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GST:QUESTIONS AND ANSWERS - 09:08:2017

QUESTION 1:

Can the supply be made directly from the place of a person doing the job works instead of bringing the same to our place i.e place of primary supplier?

Answer:

Yes, it can be. If the serviceman doing job work is a registered person, he can supply the goods from his place directly.  In case, he is not a registered one, the job provider must furnish the service man’s address as an additional place for his industry.

Question: 2

We are operating a “Micro Finance” Institution. For us, there is a regulation of 50% as Input Tax Credit. Is this regulation applicable for the tax remitted under reverse charge basis or can we avail such tax completely as input tax credit?

Answer:

For Banks and Finance oriented institutions, the benefit of Input Tax Credit is available only 50%. This rule is applicable to the tax remitted under reverse charge basis also. Therefore, you can avail only 50% as input tax credit.

Question: 3

After implementation of GST, in restaurants, the rates of items previously sold at Rs.60/-, have been increased to Rs.72/- and levying 18% GST also over and above the price.  What is your opinion about this price increase, while the Government had stated that the prices will come down after implementation of GST?

Answer:

The benefit of GST cannot be felt immediately after certain days of its implementation. The prices of all goods will come down stage by stage due to maximum input tax credit. As you said, all restaurants have not increased their prices.  But it cannot be denied that the rates have been increased in certain restaurants. The reason for such increase is due to lack of understanding on the GST. It is wrong to increase the price and also levy 18% GST over the same. For this Government is preparing itself to take actions. To this, there are guidelines also in GST Act.

 

Question: 4

I am working in a subsidiary company of a foreign company.  At times, our Foreign company provides software service to our Indian Subsidiary free of cost.  For such service, will GST be levied under reverse charge basis?

Answer:

Normally, GST will not be levied on the import of services which are (non-beneficial) extended at free of cost. But if a registered person, as a part of his business development, imports services from a related person or from his own foreign establishment, they will be deemed as supplies even if the benefit is not received. For such supplies, GST will be levied under reverse charge basis.

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