GST Acts: CGST Act, SGST Act, IGST Act Short Answer Type Questions

Question 1.
Bring out the differences in appeal (to Tribunal) provisions under CGST & SGST?
Answer:
(i) The provisions under Section 82 of SGST Act for appeal by any person aggrieved by the order or decision passed against him by First Appellate Authority are essentially similar to provisions contained in Section 82 of CGST Act and discussions made therein are equally applicable to section 82 of SGST as well.

(ii) In addition to the above the provision of Section 82 of SGST Act also covers an appeal to be filed to Appellate Tribunal against the revisionary order passed by Commissioner.

(iii) However the provisions relating to appeal by the revenue against the order of first appellate authority as CGST Act is not provided in SGST Act since the revisionary powers (against the orders passed by the FAA, who in the states is likely to be “subordinate” to the Commissioner) is provided to Commissioner to SGST.

(iv) In addition, the person aggrieved under SGST Act has to pre-deposit full deposit of admitted tax, interest, fine, fee and penalty arising from the impugned order.

Question 2.
Explain the main features of Central Goods and Services Tax (CGST)?
Answer:
The main features includes:
(i) A state-wise single registration for a taxpayer forfiling returns, paying taxes, and to fulfill other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official.

(ii) A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the state or exported out of the country and pay the applicable taxes on them. Such taxes can be Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST) and Integrated Goods and Services Tax (IGST).

(iii) A business entity with an annual turnover of upto Rs 20 lakh would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakh.

(iv) A business entity with turnover upto ₹ 1.5 crores can avail the benefit- of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector.

(v) In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law.

(vi) In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State Law, it has been provided that the ITC entitlement arising out of taxes paid under the Central Law can be cross-utilised for payment of taxes under the laws of the States or Union Territories. For example, a taxpayer can use the ITC accruing to him due to payment of IGST to discharge his tax liability of CGST/SGST/UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST/SGST/UTGST, for payment of IGST. Such payments are to be made in a pre-defined order.

(vii) In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input services within a legal entity.

(viii) To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, 90 per cent of the claimed amount on a provisional basis.

(ix) In order to ensure a single- administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the states to exercise the powers conferred under all Acts.

(x) An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime.

(xi) To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.

(xii) Exhaustive provisions for Appellate mechansim have been made.

(xiii) Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of unutilised ITC in the GST regime.

(xiv) An anti-profiteering provision has been incorporated to ensure that the reduction of tax incidence is passed on to the consumers.

(xv) In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has been empowered to allow payment of taxes in instalments.

Question 3.
State the features of CGST Act. or IGST Act.
Answer:
Features:
(i) A state-wise single registration for a taxpayer forfiling returns, paying taxes, and to fulfill other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official.

(iii) A business entity with an annual turnover of upto ₹ 20 lakh would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is ₹ 10 lakh.

(iv) A business entity with turnover upto ₹ 1.5 crores can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector.

(v) In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law.

(vi) In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State Law, it has been provided that the ITC entitlement arising out of taxes paid under the Central Law can be cross- utilised for payment of taxes under the laws of the States or Union Territories. For example, a taxpayer can use the ITC accruing to him due to payment of IGST to discharge his tax liability of CGST/SGST/UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST/SGST/UTGST, for payment of IGST. Such payments are to be made in a pre-defined order.

(vii) In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect Of input services within a legal entity.

(ix) In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the states to exercise the powers conferred under all Acts.

(x) An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime.

(xi) To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.

(xii) Exhaustive provisions for Appellate mechansim have been made.

(xiii) Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of unutilised ITC in the GST regime.

(xiv) An anti-profiteering provision has been incorporated to ensure that the reduction of tax incidence is passed on to the consumers.

(xv) In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has been empowered to allow payment of taxes in instalments.

Question 4.
Write short note on aggregate turnover.
Answer:
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 exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess. The phrase “aggregate turnover” is widely used under the GST Jaws. Aggregate Turnover is an all-encompassing term covering all the supplies effected by a person having the same PAN.

It specifically excludes:
(a) Inward supplies effected by a person which are liable to tax under reverse charge mechanism, However, it is not to be understood that the value of such inward supplies is to be reduced from the value of outward supplies to arrive at aggregate turnover and –

(b) Various taxes under the GST law, Compensation cess.

(c) There is a certain amount of ambiguity as to whether the value of inward supplies would form part of ‘aggregate turnover’ since the definition covers all taxable supplies and excludes only inward supplies to the extent liable to tax under reverse charge mechanism.

Question 5.
Write short on adjudicating authority.
Answer:
It means any authority, appointed or authorised to pass any order or decision under this Act. but does not include the Central Board of Excise and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority and the Appellate Tribunal. The following authorities are not permitted to pass an order/ decision- under the GST laws:

The Central Board of Excise and Customs
Revisional Authority
Authority for Advance Ruling
Appellate Authority for Advance Ruling
Appellate Authority
Appellate Tribunal

Question 6.
Discuss the comparison between composite supply and mixed supply.
Answer:
Composite Supply:
Composite supply refers to 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.

Example:

Supply of laptop and carry case.
Supply of equipment and installation of the same.
Supply of repair services on computer along with requisite parts.
Supply of health care services along with medicaments.

Mixed Supply: Mixed supply refers to 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.

Example: 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.