remain valid only for a period of 15 days for updating Vehicle No. in Part-B of

FORM EWB-01

Question 37 Can the validity of E-way bill be extended?

Answer In case, the consignment is not being reached the destination within the validity period

due to exceptional circumstance like natural calamity, law and order issues, trans-

shipment delay, accident of conveyance, etc. The transporter needs to explain this reason

in details while extending the validity period.

Question 38 How to extend the validity period of e-way bill?

Answer There is an option under e-way bill to extend the validity period. The option of extension

of E-way bill is available before 4 hours of expiry of EWB & work upto 4 hours of expiry

of E-way bill. For extension of E-way bill transporter is required to provide the distance

from current place destination along with reason for extension. Transporter is not allowed

to modify the details of part-A in any circumstances.

Question 39 How can anyone verify the authenticity or the correctness of e-way bill?

Answer Any person can verify the authenticity or the correctness of e-way bill by entering EWB

No, EWB Date, Generator ID and Doc No in the search option of EWB Portal.

Question 40 Time period for rejection of E-way bill by other party?

Answer The person who causes transport of goods shall generate the e-way bill specifying the

details of other person as a recipient of goods. There is a provision in the common portal

for the other party to verify the e-way bill generated against his/her GSTIN. As the other

party, one can communicate the acceptance or rejection of such consignment specified in

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the e-way bill. If the acceptance or rejection is not communicated within 72 hours from

the time of generation of e-way Bill or the time of delivery of goods whichever is earlier,

it will be deemed that the other party has accepted the details.

Question 41 What are the modes of e-way bill generation, the taxpayer can use?

Answer The e-way bill can be generated by any of the following methods:

Using Web based system

Using SMS based facility

Using Android App

Bulk generation facility

Using Site-to-Site integration

Using GSP (Goods and Services Tax Suvidha Provider)

Question 42 Can we generate EWB from a location (i.e. From Address) which is not covered

under the registration certificate?

Answer Part A of EWB has column to mention the “place of dispatch”. The address from where

movement of goods is commencing needs to be mentioned there. This filed is different

from the “Bill to” place which indicates that the movement may be commenced from

unregistered place also. However, it is to be noted that if, such place of dispatch falls

within definition of “place of business” as per GST Act from where supply is taking place,

it should be registered as additional place of business.

Question 43 In case of High Sea Sale Transactions – Whether EWB is required?

Answer EWB is required for movement of goods within the country. In case of High Sea Sales as

the supply is effected before the goods cross the custom frontiers of India, EWB is not

required to be generated. When the ultimate buyer files bill of entry, he is required to

generate EWB for movement of goods from port to his place of business.

Question 44 Whether multiple invoices can be clubbed in one E way bill? If yes, then to what

extent?

Answer The value of goods determined in the invoice shall be regarded as the value of

consignment, on the basis of which it is decided whether the consignor or consignee is

required to generate EWB or not. Therefore, a separate EWB is required to be generated

for every individual invoice where value of corresponding consignment exceeds

Rs.50,000.

Question 45 If goods are supplied in same truck, whether EWB would have to be generated even

if value of each invoice individually is less than the threshold limit of Rs.50,000/- but

overall it crosses Rs.50,000/-?

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Answer Rule 138 (7) of the CGST Rules provide that if consignor or consignee, in case of inter-

State supply have not generated the EWB and aggregate of consignment value of goods

carried in the conveyance is more than Rs. 50,000/-, the transporter has to generate EWB

based on the documents (invoice, bill of supply, delivery challan, as the case may be).

Further, transporter may generate consolidated e-way bill on the basis of multiple

separate EWB generated. However, the conditions to raise EWB in this manner is not

applicable on the railway, air and vessel. However, it may be noted that till the time Rule

138 (7) has not been notified. So EWB in such circumstances shall be required to be

generated only after Rule 138(7) gets notified.

Question 46 If the goods are taken from one State to another for the purpose of display in

exhibition, whether EWB is required to be generated?

Answer EWB would be required to be generated, where the value of the consignment exceeds

Rs.50,000/- There is separate sub heading which has specific reference of

exhibition/display for generation of EWB

Question 47 Where the goods are transported from mines to factory, the value of goods and

quantity is not known precisely. How to generate EWB in such cases?

Answer EWB is required to be generated for every movement of goods, exceeding Rs.50,000/ in

case of inter State or prescribed threshold in case of intra State movement. In such

situation, the goods may be sent to the factory by generating delivery challan with

approximate values and the EWB needs to be generated for such movement.

Question 48 How to generate the EWB in case goods are to be moved to a weighbridge situated

outside the factory and invoice cannot be issued unless goods are weighed?

Answer EWB is not required to be generated where the goods are to be transported up to a

distance of 20 kms for the purpose of weighment from the place of business of consignor

to a weighbridge, or, from the weighbridge back to place of consignor. However, such

movement should be along with delivery challan.

Question 49 Whether fresh EWB could be generated for the consignment on expiring of earlier

issued EWB, if yes the how these both EWBs will appear in the portal?

Answer No, the supplier is not allowed to generate a new EWB (except in some exceptional

circumstances, including transshipment) where the EWB generated earlier has expired.

The goods should not be moved further on expiration of EWB.

Question 50 In case of accident to vehicle when the goods are in transit– what shall be the status

of EWB?

Answer If accident happens on the road and vehicle is required to be changed, the

transporter/registered person who has furnished details in Part A has to change the details

of vehicle in Part B of the EWB. The EWB issued earlier shall continue to be valid till the

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expiry of the validity period. If the validity of EWB is expired due to accident of vehicle,

then it could be said to be falling within circumstances of exceptional nature and

transporter may update the validity period of EWB

Question 51 What if the vehicle is stuck at a particular point in the journey due to calamity or

traffic jam?

Answer The goods are required to be transported within the validity period of the EWB. However,

it is provided that under exceptional circumstances, the transporter may generate another

EWB after updating the details in Part-B of FORM GST EWB-01. This can be called as

exceptional circumstances for extension of EWB.

Question 52 What happens if EWB is generated but no movement takes place and if EWB is not

cancelled?

Answer In case EWB is generated but no movement of goods took place, it may be cancelled

within 24 hours from the time of its generation. However, if the same is not cancelled

within 24 hours, then the system would not allow the cancellation by consignor. In such a

situation, one can request recipient to reject the EWB at his end in the common portal

within 72 hours of its generation. However, if the time period for rejection of 72 hours

also lapses then no mechanism is provided in the rules. Therefore, it is very important that

all EWBs that are not supported by proper movement of goods or are invalid or wrongly

generated must be immediately cancelled.

Question 53 Whether EWB has to be generated immediately at the time of generation of raising

of invoice or there could be time gap between two documents?

Answer EWB is required to be generated before the commencement of movement of goods. There

is no time limit prescribed within which it has to be generated from the date/time of

invoice. Hence, there could be gap (even in number of days) between date/time of invoice

and time of generation of EWB. However, once “Part A” of EWB has been generated, the

details of vehicle have to be filled in in Part B within 15 days from the date of filling of

“Part A”. This time limit has to be kept in mind especially in cases where goods are

moved in part truck load where goods are aggregated in the warehouse of transporter and

subsequently dispatched. Further, no EWB can be generated in case of future dated

document.

Question 54 How to generate E-way bill in case goods are transported through a goods transport

operator who is not registered under GST Act and does not issue any consignment

note or any other transport document?

Answer In respect of transport of goods by road, providing the details of Transport Document is

not mandatory field for the purpose of generation of EWB. A person may furnish other

mandatory details like “Mode of transport”, “Transport ID” and “Vehicle Number.” and

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can generate the EWB. Therefore, in case of transportation of goods through goods

transport operator the person causing the movement of goods himself has to update Part A

and also provide vehicle no. in part B and accordingly EWB needs to be generated. Also,

if such operator takes registration and obtains TRAN ID, then EWB can be raised same as

in case movement done through any other registered transporters.

Question 55 Employees posted in one Project and having residential quarter in another Project

carry Laptops and Pen drives in Vehicles. Whether EWB is required for the same?

Answer EWB is not required to be generated where the supply of goods being transported is

treated as no supply under Schedule III of the Act.

Question 56 What is the procedure to transport semi knocked down or completely knocked down

goods or for the movement of goods in lots or instalments?

Answer Where the goods are being transported in a semi knocked down or completely knocked

down condition or in lots or instalments:

The supplier shall issue the complete invoice before dispatch of the first

consignment;

the supplier shall issue a delivery challan for each of the subsequent consignments,

giving reference of the invoice;

each consignment shall be accompanied by copies of the corresponding delivery

challan along with a duly certified copy of the invoice;

[The value and quantity of the goods being moved in a particular vehicle should be

mentioned in the delivery challan issued for the particular vehicle along with the

tax rate and tax amounts as applicable to the value of goods moved in the vehicle]

the original copy of the invoice shall be sent along with the last consignment.

Where the goods are being transported in a semi knocked down or completely knocked

down condition then E-Way bill has to be generated for movement of each consignment

against the copy of original invoice and delivery challan. EWB for each vehicle should be

generated for each vehicle based on the delivery vehicle in respect of the goods moved in

the same vehicle.

Such a procedure has to be followed even when the goods of a single invoice are being

moved in multiple vehicles simultaneously.

Question 57 How and who should generate the EWB for the sale of goods and how distance must

be computed in case of “Bill to” and “Ship to” transaction?

Answer In above kind of transactions, the transporter shall not be required to carry two EWBs to

be able to capture the movement of goods from the suppliers under Ship To party under

Bill to- Ship To transaction. Even though there are two sales made, there is only one case

of movement of goods. Therefore, only one e-way bill is required to be generated.

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Following fields have been added in Part-A of the FORM EWB-01 to tackle the issue of

raising EWB in Bill to-Ship to transactions:

1. Place of Dispatch: This includes the address of the place from where the goods are

dispatched for the movement to the recipient.

2. Bill To: This includes the details of the Bill To party on whose options the goods are to

be transported at the place of Ship To party.

3. Ship To: This allows the registered person to enter the address of Ship To party i.e.

address where goods are destined. Therefore, EWB can be generated for Bill To-Ship To

transactions easily by providing the above details in Part-A of the Form

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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 At the time of implementation of GST, it is decided that Vendor code will be the PAN of

the Vendor. All the existing vendor codes will be updated accordingly.

One vendor will be allotted against one PAN. Multiplicity of vendor codes to one single

vendor will be abolished. State wise GST ID of one vendor shall be updated in one vendor

code itself and relevant GST ID of vendor shall be selected via dropdown facility

provided in coal net.

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.40

lakhs and Rs.20 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. 1.5 Crore 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, NCL has taken state wise GSTIN number. Following are the GSTIN number

of NCL:

For MP State 23AABCN4884H1ZE

For UP State 09AABCN4884H1Z4

For West Bengal State 19AABCN4884H1Z3

For ISD (MP) 23AABCN4884H8Z7

For ISD (Kolkata) 19AABCN4884H2Z2

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 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 shall submit supporting documents as well as certificate

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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 being less than 40 lakh then bidder has to submit the copy of

Notification alongwith Certificate from Practicing CA/CMA/CS that Aggregate turnover

from all business is less than 40 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 40 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 Whether person opting composition scheme can make interstate supply?

Answer No, As per Section 10(2) of CGST Act, 2017, the supplier engaged in providing interstate

supply cannot opt Composition scheme.

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 Notified goods purchased from unregistered person will attract GST under Reverse charge

mechanism. However CBIC has not declared the list of notified goods yet. In case of

notified goods GST under Reverse charge will be added in quoted price & eligible ITC will

be excluded for evaluation purpose. For goods other than notified goods GST can be

considered as NIL for evaluation purpose.

Question 9 Whether a supplier of services is eligible to pay tax under composition scheme?

Answer Initially, a supplier of services is not eligible to opt for composition scheme except 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). However as per CGST (Amendment), Act 2018 service provider can opt

composition scheme and supply the services of value not exceeding 10% of turnover in

preceding F.Y. or Rs. 5 Lakhs whichever is higher.

Question 10 Can bidders opting composition scheme, allowed to charge GST?

Answer NO, as per section 10(4) of CGST Act, A taxable person opted composition scheme 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.

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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 the Bidder is

eligible to opt the scheme and that he fulfills all the conditions as mentioned in the

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/Audited Books of Account).

(If place of supply and supplier are located in same state and turnover is below Rs.1.5

Crores then bidder may opt composition scheme).

d) Information given to GST Authority in CMP-01 or CMP-02 forms.

Question 12 Will NCL be eligible to take benefit of input Tax credit, in case of procurement is

made 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.Thus question of

claiming ITC will not arise. 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 14 What are the contents of invoice as per the provisions of CGST Act, and Tax Invoice

rules under GST?

Answer The Invoice form should contain the below mentioned details, otherwise NCL will not get

the benefit of Input Tax credit :-

(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;

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(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 of person liable for paying tax whether as consignor, consignee or GTA

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 eligible Input tax Credit (CGST,

SGST or IGST or UTGST as the case may be) from bid price including taxes.

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However, if Bidder has opted composition scheme to deposit GST under section 10 of

CGST Act, 2017, 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

determine 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 on

notified goods & services as per the Provision of CGST Act, then the same will be included

in cost while computing the landed price. However, CBIC has not declared list of notified

goods yet.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 eligible Input Tax(CGST,SGST or IGST or UT-GST, 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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Procurement Module

Question 1 What will be the treatment of running contract after implementation of GST?

Answer Kindly refer the chapter “FAQs on Anti- Profiteering”.

Question 2 What will be the evaluation process in case bidder is a registered supplier?

Answer In case bidder is a 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 3 What will be the evaluation process in case dealing with unregistered Supplier?

Answer Notified goods purchased from unregistered person will attract GST under Reverse charge

mechanism. However CBIC has not declared the list of notified goods.

Unregistered person cannot charge the GST, therefore GST can be considered as NIL for

evaluation purpose.

Question 4 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 in Invoice.

The GST will be considered as NIL for this case. Accordingly evaluation will be based on

basic price only.

Question 5 What precautions to be taken before accepting Invoice for payment?

Answer On receipt of invoice or other similar document (Debit Note/Bill of entry) 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

f) Verify the date of Invoice for ensuring payment within 180 days.

g) Declaration from supplier is obtained or not to deposit the GST within time

h) Proper DRR entry and accounting in prescribed code for smooth filing of Return.

Question 6 What will be the time limit for making payment against invoices?

Answer Payment (Full payment) is to made in any case within 180 days from the date of Invoice,

otherwise NCL is liable to reverse the ITC already claimed.

Question 7 What changes will come in case of Import?

Answer In case of imports, CVD and SAD will be replaced by IGST.

Question 8 What precautions need to be taken for availing Input tax credit?

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Answer Kindly refer module “ FAQs on ITC”.

Question 9 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, 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 ITC 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.

Question 10 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.

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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 ITC/setoff allowed to NCL

(depending upon the nature/category of item) for arriving at the landed price.

Question 11 What is mixed and composite supply under GST?

Answer Composite and mixed supply has been defined under GST Act as follows:

Sec 2 (30) “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 1— Where goods are packed and transported with insurance, the supply of

goods, packing materials, transport and insurance is a composite supply and supply of

goods is a principal supply;

Illustration 2- Combined services of Coal transportation, loading and unloading

Sec 2 (90) “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;

Section 2 (74) “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 1- 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;

Illustration 2- Combined services of collection of garbage from door to door,

transportation of garbage and disposal of garbage.

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Question 12 Whether there is any criteria to determine a service is naturally bundled or not?

Answer “‘Bundled service’ means a bundle of provision of various services wherein an element of

provision of one service is combined with an element or elements of provision of any

other service or services.’

No straight jacket formula can be laid down to determine whether a service is naturally

bundled in the ordinary course of business. Each case has to be individually examined in

the backdrop of several factors some of which are outlined hereunder.”

Certain illustrative indicators (not determinative but indicative) of bundling of services in

ordinary course of business are –

There is a single price or the customer pays the same amount, no matter how much

of the package they actually receive or use.

The elements are normally advertised as a package

The different elements are not available separately.

The different elements are integral to one overall supply – if one or more is

removed, the nature of the supply would be affected.

If the nature of services is such that one of the services is the main service and the

other services combined with such service are in the nature of incidental or

ancillary services which help in better enjoyment of a main service.

Question 13 What is the GST implication on mixed and composite supply?

Answer 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 14 What shall be the GST implication on purchase of Dumper along with payment for

transportation charges and Transit Insurance?

Answer The combined services of Dumper, Transportation service and Transit insurance will be

covered under Composite services as defined under Section 2(30) of CGST ACT.

The GST rate on Dumper is 28%, transportation service is 5% or 12% and transit

insurance is 18%, since the principal supply is dumper, the composite service shall be

leviable to GST @ 28%.

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CMC MODULE

Question 1 What will be the treatment of running contract?

Answer Kindly refer our module on “FAQs on Anti-Profiteering”.

Question 2 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 along with 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 3 How are the Services of Coal Transportation, Tipper Loading and Wagon Loading

classified in the Pre-GST 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 Pre GST tax regime i.e., Finance Act and Service Tax Rules.

Question 4 Shall the Existing Classification of above services, will change in GST Regime?

Answer In GST regime, the same classification is adopted by GST Authority thus Classification of

the Overburden removal outsourcing, transportation and loading services is remain constant

in GST regime too, i.e., Services of overburden removal outsourcing is classified under

“Other Services”, Services of Coal Transportation and tipper loading is covered under

“Goods Transport Agency services” and Services of wagon Loading is covered under

“Cargo handling services” in GST Regime also.

Question 5 What is the concept of composite services and Mixed Services is as described in CGST

Act?

Answer Kindly refer question 5 of Chapter 2 of this e-book titled “Services Provided/Received and

Scrap sale”.

Question 6 Whether there is any criteria to determine a service is naturally bundled or not?

Answer Kindly refer question 6 of Chapter 2 of this e-book titled “Services Provided/Received and

Scrap sale”.

Question 7 What is the difference between Composite supply and Mixed Supply?

Answer

Kindly refer question 7 of Chapter 2 of this e-book titled “Services Provided/Received and

Scrap sale”.

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 is nor 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,

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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.

Question 9 Whether is it mandatory for GTA service provider (opted RCM) to get them

registered under GST Act?

Answer CBIC vide notification no. 5/2017 dated 28.06.2017 clarified that 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.

We understand that transporters engaged in NCL are 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 dated 22.08.2017 GST on GTA services will be levied as

follows:

Situation Rate Charge

Where GTA/service provider is not availing the

benefit of ITC on their input/input services

5% Reverse Charge

Where GTA/service provider is availing the benefit

of ITC on their input/input services

12% Forward charge

Question 12 In NCL, whether GTA agency are charging 5% GST or 12% GST?

Answer Liberty is given to GTA agency to charge GST at 5% or 12% as per their convenience.

However they will inform NCL at the beginning of year regarding option they wants to opt.

Question 13 Modus operandi when GTA service provider opt to pay GST at 12% under forward

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charge?

Answer It was decided in the meeting held on 26.08.2017 and 29.08.2017 (refer MOM dated

01.09.2017) that Transporter who opts to pay GST at 12% under forward charge will

follow the below procedure :

a) Transporter will raise invoice strictly adhering the provision of section 31 of CGST

Act, 2017 along with Rule 46 & 47 of CGST Rule, 2017

b) If, any delay is arising in payment against the invoice due to fault attributable to

Transporter and any reversal of input tax credit arises due to delay in payment of

invoice the same will be recovered from Transporter along with interest as paid by

NCL due to reversal.

c) Transporter will indicate the rate as well as amount of CGST, SGST or IGST in

invoice.

d) Transporter will give an undertaking on invoice or as separate Annexure along with

invoice that Invoice/ applicable GST returns has been/will be uploaded in GST

Portal within due date as prescribed in CGST/SGST Act and CGST,SGST or IGST

as per the provision of GST Act and rules thereon has been deposited.

e) Transporter will file all the Returns and details as applicable under GST Act & rules

thereon, within due dates.

f) 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) and after

submission of documentary evidence of deposition of GST Taxes and filing of GST

Returns

g) In case the GST rating of vendor on the GST portal / Govt. official website is

negative / black listed at any stage even after award of work issued, NCL has right to

reject the work order/letter of award. NCL shall not be obligated or liable to pay or

reimburse GST to such vendor and shall also be entitled to deduct / recover such

GST amount along with all penalties / interest, if any, incurred by NCL.

Question 14 Modus operandi when GTA service provider opt to pay GST at 5% under Reverse

charge?

Answer It was decided in the meeting held on 26.08.2017 and 29.08.2017 (refer MOM dated

01.09.2017) that Transporter who opts to pay GST at 5% under reverse charge will follow

the below procedure :

a) Transporter (Registered under GST) will raise invoice strictly adhering the

provisions of section 31 of CGST Act, 2017 along with Rule 46 & 47 of CGST Rule,

2017

b) If, any delay is arising in payment of tax under GST by NCL against the invoice, due

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to fault attributable to Transporter and any interest or penalty will arise, the same

will be recovered from Transporter.

c) Transporter will clearly indicate on invoice that invoice is issued under Reverse

charge and payment of GST will be made by NCL under reverse charge.

Question 15 Whether the Benefit of Input Tax Credit is available to NCL on GST paid on GTA

services?

Answer Yes, as the GTA service is used for furtherance of business thus benefit of ITC will be

available on GTA services.

Situation Relevant document

When GTA is charging GST at 12%

under forward charge

Invoice issued by GTA

When GTA is charging GST at 5%

under reverse charge

Self Invoice

Question 16 Whether all transport 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 and

b) Issues consignment note

Issuance of consignment note is main criteria for classification of transport service under

Goods Transport Agency. Thus transporter issuing consignment note will be treated as

GTA.

Question 17 What will be the consequence when transporter does not issue consignment note?

Answer In case transporter does not issues consignment note, service of transporter will be treated

as “Goods transport service” instead of GTA and rate of GST will be 18% instead of “5%

or 12%” and it will be covered under forward charge.

Question 18 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.

Question 19 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

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g. GSTIN of Consigner, Consignee and GTA (if available)

h. GSTIN of person liable for paying tax whether as consignor, consignee or GTA

Question 20 What code shall be mentioned by GTA in their invoices- HSN or SAC?

Answer Goods transport agents provides services of loading, transportation and unloading of Coal,

hence they shall mention Service Accounting Code i.e. SAC in their invoices. GTA

services are covered under SAC code 9965.

Question 21 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 from 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 questions and NCL will pay GST under reverse charge/forward charge

(as intimated by GTA service provider) 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 22 Whether wagon loading service provider or OB outsourcing service provider has to

mandatorily get themself registered under GST at state where they are providing

these services?

Answer Yes, these services have to be provided in mines located in MP and UP. Service provider

cannot provide the 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 MOF vide Twitter dated 27.06.2017

Question 23 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 under SAC code 9997.

Question 24 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, as the service is availed for furtherance of business.

Wagon Loading Services is classifiable under Cargo Handling Services, which is

eligible for Input Tax Credit.

Question 25 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 by 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.

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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 26 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 27 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, as the OB removal outsourcing service

is availed for furtherance of business.

Question 28 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 by 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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Other than Procurement and CMC

Question 1 What will be the modus operandi of running work contract?

Answer Kindly refer our module on “FAQs on Anti-Profiteering”.

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, only immovable property are covered under the definition of works contract.

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 Whether services undertaken (viz; installation, fitting out, improvement,

modification, repair, maintenance) on movable property will be covered under

works contract?

Answer In GST regime, works contract is limited to services undertaken only on immovable

property unlike as prevalent in Service Tax/Pre GST regime. The treatment of works

contract under GST will be applicable only for immovable properties.

Accordingly, services undertaken (viz; installation, fitting out, improvement,

modification, repair, maintenance) on movable property will not be covered under works

contract

Question 6 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 7 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 8 What will be the GST rate in case of work contract for CSR activities?

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Answer As per the notification no. 20/2017- Central Tax (Rate) dated 22.08.2017 GST will be

levied at concessional rate of 12% instead of 18% for the following activities:

3. Composite supply of works contract as defined in clause (119) of section 2 of the

Central Goods and Services Tax Act, 2017, supplied by way of construction,

erection, commissioning, installation, completion, fitting out, repair, maintenance,

renovation, or alteration of,-

g) a road, bridge, tunnel, or terminal for road transportation for use by general

public;

h) a civil structure or any other original works pertaining to a scheme under

Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

i) a civil structure or any other original works pertaining to the “In-situ rehabilitation

of existing slum dwellers using land as a resource through private participation”

under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for

existing slum dwellers;

j) a civil structure or any other original works pertaining to the “Beneficiary led

individual house construction / enhancement” under the Housing for All (Urban)

Mission/Pradhan Mantri Awas Yojana;

k) a pollution control or effluent treatment plant, except located as a part of a

factory; or

l) a structure meant for funeral, burial or cremation of deceased.

4. Composite supply of works contract as defined in clause (119) of section 2 of the

Central Goods and Services Tax Act, 2017, supplied by way of construction, erection,

commissioning, or installation of original works pertaining to,-

f) railways, excluding monorail and metro;

g) a single residential unit otherwise than as a part of a residential complex;

h) low-cost houses up to a carpet area of 60 square meters per house in a housing

project approved by competent authority empowered under the 'Scheme of

Affordable Housing in Partnership' framed by the Ministry of Housing and Urban

Poverty Alleviation, Government of India;

i) low cost houses up to a carpet area of 60 square metres per house in a housing

project approved by the competent authority under-

III. the “Affordable Housing in Partnership” component of the Housing for

All (Urban) Mission/Pradhan Mantri Awas Yojana;

IV. any housing scheme of a State Government;

j) post-harvest storage infrastructure for agricultural produce including a cold

storage for such purposes; or

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k) mechanised food grain handling system, machinery or equipment for units

processing agricultural produce as food stuff excluding alcoholic beverages.

Question 9 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 except for solar plant.

In Pre-GST regime, VAT is payable on the works contract. Service tax is being levied

@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 10 Whether Civil Contractor has to get registered 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 MOF vide Twitter dated 27.06.2017

Question 11 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 to

constitute works contract.

Question 12 Whether repair and maintenance will be covered under works contract?

Answer Yes, the repair and maintenance of immovable property is covered under works contract

however repair and maintenance of movable property is not covered in works contract.

Question 13 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 14 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 15 Can a particular transaction be a supply of goods and service both?

Answer No, In schedule II of CGST Act both Supply and Services are defined separately.

Question 16 Is it required to distinguish whether a particular supply involves supply of goods or

services?

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Answer Yes under CGST Act, 2017 separate Provision has been prescribed to ascertain the taxable

event for goods and services Section 12 of CGST Act, 2017 describes the provision for

time of supply for goods and Section 13 describes the provision for time of supply of

service.

Further, the rate of tax applicable to supply of goods and supply of services are different.

Accordingly, it is important to distinguish whether a particular transaction involves supply

of goods or supply of services.

Question 17 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

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 18 Whether renting of Motor cab is covered under reverse charge?

Answer Yes, CBIC vide Notification number 22/2019-Central Tax (Rate) dated 30.09.2019

prescribed that “service of hiring of motor vehicle provided to a body corporate by any

person other than body corporate opt to pay GST @5% when service provider is not

availing the benefit of ITC of input and Capital goods is covered under Reverse charge

mechanism with effect from 01.10.2019.”

For more details kindly refer question 37 of chapter 2 of this e-book titled “Services

provided/availed and Sale of Scrap” .

Question 19 What will be the GST rate in case of renting of Motor Vehicle?

Answer The GST implication on availing hiring of vehicle services or renting of motor vehicle in

various scenarios is enumerated hereunder :

Type of Service

Provider

Type of

Service

receiver

Rate of GST Reverse charge or

Forward charge

Non corporate and

Registered

NCL 5%

(Diesel cost cost

included)

Reverse Charge

(w.e.f 01.10.2019)

Non corporate and

Registered

NCL 12%

(Diesel cost cost

included)

Forward charge

Corporate and Registered NCL 5% or 12%

(Diesel cost

included)

Forward Charge

Non Corporate and NCL 18% Forward Charge

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Registered (When diesel cost

not included in

invoice)

Kindly refer question 37 of chapter 2 of this e-book titled “Services provided/availed and

Sale of Scrap” for complete modus operandi.

Question 20 What is Motor Vehicle as per GST?

Answer As per section 2 (76) of the CGST Act 2017 “motor vehicle” shall have the same

meaning as assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988;

As per Section 2(28) in The Motor Vehicles Act, 1988 “motor vehicle” or “vehicle”

means any mechanically propelled vehicle adapted for use upon roads whether the power

of propulsion is transmitted thereto from an external or internal source and includes a

chassis to which a body has not been attached and a trailer; but does not include a vehicle

running upon fixed rails or a vehicle of a special type adapted for use only in a factory or

in any other enclosed premises or a vehicle having less than four wheels fitted with engine

capacity of not exceeding 4[twenty-five cubic centimetres]; 1[twenty-five cubic

centimetres];"

Question 21 Will evaluation of tenders to 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 including taxes

excluding eligible amount of ITC.

Question 22 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 23 What will be the evaluation process in case dealing with unregistered service

provider?

Answer If services are notified services then this situation will be covered under Reverse charge

mechanism; NCL has to deposit tax and issue self-invoice. CBIC is yet to notify list of

notified goods.

While evaluating the proposal, it 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 24 What are the contents of invoice as per the provisions of CGST Act, and Tax Invoice

rules under GST?

Answer Kindly refer FAQs on Sales module.

Question 25 What will be the time limit for making payment against invoices?

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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 26 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.

Question 27 What will be treatment of other services availed by NCL like horticulture, CSR,

advertisement services, sponsorship services, cleaning services etc.

Answer Kindly refer the FAQs on services.

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Bill Processing Module

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 55 of CGST Rule, 2017

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.

ix. Verify whether the invoice is appearing in GSTR 2A, if yes then release the GST

amount, if not, then in case of running invoice, if previous invoice is appearing in

GSTR 2A, release the invoice value, in case of final invoice, withhold the GST

amount until the invoice is not appearing in GSTR 2A

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

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(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 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,

In GST era ;

(i) supplier / service provider has to issue Credit Note in accordance with Sec.34

(ii) 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 applicable GST Return, NCL would not

be able to avail the benefit of Input Tax Credit.

Therefore, it is necessary to take declaration from supplier that he has deposited or will be

depositing 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 loss of input tax credit incurred by NCL

Question 8 How to ensure supplier / service provider has deposited the GST?

Answer We cannot ensure whether supplier has deposited GST or not and whether supplier has

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filed the applicable GST return, until it is auto-populated in our GSTR 2A.

To avoid the loss of ITC, it is decided that amount of statutory levies like CGST, SGST,

or IGST will be released when the same will appear in GSTR-2A of NCL, the common

portal of GST. However, relaxation is provided in following cases/ situation, i.e., GST is

not to be withheld in following cases :-

1) Where the value of invoice is less than Rs. 10,000/- and supply/service is

ineligible for Input tax credit

2) Invoices other than final invoice of PSU

3) Running Invoice other than final invoice of supply; where number of invoice is

more than two in month like invoice of explosive

4) Invoices other than final invoice of supplier having Rate Contract with NCL

5) Invoices other than final invoice of supplier having Depot Agreement with NCL

6) Running invoice other than final invoice of services having Letter of award, work

agreement.

For Clause (2) to (6), liberty is taken for invoices of first month, for next month

invoice, it will be released when the detail of first invoice will be appeared in

GSTR-2A (after the expiry of due date of filing of GSTR-1) and so on

Question 9 What if supplier detail/Invoice detail is not appearing in corresponding GSTR-2A?

Answer If the supplier is not falling in above relaxation as mentioned in “question 8”, the amount

of GST will be withheld and booked under liability code 810113. At the end of each

month schedule of accounting code 810113 containing party wise details in following

format will be uploaded at NCL website:

GSTIN Name

of party

Invoice

no.

Invoice

date

Invoice

value

CGST SGST IGST Reason

of with-

holding

GST

The party wise detail of GST withheld is displayed on NCL website.

Question 10 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 invoice.

Question 11 What will happen if the payment of invoice could not be made within 180 days from

the date of invoice due to fault of supplier/service provider?

Answer When the payment of invoice could not be made within 180 days and reason of delay is

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attributed to supplier/service provider like invoice not being in prescribed format or other

reasons, interest liability, if any arising due to reversal of ITC would be recovered from

supplier..

Question 12 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:

Question 13 What are the activities / supplies covered under Reverse Charge?

Answer Kindly refer FAQ on Reverse Charge.

Question 14 Whether CGST, SGST/UTGST and IGST will be simultaneously charged in the

same invoice?

Answer No, bill passing officer has to verify that:

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 15 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 16 Whether services availed by NCL can be interstate?

Answer Yes, service availed by NCL can be interstate, if location of supplier is other than place of

supply (MP or UP as the case may be). However, services related to immovable property

can’t be interstate like civil construction related services, hotel services etc.

Question 17 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

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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 18 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 19 What is the Purpose of Input Service Distributor, in context of NCL?

Answer Companies may have HQ and units at different places, which may be having separate

GSTIN. One or more of the units would be procuring certain services which would be for

common utilization of all units across the country. The bills for such expenses would be

raised on the one unit/HQ. But that unit/HQ itself would not be providing any output

supply so as to utilize the credit which gets accumulated on account of such input

services. Since the common expenditure is meant for the business of all units, it is but

natural that the credit of input services in respect of such common invoices should be

apportioned between all the consuming units. ISD mechanism enables such proportionate

distribution of credit of input services amongst all the consuming units.

For Example :

1. NCL HQ procures advertisement services for NCL as a whole. As advertisement

expenses are not alone for MP state but also for project located in UP state, since

the common expenditure is meant for both UP and MP, Credit of input services in

respect of such common invoices should be apportioned between both states.

2. Kolkata Desk office arranges the Hotel services for stay of NCL employees at

Kolkata while in official duty/tour. Hotel bill is charges as expense in

corresponding Project. Here, Kolkata Desk office is acting as ISD and distributes

these charges among Projects by raising ISD Invoice.

Question 20 What was practice for distribution of above expenses in Pre-GST era?

Answer We understand that CIL and CMPDIL raise invoice for Apex charges, Guarantee fees,

service charges, along with service tax to AFM-NCL HQ, which was subsequently

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apportioned by AFM-HQ/Central Accounts, to all projects/units in the proportion of

Production through Debit Note without service tax. As the NCL was having centralized

Registration, Cenvat credit was availed by NCL HQ directly.

Question 21 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 accounting policies, 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 memo.

Question 22 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) of CGST Act 2017, read with rule 39 of

CGST Rule 2017, the credit of tax paid on input services attributable to all recipients of

credit shall be distributed amongst such recipients on pro-rata 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.

i.e., Distribution of input tax credit on input services shall be made as follows :

Common ITC on Input services * Turnover of relevant state

Aggregate of turnovers of all states

Question 23 What will be new accounting code in GST for recording GST liabilities?

Answer Kindly refer the Chapter “Accounting under GST”

Question 24 What will be new accounting code in GST for recording Input tax credit?

Answer Kindly refer the Chapter “Accounting under GST”

Question 25 Why separate Accounting codes are required for ineligible credit?

Answer Kindly refer the Chapter “Accounting under GST”

Question 26 What will be done with ineligible Cenvat Credit, appearing in relevant accounting

code as mentioned above?

Answer Kindly refer the Chapter “Accounting under GST”

Question 27 What will be relevant accounting code for recording GST withheld by Project?

Answer GST withheld by the project is to be recorded in accounting code 810113.

Question 28

What if GST amount of supplier is withheld on the ground that invoice detail is not

appearing in GSTR 2A?

Answer In case GST amount is withheld on the ground that supplier has not filed the GSTR-1 or

GSTR-3B, detail of such supplier along with their GSTIN number, amount of GST

withheld, invoice number will be provided to GM (System) to publish their details at NCL

website.

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In the later month, if supplier filed GSTR-1 and GSTR-3B, after verification the detail

from GSTR-2A, their withheld GST amount can be released and details will be updated in

NCL website.

Question 29 What if supplier refuses to issue credit note in case bills accepted by the user

department for a lesser amount?

Answer Section 34 of the CGST Act,2017 states that credit note may be issued by the supplier, as

follows:

1) Where the taxable value or tax charged in that tax invoice is found to exceed the

taxable value or tax payable in respect of such supply, or

2) where the goods supplied are returned by the recipient, or

3) where goods or services or both supplied are found to be deficient,

The word “may” used in above provision indicate that, issuance of credit note is

discretionary not mandatory. If supplier is not issuing credit note in line with the

provisions of CGST Act, supplier will not get the benefit to reduce the GST liability to the

extent of amount deducted by recipient.

In cases where user department accepts the invoice for lesser amount, but

supplier/contractors fails/refuses to issue credit note, then invoice may be procured for

payment at value accepted by user department and ITC will be availed, in proportion to

the invoice value accepted.

In case full ITC has already been availed on the basis of the invoice, ITC in proportion to

the amount deducted from the bill is liable to be reversed.

Question 30 What if the Tax Invoice is issued by the supplier but the same is not appearing in

GSTR 2A due to non-filing of the return by the supplier and subsequently supplier

wants to issue a credit note against the original invoice along with a fresh tax

invoice?

Answer Section 34 of the CGST Act,2017 clearly defines the circumstances under which credit

note may be issued by the supplier, as follows:

1) Where the taxable value or tax charged in that tax invoice is found to exceed the

taxable value or tax payable in respect of such supply, or

2) where the goods supplied are returned by the recipient, or

3) where goods or services or both supplied are found to be deficient,

Credit note may be issued only in circumstances enumerated above and one cannot accept

credit notes for reasons other than that mentioned above.

Accordingly, Bill passing officer shall not accept credit note and approach to supplier

160

(through user department) to file GSTR-1 to enable the recipient to avail the benefit of

ITC.GST amount as mentioned in invoice shall be withheld as per extant practice due to

invoice detail not being appearing in GSTR 2A .

Question 31 What if supplier raises invoice as composition supplier, however, as per GST portal

his status is indicated as a regular supplier?

Answer It is informed by supplier they have opted the composition scheme, however, due to

technical glitches of GST portal their status is not updated in GST portal.

While dealing with such instances, bill passing officer has to take following precautions:

1) Documents: Verify the following documents:

a) Intimation given to authority for composition scheme (CMP-02) or

b) Registration certificate of the supplier or

c) Latest GSTR-4 filed by supplier

to verify the fact that supplier has opted the composition scheme

2) Kindly verify that the CMP-02 has to be filed within 60 days from the

commencement of relevant financial year

3) Supplier has not charged/levied GST on bill

4) In case of doubt, a declaration can be obtained from supplier that he is registered

under composition scheme with GST authority which is alive as on date of issue of

invoice.

Question 32 What if, supplier raises tax invoice along with GST but as per GST portal his

registration status is indicated as Cancelled?

Answer While dealing with cases where supplier claims to be registered and issues GST invoice,

however his registration status is indicated as Cancelled in GST portal, the billing officer

shall take following precautions :-

1) Verify latest returns filed by the supplier (latest GSTR-1 or GSTR-3B)

2) Declaration can be obtained from supplier regarding his registration status

3) GST amount will be released when the invoice detail appears in GSTR-2A and

supplier provides the copy of GSTR 3B of respective month else the GST shall be

withheld.

Question 33 What if supplier raises tax invoice mentioning GST ID other than their GST ID as

mentioned in work order/LOA/Agreement?

Answer It is noted that in some instances, supplier raises the invoice with their GST ID other than

GST ID number mentioned in work order/LOA/Agreement (whatever name called). Bill

passing Officer has to abide by the work order/ supply order/LOA/ Agreement, thus,

without amendment in LOA/work order/ Agreement, invoice cannot be processed and

liable to be returned to user department.

161

Question 34 On what value GST TDS shall be deducted where supplier has issued tax invoice and

credit note in the same month?

Answer GST TDS is deducted on invoice value and subsequent issue of credit note against the

invoice shall not have any impact on deduction of GST TDS by NCL.

Question 35 What if supplier files their GST return indicating NCL unregistered recipient?

Answer Bill passing officer has to process the invoice after duly verifying that the details of the

invoice as prescribed in answer to question (32) above.

This situation may arise when supplier issues the invoice mentioning correct GST ID of

NCL however, while filing its GST return (GSTR 1), he indicate NCL as unregistered or

B2Cs. In such cases, the transaction with mentioned supplier will not appear in GSTR 2A

of NCL leading to a loss of ITC. Therefore, GST of the mentioned transaction shall be

withheld by NCL as per extant practice, due to invoice detail not being appearing in

GSTR 2A.

162

Accounting under GST

Question 1 Types of Accounts/Schedule to be maintained for GST Era?

Answer The Following schedules is to be maintained in GST Era:

i) Schedules for liability of SGST, CGST, IGST and GST Cess against outward supply of

Goods and Services.

ii) Schedules for eligible ITC of SGST, CGST, IGST and GST Cess

iii) Schedules for Ineligible ITC of SGST, CGST, IGST and GST Cess

iv) Schedules for Electronic balance for Liability (CGST, SGST,IGST, CESS)

v) Schedules for Electronic balance for ITC (CGST, SGST,IGST, CESS)

vi)Schedules for liability of TDS(SGST, CGST& IGST TDS)

vii) Schedules for Credit of GST TDS(SGST, CGST& IGST TDS)

Question 2 What is the process for Accounting of GST on outward supply of goods and services.

Answer GST on outward supply of goods and services is recorded in the respective/

corresponding liability codes, separate accounting codes for significant supply (for eg.

Coal, Tender paper, Scrap, DTI and Service) has been provided. At the end of each month

Projects transfers the closing balances of liability of GST recorded in their natural codes to

HQ and HQ after reconciliation of liability with GSTR-3B transfer the same to electronic

liability codes.

Question 3 What is the Natural code and Electronic codes?

Answer Natural GST codes are the accounting codes where Project record the corresponding

liability and ITC of GST. At the end of the month closing balance of natural code is

transferred to HQ along with GSTR-3B/GSTR-1.

Electronic codes are the accounting codes wherein HQ consolidates the Liability/ITC

recorded by Projects lying under same GSTIN.

Question 4 What is the relevance of Electronic codes when there are separate natural codes for

recording the GST liability as well as ITC?

Answer Separate Electronic codes are required for following reasons:

1. There are more than 1 Project (In MP, 10 Projects are lying under the same GSTIN

and In UP 5 Projects) are lying in the same GSTIN, There may be possibility that

GST liability of one Project is more than the GST ITC available in that Project,

However other Projects under same GSTIN may be having excess balance of ITC.

It will not be a good practice that one project under same GSTIN is having excess

credit of ITC and other Project under same GSTIN is discharging their liability

163

through cash ledger.To avoid such kind of situation, Project will record their

output GST liability and ITC in natural codes and at the end of the month transfer

the output GST liability and GST ITC to HQ.

2. It will be easy to reconcile the closing balance of credit ledger of ITC with GST portal

and Accounts.

Question 5 Is there separate codes for recording of GST for different type of outward supplies?

Answer Yes there are separate liability codes for significant supply (for eg. Coal, Tender paper,

Scrap, DTI and Service) has been provided, For laptop GST will be recorded under

codes provided for sale of scrap, the following are the codes for recording of GST:

Accounting code Description

For Coal Sale

810766 CGST Payable to Dept. (Billed)

810767 SGST Payable to Dept. (Billed)

810768 IGST Payable to Dept. (Billed)

810769 UTGST Payable to Dept. (Billed)

810770 GST (Compensation to state) cess payable (Billed)

For Scrap Sale

810775 Liability on CGST on Scrap

810776 Liability on SGST on Scrap

810777 Liability on IGST on Scrap

For Supply of service

810778 Liability on CGST on Services

810779 Liability on SGST on Services

810780 Liability on IGST on Services

For DTI other than Coal

810781 Liability on IGST on DTI

For Sale of Tender Paper

810782 Liability on CGST on Tender Paper

810783 Liability on SGST on Tender Paper

810784 Liability on IGST on Tender Paper

These codes can be termed as natural codes for recording of the GST liability by Projects.

Question 6 What are the electronic codes for recording of liability and their relevance?

Answer Relevance of Electronic codes has already been described in question no. 4

The following codes are used as electronic codes for recording of liability:

For Projects located under GSTIN of Madhya Pradesh (23AABCN4884H1ZE)

164

Accountin

g code Description

810769 Electronic balance of CGST Payable to Dept. (Billed)/Under Forward Charges

810774 Electronic balance of SGST Payable to Dept. (Billed)/ Under Forward Charges

810788 Electronic balance of IGST Payable to Dept. (Billed)/ Under Forward Charges

810933 Electronic balance of GST (Compensation to state) cess payable (Billed)

For Projects located under GSTIN of Uttar Pradesh (09AABCN4884H1Z4)

Accountin

g code Description

810754 Electronic balance of CGST Payable to Dept. (Billed)/Under Forward Charges

810755 Electronic balance of SGST Payable to Dept. (Billed)/ Under Forward Charges

810762 Electronic balance of IGST Payable to Dept. (Billed)/ Under Forward Charges

810763 Electronic balance of GST (Compensation to state) cess payable (Billed)

Question 7 What are the accounting codes for deposition of GST? What accounting entry will be

passed at the time of deposition of GST amount with GST Authority.

Answer Following accounting codes are used at the time of deposition of GST for discharge of

output liability:

For CGST (Forward charge): 340551

For SGST(Forward charge)::340552

For IGST(Forward charge)::340553

For GST Compensation cess:340555

For CGST (Reverse charge): 340127

For SGST(Reverse charge)::340128

For IGST(Reverse charge)::340129

Following entry will be passed:

A/C Code Description Debit Cred

it

340551/340552/340553

CGST/SGST/IGST Advance on forward

charge (just like PLA)

****

340555 GST(Compensation to state) cess

Advance

****

340127/340128/340129 CGST/SGST/IGST advance on reverse ****

165

charge (just like PLA)

330102 Bank a/c ****

Question 8 Why the separate accounting codes are prescribed for GST deposition instead of

directly setoff of the liability?

Answer It is informed that GST liability (Forward charge and Reverse charge) has to be deposited

before filing of GSTR-3B and liability can be treated as setoff/discharged after filing of

GSTR-3B.

Question 9 What is the process of accounting for recording of ITC for inward supplies?

Answer ITC on inward supplies is recorded by projects in corresponding accounting codes (natural

codes). There are separate accounting codes for eligible and ineligible ITC. Balance of

Eligible ITC is transferred to HQ every month along with GSTR-3B for recording in

electronic ITC credit codes. Balance of ineligible ITC of Input and input service is

transferred to relevant code i.e. 004808 and balance of ineligible ITC for capital goods is

capitalized in relevant store/capital WIP Account at the end of every quarter.

Question 10 What if ineligible credit is not transferred to relevant code before closing of each

quarter?

Answer If the amount of ineligible credit is not transferred to relevant codes before closing of each

quarter, then profit as well as current assets will be inflated to the extent of the amount of

Ineligible credit.

Question 11 What if ineligible credit is related to CSR expenses?

Answer It is prudent to transfer the balance of ineligible ITC to CSR head instead of revenue code

00408, otherwise the books will show the less expenses of CSR then actual expense

incurred.

Further CSR expense is disallowed expense in income tax, corresponding ineligible ITC

related to CSR expense will be transferred to CSR head.

Question 12 Why separate Accounting codes are required for ineligible credit

Answer As we have to segregate the eligible and ineligible ITC from GSTR-2A (include

eligible as well ineligible ITC), which will be auto populated. If we have separate

schedules for eligible ITC as well as ineligible ITC, segregation can be done immediately

without any hurdle

Question 13 What are the accounting codes for recording of eligible ITC.

Answer Following are the accounting codes for recording of eligible ITC by Projects:

Account

Code Description

166

340131 GST(Compensation to state) cess ITC Receivables

340132 Input Tax Credit of CGST on Input - Eligible

340133 Input Tax Credit of SGST on Input - Eligible

340134 Input Tax Credit of IGST on Input - Eligible

340135 Input Tax Credit of CGST on Input Services - Eligible

340136 Input Tax Credit of SGST on Input Services - Eligible

340137 Input Tax Credit of IGST on Input Services - Eligible

340138 Input Tax Credit of CGST on Capital Goods - Eligible

340139 Input Tax Credit of SGST on Capital Goods - Eligible

340140 Input Tax Credit of IGST on Capital Goods - Eligible

Question 14 What are the accounting codes for recording of Ineligible ITC (also known as natural

accounting codes for recording of ineligible ITC)?

Answer Following are the accounting codes for recording of ineligible ITC by Projects:

Account

Code Description

340141 Input Tax Credit of CGST on Input - Ineligible

340142 Input Tax Credit of SGST on Input - Ineligible

340143 Input Tax Credit of IGST on Input - Ineligible

340144 Input Tax Credit of CGST on Input Services - Ineligible

340145 Input Tax Credit of SGST on Input Services - Ineligible

340146 Input Tax Credit of IGST on Input Services - Ineligible

340147 Input Tax Credit of CGST on Capital Goods - Ineligible

340148 Input Tax Credit of SGST on Capital Goods - Ineligible

340149 Input Tax Credit of IGST on Capital Goods - Ineligible

Question 15 What are the electronic codes for recording of eligible ITC?

Answer The following codes are used as electronic codes for recording of eligible ITC.

For Projects located under GSTIN of Madhya Pradesh (23AABCN4884H1ZE)

Account

Code Description

340130

Electronic balance of Input Tax Credit of CGST on Input/Input service

/Capital goods

167

340554

Electronic balance of Input Tax Credit of SGST on Input/Input service

/Capital goods

340625

Electronic balance of Input Tax Credit of IGST on Input/Input service

/Capital goods

340630 Electronic balance of GST(Compensation to state) cess

For Projects located under GSTIN of Uttar Pradesh (09AABCN4884H1Z4)

Account

Code Description

340315

Electronic balance of Input Tax Credit of CGST on Input/Input service

/Capital goods

340316

Electronic balance of Input Tax Credit of SGST on Input/Input service

/Capital goods

340317

Electronic balance of Input Tax Credit of IGST on Input/Input service

/Capital goods

340320 Electronic balance of GST(Compensation to state) cess

Question 16 What is the process for accounting of GST on reverse charge?

Answer GST liability under reverse charge is to be recorded by Projects in relevant accounting

codes, and Project will deposit the GST liability and record the balance in relevant

accounting code as current assets. After deposition of liability of reverse charge Projects

will setoff the liability under reverse charge by passing relevant accounting entry.

Question 17 What are the accounting codes for recording of liability on reverse charge?

Answer Following are the Accounting codes for recording of liability under reverse charge:

Accounting code description

810785 Reverse Charge Payable – IGST

810787 Reverse Charge Payable – CGST

810786 Reverse Charge Payable – SGST

Question 18 Entries to be passed for the expenses covered under reverse charge?

Answer Accounting Code Particulars Dr. Cr.

00**** Relevant Expense A/C *****

340132/340133/3401

34

Input Tax Credit of CGST/SGST/IGSTon

Input – Eligible

*****

340141/340142/3401

43

Input Tax Credit of CGST/SGST/IGST on

Input – Ineligible

*****

168

340135/340136/3401

37

Input Tax Credit of CGST/SGST/IGST on

Input Services – Eligible

*****

340144/340145/3401

46

Input Tax Credit of CGST/SGST/IGST on

Input Services – Ineligible

*****

810787/

810786/810785

Reverse Charge Payable – CGST / SGST /

IGST

*****

810*** Relevant sundry creditors A/C *****

Question 19 Accounting entry to be passed at the time of setoff of liability under reverse charge?

Answer Project will pass following entry:

For settlement of GST liability under reverse charge

A/C Code Description Debit Credit

810785/810786/810787/8107

88

Reverse Charge Payable –

IGST/SGST/CGST/UTGST

*****

340127/340128/340129/3401

30

CGST/SGST/IGST/UTGST advance

on reverse charge

*****

Question 20 What are the accounting entries to be passed by HQ Sales Finance after receiving

amount from customers for coal sale?

Answer A/C

Code

Description Foli

o no

Debi

t

Credit

When Advance /Security received from Customer

330102 Bank current A/c 1 ****

810209 Coal sale secur. Deposit 1 *****

(Being advance received from customer for supply of coal)

At the time of issuance of DO cum ARV

810209 Coal sale secur. Deposit 1 ****

810210 C/ sale deposit realisation 3 *****

810207 Adv. & deposit- cash sale 3 *****

810231 EMD E- Auction 3 *****

(Being bifurcation of advance from customer for supply of coal when ARV is issued)

ARV has to issue within 3 days from the date of receiving of securities, but not

later than last day of month

For transfer of advance amount to Projects

169

810210 C/ sale deposit realisation 3 ****

810207 Adv. & deposit- cash sale 3 ****

810231 EMD E- Auction 3 ****

378*** Related Project A/c 2 *****

(Being advance amount transferred to related unit)

Question 21 Accounting entries to be passed by Projects for Coal Sale?

Answer A/C Code Description Foli

o

no

Debit Credi

t

Entries to be made by transferee project for advance money/sales realization

transferred from HQ sales department

378000 HQ Branch *****

810207 Adv. & deposit- cash sale *****

810231 EMD E- Auction *****

(Being accountal of advance money received from customer through HQ)

At the time of lifting of coal –

320101 SALES Debtors *****

000101 Sale Of Coal *****

000106 E-Auction sales *****

000107 Crushing Charges *****

000109 Silo Charges *****

000160 Rejects *****

000701 Transportation *****

810709 Royalty *****

810765 NMET MMDR Royalty Central Fund *****

810764 DMF MMDR Royalty State Fund *****

810708 SED *****

810766/810767/81076

8/8

10769

CGST/SGST/IGST/UTGST Payable to

Dept. (Billed)

*****

810770 GST (Compensation to state) cess

payable (Billed)

*****

810753 Transit Fees *****

810758 MPGATSVA *****

(Being accounting of sales done)

In case of e- auction parties, when contracted coal quantity is lifted by coal

170

customer

810231 EMD E- Auction *****

810207 Adv. & deposit- cash sale *****

(Being transfer of EMD money to advance head after issuing ARV)

**Project has to issue ARV immediately for EMD money, once the contracted

quantity is lifted by e- auction party

At the time of issuing Refund Voucher after forfeiting advance from customer for

non-lifting of coal

810231 EMD E- Auction *****

000705 Income Head (with amount

forfeited, if any)

*****

810778/ 810779 /

810780

Liability on CGST / SGST / IGST on

services

*****

(Being amount forfeited for non- lifting of coal along with GST by customer)

When advance from customer is settled with debtor

810207 Adv. & deposit- cash sale *****

320101 Sales Debtors *****

(Being advance settled)

Question 22 Accounting entries to be passed at the time of transfer of Coal from MP Jurisdiction

to UP Jurisdiction within the same project (Only applicable for basket Mines; Bina,

Khadia and Dudhichua)

Answer A/C

Code

Description Debit Credit

340134 Input Tax Credit of IGST on Inputs –Eligible (UP) ****

340131 GST (Compensation to State) Cess ITC Receivable

(UP)

*****

810768 IGST Payable to Dept. (Billed) (MP) *****

810770 GST (Compensation to state) Cess payable (Billed)

(MP)

*****

(Being transfer of Coal within from MP to UP within the same Project.)

Question 23 Accounting entries to be passed at the time of sale of laptop to employees?

Answer A/C Code Description Debit Credit

On sale of laptop to employees @ 5% value

820205 Prov - depren P&M 95

340205 Others ch. Recov- emp 5+(18%

on 5)

171

150326 Laptop/ ipad/ tablets 100

810775/810776/810777 Liability on CGST/SGST/IGST on Scrap (18%

on 5)

When employee transfer to other project within same state and laptop is transfer to other

projects

****** Branch Account Dr ******

820205 PROV - DEPREN P&M ******

150326 Laptop/ IPAD/ tablets ******

When employee transfer to other project located in other state or transfer to other

subsidiary and laptop is transfer to other projects

***** Branch Account/ Subsidiary Dr. ******

820205 PROV - DEPREN P&M ******

150326 Laptop/ IPAD/ tablets ******

810777 Liability on IGST on Scrap ******

Entry of Laptop for receiving project

150326 Laptop/ IPAD/ tablets ******

340140 IGST on Capital Goods – Eligible ******

820205 PROV - DEPREN P&M ******

****** Branch Account/Subsidiary Account ******

Question 24 Accounting entries will be passed at the time of Sale of Tender Paper?

Ans. On sale of Tender Paper

320*** Relevant Party A/c *****

000709 Sale of Tender Paper (Income) ******

810782/ 810783

/810784

Liability on CGST / SGST / IGST on Tender

Paper

******

Question 25 Accounting entries will be passed at the time of procurement of input/capital goods?

Ans. Procurement of Inputs, Capital Goods & spare parts except petty expenses

A/C Code Description Foli

o

no

Debit Credit

310*** Relevant store/stock A/c 2 *****

340132/340133/34013

4

Input Tax Credit of

CGST/SGST/IGST on Input –

Eligible

2 *****

172

340141/340142/34014

3

Input Tax Credit of

CGST/SGST/IGST on Input –

Ineligible

2 *****

340138/340139/34014

0

Input Tax Credit of

CGST/SGST/IGST on Capital Goods

– Eligible

2 *****

340147/340148/34014

9

Input Tax Credit of

CGST/SGST/IGST on Capital Goods

– Ineligible

2 *****

810*** Relevant sundry creditors A/C 3 *****

Note: Under GST regime; Input tax credit of spare parts will be treated as ITC of

Input unlike excise Act

Question 26 Accounting entries to be passed at the time of Procurement of Inputs Services like

repair and maintenance from registered supplier covered under forward charge?

Ans. Procurement of Inputs Services from registered supplier covered under forward

charge

00**** Relevant Expense A/C 4 ****

340135/340136/34013

7

Input Tax Credit of CGST/SGST/IGST on

Input Services – Eligible

2 ****

340144/340145/34014

6

Input Tax Credit of CGST/SGST/IGST on

Input Services – Ineligible

2 ****

810*** Relevant sundry creditors A/C 3 ****

Question 27 Accounting entries to be passed at the time of passing bills in respect of civil

contractors?

Ans. When civil work is capitalized

111*** Relevant Capital WIP A/c 1 ****

340144 Input Tax Credit of CGST on Input Services –

Ineligible

2 ****

340145 Input Tax Credit of SGST on Input Services –

Ineligible

2

810*** Relevant sundry creditors A/C 3 ****

When civil work/Repair work is booked under Revenue

***** Relevant Expense A/C 4 ****

340135 Input Tax Credit of CGST on Input Services – Eligible 2 ****

340136 Input Tax Credit of SGST on Input Services – Eligible 2 ****

173

340144 Input Tax Credit of CGST on Input Services –

Ineligible

2 ****

340145 Input Tax Credit of SGSTon Input Services –

Ineligible

2 ****

810*** Relevant sundry creditors A/C ****

Question 28 Accounting Entry to be passed when Input/Input service received from unregistered

supplier for the goods/ services notified to be covered under RCM under section 9(4).

Answer When Input/Input Services has been received from unregistered supplier and

covered under section 9(4) and goods and services notified to be covered under

RCM.

00**** Relevant Expense A/c 4 *****

340132/3401

33/340134

Input Tax Credit of CGST/SGST/IGSTon

Input – Eligible

2 *****

340141/3401

42/340143

Input Tax Credit of CGST/SGST/IGST on

Input – Ineligible

2 *****

340135/3401

36/340137

Input Tax Credit of CGST/SGST/IGST on

Input Services – Eligible

2 *****

340144/3401

45/340146

Input Tax Credit of CGST/SGST/IGST on

Input Services – Ineligible

2 *****

810787/

810786/8107

85

Reverse Charge Payable – CGST / SGST /

IGST

3 *****

810*** Relevant sundry creditors A/C 3 *****

Question 29 Accounting Entry to be passed when Input/Input service received from unregistered

supplier for the goods/ services which are not notified to be covered under RCM

under section 9(4).

A/C Code Description Fol

io

no

Debit Credit

007066 Supply from unregistered Person (Petty

Expense) A/C

4 *****

810*** Relevant sundry creditors A/C 3 *****

Question 30 Accounting Entry to be passed at the time of purchase from supplier opting

composite scheme

Answer A/C Code Description Foli Debit Credi

174

o no t

00**** Relevant Expense A/c 4 *****

810*** Relevant sundry creditors A/C 3 *****

Question 31 Accounting Entry to be passed at the time of purchase of Exempted/Nil

rated/Nontaxable supply.

Answer A/C Code Description Foli

o no

Debit Credi

t

00**** Relevant Expense A/c 4 *****

810*** Relevant sundry creditors A/C 3 *****

Question 32 Accounting entries to be passed at the time of Transfer of Ineligible ITC at the end of

month?

Answer When ineligible input credit (ITC) related to Input / Input Services / Petty

Expenses is charged to expense at month end

004808 Input Tax Credit of GST – Ineligible 4 ****

340141/340142/3401

43

Input Tax Credit of CGST/SGST/IGST on

Input – Ineligible

2 ****

340144/340145/3401

46

Input Tax Credit of CGST/SGST/IGST on

Input Services – Ineligible

2 ****

When ineligible input credit (ITC) related to Capital Goods / Capital WIP is

capitalized

310*** Relevant Store / Capital WIP A/c 1,

2

*****

340147/340148/3401

49

Input Tax Credit of CGST/SGST/IGST

on Capital Goods – Ineligible

2 *****

Question 33 What accounting entries will be passed at the time of making payment to Supplier?

Answer When payment is made to supplier after adjustment of GST withheld and liquidity

damages or other deduction, if any

810*** Relevant sundry creditors A/c 3 *****

810113 GST Withheld A/c 3 *****

810771/810772/8107

73/

CGST/SGST/IGST – TDS 3 *****

Income Tax - TDS 3 *****

000703 Relevant Income(Liquidity Damages)

A/c

4 *****

175

810778/810779/8107

80

Liability on CGST/SGST/IGST on

Liquidity damage

3 *****

330102 Bank a/c 2 *****

When withheld amount of GST is released/ paid

810113 GST Withheld A/c 3 *****

330102 Bank A/c 2 *****

When withheld amount of GST is forfeited after specified period

810113 GST Withheld A/c 3 *****

340132/340133/3401

34

Input Tax Credit of

CGST/SGST/IGST on Input –

Eligible

2 *****

340135/340136/3401

37

Input Tax Credit of

CGST/SGST/IGST on Input Services

– Eligible

2 ******

340138/340139/3401

40

Input Tax Credit of

CGST/SGST/IGST on Capital Goods

– Eligible

2 ******

When Interest / Penalty levied by authority on reversal on ITC has been recovered

from supplier

810*** Relevant sundry creditors A/c 3 ****

810778/810779/810780 GST liability (interest) 4 *****

Subsequent, when supplier deposit GST and GST appears in NCL GST portal and

ITC of the same is available to NCL

340132/340133/3401

34

Input Tax Credit of CGST/SGST/IGST

on Input – Eligible

2 *****

340135/340136/3401

37

Input Tax Credit of CGST/SGST/IGST

on Input Services – Eligible

2 *****

340138/340139/3401

40

Input Tax Credit of CGST/SGST/IGST

on Capital Goods – Eligible

2 *****

330102 Bank 2 *****

Question 34 Accounting entries to be passed at the time of invoice is raised for renting of

immovable property?

Answer 1. When invoice is raised for renting of immovable property

320*** Relevant Tenant a/c 2 *****

176

000*** Relevant income a/c 4 *****

810778/8107

79/810780

Liability on CGST/SGST on Services 3 *****

Question 35 Accounting entries to be passed at the time of Inter-state transfer of DTI?

Answer 1. On inter-state transfer of DTI by the transferor project

3780** Branch A/C 2 *****

310*** Relevant store/stock A/c 2 *****

810781 Liability on IGST on DTI 3 *****

2. On inter-state transfer of DTI by the transferee project

310*** Relevant store/stock A/c 2 *****

340134/ 340140 ITC of IGST on Input /Capital Goods 2 *****

3780** Branch A/c 2 *****

Question 36 Accounting entries to be passed by Project at the time of transfer of GST liability to

HQ?

Answer A/C Code Description Debit Credit

810766/810767/810768/810

769

CGST/SGST/IGST Payable to Dept.

(Billed)

*****

810781 Liability on IGST on DTI *****

810782/810783/810784 Liability on CGST/SGST/IGST on

Tender Paper

*****

810775/810776/810777 Liability on CGST/SGST/IGST on

Scrap

*****

810778/810779/810780 Liability on CGST/SGST/IGST on

Services

*****

810770 GST (Compensation to state) cess

payable (Billed)

*****

378000 Hqtr.Branch Account(0936) *****

Question 37 Accounting entries to be passed by HQ at the time of transfer of GST liability to

Electronic codes after reconciliation of liability with GSTR-1?

Answer A/C Code Description Debit Credit

378… Branch Account(0936) *****

810769/810774/810788/810

933

Electronic codes for

CGST/SGST/IGST/UTGST/Cess

(MP Project)

*****

177

810754/810755/810762/810

763

Electronic codes for

CGST/SGST/IGST/UTGST/Cess

(UP Project)

*****

Question 38 Accounting entries to be passed by Project at the time of transfer of Eligible GST

ITC to HQ?

Answer A/C Code Description Debit Credit

378 Branch Account(0936) *****

340132/340133/340134 Input Tax Credit of CGST/SGST/IGST

on Input – Eligible

*****

340135/340136/340137 Input Tax Credit of CGST/SGST/IGST

on Input Services – Eligible

*****

340138/340139/340140 Input Tax Credit of CGST/SGST/IGST

on Capital Goods – Eligible

*****

340131 GST (Compensation to State) Cess ITC

Receivable

*****

Question 39 Accounting entries to be passed by HQ at the time of transfer of Eligible ITC to

Electronic codes after reconciliation of ITC with GSTR-3B?

Answer A/C Code Description Debit Credit

340130/340554/340625/340

630

Electronic codes for

CGST/SGST/IGST/Cess (MP

Project)

*****

340315/340316/340317/340

320

Electronic codes for

CGST/SGST/IGST/Cess (UP

Project)

*****

378 Branch Account(0936) *****

(Being ITC of …. Project for the month of **** transferred to Electronic code)

Question 40 Accounting entries to be passed at the time of deposit of GST amount with GST

Authority before filing of GSTR-3B.

Answer A/C Code Description Debit Credit

340551/340552/340

553

CGST/SGST/IGST Advance on forward

charge

*****

340555 GST(Compensation to state) cess Advance *****

340127/340128/340

129

CGST/SGST/IGST advance on reverse

charge

*****

178

330102 Bank a/c *****

Question 41 Accounting entries to be passed at the time of settlement of GST liability under

forward charge.

Answer A/C Code Description Debit Credit

810769/810774/810788/81

0933

Electronic codes for

CGST/SGST/IGST /Cess (MP Project)

*****

810754/810755/810762/81

0763

Electronic codes for

CGST/SGST/IGST/Cess (UP Project)

*****

340130/340554/340625/34

0630

Electronic codes for

CGST/SGST/IGST/Cess (MP Project)

*****

340315/340316/340317/34

0320

Electronic codes for

CGST/SGST/IGST/Cess (UP Project)

*****

340551/340552/340553/34

0554/

340555

CGST/SGST/IGST/CESS Advance on

forward

*****

Question 42 Accounting entries to be passed at the time of deposit of GST under protest?

Answer 340622/340623/340

624/340625

CGST/SGST/IGST Advance under protest *****

340626 GST(Compensation to state) cess Advance

under protest

*****

330102 Bank a/c *****

Question 43 Accounting entries to be passed at the time of refund is granted of GST, earlier

deposited under protest?

Answer 330102 Bank *****

340622/340623/340

624/340625

CGST/SGST/IGST Advance under protest *****

Question 44 Accounting entries to be passed at the time of application for refund of ITC is filed at

the end of year if due any?

Answer 340627/340628/340629 CGST/SGST/IGST Refundable ****

340130/340554/340625/34

0630

Electronic codes for

CGST/SGST/IGST/Cess (MP Project)

****

340315/340316/340317/34

0320

Electronic codes for

CGST/SGST/IGST/Cess (UP Project)

****

179

Impact of GST on working capital of coal industry

Question 1 What is inverted rate of duty structure under GST?

Answer In simple term ‘Inverted duty Structure’ is a situation when the credit has accumulated on

account of rate of tax on input being higher than the rate of output supplies (other than nil

rated or fully exempt supplies).

Products GST on

Finished Goods (Output) Input Finished Goods Input

Coal Explosive 5% 18%

Question 2 What are the Provision in GST for inverted rate of duty?

Answer As, per Section 54(3) of the CGST Act, 2017, a registered person may claim refund of

unutilised input tax credit at the end of any tax period. A tax period is the period for which

return is required to be furnished. Refund of unutilised input tax credit is allowed only in

following two cases:

a) Zero rated supplies made without payment of tax: As per Section 16(3) of the

IGST Act, 2017, a registered person making zero rated supply is eligible to claim

refund.

b) Inverted duty structure: Where the credit has accumulated on account of rate of tax

on inputs being higher than the rate of tax on output supplies (other than nil rated

or fully exempt supplies), except supplies of goods or services or both as may be

notified by the Government on the recommendations of the Council.

Rule 89(5) of CGST Rules as amended on 13.06.2018 states that In the case of refund

on account of inverted duty structure, refund of input tax credit shall be available as per

the following formula:-

Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services)

x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of

goods and services.

Question 3 What is the relevant provision of GST to claim refund under inverted rate of duty

and what will be the maximum amount of refund that can be claimed.

Answer As per amended provisions under section 54(3) of CGST Act, 2017 read with Rule 89 (5)

of CGST Rule, 2017 refund of Input tax credit will be allowed only for Input and

clarified that maximum amount of refund of input tax credit shall be granted as per the

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following formula;

Maximum amount of refund

Turnover of Inverted Rated

Supply of Goods (i.e. value of

Coal Supplied)

(x) Net ITC (-)

Tax payable on Inverted Rated

Supply (i.e. value of Coal

Supplied)

Adjusted Total Turnover

Example:

Turnover of product covered under inverted rate of duty 1000

Inverted rate of duty 5%

Turnover of other supply covered under GST rate of 18% 200

Eligible ITC for Input 70

Eligible ITC for Input Service 80

Eligible ITC for Capital goods 20

Total eligible ITC 170

Maximum refund 1000/1200*70-(50)

= Rs.8.3

Wherein:

Turnover for inverted rate 1000

Adjusted total turnover 1000+200=1200

Net ITC i.e. Eligible ITC on Input 70

Tax payable on supply covered under inverted rate of

duty

1000*5%=50

Question 4 What the meaning of Net ITC is as mentioned in Rule 89(5)?

Answer Net ITC shall mean input tax credit availed on INPUTS during the relevant period

other than the input tax credit availed for which refund is claimed under sub-rule (4A) or

(4B) or both; which indicate that Input tax credit availed on Input services and

Capital goods would not be eligible for refund in the above case.

Initially, Net Input tax credit for refund includes input tax credit availed on inputs as

well as Input services, However, after amendment made by CBIC vide notification no

26/2018 dated 13.06.201, Government has limited the refund the refund only on eligible

inputs (i.e. input service has been made ineligible) retrospectively w.e.f. 01.07.2017 . We

understand that after the amendment the definition of ITC for refund, Coal Industry could

not claim refund as substantial amount of Input tax credit is related to Input services like

Service of OB outsourcing, GST on Royalty under reverse charge, however being mining

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industry our Input is limited to explosive, lubricant, spares parts etc. whose ITC is much

lesser than ITC of services due to quantum of work.

It is pertinent to mention here that as per our knowledge some federation has challenged

the Notification no 26/2018 dated 13.06.2018 as it is settled position of law that

notification cannot be having any adverse effect from the retrospective date. We are

expecting some favorable decision from authorities on this issue; in that case we may

become eligible for refund.

Net ITC (as per prevalent legal provision) would be-

Total ITC for the period (A) *******

Less:

ITC on Capital goods (B) *******

ITC on Input Services (C) *******

Ineligible ITC (D) *******

NET ITC (A-B-C-D) *******

Question 5 What the meaning of Adjusted Total turnover is as mentioned in Rule 89(5)?

Answer "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined

under clause (112) of section 2, excluding –

(a) the value of exempt supplies other than zero-rated supplies and

(b) the turnover of supplies in respect of which refund is claimed under subrules (4A) or

(4B) or both,

if any, during the relevant period;

As per the provision of section 2(112) of CGST Act:

“turnover in State” or “turnover in Union territory” means the aggregate value of all

taxable supplies (excluding the value of inward supplies on which tax is payable by a

person on reverse charge basis) and exempt supplies made within a State or Union

territory by a taxable person, exports of goods or services or both and inter-State supplies

of goods or services or both made from the State or Union territory by the said taxable

person but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Adjusted Turnover=

Total Turnover of Business (A) *****

Less :value of exempted supply(other than zero rated supply) (B) *****

Less: Deemed Export and advance authorization (C) *****

Adjusted Turnover (A-B-C) *****

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Question 6 What is the turnover for inverted rate of duty?

Answer Turnover for inverted rate of duty will be -

Total turnover for the period *****

Less: Turnover not covered by inverted rate of duty *****

Less: Zero Rated supply *****

Question 7 Whether Coal industry is covered in inverted rate of duty?

Answer Yes, Coal industry is covered under inverted rate of duty since Coal is under the 5% rate

of GST; however Input, Capital goods and Input services used in extraction i.e Explosive,

Lubricants, HEMM, spares parts of machineries, OB extraction services are under the tax

bracket of 12%, 18% and 28%.

Question 8 What will be the impact of GST on working capital of NCL and Coal industry as a

whole?

Answer Coal is under the 5% rate of GST; however Input, Capital goods and Input services used

in extraction i.e Explosive, Lubricants, HEMM, spares parts of machineries, OB

extraction services are under the tax bracket of 12%, 18% and 28%. This shows that Input

tax rate of GST is more than output tax rate due to which NCL would not be able to fully

utilized GST Input tax credit consequently blockage of their working capital/liquidity. In

simple language, it can be said that NCL are reimbursing the GST to suppliers, However

unable to fully utilize the same as output GST liability is less than the ITC, consequently

blocking liquidity.

Question 9 What is the Input for Coal Industry?

Answer We understand that Coal industry is engaged in extraction of Coal (natural resource)

unlike other manufacturing industry, no input is converted in finished goods rather Coal is

extracted from mine. Technically it can be said that there cannot be any input for

industries engaged in natural resources. However as per the provision of GST Act & Rules

thereon, Explosives used for blasts, lubricants and spare parts of HEMM & other

machines can be treated as INPUT.

Question 10 What will be the impact of amended Rule 89(5) of CGST rules on NCL?

Answer CBIC vide notification no 26/2018 dated 13.06.2018 retrospectively amended the

provision of Rule 89(5) clarified that refund of Input tax credit is only allowed for Input

and clarified that maximum amount of refund of input tax credit shall be granted as per

the following formula;

Maximum amount of refund

183

Turnover of Inverted Rated Supply of

Goods (i.e. value of Coal Supplied)

(x) Net ITC (-)

Tax payable on Inverted

Rated Supply (i.e. value of

Coal Supplied)

Adjusted Total Turnover

Before amendment of this rule, Net Input tax credit for refund includes input tax credit

availed on inputs as well as Input services, However, after amendment Government

has limited the scope of refund only on eligible inputs (i.e. input service has been made

ineligible) retrospectively w.e.f. 01.07.2017 .

It is noted that substantial amount of Input tax credit is related to Input services like

Service of OB outsourcing, GST on Royalty under reverse charge, however being mining

industry Input is limited to explosive, lubricant, spares parts etc. whose ITC is much

lesser than ITC of services due to quantum of work.

Lets take a example of NCL (MP) for FY 2019-20 (up to Dec’19):

Value of ITC on Input for NCL (MP): 258.15 Cr.

Value of ITC on Capital Goods (MP):49.65

Value of ITC on Input Services (MP):1050.03

Total ITC available(MP):: 1357.83

Value of Output Tax Liability (MP):582.18

From the perusal of above, it can be seen that value of output tax liability of coal is more

than value of Input tax credit pertains to Inputs; thus no refund will due to NCL (MP).

In view of above facts, it appears that working capital of Coal Industry is going to block in

the form of Input Tax credit.

Question 11 Under which situation ITC can be fully utilized when industry are covered under

inverted duty structure?

Answer We understand that balance of unutilized ITC depends upon Turnover/Expense ratio.

When expenses (eligible for ITC) is lower than turnover, balance of ITC would

significantly reduce. This can be understand through following example:

Example-1

Say A industry is covered under inverted rate of duty, input are covered under 18% tax

bracket, however output produced is in 5% tax bracket.

Say A has incurred eligible expenses to run the business for Rs. 100

Eligible ITC on expense is Rs. 18.

Now for fully utilization of this ITC turnover of business should be 18/5%= Rs. 360.

In this case expense and turnover ratio would be =100/360 i.e. 27%

So it can be said that higher the ratio, higher will be the blockage of working capital

184

Example-2

NCL is having closing balance of unutilized ITC as on 31.03.2019 –Rs. 1128.49 Crore,

to fully utilize this ITC, it has to increase the coal sale in corresponding FY to the tune of

Rs. 22569.60 Crore i.e. 1128.49/5%., which is practically impossible.