Qi Ans, 2 Ans. Electronic Commerce What is e-commerce? Section 436(d) of the MGL de- fines an Electronic Commerce to mean the supply or receipt of ‘goods and/or services, or trans- mitting of funds or data, over an electronic network, primarily the intemet, by using any of the"ap- plications that rely on the inter net, like but not limited to e-mail, instant messaging, shopping carts, web serviees, universal de scription Discovery and integra- tion (UDDD, File Transfer Pro- tocol (FTP) and Electronic Data Interchange (EDI) whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or ser- vives is done by the operator Who is an e-commerce opers- tor? Section 43B(e) of the MGL de- fines an Electronic Commerce Operator (Operator) as every person who, directly or indirect ly, owns, operates or manages an electronic platform which is engaged in facilitating the sup- ply of any goods and/or ser vices. Also a person providing, any information or any other ser vices incidental to or in connec- tion with such supply of goods and services through electronic platform would be considered as an Operator. A person sip plying govds/services on his own account, however, would not be considered, as an Opera- tor. For instance, Amazon and Flipkart are e-commerce Opera- tors because they are facilitating, actual suppliers to supply goods through their platform (popu: larly called Market place model or Fulfillment Model). However, Q3. Ans, Q4. Ans. Ans. Titan supplying watches and jewels through its own web- site would not be considered as an e-commerce operator (or the purposes of this provi- sion. Similarly Amazon gad Flipkart will not be treated as e-commerce operators in rela- tion to those’supplies whic they make on their own ac- count (popularly called in- _ventory Model). Js it mandatory for e-commerce operator to obtain registration? Yes. Section 19 t/w Schedule- IIL of the MGL, provides, that the threshold exemption is not available to ecommerce opera: tors and they swould be liable to be rexistered irrespective of the value of supply made by them. Whether a supplier of goods! services supplying through e- commerce operator would be entitled to threshold exe:3p- tion? No. Section [9 r/w Sehedute-t (the MGL, provides thac the threshold exemption is not avail able ti such suppliers and they would be liable to be registered irrespective of the value of s ply made by them. Who is an aggregator? Section 438(a) af the MGL de- fines aggregator to méan’a per gon, who owns and manages an electronic platform, and by means of the application and communication deviee, enables a potential customer to connect with the persons providing ser- vice of a particular kind the brand name or trade nam der Q7. Ans. Ans. 0 i) a9. Ais. Overview of Goods and the said aggregator. For ins Ola cabs would be an agg tor, fs ap aggregator required to 1» registered under GST? Yes. Section 19 r/w Schedule HIE of the MGL, provides th: the threshold exemption is not available to ayygregators and the would be liable to be register respective of the value uf = ply made by them, What is Tax Collection at Source «res? TA terms of Section 43C(1) of the MGL, the e-commerce operator is required to collect (i.e, dedu ation paid or payable to the ac- tual supplier of goods or services in ie@ect of supplies of goods and / of services made throught such operator. Theamountso de: ducted /collected is called as Collection at Source (TCS). out of the cunside At what timefintervals should the e-commerce operator make such deductions? The timings for such collection’ deduction are earlier of the two events: the time of credit of any smoun’ to the account of the actual sup: plier of goods and / or services; the time of payment of an amount in cash or by any other mode to such supplier. What is the time within which such TCS is to be remitted by th e-commerce operator to Govern- ment account? Is the operator re- quired to file any returns for this purpose? ms of Section 43C() of the , the amount collected by the operator is to be paid to the credil of appropriate government within 10 clays after theQw. Ans. qn. Ans. @ Gi) the month in which amount was so collected. Further, in terms of Section 43C(4) of the MGL, the operator is required to filea State- ment, electronically, containing details of all amounts collected by him for the outward supplies made through his Portal, within 10 days of the end of the calendar month to which such statement pertains. The said statement Would contain the names of the actual supplier(s), details of re- spective supplies made by them and the amount collected on their behalf, The Form and Manner of the said Statement would be p scribed in the GST Rutes. How can actual suppliers claim credit of this TCS? Such TCS whieh is deposited by the operator into government ac- count will be reflected in the cash ledger of the actual registered supplier (ort whose account such collection has'iéen made) vn the basis of the statement filed by the operator. The same can be used al the time of discharge of tax li- ability in respect of the supplies by the actual suipplier. Is the e-commerce operator re- quired to furnish information to the Government? Yes. In terms of section 43C(10), an officer not below the rank of Joint Commissioner may require the operator to furnish details re lating to: supplies of goods / services ef fected through the operato~ dur- ing any period; stock of yoods held by acttial sup- plier making supplies through such operator in the godowns or warehouses belonging, to the operator and.registered.a5 ade itional place of business by the actual supplier. The operator is required to fur- nish the above information within 5 working days from the date of ser- vice of notice asking such informa- tion. In case of failure to furnish such information, the penalty could be ex- tended to Rs. 25,000/- en. Is the e-commerce operator re- quired to submit any statement? What are the details that are re- quired to be submitted in the statement? Ans, QB. Ans. Yes, in terms of S ction 43), every operator is required to fur nish a statement, electronically, of all amounts collected as TCS towaris outward supplies of ood, andor services effected through it, ducing a calendar month within ten days after the end of such crlendar month, The siatement shall contain, inter alia, the details of the amount collected on behalf of each sup- plier in respect of all supplies of syoods and/ or services effe.! through the operator and the de- he tails of such supplies during aid calendar month. What isthe concept of matching in, ecommerce provisions and how itis going to work? AAs per section 43C (6), the details of supplies and the amount col lected during a calendar month, and furnished by every operator iv his statement will be matched with the corresponding details cf outward supplies furnished by the concersied supplier in his val- id return filed tinder section 27 for the same calendar month or any preceding calendar month. Where the details of outward ou. Ans, supply, on which the tax has been collected, as declared by the ‘operator in his statement do not match with the corresponding details declared by the supplier the discrepancy shall be commu: nicated to both persons. What will happen if the details remain mismatched? ‘As per section 43C (8), the value of a supply relating to any pay ment in respect of which any discrepancy is communicated and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output liability of the said supplier, for the calendar month succeeding the calendar month in which the diserepancy is com- municated. The concerned sup- plier shall, in whose output tax liability any amount has been added shail be liable #0 pay the tax payable in respect of such supply along with interest, at the rate specified under sub-seetion (1) of section 36 on the amount so added from the date such tax was due till the date of its payment. Job Work Qu Ans, Ans What is job-work? Section 2(62) of the MGL pro vides that “job-work” means undertaking arly treatment. or process by a person on goods be- Jonging to another registered tax: able person. arid the expression “job-worker"” shail be construed accordingly This definition is much wider than the one given itt Notifiéa- Han No, 214/86 ~CE dated 23rd ch, 1986 as amended, b-work has been definetin such 9 manner so as to ensure that the activity of job-work mast amount to manufacture. Thus the definition of job-work itself re- flects the change in basie scheme of taxation relating to job-work. in the proposed GST regime Whether yoosls sent by a taxable person to a job-worker will be freated as supply and liable to GST? Wh No. 1 will not b apply. In terms « dated as a Q3. ‘Ans. Para 5 of Schedule I of the MG the supply of goods by a regis: tered faxable person (principal) to job-worker, in terms of Sec- tion 43A, shall not be regarded as supply of goods. Therefore, it can be inferred that no GST shal! be applicable on the goods supplied by the registered principal to a job-worker Can a registered taxable person send goods without payment of tax to his job-worker? “Yes. Section 43A of the MGI. provides that the registered tax- able person (principal) can send the taxable goods to a job-worker for job-work without payment of tax. He can further send the goods from one job-worket. to 2nother jub-worker and so on subject to certain condition. it may be noted that provisic fon 434 are not applic on-taxable or exempted govt! re proposed to be sent for job- worka aa 4. Isajob-worker required to take Q8. What are the provisions con- SGST can be taken under SGST registration? cerning taking of ITC in respect Act. Further the credit of CGST & Ans. Yes, as a Job-worker would be a of inputs/eapital goods sent to a SCST cannot be erossutilized. supplier of services, he woud be job-worker?’ Q3. Can GST paid on reverse charge requited to obtain registration if Ans. In the MGL, aspects relatir:. to be considered as input tax? * his aggregate tumover exceeds taking input tax credit in respect Ans. Yes. The definition of ihput tax he a ers seine nia, ayn agra Q5. Whether the goods of princi- jyb-work have been specifically sub-section (3) of section 7 (Re pal directly supplied from the dealt in Section J6A, which pro, Verses Charge). The credit can be job-worker's premises will be vides that the credit of taxes paid availed if stich goods and /erser- included in the aggregate tum- (on inputs or capital goods can be vices are uneci, or are intended to 2) over of the job-worker? eee ee ery be used, in the course or further asus Nopiuisiligbertidaded inthe Principal shall be entitled to take ance of his business, aggregate turnover of the princi- credit of inputs sent to 2 jeb- Q4 Does input tax includes tax a worker if the said inputs, after (CCST! IGST/SGST) paid on completion of job-work are re- ceived back in 180 days from the date of being sent out. In case the input goods, input services and/ Q6. Can the principal supply the eee goods directly from the prem- ises of the job-worker without inputearesentdireetly othejob- Ans Yes, in terms of section 2(54) bringing it back to his own Pp eDe rece earmlinerea eer 2(55) & 2020) of the MGL respec: Premises? from the date of receipt of in- tively. It may be noted that credit ‘Ans. Yes but with a rider that the puts by job-worker. Further an of fax paid on capital goods alse principal should have declared cinouln equivalent tn. the input is permitted to be availed in one The premises of such job-worker {ax credit availed on such inputs instalment. as his additional place of busi- has to be paid along with inter- Q5. What is the ITC entitlement ness or where the job-worker is est, in case the inputs are not ‘of a person who has applied a registered person or w! he ceived back within the spec: goods have been notifi time. The credit can-be rec! when the inputs are actua for registration under the Act within thirty days from the date on which he becomes liable to Q7. Under what circumstances can Wctotienal eaueciee analy ceived back. registration and has been grant- oer applicable 10 all category of 162) oe pn ee goods? Ans, He shall be entitled to take credit reeilyefrom the place ef business Ans. No, The provisions relating to of input fax in respect of inputs of job-worker without declaring jobawork “are applicable only held irvstock and inputs con- it as additional place of business When registered taxable, person tained in. semifinished or fin in bwo. cireuntstances namel intends to send wable’ goods. ished oud held in stock on the where the job-worker is a regis- In other words, these provisions day immediately preceding the tered taxable person or where the ‘are not applicable to exempted date from which he becomes principal is engaged in supply of or nontaxable goods or when able to pay tax under the pros such goods this behalf as may be notified in the sender is a person other than sions of this Act. may be noted may ed in. Ps that the credit on pre-registration Stock would not be admissible jon has not been ~__Input Tax Credit SD) ets cae eeninie days from the date on which he registered taxable person, QL. Whatis input tax? charged on any supply of goods becomes liable to registration, ‘Ans. “Input tax” has been defined in and / or services. CUA Semen ie par Fee er nad TAGuNereI no mn anEeehelimeien ienler arr Mca = et cUAaeceaciT aes section 2 (1) (d) of the IGST Act. ferent definition of “ pena obtained registration on 15th Input tax in relation to a taxable in three acts. viz CC ‘August, 2017. Such person person, means the {IGSI and and IGST A Ena apa cee CGST} int respect of CGST Act an, 7 inputs held in stock as on. and [IGST and SGST} in respect” ‘Stacks sient . of SGST Aci, charged on any sup- Senne aaa ly of goods and/or services to : i ot Act In ih’ Q7. What is the eligibility of inj P 9 {CST Ad), input tax consists ofall igibilit 'P him which are used, or are i eee CST COST tax credit on inputs in stock foi tended to be used, in the course ene 2 person wiio obtains voluntary or furtherance, of his business: registration? = ond includes the Vere payable it Tetuptheriinpties thateredivof all — er section 16(2A) of MGI der sub-section (3) of section 7. three can be used for discharging a fe Neon Wh SN PTT ee the person who obtains volun Ticrielcer adi ipurtse | Seapiubllyrwhrenrtntyesel 57, F craton rental defined as IST, CGST or SGST TRCGBi Acard ihat oe GST & take the input tax credit of inputQs. Ans. Q9. Ans. Q10. ‘Ans. qn. tax on inputs in stock, inputs in seminfinished goods’ and_fin- ished goods in stock, held on the day immediately preceding the date of registration. Where goods andlor services received by a taxable person are used for effecting both tax- able and non-taxable supplies, whether the input tax credit is available to the registered tax able person? As per section 16(6) of MGL, the input tax credit of goods and / or service attributable te only taxable supplies can be taken by registered taxable person. The amount of eligible credit would be calculated in a manner tg be prescribed in terms of section 16(2) of the MGL read with GST ITC Rules (yet to be issued). It is important to note that credit on capital goods also would now be permitted on proportionate ba- Where goods and/or services re- ceived by a taxable person are used for the purpose of busi- ness and non-business supplie whether the input tax credit is available fo the registered tax- able person? As per section 16(5) of the MGL, the input tax credit of goods and / or service attributable to only supplies effected for busi ness purpose can be taken by registered taxable person. The amount of eligible credit would be calculated in a manner to be prescribed in terms of section 16(2) of the MGL read with GST TTC Rules (yet to be issued). It is important to note that credit on. capital goods also would now be permitted on proportionate ba- What would be input tax eligi- bility, in cases where there is a change in the constitution of a registered taxable person? As per section 16(8) of the MGL, the transferor shall be allowed to transfer the input tax credit that remains unutilized in its books of accounts to the transferee pro- vided that there is a specific pro- vision for transfer of liabilities. What would be input tax el bility in case where the goods and/or services supplied by = Ans. en. Ans. QB. Ans. Qu registered taxable person be- ‘come absolutely.exempt? As per section 16(12) of the the registered taxable per- ho supplies goods and / or ces which become abeolute- ly exempt, has to pay an amount equivalent to the input tax credit in respect of inputs held in stock and inputs contained in semi- finished or finished goods held in stock on the day immediately preceding the date of such ex- emption. It has also been pro- vided that after payment of the amount on such goods, the bal- ance, if any available in elec tronic credit ledger would lapse The amtount, required to be paid, is to be calculated as per GAAP in terths of section 16(13) of the MGL. What would be input tax eli- gibility im cases where taxable person paying tax under section 7 opts to pay tax under Com- pounding Scheme under Sec- tion 8? As per section 16(12) of the MGL, the registered tasable per- son, who was paying. tax under section 7 opts to pay tax under Compounding Scheme under Section 8, has to pay an amount equivalent to the input tax credit in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the day immediately preceding the date of such switch over, It has also been provided that after payment of the amount fon such goods, the balance, if any available in electronic credit ledger would lapse, The amvant, required to be paid, isto be cal- culated as per GAAP in terms of 3) of the MGL. A dealer payitg tax on com- pounding basis crosses the ‘compounding threshold and be- comes a regular taxable person. Can he avail ITC and if so from what date? As per section 16(3) of the MGL, he can avail ITC in respect of inputs held in stock end inputs contained in semi-finished or fin- ished goods held in stock on the day immediately preceding the date from which he becomes li- able to pay tax under section 7 seetion | Mr. B, a registered taxable per Ans. Ans. Q16. Ans. on. ‘Ans. Q18. Ans. 1. Ans. son was paying tax under com- position rate up to 30th July, 2017. However, w.e 3ist July, 2017. Mr. B becomes liable to pay tax under regular scheme. Is he eligible for ITC? Mr. B is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 30th July,2017. Mr. A applies for voluntary reg- istration on 5th June, 2017 and obtained registration on 22nd June, 2017. Mr. A is eligible for input tax credit on inputs in stock 8 OM esse Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as oon 21st June, 2017, When shali a taxable person be not entitled to take input tax credit under sub-section (2), QA) orsub-section (3) of Section 16 in respect of any supply of goods and / or services to him? As per section 16(4) of the MGL, he cannot avail TTC after the ex- piry of one year from the date of issue of tax invoice relating to such supply. Whether the principal is eli gible to avail input tax credit of inputs sent to job worker for job work? Yes, the principal is eligible to avail the input tax credit on in- puts sent to job worker for job work in terms of Section 164@) of the MGL. What is the time period within which the inputs sent for job work has to be received back by the principal? 180 days. Whether principal has to re- verse the input tax credit on inputs which have not been re- ceived back from the job worker within 180 days? Yes, the principal has to reverse the ‘credit along with interest on inputs which have not been received back from job worker within 180 days but he can r- claim the credit on receipt of in- puts. [To be continued)