Central Excise Comm Central GST, Nagpur replies queries

Source: The Hitavada      Date: 24 Jul 2017 09:45:10


Business Bureau,

The Hitavada invited a few questions from general public on GST at the inaugural Gopal Krishna Gokhale Memorial Lecture on ‘GST and Indian Economy’ organised by ‘The Hitavada’ at Dr Vasantrao Deshpande Hall on Sunday. A K Pandey, Chief Commissioner of Central GST, Nagpur replied to the queries in the presence of Nitin Gadkari, Union Minister for Road Transport, Highways and Shipping, Nandatai Jichkar, City Mayor, P K Agrawal, Joint Commissioner of State GST, Nagpur, Rajendra Purohit, Managing Director of The Hitavada and Vijay Phanshikar, Editor-The Hitavada.

Question. Education institutions are exempted and have not taken registration. During construction of school building whether reverse charge mechanism (RCM) applicable on payment of transportation of building material.?

Answer: Services given by educational institutes to its students, faculty and staff is exempted vide Sr No. 6 of List of Nil rated supply of services. However, in this case the services are being provided by goods transport agency (GTA). Vide Notification No. 13/2017C Tax (Rate), the person receiving the service is required to pay GST only if it is one of the seven notified entities. Since educational institute is not one of the notified entities, the burden is on GTA to discharge applicable GST if any.

Question. Cotton Ginning and Oil Mill purchasing cotton from agriculturist whether RCM is applicable.?
Answer: Ginning is a process of segregating seeds from cotton and oil mill extracts oil from cotton seeds. Under Section 23 (1)(b) of CGST Act, an agriculturist supplying agricultural products is not required to take registration. However, the agriculturist is supplying cotton to ginning & oil mill who are registered. Therefore, the tax liability Under Section 9(4) will fall on the mill. In any case cotton per se attracts 5% GST.

Question: Whether construction work (material + labour) under Pradhan Mantri Awas Yojna is exempt.?
Answer: Supply of material will be taxed as no exemption is granted for goods supplied to said scheme. However, supply of labour for execution of said scheme is exempted.
Question: Whether the exemption limit of Rs 5,000 for reverse charge under Section 9(4) of CGST Act, granted by Notification 8/2017 – Central Tax (Rate), includes purchases of exempt goods from unregistered dealers; or such purchases of exempt goods are to be excluded when determining this limit.

For example: If I purchase goods worth Rs 6,000 from an unregistered dealer consisting Rs 3,000 worth of exempt goods and Rs 3,000 worth of taxable goods. Will I be liable to pay GST on reverse charge on Rs 3,000 or will I be within the limit of Rs 5,000 as per the notification.?

Answer: Only taxable supply will be included in value of Rs 5,000/- Section 9(4) refers to supply of taxable goods and services by unregistered person and does not refer to non taxable goods and services.

Exempted supplies are in any way exempted.
Question: Will doctors/hospitals charging a bundled amount for a surgery, wherein taxable implants/medicines are supplied free of cost to the patient; be liable to register under GST.? or will this be considered an exempt supply of healthcare services.?

Answer: Health care service is exempted. For heart ailment stents are input. Doctor does not charge anything further. Stent has already suffered GST. For performing singular health service what is needed is stent as input, doctor’s technical know how and support service if any. The resultant is health service. In perfuming health service all related input, input service get subsumed, and therefore in my opinion it will not attract GST.

Question: Will the limit of turnover of Rs 20 lakh in a financial year under GST, be counted from the April 1, 2017 or from July 1, 2017
Answer: As per Section 22, the turnover of Rs 20 lakh has to be counted from April 1, 2017.

Question: a Person was dealing in exempt goods (like cloth, oil seed cake) which is now taxable w.e.f July 1, 2017. Whether he can opt for Composition Scheme.? If yes. whether he need to pay tax on stock held by him on July 1, 2017.
Answer: Yes he can opt for Composition Scheme. He will have to pay GST at composite rate of 1% on stock cleared after July 1, 2017.

Question: Newspaper publisher whose goods are tax free and advertisement services are taxable. How he will get set off for paper purchased.?
Answer: Advertisements attract 5% GST to the extent advertisers use paper, ink etc., will get set off.

Question: Whether publisher need to pay under RCM for honorarium to author used for exempt services.?
Answer: Service by the author are liable to be taxed at the hands of publisher on RCM basis (Sr No. 9 of Notification No. 9/2017 C.Tax (Rate) refers.

Question: What rate of tax is to be charged by an automobile service centre on a composite supply of labour and spare parts.? Can the service center charge separate rate of 18% for labour charges and 28% for spareparts.? Or are they supposed to consider this as a composite supply of repair service and charge 18% on the whole amount.?
Answer: Service centre provide repairs and maintenance service . For provision of service inputs, input services and capital goods will be used. Spares/inputs they loose their identity in the performance of service. Therefore, the gross amount received for performance of the service will attract 18% GST.

Question: What will be the challenges for small dealers who are having turnover below Rs 20 lakh under GST regime.?
Answer: Registered persons may not be buying goods from small dealers to avoid payment of tax under Section 9(4). In fact they should not do so as credit is available to them and the whole exercise is revenue neutral for registered persons.